roadrunner, the only stocks I might be tempted to buy are a couple of mining stocks.
But, do you think now is the time? (I really don't think now is the time.) Also, what is the likelihood of some type of nationalization in mining stocks? What about China taking a majority position in the stocks that I might buy?
Your opinion?
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>roadrunner, the only stocks I might be tempted to buy are a couple of mining stocks.
But, do you think now is the time? (I really don't think now is the time.) Also, what is the likelihood of some type of nationalization in mining stocks? What about China taking a majority position in the stocks that I might buy?
Your opinion? >>
The only statement/question I would add here is that I'm not sure many companies could be nationalized effectively. Almost all of them are multinational companies with far more operations outside of the US.
There are about half a dozen or so miners that I like better than others. None of them have any of their mines in China. Kinross for example has a mine in Russia that accounts for 1/3 of it's total mined ounces. That does present some risk if nationalization should occur. Still, Kinross is well thought off. If Russia should nationalize that mine, one would expect retaliation back the other way. No one win really wins. I also worry about those miners who have significant holdings in South Africa where electrical infrastructure and cost/availability of labor is under stress. Less risky places to be are Canada, US, South America, Australia, etc, though I would not discount even nationalization of US mines, or at a minimum, windfall profit taxes, difficulty in permit renewals, or other roadblocks down the road.
We're right about the inflection point where miners are cheap. It's just that they have a habit of going 10-20% lower when such opportunities present themselves. Monday was such an opportunity as they went sub-cheap. And if you bought, you saw them go even lower like I did. They are tied loosely to the stock market and commodities, and more tightly to $USD and pog. Yet, miners can move with or opposite to all of these for weeks or even months. I'm waiting for later this week, even if that means they already turned and everyone knows it. If or when the general stock market takes a header again, the more senior gold miners will go with them, though probably not as severe as last July-Oct. when they fell 65-85% across the board.
The dollar appears to have run out of gas and now at .797 with a much better chance of a <.80 close. Good call by PC about the trend exhausting last night. The first bond auction today went superbly as expected. So why did the dollar tank in light of that news? I would have figured just the opposite response...and one of the reasons why I expected a couple more days weakness in gold.
The first bond auction today went superbly as expected. So why did the dollar tank in light of that news?
The 2-yr bond isn't as susceptible to interest rates or the level of the dollar. In the current environment, I'd expect the 2-yr to do better than the other Treasuries. I'd expect people to be running to the short bond, away from the long bond.
Q: Are You Printing Money? Bernanke: Not Literally
A foreign country could simply nationalize a company's mines that lie within their boundaries. It might only be 1 mine out of dozens the company might own around the world. But if that 1 mine is only one of a few properties that could kill the bottom line. Venezuela recently put this tactic to use. Fortunately Chile, Peru, Argentina, and Brazil aren't so short-sighted.
Lightening up this morning was surely the wrong time to do that in hindsight. Once the dollar cratered, up went the mining stocks. What do they say? Your emotions are your worst enemy. But on the good side is that I've watched the stochastics bury themselves under 20 for days now. There's no telling when that might end, and gold finally pulls up for a real rally. I watched the same thing happen in late May (once I was out) when they buried themselves above 80 and gold just kept plowing along. Trends are hard to break once in play.
The dollar did end the day at <.80 at .785 which results in a breakdown from the triangle formation.
the beauty of technical analysis is that you dont try to second guess the market... you go with the flow, the trend is your friend, you follow the patterns, etc, etc.
with technical analysis you don't ask "why" you just accept "that it is."
Technical analysis leaves many options to consider. There is rarely just one "right" view or possible outcome. Even now we have a pair of short term bearish H&S formations in play point to $895/$865. And then we have the long term IH&S formation pointing to $1300+. So which is right? Maybe both will occur...maybe neither.
Usually it's the not technical analysis at fault, but the person trying to decipher it. And with all the ways of looking at it, and the number of people that aren't successful, implies that most make the wrong interpretation. Since the computers have all these patterns programmed in, it's not much a stretch to think that many patterns are purposely played out as bait to draw in the fish. You can look at hourly, daily, weekly, and monthly charts and get different outcomes. You can jump out this morning like I did on a 5-15 min. daily chart only to realize at the end of the day, that a 15 min. chart over several days would have lead to a different decision at that same point. My bad.
I believe in the value of history. Maybe the rear view mirror wasn't the best possible analogy. TA does have it's own set of limitations. That seems obvious. The rabbit is a perennial no show but the rabbit can also pop out of the hat when you least expect it. TA has no ability to see what the rabbit will or will not do.
I like how and where gold closed today (~$926), as well as the weakness in the dollar. I'll be able to relax once gold gets solidly back over $930. Pivot for the tonight/tomorrow is $922.40, R1 is $936.70 and I expect gold to stay in this range. I'll be cautious and disappointed if gold drops below $920 again, but we do have support at $917.2.
A local bullion dealer here reported that overnight the price of $20 Libs/Saints jumped $45, so the physical markets are getting excited if this is true.
