I will be buying if we fall $50 next week....but I don't think we'll see more than some increasing volatility around the $925-$938 range.
Gold broke out sharply above a 3 week down trend line consisting of a nice pattern of 5 waves down on Friday when it exceeded $938. It had touched that line the day before at $941 but failed to break out. At $948 on Friday it broke out cleanly even if it got repelled back to touch the top of the downtrend line at around $935-$936. If gold holds above $930 on Monday and by $928 by Wednesday the line holds. A couple days of retesting in this area will give gold the chance to complete a reverse H&S with a neckline at $945 (target of $980), basically the same level that was formed on the way down. Expecting some snap moves early next week to shake the tree but I think $950 by the end of the week is more likely than sub-$912.
The dollar broke out of a triangular pattern to the downside early this week and is still in a larger such pattern. It's going to need to break out sharply above 81 to get gold to start dropping $50. The dollar still might have a strong up-move on its mind, but the very short term picture still looks very weak. The bond auctions went well, but that was still $100 BILL of debt ultimately linked to the dollar. So I guess in hindsight, it makes sense while the dollar weakened all week. Gold seems to have reversed its pattern from April/May of following the inverse of bond prices to following bond prices directly (flight to safety as dollar and SM weaken together?).
<< <i>> 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 >>
Nor can the mumbo jumbo about some metaphysical crap.
Of course there can be no ABSOLUTE certainty about anything. Lets just say gold is down $35 or $75, was a prediction of being down $50 really wrong?
What I see happening this this thread is the ever increasing potential for some members to get their A$$e$ handed to them. I do a TREMENDOUS amount of technical analysis and I see a lot of misinformation or misreading coming from some of the newsletters. Some are making the charts read what they want them to read. An example, is saying that gold has support at, lets say 938.50, then when it is broken, they say the support is 933.30, then when that is broken they say 927.40, ect. Next thing you know you have talked yourself into holding a position much longer than anticipated. They are using all kinds of indicators which will as MoneyLa stated, create whiplash. If one indicator doesnt yield the desired result then just use another until the right answer is acheived. This will lead to disaster.
My point is that conviction and overconfidence ALWAYS leads to ruin. ALWAYS. There is nothing wrong with planting a seed of doubt. Sometimes that seed grows into a giant beanstalk leading to a pot of gold.
And as far as enjoying myself in a most excellent location, who says I dont? For my lifestyle, I couldnt pick a better locale. In fact, I did choose this area to live. I just wish the taxes were not so high. And about writing on these forums, heck, I enjoy it. Don't you?
<< <i>> 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 >>
My point was that merely tossing out a number is meaningless and pretty much a waste of bandwidth. If you toss out a number with some thoughts behind it (or perhaps a chart), we can see the reasoning behind your number. Maybe a reader here will see something he missed before, or interpret something differently. Such and such support, or such and such formation, or breaching whatever moving average. That kind of information is useful. A seemingly random number is not.
<< <i>> 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 >>
My point was that merely tossing out a number is meaningless and pretty much a waste of bandwidth. If you toss out a number with some thoughts behind it (or perhaps a chart), we can see the reasoning behind your number. Maybe a reader here will see something he missed before, or interpret something differently. Such and such support, or such and such formation, or breaching whatever moving average. That kind of information is useful. A seemingly random number is not. >>
Those who know my writing style should know by now that I much prefer to teach someone to fish rather than giving them a fish. I think it is quite plain to see from the above chart, where potential concern may originate.
> And as far as enjoying myself in a most excellent location, who says I dont? For my lifestyle, I couldnt pick a better locale.
cohodk, Great. I'm happy for you. We're located in a county with the 7th highest USA per capita income. Sometimes the great 2009 recession seems really far away. These 'dire' economic times certainly haven't touched the Hummer guys, who run their engines for the AC, not inexpensive, while casually looking at items of mail they just picked up at the local post office.
With charting and analysis, you might be better than what you're speaking against, and I catch your point, but, it's like everything else, there will always be someone out there better than you. I think it's always wise to be humble about any skills you may have. A brief cryptic blanket assertion doesn't seem responsible or tremendously helpful, to me.
