OK, time to put up or shut up

bluelobster

One thing is clear Gold is either getting ready to break out on the upside or is putting in a double top

What say ye? I wouldn't trade it without tight stops stops..either way

MoneyLA

aren't you being a bit premature to say that gold is either putting in a double top or breaking out? remember "one day does not make a trend," and frankly a week doesn't make a trend either.

if you start calling "tops" or "breakout" based on a couple of days moves, you are going to have a bad case of whiplash.

roadrunner

One of the Kitco forum traders who has a decent following, suggested a $977 stop on gold. Ironically that was just about the point that gold dropped to today, then rose back up to $996-$998 briefly. The problem with the stops is that it can take you out for good just when you want to stay in. There's no free lunch here.

Personally I see strength lingering around as today's gold drop and recovery showed. A run towards $1025 (Ackerman's pivot point) and then to $1033 seems the most likely outcome right now. Maybe not this week. But we're looking at possibly moving sideways for at most 2 weeks before gold moves up again. If it stays above $960 in that time it will likely break out and up. Take a look at the gold monthly chart for the past 6 months. It tends to support a new bullish move continuing. The 50/200 day moving average cross is just occuring....it had been strongly negative in prior months. This normally only happens in early bulls, not late ones. Yes, a correction is overdue. And it could stay overdue. Between the monthly gold chart and the Point & Figure chart prediction (see the main gold thread), the longer term picture seems very bullish.

I'm also surprised that the wholesale price of $20's and even smaller generics continues to rise. With gold down today, some of them still went up. Generic gold has far outperformed gold since January, mostly because much of it got pounded into the dirt. While I was shocked to see MS64 saints wholesaling at $1600 just a couple of weeks ago, they are now over getting close to hitting $2000. They have tripled since March of 2004. One poster here mentioned how stupid the Teletrade price of $1600+ was on MS62's $20's last week. Right now I don't think you could buy one that cheap except from someone who has been sleeping for a few weeks. Gold stocks held their own today with several making new highs or close to it. That too doesn't smell like things are falling apart.

roadrunner

MoneyLA

there is plenty of space for this "bull" to roam.

If you look at the one year chart, there is a "top" in March around $1,000 and another top in July at about $975. If you connect those "tops" you'll find that this descending tops line hits at about $925/ We had a test of $925 and a SLIGHT retracement only to have a nice spike up following that.

This tells me the "bull" might retrace back to $925... but I doubt it.

You gold longs are about to have a nice ride.

But I'm still going to wait till we're north of $1,000 for a few days before I join you.

ProofCollection

I see $970-976 as a price level that may get tested a few more times. I'm prepared to bail on a drop through $970. I don't expect it to happen, I'm looking for $1030's.

Metalsman

<< <i>there is plenty of space for this "bull" to roam.

If you look at the one year chart, there is a "top" in March around $1,000 and another top in July at about $975. If you connect those "tops" you'll find that this descending tops line hits at about $925/ We had a test of $925 and a SLIGHT retracement only to have a nice spike up following that.

This tells me the "bull" might retrace back to $925... but I doubt it.

You gold longs are about to have a nice ride.

But I'm still going to wait till we're north of $1,000 for a few days before I join you. >>




LA.. I read ALOT of your posts..... your statement above has me thinking you got BIGUN's! Are you saying you are actually going to trade some fiat for GOLD north of $1000? I mean this is coming from the pivitol nay-sayer of the Gold Bull........ just trying to give you a kudo;s where it is due.... do tell.

jmski52

In this environment, I don't any concerns about the price of gold. It's not about charts or momentum. It's not about short term trading and stop orders. The price is an artifact.

The psychology in the markets can't be good for most assets, but I think that gold is less susceptible than most assets are. Based on gold's recent rise, and the market's decline over the past months, you would normally tend to think that in relative terms, gold is now overvalued. I don't think so.

Every new program and anti-business move made by the administration and congress sends money running for the hills. Nobody wants what is happening. Instead of free-market job creation, we're getting a 5-year plan for wealth redistribution. Jobs. Yeah, right. Job killers is what we've got.

In this environment, every day - more people are resolving that gold is necessary. But it's not the demand for gold that you need to worry about. It's the government and their bad decisions, over and over. It's the corrupt bankers and ponzi scheme scammers. It's the tax cheat in charge of tax collection enforcement.

