Options
GLD (Paper) looks to go Higher - Chart
COINB0Y
Posts: 4,505
All I can say for PMs, charts work.
I hope most folks took advantage of the MS Live to get some Gold Coins around $690-$715 over the past few weeks.
Lets see what happens next week as it hits the first Fib Line at 38.3% or $80.89
Chart Made and Comments 11-14-2008:
Same Chart as of 11-21-2008 Friday with the Breakout on real nice volume! :
I hope most folks took advantage of the MS Live to get some Gold Coins around $690-$715 over the past few weeks.
Lets see what happens next week as it hits the first Fib Line at 38.3% or $80.89
Chart Made and Comments 11-14-2008:
Same Chart as of 11-21-2008 Friday with the Breakout on real nice volume! :
0
Comments
Read all you can.
What you see before you is the result of a very, very expensive and painful education that lasted about 6 years.
The formal chart education period ended for me in 2004 when it finally all came together in the 'epiphany'
That's 5 chart-initiated trades in a row that result in very large profits.
Yeah, it took 6 years to learn how to do that.
I met and learned from Stan when I worked in Miami back in the early and mid 1980s. Stan is the master.
Once you learn any kind of "charting" you can interpret all charts, whether they be stocks or commodities, or hula-hoop sales. Thats what "technical analysis" is all about.
What is good about Stan's methodology is that it is more simple than what some other "technicians" study and promote. While the other technicians may have a more complicated "look" at charts, Stan has shown that the "simple approach" works just as well as the complex approach others use.
I have been exposed to the "simple" and to the "complex" and I tend to agree -- in the end they have the same result.
I like to use Kitco's "one year" gold chart. I dont think it makes much sense to go beyond a year to examine current trends, or short term expectations. After all, we all function in the short term. We want to make money NOW and not TWENTY YEARS IN THE FUTURE.
So my examination of the one year gold chart shows "declining tops" and if you connect the "declining tops" gold will run into some price resistance at $875 an ounce. If we can clear 875 then gold will have a short term break out that could see it rally substantially from there.
We are at about 802 now, so the question is will the rally continue and will it break through 875?
www.AlanBestBuys.com
www.VegasBestBuys.com
Martin J. Pring and John J. Murphy also have decent books on technical analysis. Let me caution the readers that reading charts are like reading tea leaves, there is a lot that is open to interpretation. If it were so easy to just read a book or two and then have a huge financial edge over everyone else, virtually everyone would do it. If everyone did it, the playing field would be level again, because everyone would have the same exact edge and no one would have an advantage.
See? Maybe not, but don't expect miracles like five winners in a row after reading a book, or even reading books plus six years of looking at charts. Winning trades can build false confidence, just as losers can result in false apprehension. Some have more natural talent at it than others, and talent helps. Luck helps even more than talent, but usually doesn't stick around through the next market cycle.
With all that, I don't see what CoinBoy is seeing on the chart. To me it looks like a coin flip at this juncture, 50/50 or so up or down, especially when factoring what is often spurious option expiration activity this past week. I've been looking at charts for a very long time. My style is to look for high probability trades and will stay out while many others are in. Good luck.
If you really believed and understood technical analysis you would not say this. Instead, you would say "its all in the price and the pattern."
Those who really know and understand technical analysis know that the price and pattern and changes in the price and pattern are more than a roll of the dice, and certainly more than reading tea leaves. The patterns do forecast the future. But I must admit, the forecasts are not foolproof. A case in point: the crash of 1987. while technicians knew the market was slumping, none knew the ferocity of the October selloff. but, they did know a slide was coming... and they were not telling their followers to "buy on weakness" or "shop for bargains" in the days prior to the crash.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>RedTiger wrote: "Let me caution the readers that reading charts are like reading tea leaves, there is a lot that is open to interpretation."
If you really believed and understood technical analysis you would not say this. Instead, you would say "its all in the price and the pattern."
Those who really know and understand technical analysis know that the price and pattern and changes in the price and pattern are more than a roll of the dice, and certainly more than reading tea leaves. The patterns do forecast the future. But I must admit, the forecasts are not foolproof. A case in point: the crash of 1987. while technicians knew the market was slumping, none knew the ferocity of the October selloff. but, they did know a slide was coming... and they were not telling their followers to "buy on weakness" or "shop for bargains" in the days prior to the crash. >>
You contradict yourself with your example of the 87 crash. Many technicians did see the possibility of a big slide. However, quite a few notable technical analysts thought there was an equal chance of a huge rally instead of the big banana because the market became so oversold.
