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April 17, 2010

Just charts here mostly…You’ve already heard just about everything I have to say on the markets in which I’m positioning. I will say I turn on my computer every morning expecting this to be the day that Bonds really starting cranking on the upside while the Soybean complex and Precious Metals start getting clobbered in the opposite direction. This is not just wishful thinking on my part. I strongly believe we are at a major turning point in the markets and my sense is a lot of stuff is about to start moving in a BIG way. In a number of markets, the year has not really kicked off yet as many of them have only been sideways…but I know that will change…as it always does.

I still think Treasury Bonds have a 15-20 point ($15,000 to $20,000 per futures contract) rally dead ahead of them…See my previous newsletters if you want my reasons…



I still see short the Soybean Oil as one of the best 2 and 1's I have EVER seen, especially when we are now entering the most volatile 4 months of the soybean crop year...meaning, from perched up  here near the highs, I believe the odds are sky high this is about to FLY or ABSOLUTELY DIE.



In my dumdum opinion, Gold is kind of back where it was in 1981 after it had made its then all time high of $875 an ounce…and will now spend years heading back lower, sometimes doing so in brutal downdrafts that eventually will see it lose AT LEAST 50% of its value…And as is the case in Soybean Oil, I think ANY down day can be the beginning of a major sell 0ff.

Unless you believe that hyper-inflation is coming (I don’t) or that the world currency/financial system is falling apart (I don’t), expecting Gold to just keep on climbing is, to me, sheer folly. I still look for this market to crack wide open and there is no size move on the downside that would really surprise me. This is now an OLD, OLD story that remains at these levels on nothing more than stale speculative hype and mob psychology…The global electronic world, which did not exist 30 years ago, is where money is “stored” in the 21st century, and it is not going to suddenly disappear as a financial medium…And I think the idea that the world’s true value of wealth is going to be based on how many bars this or that country has stored in a vault somewhere is something akin to thinking 100 years ago that automobiles would never replace the horse and buggy…Gold IS valuable and it is beautiful and it does last forever…but  it is NOT something any of us are going to be walking around with in our pockets as a means of exchange…Gold is just another commodity on the planet. It has its ups and downs…and like all this stuff, once the bull STORY is fully known to the masses, it’s time to be looking at the short side…Don’t kid yourself…ALL of investing is nothing more than a big I’ve said before, in a sense, a game of “chicken”  or “Who’s the last fool”...And this market, to me, will prove to be just another classic example of that concept.



And Silver is where I have seen some truly horrendous, absolutely mindboggling selloffs during my career…This is, after all, really just a byproduct of copper mining…In some ways, I would even say this metal is not really “precious”. Yes, it’s pretty, but precious implies “rare” and Silver is not.


Here’s one more chart I still find very interesting…

As I wrote when I first posted the following chart in November, I see the stock market as a trading affair for years to come...Interestingly, at the moment, my stock broker buddies tell me there is STILL NO ONE who wants to buy equities, that EVERY conversation with their clients begin with, "When do we get the pullback?". This suggests to me that this thing could keep on trucking…or if we DO come off 5-10 % (have that pullback in other words), you don’t want to touch it…Which will it be? Don’t know…


There are several other markets I believe are now attractive on the short side (Copper, Crude Oil, Cattle) but I’ll leave them for another newsletter.

Give me a call if anything here interests you…


Bill Rhyne



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