Longer View

Trading is not gambling. Gotta have long and short views at the same time. L'histoire se repete. From this principle, it's always good to think that crude and gold used to be cheap. Even with inflation/GDP-growth adjustments, market values sometime can still make no sense.

However, Barrick Gold once made a press announcement that production price for gold is around 940-980 USD in September 2015 just when trading around 1080 level, then around the same time Soros long on Barrick and Deutsche raised its rating to outperform.

While for oil, some economists argued that 10% drop can stimulate 0.1-0.5% economic growth. But apparently, oil price gotten too low will just increase default probability of oil companies with large contribution to the economy (e.g. employment) and raising deflation risk.

Sudden bullish moves on both gold (as classic volatility indicator before the VIX) and crude can remind of pre-2008 crisis. But what if this is just plain market mechanism, a simple under-valued adjustment?

Too bullish is not good, but neither is too bearish. I would rather use both fundamentals and technical in my trading strategy, one for short view and the other for the long view.

Anyway, have a great weekend!