The recent stock market action shows similar disagreement. Quite a few chart readers have been saying to buy as the price has declined to various support levels. While many others were saying to stay short or stay out because they saw more downside. I find it hard to believe that you really think there is only way to read a chart. If that is your position, I can't argue with someone who thinks that way. There was one noted old school chartist that always gave several possibilities in his presentation and then would say something along the lines of "in the fullness of time," meaning we will only known which interpretation is the right one after the fact.
Maybe all of this is because your mentor was Weinstein. I would categorize Weinstein's approach as very basic and his real time audited track record for his newsletter (when Weinstein had a newsletter) well below average for newsletter writers. The readers don't have to believe me, they can look it up in the Mark Hulbert archives. If what you write above is true, why does Weinstein have such a poor trading record? I mean a real time audited track record, not smoke and mirrors, not hype, not claims to 100% winners or some such baloney.
What is your call on the gold chart posted by Coinboy now? Bullish, bearish or neutral? Coinboy has studied charts and says bullish. I say 50/50 coin flip--neutral. And you? How is it possible that all three of us have a good understanding of charts and may come up with different conclusions at different times?
How come when I called "breakout" from gold $700 in September 2007, so many other chart readers were seeing "double top?" I got that one right, and at the time the only one on the PCGS forum that I can remember agreeing with with me was Roadrunner. I think there were at least ten others telling me why I was wrong and a lot of the disagreements came from other chart readers. Explain how this happened. Is the answer that the others don't understand basic chart reading? They need more study time? My answer is very clear: there are many ways to interpret a chart. Sometimes a person gets it right, sometimes wrong. Sometimes external surprise news means that you can throw the chart out the window for a time. Weinstein, in his real time audited track record, got it wrong more often than the average chartist. How is that possible if what you wrote is true?
why are some technical analysts right on, and why are some off?
well... why do some lawyers win the case, while other lawyers lose.
why do some doctors get a cure, while other doctors fail and the patient dies?
the problem with technical analysis is that different technicians read and interpret the SAME charts differently.
I think those who followed Weinstein made a lot of money when they followed this advice: "buy high and sell higher."
its that simple.
www.AlanBestBuys.com
www.VegasBestBuys.com
If chart reading were so "easy" then everyone would have the same 100% "infallible" info that would produce no effective gains. In the current environment we have potential Trillion dollar hits in multiple markets waiting behind closed doors to drop at anytime. Then toss in the vagarities of our FED, Treasury, and elected officials "trying to do something" which will usually have the unintended result of exacerbating the original condition. A new shoe can drop at any time and totally change the TA landscape. We're not in Dorothy's beloved Kansas anymore (2001-2007).
roadrunner
thank you for posting this, because this sums up your strategy and position. I respect it. This is how you "want to do it." I find no fault with that.
As Ive said before, my position is different. I would rather wait and buy when the breakout has been confirmed and gold is making its move. I dont want to buy "early" and wait for the breakout, or buy expecting a breakout to come soon.
I am willing to let others take the risk by buying early, even if they will get the maximum profit by buying early. I would rather buy into the market "later" but when it is more likely that I am buying during the "run up."
while a market (whether it be gold or shares of a stock, etc) is trying to find its breakout, I would rather be on the sidelines with my cash in a safe place. when the time is right, and the move "has started" that is when I will move into the market.
going back to what Weinstein said, "buy high and sell higher." which eliminates much of the risk, even though it does not give you maximum profit potential.
www.AlanBestBuys.com
www.VegasBestBuys.com
I use a couple of Ameritrade Accounts, I buy Calls and Puts mostly.
I like to buy shares in the PM ETFs , like DZZ(short ETF) , DGP (Double Gold) , GLD, SLV, etc.
I don't monkey with futures trading because I want a life.
Stan Weinstein is a GOD.
Gary Kaltbaum is one of the best too.
Outside of the hours that GLD doesn't trade, GLD and gold futures should track each other within a percent or two.
So again, why would you use the inferior GLD chart when you could use the futures chart for a more complete picture?
Using Technical Analysis by Clifford Pistolese
isbn 1-55738-527-0
and
Technical Analysis from A to Z by Steven B. Achelis
isbn 1-55738-816-4
MoneyLA is right on.
BTW, Stan called the 87' Crash a few weeks before in his newsletter telling them all to GET OUT!.