Metaphysics will trump supposed reality every time. It makes no real difference what one believes. I'm sure each of us will have some things we need to unlearn, if we want to know more about what projects a great movie onto the screen. I can say I enjoy the movie as much as anyone. I'm not complaining about it. It doesn't make a bit of difference to me some folks are so engrossed in the drama they forget how it gets up on the screen, or even that there is a screen.
I would like to see gold go up, not down. If it goes down big next week I probably won't think about how you predicted the move. That's essentially a 50-50 call. I still believe we are trending towards living on the razors edge. Anything can happen, including a boring sideways more of the same.
<< <i>> 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 >>
And one more thing Kentuckyj, because Im in a fightin mood today--I posted the following on June 5th with a chart of GS....
"At the risk of upsetting some who do not like to use or see charts, I post the following. I will not make any comments on it other than that I believe the next few weeks will offer some incredible trading opportunities in equities, PM, Treasuries and currencies."
Since then the following has happened..
1. GS dropped from 150 to 137. 2. The DOW dropped nearly 600 pts. 3. The Nasdaq dropped 110. 4. The yield on the 30yr treasury dropped from 4.72% to 4.30%. 5. The yield on the 10yr dropped from 3.90% to 3.50%. 6. GLD dropped from 95 to 90. 7. SLV dropped from 15.33 to 13.53. 8. FXY--the YEN etf-- rallied from 100.58 to 104.84
Cohok's chart doesn't preclude the chance of the current leg in progress since June 1st being the finale in an ABC sequence that could easily fall below the bottom of the A leg at $864. That's something we have to keep in mind. As of a week ago the Hulbert gold sentiment index was at 10% after having topping out at around 57% in May. If one looks back 5 years in gold more often than not a 2-3 week rally occured in July. In one year it was flat and in one year in was slightly down. But in 3 of those years there was a nice up move. If one compares the increasing lows from November, they are sequentially higher than all the comparable lows of 2008. The dollar is still due for a final 5th leg down from March before it goes into extended summer strength. For me, I see more pluses than minuses for gold over the next few weeks.
Other things the chart show is a converging triangle pattern in play since November. When gold has presented these patterns in the past, during the course of an up-move, they more often resolve to the upside. If I had to wager on it, that's where I would lean. Let's also not forget that gold has been in an ascending pattern for 8 years, with 4 bounces off the the $990-$1033 resistance region. Quadruple top?? One could "imagine" that there are powers out there that don't want to see $1000 gold for the long term. Could it be the same guys holding $100 Billion in gold derivatives, $200 Bill in silver derivatives and 200,000 short contracts on the Comex? (lol).
I bet we bounce off or near $1000 at least one or two more times before before finally exceeding it. At some point even J6P is going to wonder what the heck, is something rigged here? We're gonna have to rewrite the text book concerning how many times an upward resistance line gets hit before you can go through it. The 2x, 3x, 4x thumbrules are already in the trash heap.
Some might offer up the Dow from 1966-1982 as a parallel to the above as it hit around 1000 at 5 separate times at periodicities of 3-5 yrs. It took a 6th time to finally leave Dow 1000 behind for good. One big difference, the Dow was cycling during a recession where in prior times, it should have just gone down. But inflationary forces helped to buoy it's "index" multiple times while real buying power shrank. Against gold it dropped 70% in value during those years while J6P thought he was breaking even. Today, gold has been in a distinctly rising market for 7 years, quadrupling in value at the first $1030 bounce. While the dollar index on paper has strengthened from 8-22% following that first bounce in 2008, one also has to realize that the money supply has increased at least at a comparable amount in this same period depending on which Money aggregate one uses. Comparing Dow 1000 to Gold 1000 is like apples and oranges. The management of gold today is far different than anything conceived of in the 1970's, though Robert Rubin was learning his chops at the London gold market back in those days.
In looking at gold's RSI and it's been the case that whenever it has cratered from 70 back into the 30's it has bounced back for a while. At a minimum I see that as likely as well with stoch, momentum giving some support to that. Rather than a 50/50 I'd give gold 60/40 or a 70/30 in going up from here....after a down day Monday and/or Tuesday to shake out more weak hands. The XAU/HUI scares me though at the moment after topping following 4 days up and then falling back Friday.