Found this Bloomberg article on the treasury auction today. A few things of notice... --Although the auction went well and was successful, bond yields on short term bonds actually rose, meaning they probably had to increase the rate to boost demand. --The 5 and 7 year note auctions are later this week. The article speculates that a shift from long term to short term bonds may have caused these short term auctions to "go well." We'll have to wait until the 5 and 7 year note auctions are over to see if maybe the preference has shifted to short term and if so, there may be less interest in long term.
The fed announcement is probably a wild card for gold. A few comments about continuing or increasing quantitative easing may help.
A local bullion dealer here reported that overnight the price of $20 Libs/Saints jumped $45, so the physical markets are getting excited if this is true.
I didn't see this in the Heritage prices today with gold at $923. The bullion $20 Libs are up $35 or so from June 12th prices with gold at $940, but Saints are almost the same. They have bumped their slabbed $20 Lib prices up $40-50 over the past week but the saints are somewhat lower. As I mentioned earlier in the week, slabbed generic gold of all denominations has steady or going up in value even with a $70 drop in the pog. Very unusual. There are people accumulating a lot of slabbed gold right now, esp. the $20 Libs. As much as they were "overpriced" a few months ago at $1007 gold, they are even more "overpriced" today. That's what happens when demand exceeds supply.
The FED meeting can always toss out a wildcard, but I think they learned their lesson back on March 18th and are far more careful on how they word things now. I'm figuring the announcement Wed. will be uneventful. If anything they will say things are still under control and looking up for the fall. That might bump the stock market.
I'm still looking for another bounce down before proceeding up. The boyz are too coy not to do it and steal some more money by wiping out stops. Here's a link showing P&F charts for gold's short term potential weakness yet longer term bullishness. This is the way I'm feeling about gold right now: bearish and bullish. This Friday marks 89 days since the gold cycle that topped out on Feb 20th. It's a fib number.
I'm really pleased with the trading action last night. At one point I almost considered selling at $931 to try to buy back in lower, but I'm glad I didn't risk it, even though that would have worked out. This is the pattern I was expecting yesterday, so I was just a day off. I don't want to get ahead of myself, but things are looking good and I expect we'll be knocking on $990 again in a week or so.
My plan now with my futures and mining stocks is just to sit back and enjoy the ride, and I'll add more at $985 for no other reason than my account will have grown to a point such that I can add another contract and still have a large buffer if the trend looks intact. I'm going to try to not actively trade in and out of the position, as I often sabotage myself that way.
Gold went up to retest the long term uptrend line that was violated in the past 2 weeks at $941. This right around the neckline of one of the head and shoulders formations (ie $944). That was the one indicating a possible return to the $890's.
GSR continued to stay locked into that tight 66.7-67.3 range. The dollar got some life back into it following the FED's happy news of things becoming "rosier." It found support at .795 but could still rally back further up. Seems like the FED is walking a fine tightrope between the dollar, bonds, SM, and PM's. Very important to get those bonds sold this week. I don't expect gold will move any higher until this week plays out with the gold options expiring.
Should have bought back into the move when gold retreated to $929 but feel safer waiting for the week to play out. The brief move back to $912 mapped out a precise 61.8% of the entire move from $864 to $990.
Evidently the 5 year bond auction went well today, with yields declining. 7 year and longer bonds will be sold tomorrow. the below article and others did iterate that they changed how they calculate "indirect" bids, which typically indicate foeign demand. This is making the demand numbers look exceptionall well.
Local bullion dealer is reporting the premiums on $20 Libs/Sts up $60 in the past 2 days now (so another $15 since yesterday). RR, I'm not sure if you'll see this reflected elsewhere right away, this is on some kind of dealer price sheets that are distributed and updated daiily.
I was thrilled to see gold hit $941, which was also a resistance level, although I knew it probalby wouldn't last with volatility due to FOMC meeting. I'm still happy to see it close near $931. As long as the candles are white, we're all good. All of my account were up.
Support at $921, Pivot at $932.8, and resistance way up at $954. Tomorrow could be a $20 day, but I wouldn't be surprised to see it get mired in the $920's for a few hours overnight.
RR, What are you saying about the H&S formation? I don't understand it that's bullish or bearish.
I'm pretty much ignoring everything right now, and just sticking with my earlier predictions of a new move up and over $1000 starting Tuesday. Only a close below $930 at this point will really cause me to reconsider.
RR, I'm not sure if you'll see this reflected elsewhere right away, this is on some kind of dealer price sheets that are distributed and updated daiily.
I see the Heritage buy/sell gold fax sheet once or twice each day and $20 Saints don't yet reflect this premium. They price both circs and slabs. In fact based on the quanitites of $20's they keep putting up in their weekly internet auctions, I'd say they continue to be top heavy in the circ gold. But I'm just guessing here.
The head and shoulders I mention was formed when gold fell from $990 and then turned back up from around $942-$943 back to $962-$965 a couple of times. It is that neckline formed at $942-$944 that is the strong resistance point and also when broken on the way back up, negates the orig formation of predicting a fall to the $890's. In other words it's out of play once $944 is broken and it's freer sailing towards $990.