His Book is "Secrets for Profiting in Bull and Bear Markets" Don't let the pub date fool you and disregard the GM comments, it is timeless knowledge. I have read it 7-8 times and still learn everytime I read it.
Technical Analysis is nothing more than following the patterns created by supply and demand. Price and Volume are the indicators of supply and demand. No system is 100%, but by gosh, knowledge of TA will at least have the wind at your back when you make a trade.
Listen to Gary Kaltbaum at 6:00PM Eastern live or a Pod Cast, he is the best around, today.
ANYONE telling you to 'buy and hold' should be drawn and quartered, that includes Warren Buffet.
I know the very day, last year, on October 10th 2007 when I told (2) Postal Clerks who were discussing the market that they had just seen the top and to sell everything they had and to get short market or be into cash. They ask me everytime I go in to mail something ,when is the bottom?. They both bought more stock the next day and have been 'killed' riding it down. I just say 'lucky guess'. It was simply the charts. Not that I was playing the market and followed my own advice ;>.! I didn't own a share of stock. To do it right it is a full time job 7 days of week, its one of constant study. Its a job for younger guys with no family.
Jeeze! I like Pepsi, you like Coke!!
I could trade Minis for that matter, but SO WHAT?
Its not what you trade, BUT HOW YOU TRADE IT!
Look, I walk the talk.
Search my posts for calls over the past 6 months, you will find most are winners; yeah a few stop outs like my too-early SLV trade the other day. That said I make a call before it happens. Its up to you to use the information as you see fit.
It's just an honest question, I am curious why or how you rationalize using a GLD chart which excludes what I believe to be important hours of important trade data and price movements. It seems to me that using a futures chart would give you more data to make decisions with regardless of what you actually trade. Besides the answer that you don't trade futures, why do YOU choose to use the GLD chart and not a futures chart? i.e., Why do you not find it necessary to consider the trading action that happens outside of normal US trading hours? Do you somehow think that what happens outside of normal hours doesn't affect the overall pattern?
Over the past few years, it seems to me that what happens overseas is not indicative of what happens in the US the following morning. Take that for whatever it's worth. If you spend the last few weeks watching the Asian market, you'd think gold was headed to $2000. Yet watching the US morning Comex, you'd have thought gold was headed back to $255.
roadrunner
This is true, however, the intensity of the sell off was something Stan did not expect.
At the time I was the business reporter with WTVJ, Channel 4. I interviewed Stan for the news at least once a week, since he was the "ranking guru" in South Florida. (Actually there were few market mavens in Miami at the time).
The night of the crash, I was with Stan in his office for the interview for the 11PM news.
Picture this: Stan had a running chart of the Dow on the wall of his office. It was a print out on graph paper. Well, the night of the crash the chart literally hit the floor. In fact, the graph paper went from about six feet high on the wall, to the floor, and then stretched out on the floor by several feet. There was no way to keep the graph/chart on the wall itself, because the plunge was too dramatic for the scale he was using.
In that interview he was shocked at the intensity of the sell off. He was, in effect, in mourning. He just couldn't believe it.
Memories.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>I hope most folks took advantage of the MS Live to get some Gold Coins around $690-$715 over the past few weeks. >>
Sold a bunch of 1 oz ms69-W .. 2006 ... eagles for $980+ ...
purchased a bunch of Swiss 1 oz Pamps from Apmex for spot + $49......so far .. so good.
You might recall that there was a shooting at the Merrill Lynch office at The Falls in Kendall, part of Miami. That was my broker's office.
The "investor" who walked into the office, shot and killed his broker, wounded the manager (shot and paralyzed him) and wounded another, was a disgruntled options trader who lost a bundle in the crash.
He was living in Miami on a witness protection program, and the money came from the government as payoff money to keep him living there.
Talk about a wild connection.
www.AlanBestBuys.com
www.VegasBestBuys.com
Yes, you may miss out on a few blackjacks waiting for the deck to turn favorable, but in the end those blackjacks don't really matter.
Now Coinboy, are you going to answer my question please? I really do want to see your repsonse.
<< <i>Do you somehow think that what happens outside of normal hours doesn't affect the overall pattern?
Over the past few years, it seems to me that what happens overseas is not indicative of what happens in the US the following morning. Take that for whatever it's worth. If you spend the last few weeks watching the Asian market, you'd think gold was headed to $2000. Yet watching the US morning Comex, you'd have thought gold was headed back to $255.
roadrunner >>
I know what you're saying, it does seem to happen a lot but it doesn't happen every time. Last night was a good example. Big move overnight that held up and continues into today.