But one thing I am 100% positive of......and you can quote me..... When the Aden Sisters speak, the top is nearly in. I'll also take a flyer and say that it will take a 6th time for gold to break 1000, just like it took it for Dow 1000 to go.
Another trend: the last 7 Mondays in a row have been gold down days. The past 3 Fridays as well. The 3 month gold chart only has a couple of up Mondays and they tended to occur coming off of bottoms (Out of 25 1st trading days of the week in 2009, only 5 were up). I have to figure on continuing the trend until it breaks.
So far the trendline support has held. Thats a good thing. Respect the trend. The more times gold is rebuffed at $1000, the stronger and more violent should be the rally once it breaks out. However, it can only bump its head so many times before it has a concussion and passes out. Be wary of that time as it will occur just when it looks the best.
We have had a pretty decent selloff/rally in the different asset classes the last 3 weeks. Hopefully we see a bit of a trend change over the next 2. Equities also usually do well during the week of the 4th of July.
I posted what I did as I was sensing a strong amount of bullishness, and every successful trader I know is very cautious of extremes.
So far so good tonight. We appear to be headed over R1 at $940.70 with increased volumen and with the next resistance at 944.50 and then the next level is $951.80.
My vote is on a scenario predicted by a chart RR referred to. One more bounce off of $1000, a quick test back to $945, then off to the races.
A quick Monday morning whack as expected. This one came right at 9 am following a very slight tick up in the dollar that started about 5 min earlier. Not to let that opportunity go to waste, gold was bombarded on a 10-1 percentage basis for a tiny dollar move of .11. Basically, more sell stop surfing on the 9 am train.
The GSR expanded up to around 67.5 which was wider than the range seen late last week. We could still see a high of 68.0 with say $930 gold and $13.68 silver. $942/$13.85 also works though.
Spent some time assessing what the GSR is doing as it seems to be gravitating towards 68.0 at around the 100 dma (today's high of 67.8). Momentum and stochastics are close to indicating a turning over and RSI is about as high as it's been for months. Bollinger bands indicate an immediate change coming. The dollar index was giving off the same signals with BB, ATR, momentum, Trix, indicating a change upon us. Looking back at the dollar chart for the past 4 months would seem to indicate it goes lower for now. This seems like a good time for GSR and $USD to start moving back down with more conviction following some further shaking out on Tuesday and possibly Wednesday.
The only real bargain I saw today was in RGLD as it dipped below 42.0 following a 10% sell off since Friday. Unfortunately I got busy elsewhere and when I came back 30 min. later it was already back up $1. Missed that one. No other major producers nor gold appeared to be on sale today, so we'll wait to see what Tuesday brings.
The 6am smackdown came right on schedule, just like yesterday, and then a little while later the market went nuts to the downside with consumer confidence numbers. Dollar above 80.50 at the moment.
My futures position is down to break even. We touch S3 support at $922. I wouldn't be surprised to see prices hang here near the lows all day. This will give a nice low starting point for the July candle.
The 9 am smackdown was the 3rd one in a row. But this time at 10 am everyone jumped in on the poor housing and confidence data. Gold fell through $925 briefly to hit $922.8 but that came right back up. GSR nearly reached 69. Ironic that bad economic data strengthens the dollar but weakens gold in the face of massive liquidty injections. And last I looked they aren't key stroking gold into existence. On Friday I was expecting a stop sweep down into the $925-$930 range. We definitely checked that one off.
That's our first touch of the $925 line, is it the last for a while? The YYGold guys called the past few days to a tee: turn date on 6/29, lots of volality through Wednesday/Thursday, and another turning date due on Wed.
Th' price of gold will hoof it up when we use even fancier terms an' explanashuns of charts t'determine its right path. When it goes down we call it a smack down but while it is gwine up we use sech terms as, "convahgin' triangle pattern", "trend line", "momentum an' stochastics", an' "Bollinger ban's". Obviously we is not usin' fancy an' complicated inough language t'discuss this hyar issue of gold failin' t'pass one thousan' dollars per ounce. ah suggess we retch into th' wo'ld of physics an' biology to splore noo language t'prompp gold t'splode into th' atmosphar. Such terms as, "chaos theo'y", "cold fushun", an' "osmosis via semi-permeable membrane". Such terms as these c'd make th' rally we all speck a dream come true.
i just could not resist. please continue with this serious discussion.