For now, Gold is now in a descending flag channel that begs for a breakout to a new level....your $954+. I have to wait for part of my trading account to clear from what I sold in the past few days which sort of stinks. If you get off the horse at the wrong time it is hard to re-enter. And when the SM finally decides to take a big dump, it's going to drag miners down with it.
That would be fine with me as I'm currently running near empty in my trading accounts.
We're basically right back where we were last week trading from $926 to $942. Gold just made a $30 move back up which would be a 38% fib of the 990-912 drop. Somehow that doesn't feel like enough, but it would qualify for the lift back before going lower. Time along with options expiration.......will tell.
Edit: And unless the CNBC ticker is wrong at 9 pm, the 2yr yield is back to 1.20. It moved around a lot today.
I don't mind the whipsawing as long as I can make 5-10% a week during quick moves. I was in the right place Monday and Tuesday am but sold out on....the fear of being further whipsawed. In fact the same can happen to us (or you) on a "breakout" of gold above $1033. The price could just as easily whip saw right back to $990 and then back to $1050.....rinse, lather, repeat several times. Regardless of what side of the curve you are on in the gold market you will be whipsawed....unless you buy and hold for many months or years. I don't think you'll get the same "tame" opportunity to get into the gold market again at $350 and cash out at $950. If you think it will be just as easy say getting in at $1050 and riding that wave to an equivalent $2850, I think you're deluding yourself. The volatility seen from 2003-2008 was a kitty cat compared to what's coming at >$1000 levels. The bull will be bucking hard as the curve goes more parabolic and shortens the durations of the moves. A $100-$200 down day in gold will scare the heck out of anyone. So will be the temptation to take a $200 profit on a couple day/week upmove.
I am preparing for the whipsaw as I place my bet on a sustained move from current levels to $1400-1600. Whipsaw tends to be part of any market. For my stocks it doesn't matter, those can go up and down. For my futures account, I currently have a $50 cash buffer, which I plan to gradually increase to $150 as the price increases. I do not plan to trade in and out unless a move is fairly obvious and low risk. My only plan is to add to the position as gold increases in price and my account increases in value. When I say a $50 buffer, I mean that I can easily weather a down turn of $50 in the price of gold without coming close to running out of margin. My plan, if it works as designed and gold reaches $1500, will net me a 70x multiplier on my initial investment, not including the initial cash buffer. I do expect to run into possible complications along the way, but if I play the macro trend and ignore the mini trends, I believe I can be successful. I may end up losing out on this one, but I think the risk is reasonable and can still be managed such that I don't get completely wiped out, but you never know.
I do sort of consider my futures position a gamble, rather than an investment (although sometimes gambling and investing are indistinguishable it seems). I've studied the charts and read lots about the developing pattern. I've saved up and waited for this week to start and I set aside a few thousand dollars for this gamble, using my Vegas money. I've decided on the bet I'm making, and I'm going to try my best not to be scared out of it. I'm not going to bet on red and then move it to black, or bet on red and black. I'm betting on $1400-1600 gold.
I misreported the resistance level for tonight/tomorrow. The first resistance leve is $942.7. $952 would be the second level. On my other computer, sometimes the levels don't show up. Evening trading looking good. Gold has inched up almost $4.
MoneyLA, when you get back in after gold breaks out over $1050 (or whatever level you end up chosing), how will you handle the inevitable whipsaw during the next bull trend?
RR where we differ is that when I see a break out above 1033 I dont think we are going to be looking back. You should like that I say that. but first, we've got to break out above 1,000 and then 1,033. and we could be waiting a while for that to happen. good luck to us all.
The action last night was good and bullish. Knocking on $940 again. Will feel better if we can bust through $942.70 decisively, although $940.0 seems pretty tough also.
RR where we differ is that when I see a break out above 1033 I dont think we are going to be looking back. You should like that I say that. but first, we've got to break out above 1,000 and then 1,033. and we could be waiting a while for that to happen. good luck to us all.
We do differ on that. $990-$1030 was a strong resistance point and several patterns point back to this range as a probable retest point. If PC gets the rally he expects to a new all time high in the next few weeks, you can be sure that we will pull back to retest near $1000. If gold goes up to what some think will be silly numbers, then there will be large corrections of up to $500-$1000/oz. It will be interesting to see who will weather that and who will just get out. A move to JS's $1650 final "angel" could easily have a pull back to $1350-$1450.
Besides answering PC's question, I'd still like to know what a single recommended investment choice of his might be in the equity, bond, or currency markets. Just where does MLA recommend putting his own money while he is awaiting the next possible run in gold. Considering that most of the markets have played whipsaw for months, just what does MAL recommend, if anything.
Bernanke is speaking on the BoA/Merrill Lynch deal at 10:30 am this morning which usually means gold is held in check during such public hearings. But a nice move on today's open right up to $939.
RR Ive been out of the stock market for the last two years. About 18 months ago my group and I sold our NYC investment property. We just learned that the company that bought our property in NYC is about to file for bankruptcy and the property may return to the market for 40% or less what we sold it for.
My pension plan which is fully paid for through employers I have no control over-- it is a defined benefit plan-- but the latest report shows it only lost about 15% of its value.
Still, as a defined benefit plan it's no my headache.
