A Technical Look At Some Top Hedge Fund Holdings

Today I've asked the editor from marketfolly.com and give us their expert opinions on how the best and the brightest of the hedge fund managers. Or are they the best and brightest? Are they lucky, or good sales people? Let me know in the comments and take a trip over to marketfolly.com, as they track 35+ prominent hedge funds through 13F filings where they are required to disclose their long equity, options, and note positions to the SEC.  (They aren't required to disclose their shorts or positions in other markets).


Firstly, we'll look at David Einhorn's Greenlight Capital.  If you're unfamiliar with him, you can read up on him here.  In a recent investor letter, Einhorn mentioned that he was long Gold due to threats of inflation and risks in paper currencies.  He mentioned that the US Dollar was being debased as the Federal Reserve is forced to expand its balance sheet and thus he expects Gold to rise as the dollar declines.  So, let's take a quick look at the technicals through GLD (the Gold Trust ETF).

Let's look at GLD over a yearly timeframe just to get the big picture.  It had seen a period of lower highs and lower lows and then broke out of that trendline (illustrated in green below) here in the new year as investors sought refuge from the brutal markets.  And, some might argue that a re-test of that trendline is in order.


Turning to a 6 month timeframe, we see that GLD has seen some selling pressure.  However, it still maintains its trend line over the 6 month timeframe (illustrated below in green).  Additionally, the past resistance at $87 has now become support (illustrated with the horizontal purple line) and we would look for GLD to successfully test this support line.  Conveniently, the 50 day moving average (blue line) also acts as support and is hovering around the $87 level.  So, the past resistance, the 50 day moving average, and the trend line have all converged to provide near-term support for GLD.  Should GLD fall beneath these important levels of near-term support, it could really start to move lower as the volume has begun to creep up.  A test of this support is almost imminent and will dictate which way the ETF will swing so make sure you watch it carefully to determine if the trendline holds.  So, should you agree with Einhorn's stance, now you can better gauge the price action to determine a proper entry or exit point.


Next, let's take a look at Soros Fund Management ran by legendary investor George Soros.  Please click here to continue article.

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