I feel it has some unfinished business later this week. I'd expect higher levels starting Wed/Thursday following the end of month volatility. And with only overseas markets open Friday and then Sunday night, it would not surprise me to see gold up even higher without the usual suspects participating.
As far as when $1000 goes down for good, I've already stated that it should occur by May 2010 with better than a 50-50 chance it goes down later this year. Look back on gold's behavior during the summer of 2007 following a 16 month consolidation pattern. We have a very similar setup but with far more bullish chart patterns. Of course I'm using fractal chaos (fc) 3rd derivative passive- regressive boundary analysis theory to come to these conclusions.
The second stock chart showed a steady slope upward. My son pointed to the chart with the upward slope and said "this one, Daddy." Why? I asked him. "Because its going up." Of course he was right. But the important thing is that you don't need rocket science or lots of theory to figure it out. If it ain't going up, it ain't going up. Let me know when it does.
One thing is right with this analysis, another one is wrong.
1. Right: The chart is going up. If you're son was still 6, and you showed him a gold or money supply chart from 2001 to 2009, he would notice that the numbers were going up. If you showed him 2001-2009 charts of the S&P or $USD he would say they are going down.
2. Wrong: You could have shown your son the chart of gold in November 1979 or early January 1980 or even March 16th 2008. In those cases following a chart "going up" would have been a terrible course to follow. But that's when most 6 yr olds and adults decide to hop on board a "hot" market. And that will probably be the case as well when someone hops onboard "hot" gold as it peaks following its first run past $1050. A bunch of people are going to buy in, and get smoked by the hard pull back, especially if it falls back under $1000. 90% of them will not be around for the 2nd leg up. The Nadler's of the world will be cheering them on to sell before gold falls all the way back to $650 again.
Also just as wrong: Fixating on the gold chart in late 1976 following an 18 month/-50% consolidation...or the long pull backs following the 2004, 2006, and 2008 peaks.
<< <i>Years ago (and I mean about 24 years ago) I once showed two stock charts to my six year old son.
I explained to him that the lines on the paper show what has happened to the price of the stocks. then I asked him--- which stock is better?
One stock chart was choppy-- up and down, up and down.
The second stock chart showed a steady slope upward.
My son pointed to the chart with the upward slope and said "this one, Daddy."
Why? I asked him.
"Because its going up."
Of course he was right. But the important thing is that you don't need rocket science or lots of theory to figure it out.
If it ain't going up, it ain't going up.
Let me know when it does. >>
I see it just a little differently. One chart WENT up. The other WENT sideways. I see too many people---and you only have to look back at the thread in FEB/Mar 2008 to see examples---of buying something that has already had a good move. Think about this---how often is is the horse that is in the lead at the 3/4 mark, the eventual winner?
Can you think of a few reasons as to why the gold chart could look choppy as it has made its way up from $255? Could any of them be related to keeping the sovereign currency strong and competitors weak? Are there advantages to managing such a chart and who would profit by such a course of action? Do you think that maybe gold and oil were given a little "official" push last summer to help them along and muss up their charts?
The chart that MoneyLA and his son saw 2 dozen years ago, before the vast manipulation of the major markets by Wall Street, probably doesn't even exist any more. And if such a chart does exist, it's probably in a market of little interest where manipulators and hedge funds don't bother to tread.
I don't need a rocket scientist to show me that gold has gone up the past 8 years. When it's much higher than today, it will be even more choppy/volatile looking and therefore even less attractive to a 6 year old and maybe even to the rocket scientist and economist as well. But no one ever promised us a pretty gold chart. If it were pretty and that simple then everyone would have been onboard the train from the start at $255, only to find that the wheels were removed.