I make no recommendations with the exceptions that I told everyone I was getting out of stocks and selling my real estate.
I was very pleased and I am very encouraged with today's action. I'm really looking for a good solid move over $944, and I think we might get that tonight or tomorrow. We're up to $942 already in tonight's trading. R1 is at $941.6, R2 at ~$947, support at $936.8, and R3 is at $957. At this slow, solid pace, I think the pattern is loaded with energy and I'm expecting a nice move in the next few trading days. Perhaps timed with an international event... Iran, N. Korea, who knows...
This is right up your alley ProofCollection. Some milestones ahead to watch for. If true, it will give MoneyLA some serious things to consider once he's onboard and then a retest to under the previous high occurs. The log chart shows the price objective of the pattern to be $1520.
Wow, that looks about like what I was expecting, except I didn't have any good price targets for the intermediate moves. Interesting to see that we will be rebuffed again at ~$1000 for one last test to $945 (if the pattern holds true). I see that as being a very plausible scenario. Gold will want to shake off the bulls after another disappointing failure at $1000, some people will give up. Additionally, the banks will probably try to rebuff the $1000 attempt as well and push it down one last time. I think my plan will be to lighten up on my positions around $990-1000, ready to buy back in at a decisive climb over $1000 or back in at $950. The target of $1520 is also inline with my targets. Now if I can just keep from screwing this up.
Added: Silver up another $.15 right now I was wrong about R1 earlier - it's $943.3 which we've just bounced off of.
Yes, we bounced along the $942-$943 line 2 weeks ago - hitting those 3 times in the course of 5 days......then dropping down to test the $920's for a week. $944 forms the neckline base on the short term H&S in play. A break through of that unleashes up to $965-$975. A rebound off $990 back to $945 would be close to a 50% retrace and once again back to our neckline area of $944 ($944-$952). It's a nice plan, now all gold needs to do is to execute it. At some point the GSR has to give us a breakout as well out of the 67 area. I don't see gold getting to $990 with silver at $14.77. So at some point we need to breakout below 66 to get the momentum rolling. At this point the correlation between gold and the USDX or Dow seems to be changing. We can no longer depend on a nice inverse gold to dollar correlation. If we do that, could be left in the dust, much the same way the GSR has held firm at 67.0 while gold and silver rolled up 2-3%. Fixating on GSR would have faked one out.
So if I understand what you're saying... when gold ultimately breaks $990, you're expecting silver to exceed $15... And it might be a good indication that if gold appraoches $990 and silver isn't above $15, we're definitely correcting down to $945.
I do remember what a pain $945 was... patterns like to go back and touch the latest breakout point like you said.
It's a good plan, I hope it works. It will give me enough money to increase my position off of $945 the second time.
What would fit the GSR ratio falling below 66 would be the dollar ending it's final leg of this current counter-trend move. And then a large fall for its 5th and final leg down of a major move that began in March. The GSR has completed 5 legs up in the past 3-4 weeks and is now flat lining it around 67. A change is due and I think the dollar can jump start the next trend down.
I can't write the GSR's above trend in stone because during gold's move in the last 5 months of 2007 the ratio was fairly constant around the 55 range. It didn't drop until early 2008 then bottomed out around 47 in March 2008.
Take a gander at the above gold trend chart. It will be interesting to see if these guys continue to match their performance of the past few months. They show gold running from 6/26 to 7/24. I'm always interested in reading new ideas. What they posted about 2 weeks ago for June-August is pretty accurate so far.
Gold just hit $947.0, 0.1 over the resistance 2 level, silver at $14.25. I gotta get to bed, wish I could watch it burst above $947. Not sure it will make it through next level would be $957.
I'm curious: how many ounces of physical gold would you have to trade to realize a net profit if gold moves from 947 to 957? include taxes in figuring your net profit? thanks.
<< <i>I'm curious: how many ounces of physical gold would you have to trade to realize a net profit if gold moves from 947 to 957? include taxes in figuring your net profit? thanks. >>
Not sure who're you're asking, but on a full size futures contract that $10 move is worth $1000 minus $7 in commissions and taxes.
> I'm curious: how many ounces of physical gold would you have to trade to realize a net profit if gold moves from 947 to 957? include taxes
There are a lot of undefined variables in such an open question. What are the taxes where you live? What prices will the local (?) dealers give you during your buy/sell? Are you going to have storage (SBD) costs, etc.
I'm curious: how many ounces of physical gold would you have to trade to realize a net profit if gold moves from 947 to 957? include taxes in figuring your net profit? thanks.
Most dealers make a quick profit on their bullion transactions by buying below current "bid." They usually buy and sell immediately. Others might keep their money in the smelter's gold pool and cash out then they think the price is topping. The retail guy is buying gold for long term insurance and isn't look to play for a $10 move. So this question isn't realistic. Most people looking to play a $10 move in gold will either do it through GLD, GTU, CEF, GDX, miners, options, futures, etc. In those cases the cost to trade is fairly small and a $10 move could net you 1-5% min. in one day. The futures and options can net you much more. I like to play a $10 gold move with the gold miners which tend to move 2X to 3X the percentage amount that gold moves.
