***October, November, December 2013 Gold and Silver Stocks/Options/Futures trading thread***
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This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.
Today saw a breakdown out of a consolidation which doesn't look good for gold. With all of the possible stimuli for a rebound gold could get back on track but it's not looking good. Looks to me like we'll re-test lows, but I'm not willing to short this thing.
Today saw a breakdown out of a consolidation which doesn't look good for gold. With all of the possible stimuli for a rebound gold could get back on track but it's not looking good. Looks to me like we'll re-test lows, but I'm not willing to short this thing.
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If you didnt know that was a chart of gold and assumed it was an equity, would you then short it?
Knowledge is the enemy of fear
<< <i>but I'm not willing to short this thing.
If you didnt know that was a chart of gold and assumed it was an equity, would you then short it? >>
That's a trick question because I would never short anything based only on a chart without knowing what it was. But I agree, the chart does not look promising. The reason is that it matters A LOT what the underlying item is. For instance, I would never short natural gas at $2 or oil if it ever got down below $80. The reason? These items, unlike a stock, can only go so low and have limited downside at those levels because they have inherent value. A stock is a different story... That's not to say that it wouldn't be nice to short gold and have it drop $100 which it could realistically do. I just think at these levels gold has way more upside than downside potential, even if it's not going to happen this month or next. The risk/reward just isn't there for me. That isn't to say that I won't spot a more decisive (short term) bearish pattern tomorrow and take advantage of it though.
In the case for gold, while it may not go to zero, it could still lose considerable value or trade sideways. I think you would agree there is nothing in the chart that foretells of a major rally coming anytime soon.
The risk/reward just isn't there for me
This is what every investor should consider before making a trade. I look at 100s of ideas weekly, many times without finding a good risk/reward ratio. So I sit and wait (holding dollar bills) for better opportunities.
Knowledge is the enemy of fear
I would be a little more committal and state my opinion that gold and oil will NEVER go to zero (units of currency) in a large active market such as on exchanges.
However, locally, if you have a physical gold coin or especially a barrell of oil, you may not be able to find a trade partner that wants it at any price at the time you desire to make a trade, so they can indeed "go to zero" at an individual level in a specified time period and be completely valueless as currency (regardless of any personal utility, burning some of the oil for heat, or throwing the coin at a feral dog to scare it away, etc.) but usually, a physical good has some nominal intrinsic value.
Stocks, which have Zero personal utility and no intrinsic value or local liquidity at all, can and do go to zero on healthy national exchanges, people and companies do fail to be profitable and go out of business.
On the other hand, gold or oil will very probably NOT double or triple (or more) in a day or a week or a month or even a year on game-changing news, but every year some stocks do that, every year!. Now, one can play options and get leverage with both commodities and stocks, but of course the probability of a complete loss (or more
I realize this is a short and swing trading thread and I'm more of a long term position-builder in style (no time or inclination to day trade) but I do appreciate reading your opinions, thanks. What are you folks currently doing with respect to trading gold/silver stocks/options/futures currently?
Metals ought to be going up now with all the fake drama in DC, but they're not as of today, what gives?
Liberty: Parent of Science & Industry
mo money, mo money.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I realize this is a short and swing trading thread and I'm more of a long term position-builder in style (no time or inclination to day trade) but I do appreciate reading your opinions, thanks. What are you folks currently doing with respect to trading gold/silver stocks/options/futures currently?
Metals ought to be going up now with all the fake drama in DC, but they're not as of today, what gives? >>
Not a lot of posting lately as we're in a volatile consolidation and it's difficult to trade. For a while I thought yesterday we'd see a return to $1225 but even that move might be stalled.
Should be an open and shut case - we all know markets are not manipulated.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
I'm mainly posting because the daily email had this to say about gold:
"Turning to the chart, we see the December Gold contract consolidating in an increasingly tight range, which has formed a wedge. The pattern can be viewed as non-directional, meaning it does not hint at a possible direction until a breakout occurs. The formation has tightened significantly and could be on the verge of determining a market direction at some point in the not too distant future. The oscillators also give neutral readings, providing traders no hints as to the possible near-term direction of the Gold market.
Which I totally agree with. Although I think the breakout direction is probably predictable, because the spark for the breakout will probably be a deal in Washington. Any deal will increase the debt limit (they have no choice), and that is bullish for gold. There are really no realistic Washington scenarios that would be bearish for gold.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
There are three major 3-d printing companies that I am watching:
DDD - 3 D systems
SSYS - Stratasys
XONE - Xone systems
All are in the 3 D printing which may change manufacturing. It is hard to tell who will be the winner; so I have to watch all three.
There are more 3 D companies coming IPO soon also.
