Getting Long Gold and AUD/USD
by Jes Black
February 09/05
Over the past two days readers of our daily update know that we have been taking profits from our dollar longs against the Swiss franc and Canadian dollar and rolling the profit into long AUD/USD at an average rate of 0.7665. Today’s whipsaw and then reversal in the dollar was exactly what we expected to see so we confidently stepped up to buy more AUD/USD as we consider a move above 0.78 to be just a matter of time.
Readers may also recall that for the past two weeks we have said gold was nearing a key low around $410 to $400 and that we would look to buy our first shares of GLD after having warned to stay away from the initial offering three months ago. What we did not expect was that the technical setup would be so ideal.
In the chart below note how both GLD and AUD/USD have recorded a bullish weekly reversal and will also both perform our famous “weekly candlestick trick” next week by opening to the outside of the current trendline. New readers unfamiliar with our "trick" may read a previous market call here when we forecasted GBP/USD to rally from 1.80 to 1.95 back in October: http://www.fxmoneytrends.com/10.15.04.GBPUpdate.pdf
Its not every day that Mother Market lobs one across the plate for you
to hit. And considering that we are big dollar bulls for 2005 and have
said so for months, gold bugs should take heed that we are buying. Moreover,
considering that the dollar index has pulled back from key trendline resistance
at 85.25 and that February historically sees a 50% of January’s gains
we think that today offers an ideal opportunity to position long either
GLD or AUD/USD. Risk is limited to below this week’s lows. We look to
take initial profits in GLD at $43 and leverage into AUD/USD as it rallies
to our longstanding target above 0.82 in the coming weeks. After that
we will reposition long USD.
Jes Black
Recent Testimonial for FX Money Trends: “I find FX Money Trends’
work extremely helpful. As a macro hedge fund manager I base my success
on ideas generated both internally and through external research services:
FX Money Trends and its founder Jes Black constantly provide ideas which
are based both on very clever fundamental and technical analysis and research.
FX Money Trend’s intellectual independence makes their ideas precious,
never obvious nor “late.”
Francesco Clarelli, Italy.
Jes Black, hedge fund manager at Black Flag Capital Partners, specializes in foreign exchange and global macro trends. Prior to organizing the fund he helped MG Financial Group launch Forexnews.com. Afterwards he went on to found FX Money Trends, a research firm catering to professional traders.
Mr. Black holds a degree in economics from the University of Kansas and
an MBA from the ESC in France. His market commentary is often featured
in the Wall Street Journal, Financial Times and Reuters. He has also written
numerous strategy pieces for Futures magazine. To find out more about
the fund’s research letter visit www.fxmoneytrends.com. Qualified
prospective investors can find out more about Black Flag Capital Partners
by e-mailing info@blackflagfund.com
Jes Black
FX Money Trends, LLC
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Hoboken, NJ 07030
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