*** Monthly Short Term PM Trading Discussion *** April

ProofCollection

I have started this thread to bring together those of us who trade PM's on a short term basis: from a few days to a few weeks. No one is a PM bull or a PM hater here - we're just playing the short term trends. We don't care if you think gold is headed to $5000 in the next two years, we want to know where it will be in two days or two weeks.

Use technical (chart) analysis, news events, or whatever data or reasoning to discuss when and where the next turn is going to be. Be sure to describe this to us - your projections are worthless unless we know how you're deriving your projections.

This thread is just to help traders collaborate and share viewpoints and interpretations since charts and news can be read in many different ways. That being said, I DO NOT advise anyone to use the information provided here for their investment decisions. This is for fun only.

ProofCollection

Decided to start this up again.

Looking at the charts tonight (gold at $925), I think gold is in for a good week or week and a half. I see another attempt at $1000 coming in the next 10 days.

As always, there is a lingering possibility of a severe breakdown, but I think it's only a small chance. Look out if gold breaks below $900.

57loaded

i am kinda interested in the SDR's with China and India making a stand later this week

cohodk

It looks like it wants to roll over. Today it closed below the 50dma and 3 of 4 momentum indicators I use are negative.

ProofCollection

I agree. Today was not what I expected. I have reduced my position and I am ready to bail on a serious dip below $910 and definitely at $900. There is still a chance for the run to $1000, but it needs to happen soon.

RedTiger

<< <i>I agree. Today was not what I expected. I have reduced my position and I am ready to bail on a serious dip below $910 and definitely at $900. There is still a chance for the run to $1000, but it needs to happen soon. >>



Are you trading GLD? Or futures? Or something else?

What is your typical holding period? A few hours, a few days, or?

ProofCollection

I trade futures, and it varies. I try to hold for the duration of a trend, for a few weeks usually; however, on ocassion I Try to play shorter time frames.

roadrunner

Monthly chart for gold still bullish along with a 50-200 mda cross that just occurred. While the daily charts show a turnover in RSI, MACD, Stoch, and most everything else, I expect completion of the final "C" corrective leg down by Wed of this week and then a bullish move back to challenge $1000 over the next few weeks. We are in the process of completing the 4th leg down of a 5 wave move that commenced in November.

It would seem that we are somewhere along the final C leg now with a target in the $880-$905 range. I don't think it will fall below $890-$900. Once the dollar rally peters out (in the .86-.87) range, then gold will take over for a while. We still have the unfinished 5th leg up due to complete the Nov-April up move. I am tossing out $1065 as a base target for the 5th leg.

There are 3 cup n'handle formations in play. Having these in play to represent short term, intermediate term, and very long term is quite bullish for gold. If someone can show me any examples where gold broke down from these types of formations, I'd like to hear it.

1. From Feb 20, 2009 (past 6:00 on the curve headed to 4:00)
2. From July 2008
3. From January 1980

The one from last last month is the one currently driving and we are now moving up the cup. If one plots the current Elliot Wave down move to intersect that curve, it's at about $905 which correlates well with other resistance points. That intersection doesn't have much time to play out. From there it seems gold should move up. There is also a converging triangle formation in play as well. Again, bullish when coordinated with the other patterns above.

roadrunner

ProofCollection

RR, have you chnaged your mind over the past few days? The weakness the last two days concerns me.

OPA

"Down & down she goes, where it stops, nobody knows." For some reason that tune plays over and over again in my head.

Placid

Buy time?

roadrunner

ProofCollection,

I though that gold would bottom earlier, but it looks like today starts the day. I've been waiting to buy back in with some cheaper gold stocks that just kept getting more expensive, esp. after Tuesday's 4-5% rally. I was half torn between thinking the boat sailed without me. But decided to hang in and wait because some things on the chart were still indicating more weakness to come (such as AROON).

Between waiting for inevitable relaxation of M2M accounting, and the G20 summit, maybe that helped to let things dangle a few days longer. Timing cycle dates per the Kitco Forum guru's are due Saturday when gold shifts back to up mode. It looks like today and Friday could be the last 2 days of correction though since the cycle end date falls on Saturday, but Monday or Tuesday could fall in as well. Note that since 2/20 gold has carved out a fairly distinct abc corrective trend of a 3-3-5 flat. It would seem that it could be complete or still add a little more of a tail on the 5th leg of the C wave into the $880's. I'm figuring we don't go any lower than the $882 point we already hit on 3/18. Some of the gold stocks formed a 3-3-5 irregular where the middle wave exceeds the previous high. That would support the reasoning that the last leg of gold's 3-3-5 may not go any lower than previous low.

Silver took a nice dump this week so I dabbled in that for 2 days waiting for gold to do something. Today gold started doing the dump and I started buying. TRE, AUY, KGC came pretty close to my targets but the real heavyweights like AEM, GG, NEM, ABX are still hanging strong for now.

I think those longer term chart formations will take hold next week and we'll see gold stocks and gold make some good moves for a few weeks. Silver should follow. Commodities are already moving along such as Copper, Aluminum, Platinum, Palladium, etc. New 2009 highs for some of these.

roadrunner

storm888

I am super cautious, in both directions.