It's not even about the printing press anymore. It's about credibility and trust. There is none. The price will fluctuate and that's only a smoke screen. The real value is in gold's ability to maintain it's relative value, regardless of the price.

All said, gold's going up. There's no real reason why it won't.

cladking

Eventually the stock market will stabilize and take some wind out of gold's sails.

It's probably overdue considering how much pessimism is out there.

MoneyLA

Metalsman... my position on the gold market has not changed. Ive written about it on my website.... gold has been in a trading range of 800 to 950 for months now. there was a rally failure in the spring at 1000. get gold back above 1000, and a new bull run could be coming.

the trick is to hold above 1000 for a few days so we see its a solid return and not a flash in the pan.

when gold broke through 940 it gave all the signs of a new surge to 1000.

yep, break through 1000 and hold the new level for a few days, and the new rally will be on.

I found it curious that tonight (Monday) Cramer on CNBC went bullish for gold. I found that to be significant for a "stock man."

notwilight

You guys forget that gold is a world market, not just US. You can't do technical analysis against the US dollar in a vacuum like you can a wall st stock. Against other currencies gold took out the all time highs weeks ago and is in a frantic bull run. The only reason we're hovering around our all time high is that the dollar is so strong--yes, the rest of the world appears to be in even worse shape than we are. ---Jerry

ksammut

The wild card in all of this is China. How much of the new debt will they be willing to buy? With their economy having problems, it is hard to believe that they will be in a position to buy a great deal of it. If that is the case, who will buy it? The Fed/Treasury? Probably so. That will lead to a dollar crisis and eventually a great deal of inflation and possibly hyperinflation.

Those, who are expecting the above, have already begun to move into the PMs whether it be the metals themselves, ETFs, or mining shares. If it becomes evident that China and the rest of the world can only purchase a small part of our new debt, there will be a mad rush into PMs. Hillary's recent visit to China illustrates how important China is in all of this.

Fixing the banks, adding stimulus, etc., will not make a difference if our debt is not bought up. There is a lot of money sitting on the sidelines and it will not go back into stocks until investors see what is going to happen with the very quickly increasing debt (Just today, Congress announced another $400 Billion is going to be sought). Money managers are going to have to hedge and protect their cash by putting some (maybe a lot of it) into PMs. Even a small percentage of the trillions sitting on the sidelines will make PMs skyrocket.

You can try and trade this market but I have and will continue to accumulate the metals themselves along with the mining stocks. If it becomes apparent that our debt will be purchased by foreign countries then, at that time, I will lighten up on PMs. Unfortunately, I cannot see them (foreign countries) being in a position to purchase the huge amount of debt Congress and the new President are creating.

I would appreciate your thoughts.

ProofCollection

I agree. They put it to the Chinese that basically you have to buy our debt or our economy will get worse and it will hurt you too. But I think eventually China and other countries will realize that our stimulus isn't working or won't work and that it would be better to "bite the bullet" and stop buying the US debt and suffer whatever consequences may come.

The seriousness of the situation is obvious. Suddenly the US doesn't care about China's human rights violations. Just keep giving us money.

I read somewhere a theory - which I think is a decent one - that China may take advantage of this opportunity to take back Taiwan. They'll make an under-the-table agreement that the US will not interfere, and China keeps buying debt.

dac076

I found it curious that tonight (Monday) Cramer on CNBC went bullish for gold. I found that to be significant for a "stock man."


That could be the ultimate sell signal.

bluelobster

<< <i>I found it curious that tonight (Monday) Cramer on CNBC went bullish for gold. I found that to be significant for a "stock man."


That could be the ultimate sell signal. >>



I can not watch him anymore, without feeling ill, but if he said Gold is a buy at 1000 ....that alone would make me very leery, that gold has topped out. He is the ultimate fade. IMO.

cohodk

China will buy all the debt we can cram down their throats. They know they are HEAVILY dependant upon the USA and will do whatever it takes to ensure strong economic ties.

Unless of course they spend all their money trying to prop up their own currency. I doubt they will, so instead they will buy the debt of the strongest currency in the world and balance low yield with currency appreciation.

MoneyLA

Wow, did gold have ANOTHER rally failure at $1,000 ????

streeter

I'm not a technicion with respect to gold analysis. Fundamentally, I do not see one reason for the demand to weaken.

ProofCollection

<< <i>Wow, did gold have ANOTHER rally failure at $1,000 ???? >>



I believe so. I am looking at $930-900 in the next few days. I think the stock market is going to continue its rally from today.