Gold looks to be consolidating here after running to $948. It fell back below the $943 resistance to $936 but it did take it out. Gold stocks appear to be consolidating after 3 days of strong moves. It's not out of the question that $948 was the retrace of the $990-$912 downward move. But having broken that $944 neckline gives gold the upward momentum imo. GSR made an initial run at the 66.0 level but fell short around 66.3. It's now back in its old comfort zone again. $941 close on the monthly Comex gold contract is a positive sign.
I think RR answered my question best. For the "small" gold investor buying perhaps several thousand dollars of gold, there can be no profit in a $10 move.
What I am trying to figure out is if there is a particular number of ounces of physical gold where a $10 move would be profitable?
> Would it take 50 ounces or a 100 ounces or what?
Again, one part of the country is different from another. There is no set rule as to what your buy/sell costs will be. Even within the same city area you will find variances that impact what you're asking about.
It would also depend on the spread. I think 3% for gold is common. If gold is at $1000, you're buying for $1030 and selling for $970. Maybe you can do things to reduce the spread, but once you have the spread (and fees like shipping) covered it's all profit. You can't really play small moves with physical gold unless you have a way to beat the spread. The ETF GLD is a good alternative.
I was a little disappointed to see gold come back to $941, but not surprised. Gold had a decent week, especially considering all of the news and events. Next week we should get confirmation that this move is for real. Given the slow gradual movement this week, I believe the pattern is loaded with energy to release in either direction.
Care to wager on that? I'll bet you a 1oz silver coin (no promises on condition) shipped to your mailbox that the ask price of Gold as published on the http://www.kitco.com/market/ website will be above $895.00 (giving you an extra $5 buffer) at 6pm EDT on July 3, 2009. I'll expect the same in return if I win, and the winner shall receive their silver by July 17, 2009.
$50 is just a number I threw out. I do believe the direction will be down and the move will be sizeable. Whether it is $20, 30 or 50 really isnt that relavent. GLD looks like it could drop to 88.50 from the close of 92.29 today would be drop of about $3.79 or $40 on the metal itself. Lets just hope I'm wrong.
As I've said before I do not wish to make wagers on these boards. Im sure some members are happy I didnt take them up on their dollar bets in early 2008. I think I was even called names by some.
Im just hoping we get some volatility. Other than a quick drop on Monday, gold hasnt really done a darn thing the last 2 weeks.
Well your last reply is a whole lot more meaningful than the previous one and I haven't seen your previous comments about wagers. Throwing out a comment like "gold will be down $50 next week" really contributes nothing to this thread.
> Throwing out a comment like "gold will be down $50 next week" really contributes nothing to this thread.
I defy any human to predict with absolute certainty what gold will do next week. If you're that good why are you here on these forums rather than enjoying your wealth in some most excellent location? We can guess what gold will do. We can extrapolate moves from charts and history but do we KNOW? No. We don't know. A blanket statement gold will do this or that can't be taken seriously
What I am trying to figure out is if there is a particular number of ounces of physical gold where a $10 move would be profitable?
Owning one ounce would be profitable.
Whether or not that amount of profit would be meaningful to you depends on your finanacial position. Obviously it increases your value by 1%. to a poor guy with one ounce its 10 bucks , not much , To a millionaire with 1000 ounces thats about 10grand, not much to him either.
The reality is that if 10 bucks an ounce move is meaningful to you then you shouldn't invest in gold, no matter how much you own, its way too volatile for you.
<< <i>Well your last reply is a whole lot more meaningful than the previous one and I haven't seen your previous comments about wagers. Throwing out a comment like "gold will be down $50 next week" really contributes nothing to this thread. >>
Then it will be really interesting if it does drop $50 next week.
Comments
But, do you think now is the time? (I really don't think now is the time.) Also, what is the likelihood of some type of nationalization in mining stocks? What about China taking a majority position in the stocks that I might buy?
Your opinion?
I knew it would happen.
<< <i>roadrunner, the only stocks I might be tempted to buy are a couple of mining stocks.
But, do you think now is the time? (I really don't think now is the time.) Also, what is the likelihood of some type of nationalization in mining stocks? What about China taking a majority position in the stocks that I might buy?
Your opinion? >>
The only statement/question I would add here is that I'm not sure many companies could be nationalized effectively. Almost all of them are multinational companies with far more operations outside of the US.
We're right about the inflection point where miners are cheap. It's just that they have a habit of going 10-20% lower when such opportunities present themselves. Monday was such an opportunity as they went sub-cheap. And if you bought, you saw them go even lower like I did. They are tied loosely to the stock market and commodities, and more tightly to $USD and pog. Yet, miners can move with or opposite to all of these for weeks or even months. I'm waiting for later this week, even if that means they already turned and everyone knows it. If or when the general stock market takes a header again, the more senior gold miners will go with them, though probably not as severe as last July-Oct. when they fell 65-85% across the board.
