Wrong page. Wed May 12

I'd been reading the market swings like a book but ended up on the wrong page towards the close yesterday as Northern Hemisphere markets held on to more of their gains than I was expecting. Fortunately my shorts are quite modest as we haven't had strong enough bounce backs to get set for much. The local market has regained a little more than the 50 odd points we lost yesterday as we pass the first hour of trading.
Having said all that, the moves overseas still look like retracement and I continue to expect further weakness.
Gold has been performing according to the textbook as reserve currencies, the Euro and the US dollar, continue to print money. The latest weekly from Tim Price at the Price of Everything (see the link) has a nice argument for gold and the weekly chart, below, seems to indicate that gold is moving into an acceleration phase. Greg Peel's morning report on FnArena (also linked, and report is free after 10 am) is another to make a good case for gold.

It's enough to have me scurrying around for gold exposure and I've gone long some Lihir gold at 399. The merger with Ncm is agreed and the Lgl shareholder vote is due in late July so essentially this is now a proxy for Ncm. It's a slightly odd scenario because I like the Lgl chart better than that of Ncm. Here's Lgl.

Here's the Newcrest chart. It's bouncing along the bottom but hasn't made much of a base. If it struggles to get close to or through the first resistance level at 3360 then I'll get out of the Lgl trade.

2.24 Back in the office after an appointment....before I went I bought Lihir May 400 calls at 12 and July 425 calls at 16 because I realised that my assumption on the link with Ncm was incomplete. The deal isn't done until July and up until June 8 there is the possibility of someone else bidding. It's unlikely apparently, but I guess if the gold price runs hard enough it could happen. Equally, if the gold price did surge then, with its ample reserves, Lgl could be a better stand alone option. Again, this is unlikely but it does mean that the link with the Ncm share price is not set in stone and there's an opportunity for Lgl to run its own race.

My logic could well be faulty but so far, at least, the stock is still rising and Lgl is up to 407.

4.15 The Xjo managed a gain of 25 points. Asian markets were a touch lower, not surprisingly when the Euro can't sustain a rally and Europe is a major export market. Overnight US futures are lower while gold stocks held their gains.