One year ago we were talking of QE to infinity and 2500+ gold. Well, were still taking QE to infinity but gold is 30% lower. Psychology vs fundamentals. Expectations vs the known.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Anyway, im looking for a 10% drop in palladium imminently.
Knowledge is the enemy of fear
I do have to admit that the scenario for sub-1200 gold is looking much stronger now, but I'm going to take a small chance here and try to catch the 2nd bottom of what I hope is going to be a double bottom.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It also looks like this obsession with the Fed is hitting its ridiculous end-stages, as the knee-jerk reactions have been "turned up to 11" on the ludicrous scale. Any whiff of bad economic news is enough to launch a furious rally -- hooray, more Fed bond-buying! -- while any positively-slanted economic news is a crushing blow. So congratulations to the scholars at the Fed for engineering the most ridiculous market environment of our investing lifetimes, through their blatant manipulation of the market's price discovery mechanism.
Although his track record has not been good as of late, he does point out some signs that the market appears to be topping. And on a larger time frame, I'd have to agree that the market (SP500) appears overbought and due for a correction of some sort. It's been a long time since we've had a crash, we've got to be due for one soon, right? The year's bull run has got to be overextended, in my simple view. I guess we'll see.
On the gold front, I never got filled as gold never made it under $1210, although it came within $.70. I might look to enter here this morning around $1220, but I'm not sure if I'm ready to pull the trigger yet.
Gold chart
<< <i>The usual NFP hit tomorrow morning should give you an opportunity to buy. The only risk is if the momentum keeps it cascading under $1200 or even $1179. This has been one of the longest stretches without appreciable relief in a long, long time. While the gold hit in dollars for Nov/Dec is not as bad (yet) as it was in April or June , the amount of time gold has ground lower since October 28th has been most unusual. Miners having put in lower lows since June is one negative factor that there could be yet another crushing move lower. Even though the dollar, USD/JPY and USD/AUD pairs, and the GSR seemed to have turned around the past week in favor of precious metals, they kept PMs under pressure to ensure a good starting point for tomorrow's NFP hit. The bounce from $1211 to $1251 yesterday being almost completely negated today is quite similar to what was done on FOMC day Sept 18th. Clearly, some entity has pretty tight control of where metals are allowed to go. I don't know what kind of "fumdamentals" those are but they make odd looking movements on the chart. The stock market has numerous technical reasons to pull back. But, every dip is being bought (FED/PPT?) such that no meaningful correction is going to be allowed until all the insider money has repositioned.
Gold chart >>
The headline NFP number will likely be good (~ 220,000) with U3 at 7.1%. Continued drop in LPR could take U3 down to 6.5% by spring with the dreaded "taper" hitting in March with Fed bond purchases dropping to $80 billion/month.
What do you mean, "except"?
I knew it would happen.
<< <i>Thanks RR, I raised my buy order to 1215 and got filled this morning on the dip. Now up over $15. I expect this $1225 level to hold up and provide rock solid support, with only temporary dips below it. Metals and PM stocks are just so oversold it's hard to see them going lower. Likewise, it's hard to see the stock market continue higher without some reprieve. It's like we're in Vegas at the roulette wheel and it's come up black 10 times in a row. It could come up black 5 more times, but eventually it's going to be red... >>
I hope so. Some strong 2 hr, 4 hr, 8hr, and daily hammer candles were made today in gold, silver, AUD/USD, etc. Disappointing on the pull back in miners yet again for the umpteenth time. SLV put in a bullish candle pattern Mon-Wednesday...though still waiting on some follow through. Gold has a wide range right now from $1210-$1245 that it has no problem traversing in one day. Treasury auctions Tuesday-Thursday then FOMC/OpEx the following weak could pose strong headwinds. The bears have crushed gold the past two Decembers. They have a decent setup brewing to make it 3 in a row. Fwiw the COT levels are once again back to the extremes seen at the last bottom in late June/early July. Bank Participation report today shows that the 4 reporting US (bullion) banks are +57K net long in gold futures. All 22 reporting banks around the world are a net +43K. Still have the feeling that gold could be at anywhere from $1100-$1350 before December is out.
SLV pattern
And don't forget that the bond market is the big dog. Bond yields will have to spike when the reset is happening. In fact, the reset will be the bond yields. Nobody will want to touch bonds with a 10 ft pole at some point.
Oh, that might be when the Fed can't buy them all, in every auction. Or, maybe when the Fed does buy them all, in every auction.
See? Nothing makes sense.
At some juncture, reality WILL intrude.
I knew it would happen.
<< <i>but I'm not willing to short this thing.
If you didnt know that was a chart of gold and assumed it was an equity, would you then short it? >>
Yes, I definitely would short it.
But in this environment of madmen printing money, I'll keep my PM's.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
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