Fibonacci Retracements in Gold Being Completed

Gold in both Dollar and Euro terms is completing a maximum 61.8 percent Fibonacci retracement.  Fibonacci numbers are used by market technicians to measure how much a market bounces either up or down after a major move.  For me this measurement seems to work best in situations when I believe major tops or bottoms in a market are being put in place.  In Gold I am viewing the move that started down in early September from the 1924 area in dollars has its 61.8 percent retracement at 1776.  In Euro’s, gold topped out at 1374 and has its 61.8 percent retracement at 1297.  At this moment in the overnight trade at 7:05 AM CST gold in terms of the Dollar and the Euro have been high at 1781 and 1293, close enough in an imperfect world.

Politics is tough for incumbents during deleveraging periods, especially in a period after the world economy has seen almost 30 years of unrestrained management in so many different areas,  The problems range from pension benefits that were non-funded and probably ill conceived in the first place, double dipping by individuals who retire early and then get another job and administrations who pushed GDP growth rather than foster sound management policies.  Now we are in the period when nobody wants to take the hit and incumbents are the first choice. 

Greece is no different from the US, Papandreou is taking the hit for a culmination of years of bad management by a range of administrators.  The sad thing is that the new leader, who ever he is, will not have any better ideas.  Papandreou ironically had the right idea, to take the vote to the people in a referendum, lay out all the pluses and minuses,  and then let them choose.  The same thing should be done all around the world.  People would have to take ownership of the issues if they decided them.  In that scenario, elections could be held after the fallout of the referendums is over.

As to trading, the short T-Bond trade TBT was exited on Friday.  With all stock positions exited on the recent rally we are basically just short gold now