The dollar appears to have run out of gas and now at .797 with a much better chance of a <.80 close. Good call by PC about the trend exhausting last night. The first bond auction today went superbly as expected. So why did the dollar tank in light of that news? I would have figured just the opposite response...and one of the reasons why I expected a couple more days weakness in gold.
roadrunner
The 2-yr bond isn't as susceptible to interest rates or the level of the dollar. In the current environment, I'd expect the 2-yr to do better than the other Treasuries. I'd expect people to be running to the short bond, away from the long bond.
I knew it would happen.
Lightening up this morning was surely the wrong time to do that in hindsight. Once the dollar cratered, up went the mining stocks. What do they say? Your emotions are your worst enemy. But on the good side is that I've watched the stochastics bury themselves under 20 for days now. There's no telling when that might end, and gold finally pulls up for a real rally. I watched the same thing happen in late May (once I was out) when they buried themselves above 80 and gold just kept plowing along. Trends are hard to break once in play.
The dollar did end the day at <.80 at .785 which results in a breakdown from the triangle formation.
roadrunner
with technical analysis you don't ask "why" you just accept "that it is."
www.AlanBestBuys.com
www.VegasBestBuys.com
> the beauty of technical analysis is
The downside is you're mostly driving by looking in the rear view mirror. It definitely has it's own set of limitations.
Usually it's the not technical analysis at fault, but the person trying to decipher it. And with all the ways of looking at it, and the number of people that aren't successful, implies that most make the wrong interpretation. Since the computers have all these patterns programmed in, it's not much a stretch to think that many patterns are purposely played out as bait to draw in the fish. You can look at hourly, daily, weekly, and monthly charts and get different outcomes. You can jump out this morning like I did on a 5-15 min. daily chart only to realize at the end of the day, that a 15 min. chart over several days would have lead to a different decision at that same point. My bad.
roadrunner
not quite. it's more "past is prologue" but it is also a "lesson from history."
without looking at the past, looking to the future is only "fortune telling."
www.AlanBestBuys.com
www.VegasBestBuys.com
I believe in the value of history. Maybe the rear view mirror wasn't the best possible analogy. TA does have it's own set of limitations. That seems obvious. The rabbit is a perennial no show but the rabbit can also pop out of the hat when you least expect it. TA has no ability to see what the rabbit will or will not do.
So, what can? If you have something, you will own the world.
www.AlanBestBuys.com
www.VegasBestBuys.com
A local bullion dealer here reported that overnight the price of $20 Libs/Saints jumped $45, so the physical markets are getting excited if this is true.
--Although the auction went well and was successful, bond yields on short term bonds actually rose, meaning they probably had to increase the rate to boost demand.
--The 5 and 7 year note auctions are later this week. The article speculates that a shift from long term to short term bonds may have caused these short term auctions to "go well." We'll have to wait until the 5 and 7 year note auctions are over to see if maybe the preference has shifted to short term and if so, there may be less interest in long term.
The fed announcement is probably a wild card for gold. A few comments about continuing or increasing quantitative easing may help.
I didn't see this in the Heritage prices today with gold at $923. The bullion $20 Libs are up $35 or so from June 12th prices with gold at $940, but Saints are almost the same. They have bumped their slabbed $20 Lib prices up $40-50 over the past week but the saints are somewhat lower. As I mentioned earlier in the week, slabbed generic gold of all denominations has steady or going up in value even with a $70 drop in the pog. Very unusual. There are people accumulating a lot of slabbed gold right now, esp. the $20 Libs. As much as they were "overpriced" a few months ago at $1007 gold, they are even more "overpriced" today. That's what happens when demand exceeds supply.
The FED meeting can always toss out a wildcard, but I think they learned their lesson back on March 18th and are far more careful on how they word things now. I'm figuring the announcement Wed. will be uneventful. If anything they will say things are still under control and looking up for the fall. That might bump the stock market.
I'm still looking for another bounce down before proceeding up. The boyz are too coy not to do it and steal some more money by wiping out stops. Here's a link showing P&F charts for gold's short term potential weakness yet longer term bullishness. This is the way I'm feeling about gold right now: bearish and bullish. This Friday marks 89 days since the gold cycle that topped out on Feb 20th. It's a fib number.
Lemerande on gold Point & Figure charts
roadrunner
My plan now with my futures and mining stocks is just to sit back and enjoy the ride, and I'll add more at $985 for no other reason than my account will have grown to a point such that I can add another contract and still have a large buffer if the trend looks intact. I'm going to try to not actively trade in and out of the position, as I often sabotage myself that way.
GSR continued to stay locked into that tight 66.7-67.3 range. The dollar got some life back into it following the FED's happy news of things becoming "rosier." It found support at .795 but could still rally back further up. Seems like the FED is walking a fine tightrope between the dollar, bonds, SM, and PM's. Very important to get those bonds sold this week. I don't expect gold will move any higher until this week plays out with the gold options expiring.
Should have bought back into the move when gold retreated to $929 but feel safer waiting for the week to play out. The brief move back to $912 mapped out a precise 61.8% of the entire move from $864 to $990.
roadrunner
the below article and others did iterate that they changed how they calculate "indirect" bids, which typically indicate foeign demand. This is making the demand numbers look exceptionall well.