Comments
> it will be really interesting if it does drop $50 next week
And equally interesting if it goes up $50 next week. It's always interesting
Gold broke out sharply above a 3 week down trend line consisting of a nice pattern of 5 waves down on Friday when it exceeded $938. It had touched that line the day before at $941 but failed to break out. At $948 on Friday it broke out cleanly even if it got repelled back to touch the top of the downtrend line at around $935-$936. If gold holds above $930 on Monday and by $928 by Wednesday the line holds. A couple days of retesting in this area will give gold the chance to complete a reverse H&S with a neckline at $945 (target of $980), basically the same level that was formed on the way down. Expecting some snap moves early next week to shake the tree but I think $950 by the end of the week is more likely than sub-$912.
The dollar broke out of a triangular pattern to the downside early this week and is still in a larger such pattern. It's going to need to break out sharply above 81 to get gold to start dropping $50. The dollar still might have a strong up-move on its mind, but the very short term picture still looks very weak. The bond auctions went well, but that was still $100 BILL of debt ultimately linked to the dollar. So I guess in hindsight, it makes sense while the dollar weakened all week. Gold seems to have reversed its pattern from April/May of following the inverse of bond prices to following bond prices directly (flight to safety as dollar and SM weaken together?).
roadrunner
<< <i>> 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 >>
Nor can the mumbo jumbo about some metaphysical crap.
Of course there can be no ABSOLUTE certainty about anything. Lets just say gold is down $35 or $75, was a prediction of being down $50 really wrong?
What I see happening this this thread is the ever increasing potential for some members to get their A$$e$ handed to them. I do a TREMENDOUS amount of technical analysis and I see a lot of misinformation or misreading coming from some of the newsletters. Some are making the charts read what they want them to read. An example, is saying that gold has support at, lets say 938.50, then when it is broken, they say the support is 933.30, then when that is broken they say 927.40, ect. Next thing you know you have talked yourself into holding a position much longer than anticipated. They are using all kinds of indicators which will as MoneyLa stated, create whiplash. If one indicator doesnt yield the desired result then just use another until the right answer is acheived. This will lead to disaster.
My point is that conviction and overconfidence ALWAYS leads to ruin. ALWAYS. There is nothing wrong with planting a seed of doubt. Sometimes that seed grows into a giant beanstalk leading to a pot of gold.
And as far as enjoying myself in a most excellent location, who says I dont? For my lifestyle, I couldnt pick a better locale. In fact, I did choose this area to live. I just wish the taxes were not so high.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>> 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 >>
My point was that merely tossing out a number is meaningless and pretty much a waste of bandwidth. If you toss out a number with some thoughts behind it (or perhaps a chart), we can see the reasoning behind your number. Maybe a reader here will see something he missed before, or interpret something differently. Such and such support, or such and such formation, or breaching whatever moving average. That kind of information is useful. A seemingly random number is not.
<< <i>
<< <i>> 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 >>
My point was that merely tossing out a number is meaningless and pretty much a waste of bandwidth. If you toss out a number with some thoughts behind it (or perhaps a chart), we can see the reasoning behind your number. Maybe a reader here will see something he missed before, or interpret something differently. Such and such support, or such and such formation, or breaching whatever moving average. That kind of information is useful. A seemingly random number is not. >>
Those who know my writing style should know by now that I much prefer to teach someone to fish rather than giving them a fish. I think it is quite plain to see from the above chart, where potential concern may originate.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
> And as far as enjoying myself in a most excellent location, who says I dont? For my lifestyle, I couldnt pick a better locale.
cohodk,
Great. I'm happy for you. We're located in a county with the 7th highest USA per capita income. Sometimes the great 2009 recession seems really far away. These 'dire' economic times certainly haven't touched the Hummer guys, who run their engines for the AC, not inexpensive, while casually looking at items of mail they just picked up at the local post office.
With charting and analysis, you might be better than what you're speaking against, and I catch your point, but, it's like everything else, there will always be someone out there better than you. I think it's always wise to be humble about any skills you may have. A brief cryptic blanket assertion doesn't seem responsible or tremendously helpful, to me.
Metaphysics will trump supposed reality every time. It makes no real difference what one believes. I'm sure each of us will have some things we need to unlearn, if we want to know more about what projects a great movie onto the screen. I can say I enjoy the movie as much as anyone. I'm not complaining about it. It doesn't make a bit of difference to me some folks are so engrossed in the drama they forget how it gets up on the screen, or even that there is a screen.