The GLD chart looks broken to me. The SLV chart is a little more readable,
but not by much.

I "guess" it is nearly safe to be LONG a little GLD.

But, SLV scares me.

....................................

I would not be buying any physical, UNLESS I had none.

.........


I have NOT covered any of my GLD/SLV SHORTs.

ProofCollection

Tonight gold is hovering near $885, it has broken below $889. Is it time to bail on long positions?

I'm watching it close, I would have to say bail if the weakness persists below $885.

cohodk

Roadrunner,
Try as I might I just dont see a cup and handle in gold. My buddy--a non-trader-- keeps telling me about this formation. I just cant see it.

I do see a good cup and handle formation in silver though, which IMHO has a better chart, but I am neutral on both.

roadrunner

I mentioned 3 cup and handle formations but the one from July 2008 to date looks the best of the three. Since silver and gold tend to trace similar patterns it should look close.

Initial 2 waves down so far tonight to $880. A pull back and then maybe another move down to $875. Hopefully that will be as far as it goes. But if this just part of one single wave down, with 2 more to follow, it's going down a lot further. NY will probably gang up on this in the am. This could hurt.

roadrunner

cohodk

Roadrunner,

I know what you see and I know that certain newsletter writers are trying to explain them. I am just saying that from my 20+ years of successful chart reading, I do not interpret those formations as cups and handles.

As far as the open today, all assets are down--equities, oil, gold, silver-- except treasuries. Gold looks destined to test the 200 dma at 862.

ProofCollection

At the moment gold is at $880... I'm expecting another drop down to $850 or so where I will go long with a small position and a stop just under $840. I think it's too risky to go short at the moment, as I will consider going long on a defniitive breakout over $890.

Anyone else?

roadrunner

Ron Rosen had a good article this week why he felt the HUI would not fall below it's most recent low. Gold appears to be getting a handle in the $865-$890 range. The longer it sits here, the less chance of testing $850 or lower. I'd say that it won't. A few shots down into the 870's have been close enough for the retest at the $864 low hit on Tuesday. Tuesday also closed out the most recent 13 day (fib) down cycle (leg c) as well as the 34 day (fib) down cycle from the Feb 20th peak. We got a nice abc (5-3-5) correction that gave essentially a 50% correction. Timing, fib, elliot waves. Note also that 1-month gold lease rates have gone from 0% to -.15%. How often do you find banks giving you money to take their gold?

To supplement the above the Dow and S&P have been turning lower volumes each of the past 5 trading days, PVO is turning over hard now and MACD seems to be turning over as well. RSI, W%R, SS and other indicators show some small negative divergences. Bollinger trading bands have been tightening up for a while indicating a change to come. The banks have been pretty silent over the last leg up in the Dow with today (Friday) being an exception. Looks like a possible double top at around 8000. The dollar looks like it will probably run into resistance again at .86. And all commodities have been rallying as of late with everything up today (except for gold, silver, and possibly oil). Plat, pall, alum, copper, all at new cyclical peaks. Reasons for gold lagging include completion of its final ABC leg, the smack down news from the G20/IMF, and $USdollar strengthening. By next week many of the lagging commodity sectors should start participating as well. Just when the stock market seems to be running on fumes.....it makes new highs.

I'm looking for gold to start a move up, maybe only to $930 or $950. We could correct back down once again, or start a new bull leg from here. It's still possible that all the action since November was a corrective leg (up) from the March 2008 decline, and not a new bull.

A number of the miners have already shifted directions on the primary 6-9 day oscillators with nearly all of them reaching at least a flat line (RSI, MACD, Aroon, Slow Stoch, PVO). One of the best trend predictors is the gold:silver ratio (either $gold:$silver or gld:slv to find volume changes) and it too looks like it wants to peak here around 72. It may still have some room to grow but the prompt drop in the VIX today seems to correlate well with the gold/silver ratio peaking. Both relate to liquidity in the markets. Last time the VIX disconnected the ratio headed right back up rather sharply.

In a nutshell, I'd say gold and silver are headed back up. I wouldn't put the Gold City fire trucks away just yet (or the snow plows), but I like the indications so far. As a curiousity I noted a huge spike in the gld/slv volume ratio early today following several days of a declining ratio and culminating in a massive drop in SLV volume today. In charting back 6-12 months I couldn't correlate anything consistent with this to support a move for either metal, either wave. If anyone can figure something out please cipher away. In any case, it probably means a change is about to occur...up or down. I bet UP.

edited: the large GLD:SLV volume change seemed to have worked itself out by late afternoon. Not so obvious now. Plus, the gold/silver ratio has continued to decline today now going under 71.5. Signs remain positive.

roadrunner

ProofCollection

After today's action, gold just doesn't look that bullish. I'm still going to look for a dip down to $855 to go long.

Edited: Mis-typed $655 instead of 855

roadrunner

Good luck with waiting for $655. Nadler and his army will be back in $5 lower than that....they've been patiently waiting since summer of 2007.