WSJ Article on Bond Auction
Local bullion dealer is reporting the premiums on $20 Libs/Sts up $60 in the past 2 days now (so another $15 since yesterday). RR, I'm not sure if you'll see this reflected elsewhere right away, this is on some kind of dealer price sheets that are distributed and updated daiily.
I was thrilled to see gold hit $941, which was also a resistance level, although I knew it probalby wouldn't last with volatility due to FOMC meeting. I'm still happy to see it close near $931. As long as the candles are white, we're all good. All of my account were up.
Support at $921, Pivot at $932.8, and resistance way up at $954. Tomorrow could be a $20 day, but I wouldn't be surprised to see it get mired in the $920's for a few hours overnight.
RR, What are you saying about the H&S formation? I don't understand it that's bullish or bearish.
I'm pretty much ignoring everything right now, and just sticking with my earlier predictions of a new move up and over $1000 starting Tuesday. Only a close below $930 at this point will really cause me to reconsider.
I see the Heritage buy/sell gold fax sheet once or twice each day and $20 Saints don't yet reflect this premium. They price both circs and slabs. In fact based on the quanitites of $20's they keep putting up in their weekly internet auctions, I'd say they continue to be top heavy in the circ gold. But I'm just guessing here.
The head and shoulders I mention was formed when gold fell from $990 and then turned back up from around $942-$943 back to $962-$965 a couple of times. It is that neckline formed at $942-$944 that is the strong resistance point and also when broken on the way back up, negates the orig formation of predicting a fall to the $890's. In other words it's out of play once $944 is broken and it's freer sailing towards $990.
For now, Gold is now in a descending flag channel that begs for a breakout to a new level....your $954+. I have to wait for part of my trading account to clear from what I sold in the past few days which sort of stinks. If you get off the horse at the wrong time it is hard to re-enter. And when the SM finally decides to take a big dump, it's going to drag miners down with it.
roadrunner
Just a guess.
Knowledge is the enemy of fear
We're basically right back where we were last week trading from $926 to $942. Gold just made a $30 move back up which would be a 38% fib of the 990-912 drop. Somehow that doesn't feel like enough, but it would qualify for the lift back before going lower. Time along with options expiration.......will tell.
Edit: And unless the CNBC ticker is wrong at 9 pm, the 2yr yield is back to 1.20. It moved around a lot today.
roadrunner
www.AlanBestBuys.com
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A $100-$200 down day in gold will scare the heck out of anyone. So will be the temptation to take a $200 profit on a couple day/week upmove.
roadrunner
I do sort of consider my futures position a gamble, rather than an investment (although sometimes gambling and investing are indistinguishable it seems). I've studied the charts and read lots about the developing pattern. I've saved up and waited for this week to start and I set aside a few thousand dollars for this gamble, using my Vegas money. I've decided on the bet I'm making, and I'm going to try my best not to be scared out of it. I'm not going to bet on red and then move it to black, or bet on red and black. I'm betting on $1400-1600 gold.
I misreported the resistance level for tonight/tomorrow. The first resistance leve is $942.7. $952 would be the second level. On my other computer, sometimes the levels don't show up. Evening trading looking good. Gold has inched up almost $4.
MoneyLA, when you get back in after gold breaks out over $1050 (or whatever level you end up chosing), how will you handle the inevitable whipsaw during the next bull trend?
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The action last night was good and bullish. Knocking on $940 again. Will feel better if we can bust through $942.70 decisively, although $940.0 seems pretty tough also.
We do differ on that. $990-$1030 was a strong resistance point and several patterns point back to this range as a probable retest point. If PC gets the rally he expects to a new all time high in the next few weeks, you can be sure that we will pull back to retest near $1000. If gold goes up to what some think will be silly numbers, then there will be large corrections of up to $500-$1000/oz. It will be interesting to see who will weather that and who will just get out. A move to JS's $1650 final "angel" could easily have a pull back to $1350-$1450.
Besides answering PC's question, I'd still like to know what a single recommended investment choice of his might be in the equity, bond, or currency markets. Just where does MLA recommend putting his own money while he is awaiting the next possible run in gold. Considering that most of the markets have played whipsaw for months, just what does MAL recommend, if anything.
Bernanke is speaking on the BoA/Merrill Lynch deal at 10:30 am this morning which usually means gold is held in check during such public hearings. But a nice move on today's open right up to $939.
roadrunner
www.AlanBestBuys.com
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My pension plan which is fully paid for through employers I have no control over-- it is a defined benefit plan-- but the latest report shows it only lost about 15% of its value.
Still, as a defined benefit plan it's no my headache.
I make no recommendations with the exceptions that I told everyone I was getting out of stocks and selling my real estate.
www.AlanBestBuys.com
www.VegasBestBuys.com
This is right up your alley ProofCollection. Some milestones ahead to watch for. If true, it will give MoneyLA some serious things to consider once he's onboard and then a retest to under the previous high occurs. The log chart shows the price objective of the pattern to be $1520.
roadrunner
Added: Silver up another $.15 right now I was wrong about R1 earlier - it's $943.3 which we've just bounced off of.
rodrunner
And it might be a good indication that if gold appraoches $990 and silver isn't above $15, we're definitely correcting down to $945.