I would like to see gold go up, not down. If it goes down big next week I probably won't think about how you predicted the move. That's essentially a 50-50 call. I still believe we are trending towards living on the razors edge. Anything can happen, including a boring sideways more of the same.
<< <i>> 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 >>
And one more thing Kentuckyj, because Im in a fightin mood today--I posted the following on June 5th with a chart of GS....
"At the risk of upsetting some who do not like to use or see charts, I post the following. I will not make any comments on it other than that I believe the next few weeks will offer some incredible trading opportunities in equities, PM, Treasuries and currencies."
Since then the following has happened..
1. GS dropped from 150 to 137.
2. The DOW dropped nearly 600 pts.
3. The Nasdaq dropped 110.
4. The yield on the 30yr treasury dropped from 4.72% to 4.30%.
5. The yield on the 10yr dropped from 3.90% to 3.50%.
6. GLD dropped from 95 to 90.
7. SLV dropped from 15.33 to 13.53.
8. FXY--the YEN etf-- rallied from 100.58 to 104.84
I can only lead the horse to water.
Knowledge is the enemy of fear
Other things the chart show is a converging triangle pattern in play since November. When gold has presented these patterns in the past, during the course of an up-move, they more often resolve to the upside. If I had to wager on it, that's where I would lean. Let's also not forget that gold has been in an ascending pattern for 8 years, with 4 bounces off the the $990-$1033 resistance region. Quadruple top?? One could "imagine" that there are powers out there that don't want to see $1000 gold for the long term. Could it be the same guys holding $100 Billion in gold derivatives, $200 Bill in silver derivatives and 200,000 short contracts on the Comex? (lol).
I bet we bounce off or near $1000 at least one or two more times before before finally exceeding it. At some point even J6P is going to wonder what the heck, is something rigged here? We're gonna have to rewrite the text book concerning how many times an upward resistance line gets hit before you can go through it. The 2x, 3x, 4x thumbrules are already in the trash heap.
Some might offer up the Dow from 1966-1982 as a parallel to the above as it hit around 1000 at 5 separate times at periodicities of 3-5 yrs. It took a 6th time to finally leave Dow 1000 behind for good. One big difference, the Dow was cycling during a recession where in prior times, it should have just gone down. But inflationary forces helped to buoy it's "index" multiple times while real buying power shrank. Against gold it dropped 70% in value during those years while J6P thought he was breaking even. Today, gold has been in a distinctly rising market for 7 years, quadrupling in value at the first $1030 bounce. While the dollar index on paper has strengthened from 8-22% following that first bounce in 2008, one also has to realize that the money supply has increased at least at a comparable amount in this same period depending on which Money aggregate one uses. Comparing Dow 1000 to Gold 1000 is like apples and oranges. The management of gold today is far different than anything conceived of in the 1970's, though Robert Rubin was learning his chops at the London gold market back in those days.
In looking at gold's RSI and it's been the case that whenever it has cratered from 70 back into the 30's it has bounced back for a while. At a minimum I see that as likely as well with stoch, momentum giving some support to that. Rather than a 50/50 I'd give gold 60/40 or a 70/30 in going up from here....after a down day Monday and/or Tuesday to shake out more weak hands. The XAU/HUI scares me though at the moment after topping following 4 days up and then falling back Friday.
But one thing I am 100% positive of......and you can quote me..... When the Aden Sisters speak, the top is nearly in.
I'll also take a flyer and say that it will take a 6th time for gold to break 1000, just like it took it for Dow 1000 to go.
Another trend: the last 7 Mondays in a row have been gold down days. The past 3 Fridays as well. The 3 month gold chart only has a couple of up Mondays and they tended to occur coming off of bottoms (Out of 25 1st trading days of the week in 2009, only 5 were up). I have to figure on continuing the trend until it breaks.
Katz on current gold chart trending...a reminder on the bigger picture.
roadrunner
So far the trendline support has held. Thats a good thing. Respect the trend. The more times gold is rebuffed at $1000, the stronger and more violent should be the rally once it breaks out. However, it can only bump its head so many times before it has a concussion and passes out. Be wary of that time as it will occur just when it looks the best.