Our point exactly for the past many months.........M...A...N...I...P...U...L...A...T...I...O...N...
Also a nice battle raging now between the shorts that are getting caught and new longs piling in.
I would think that TPTB did not want to see a 3rd or 4th day in a row of major gold gains. $130 in a week's time was more than enough.
roadrunner
What was the question again?
<< <i>Now Coinboy, are you going to answer my question please? I really do want to see your repsonse.
<< <i>
...Paste...
It's just an honest question, I am curious why or how you rationalize using a GLD chart which excludes what I believe to be important hours of important trade data and price movements. It seems to me that using a futures chart would give you more data to make decisions with regardless of what you actually trade (ETF, futures, options, etc). Besides the answer that you don't trade futures, why do YOU choose to use the GLD chart and not a futures chart? i.e., Why do you NOT find it necessary to consider the trading action that happens outside of normal US trading hours? Do you somehow think that what happens outside of normal hours doesn't affect the overall pattern?
My observation is the the futures price is the basis for the all associated securities like GLD. GLD tracks the futures price, not the other way around. I believe that if you see a trend or pattern develop in the futures chart, you can apply that knowledge to directly to GLD, DPG, or anything else that is based on the futures gold price.
As a chartist, I would think that you would want the most complete data available for making your decisions, and to me that would be the futures chart. Why do you choose to use the GLD chart, which has less data, than the futures chart which has a full day's worth of data? I KNOW YOU DON'T TRADE FUTURES, but the dataset would appear to be superior, so why don't you use it instead? Don't you care about what chart movement outside of normal trade hours? Doesn't it affect the overall pattern?
Here is the continuous Gold Contract Chart with GLD plotted in dashed gold line.
What's missing on this chart?
<< <i>Here's Why - You tell me what's Missing?
Here is the continuous Gold Contract Chart with GLD plotted in dashed gold line.
What's missing on this chart? >>
The chart you posted and analyzed in this thread and others you've started used GLD. The fact that you found and linked to a different chart doesn't answer my question. Do you use the GLD chart that you posted and marked up or the one that you just linked? Does the GOLD chart you linked include futures data for other timeframes (like hourly)? Do you ever look at other timeframes other than daily?
I don't understand why you are being so defensive or evasive, I'm just trying to learn and understand why people do things the way they do.
But perhaps this might help..... what is the difference if you used a chart of gold on an hourly basis, or a chart of gold on a 12 hour basis or a chart of gold on a daily closing basis. After a month of any of these three charts, the conclusion would be the same, wouldn't it?
If I am missing your point of discussion, please advise.
thanks.
www.AlanBestBuys.com
www.VegasBestBuys.com
Volume begets ALL price action.
That's why charts that do not show Volume (like Kitco's) are absolutely worthless to a trader!
I don't just look at daily, at the same time I'll be running a 4 Minute Chart, 10 Minute, 15 Minute, 30 Minute, Hourly Charts to look for my Pivot Points (entry price or if I am scaling in, where I will make the buys, all depending on volume of course). I will also have a trading plan for my exits. I like to sell in 1/4's or 1/3's or all at once, depending on how fast it moves to target. I will also look at long term trends such as a 5 year Weekly and a 10 Year Monthly.
Proof, now I understand why you are getting a bit obsessive with this. You want to learn. Some of the books mention here are a great place to start.
I'll just keep doing what I do and leave the "why" to the ages; lets just keep it as I said, it works well with me and my lifestyle.
Just a thought though. If you are such an expert trader, why are you spending time flippin coins and cheap GW FDI's and dealing with the eBay nutcase bidders?
If I had 6+ years of chart ed, I'd be flippin Fannie Mae all day long!
That said, I do dabbling on the side from my 'real' Job, when I can.
I've have been daytrading FRE (because it has 1/2 the Float of FNM). Here are some day-trades (in/out scalpes) that are fun, if you can real-time chart them: SLV, HL, DAN, SIRI, FRE, C
Again,the Stock Market is simply a Casino with lousy hours! The House always has the advantage, all you want to do is position yourself in a place to catch some of the crumbs that fall off the table.
I do EBay because I use to like it, but you are right, it is becoming a waste of time.
I had over 3-4K GW Covers at one time, most bought at Issue price. A 100% + return is always worth the hassel.
BTW, there are Tons of Errors in these ;>