Funny how close the stock market came yesterday on tanking entirely. The news had been bad for days, including the FED minutes, unemployment, etc. Yet today some good news for Wells Fargo. But not all that surprising considering billions of Tarp money tossed at them thru the various portals, not to mention return of marked to myth accounting. One massaged day and the bank stocks had their biggest gains of the year, enough to lift the entire market with them. Why don't we all start practicing marked to myth accounting for all our assets so we can get bigger loans with lower rates from banks receiving taxpayer (ie ours) money?

The Au/Ag ratio continues to slowly contract which does not support an imminent dump. I'm assuming that some of the foreign markets will be open Friday. If so, wonder how metals will do without the standard New York 9-10 am $15-30 dump that has been the norm for several sessions in a row.

roadrunner

ProofCollection

I mis-typed $655 instead of $855.

I think the market is poised to explode. Among other things and as you've pointed out, mark-to-myth accounting will do wonders for the financial stock's earnings reports. Lots of things are looking really bullish for stocks near term. I see a run from 850 to 1000+ on the SP500.

ProofCollection

Monday's action looked promising, but since then gold has been week. I'm watching carefully for a dip below $878, in which case we might be headed to $850. Otherwise, I'm looking for a definitive breakout over $900.

fc

gold better hope that some large companies fail and get some doom and gloom
in the news. otherwise no news, is bad news for gold.

i expect one more bump for gold in the coming months. after that... pfft.

ProofCollection

The setup for this gold is looking really strong. Gold moved up nicely on Friday and held. I'd look for any short dip to $900 as a chance to get in. The next week or two or more should be very positive for gold.

What say you RR?

coynclecter

I dont know how anyone can make an intelligent decision in the short term. There is so much spin and lies coming from the news media started in Washington or Wall Street or who knows where. The gov't is in the equity, credit and metals market every day and the banks are playing with thier derivative positions moving things at will.

There is no investing anymore just manipulations and countermanipulations. Short term is all gambling.

roadrunner

PC, I'm wishing towards the bullish side but I still have concerns that we haven't completed a full correction from February 2009 and possibly even from March 2008. I took some money off the table Friday to see how we do Monday and Tuesday. Since I was overweighted in a couple of miner positions I trimmed those down. The tremendous move on the part of the silver miners Friday might indicate metals strength to come. Yesterday's COT report showed that the commercials (banks) reduced their net short position while the large specs (miners) increased theirs. Usually, the banks have tended to systematically load up on the shorts during any rallys.

2 concerns:

1. We haven't yet broke out above the resistance line of the recent 2 month down channel. We're almost there, but we could also reverse right around $915-920 and then head back to the bottom of the descending channel to the $820-$850 area. A clean break above $920-$925 will help put this concern to bed. We're in this channel until things prove otherwise. We spent November through February in a very similar up channel.

2. Gold:silver ratio chart and it's oscillators are still trending in the up direction since late February. Breaking this ratio down to <69 will help the bullish cause.

roadrunner

ProofCollection

Good comments. I agree, a fast a sudden dip to $820-850 would be very nice, as it would be the perfect setup for another assault on (and likely exceedence of) $1000. I am ready to shutdown my long position on any real weakness early next week.

roadrunner

I didn't feel my answer was thorough enough so I looked more deeply into the longer term chart (3 year weekly) to see if overlooked anything.

What I don't like here is that weekly volume still appears to be waning. Also, most of the oscillators when using default periodicity haven't really gotten into fully bearish territory. For example the weekly RSI (14) has barely touched below the 50 level whereas earlier bearish waves ended much closer to 30. The stochastics are still pointing down with only 1/2 of a bearish arch so far completed. On the 3 yr chart every major move down from a peak saw the W%R hit bottom at the oversold point. We aren't there yet. Aroon (25) has yet to experience a crossover to end the bearish down trend. Momentum is still negative. The gold chart itself shows us currently in a 4th wave back up counting back to Feb 20th. Trend charts often show 5 waves before bottoming out. And gold has demonstrated this quite well over the past 3 years. This would suggest a wave 5 to bottom Stochastics, W%R, and RSI is still lurking out there. Caution is in order.

Update Sunday night: the Asia open was bullish on silver pushing it up to over $13.20, pushing the g:s ratio down to 69.75. Silver seems to be leading the way which is strong for both metals.

roadrunner

cohodk

<< <i>I dont know how anyone can make an intelligent decision in the short term. There is so much spin and lies coming from the news media started in Washington or Wall Street or who knows where. The gov't is in the equity, credit and metals market every day and the banks are playing with thier derivative positions moving things at will.

There is no investing anymore just manipulations and countermanipulations. Short term is all gambling. >>



Interesting, as I see the short term to be very predictable and the long term to be a crapshoot.

If one thinks that markets are consistantly and systematically manipulated, then one will never have confidence in the info that is presented to them. In my case, what the charts are telling me. And if one has no confidence then they are almost guaranteed to make wrong decisions.