I do remember what a pain $945 was... patterns like to go back and touch the latest breakout point like you said.
It's a good plan, I hope it works. It will give me enough money to increase my position off of $945 the second time.
I can't write the GSR's above trend in stone because during gold's move in the last 5 months of 2007 the ratio was fairly constant around the 55 range. It didn't drop until early 2008 then bottomed out around 47 in March 2008.
yygold 58 day chart
Take a gander at the above gold trend chart. It will be interesting to see if these guys continue to match their performance of the past few months. They show gold running from 6/26 to 7/24. I'm always interested in reading new ideas. What they posted about 2 weeks ago for June-August is pretty accurate so far.
roadrunner
www.AlanBestBuys.com
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<< <i>I'm curious: how many ounces of physical gold would you have to trade to realize a net profit if gold moves from 947 to 957? include taxes in figuring your net profit? thanks. >>
Not sure who're you're asking, but on a full size futures contract that $10 move is worth $1000 minus $7 in commissions and taxes.
> I'm curious: how many ounces of physical gold would you have to trade to realize a net profit if gold moves from 947 to 957? include taxes
There are a lot of undefined variables in such an open question. What are the taxes where you live? What prices will the local (?) dealers give you during your buy/sell? Are you going to have storage (SBD) costs, etc.
Most dealers make a quick profit on their bullion transactions by buying below current "bid." They usually buy and sell immediately. Others might keep their money in the smelter's gold pool and cash out then they think the price is topping. The retail guy is buying gold for long term insurance and isn't look to play for a $10 move. So this question isn't realistic. Most people looking to play a $10 move in gold will either do it through GLD, GTU, CEF, GDX, miners, options, futures, etc. In those cases the cost to trade is fairly small and a $10 move could net you 1-5% min. in one day. The futures and options can net you much more. I like to play a $10 gold move with the gold miners which tend to move 2X to 3X the percentage amount that gold moves.
Gold looks to be consolidating here after running to $948. It fell back below the $943 resistance to $936 but it did take it out. Gold stocks appear to be consolidating after 3 days of strong moves. It's not out of the question that $948 was the retrace of the $990-$912 downward move. But having broken that $944 neckline gives gold the upward momentum imo. GSR made an initial run at the 66.0 level but fell short around 66.3. It's now back in its old comfort zone again. $941 close on the monthly Comex gold contract is a positive sign.
roadrunner
What I am trying to figure out is if there is a particular number of ounces of physical gold where a $10 move would be profitable?
Would it take 50 ounces or a 100 ounces or what?
www.AlanBestBuys.com
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No different than a 1% move in the stock of your choice, considering transaction costs and taxes. So?
I knew it would happen.
> Would it take 50 ounces or a 100 ounces or what?
Again, one part of the country is different from another. There is no set rule as to what your buy/sell costs will be. Even within the same city area you will find variances that impact what you're asking about.
Maybe you can do things to reduce the spread, but once you have the spread (and fees like shipping) covered it's all profit. You can't really play small moves with physical gold unless you have a way to beat the spread. The ETF GLD is a good alternative.
I was a little disappointed to see gold come back to $941, but not surprised. Gold had a decent week, especially considering all of the news and events. Next week we should get confirmation that this move is for real. Given the slow gradual movement this week, I believe the pattern is loaded with energy to release in either direction.
Knowledge is the enemy of fear
<< <i>Gold will be down $50 next week.
Care to wager on that? I'll bet you a 1oz silver coin (no promises on condition) shipped to your mailbox that the ask price of Gold as published on the http://www.kitco.com/market/ website will be above $895.00 (giving you an extra $5 buffer) at 6pm EDT on July 3, 2009. I'll expect the same in return if I win, and the winner shall receive their silver by July 17, 2009.
As I've said before I do not wish to make wagers on these boards. Im sure some members are happy I didnt take them up on their dollar bets in early 2008.
Im just hoping we get some volatility. Other than a quick drop on Monday, gold hasnt really done a darn thing the last 2 weeks.
Knowledge is the enemy of fear
> Throwing out a comment like "gold will be down $50 next week" really contributes nothing to this thread.
I defy any human to predict with absolute certainty what gold will do next week. If you're that good why are you here on these forums rather than enjoying your wealth in some most excellent location? We can guess what gold will do. We can extrapolate moves from charts and history but do we KNOW? No. We don't know. A blanket statement gold will do this or that can't be taken seriously
Owning one ounce would be profitable.
Whether or not that amount of profit would be meaningful to you depends on your finanacial position. Obviously it increases your value by 1%. to a poor guy with one ounce its 10 bucks , not much , To a millionaire with 1000 ounces thats about 10grand, not much to him either.
The reality is that if 10 bucks an ounce move is meaningful to you then you shouldn't invest in gold, no matter how much you own, its way too volatile for you.
<< <i>Well your last reply is a whole lot more meaningful than the previous one and I haven't seen your previous comments about wagers. Throwing out a comment like "gold will be down $50 next week" really contributes nothing to this thread. >>
Then it will be really interesting if it does drop $50 next week.
Knowledge is the enemy of fear