We have had a pretty decent selloff/rally in the different asset classes the last 3 weeks. Hopefully we see a bit of a trend change over the next 2. Equities also usually do well during the week of the 4th of July.
I posted what I did as I was sensing a strong amount of bullishness, and every successful trader I know is very cautious of extremes.
Knowledge is the enemy of fear
My vote is on a scenario predicted by a chart RR referred to. One more bounce off of $1000, a quick test back to $945, then off to the races.
The GSR expanded up to around 67.5 which was wider than the range seen late last week. We could still see a high of 68.0 with say $930 gold and $13.68 silver. $942/$13.85 also works though.
roadrunner
The only real bargain I saw today was in RGLD as it dipped below 42.0 following a 10% sell off since Friday. Unfortunately I got busy elsewhere and when I came back 30 min. later it was already back up $1. Missed that one. No other major producers nor gold appeared to be on sale today, so we'll wait to see what Tuesday brings.
roadrunner
My futures position is down to break even. We touch S3 support at $922. I wouldn't be surprised to see prices hang here near the lows all day. This will give a nice low starting point for the July candle.
Here's a good article this morning with lots of good charts:
This Summer May Prove Hot for Gold Prices Despite the Seasonal Tendencies
That's our first touch of the $925 line, is it the last for a while? The YYGold guys called the past few days to a tee: turn date on 6/29, lots of volality through Wednesday/Thursday, and another turning date due on Wed.
roadrunner
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>okay, so when is gold going up? >>
Th' price of gold will hoof it up when we use even fancier terms an' explanashuns of charts t'determine its right path. When it goes down we call it a smack down but while it is gwine up we use sech terms as, "convahgin' triangle pattern", "trend line", "momentum an' stochastics", an' "Bollinger ban's". Obviously we is not usin' fancy an' complicated inough language t'discuss this hyar issue of gold failin' t'pass one thousan' dollars per ounce. ah suggess we retch into th' wo'ld of physics an' biology to splore noo language t'prompp gold t'splode into th' atmosphar. Such terms as, "chaos theo'y", "cold fushun", an' "osmosis via semi-permeable membrane". Such terms as these c'd make th' rally we all speck a dream come true.
i just could not resist. please continue with this serious discussion.
I feel it has some unfinished business later this week. I'd expect higher levels starting Wed/Thursday following the end of month volatility. And with only overseas markets open Friday and then Sunday night, it would not surprise me to see gold up even higher without the usual suspects participating.
As far as when $1000 goes down for good, I've already stated that it should occur by May 2010 with better than a 50-50 chance it goes down later this year. Look back on gold's behavior during the summer of 2007 following a 16 month consolidation pattern. We have a very similar setup but with far more bullish chart patterns. Of course I'm using fractal chaos (fc) 3rd derivative passive- regressive boundary analysis theory to come to these conclusions.
roadrunner
I explained to him that the lines on the paper show what has happened to the price of the stocks. then I asked him--- which stock is better?
One stock chart was choppy-- up and down, up and down.
The second stock chart showed a steady slope upward.
My son pointed to the chart with the upward slope and said "this one, Daddy."
Why? I asked him.
"Because its going up."
Of course he was right. But the important thing is that you don't need rocket science or lots of theory to figure it out.
If it ain't going up, it ain't going up.
Let me know when it does.
www.AlanBestBuys.com
www.VegasBestBuys.com
The second stock chart showed a steady slope upward. My son pointed to the chart with the upward slope and said "this one, Daddy." Why? I asked him. "Because its going up." Of course he was right. But the important thing is that you don't need rocket science or lots of theory to figure it out. If it ain't going up, it ain't going up. Let me know when it does.
One thing is right with this analysis, another one is wrong.
1. Right: The chart is going up. If you're son was still 6, and you showed him a gold or money supply chart from 2001 to 2009, he would notice that the numbers were going up. If you showed him 2001-2009 charts of the S&P or $USD he would say they are going down.
2. Wrong: You could have shown your son the chart of gold in November 1979 or early January 1980 or even March 16th 2008. In those cases following a chart "going up" would have been a terrible course to follow. But that's when most 6 yr olds and adults decide to hop on board a "hot" market. And that will probably be the case as well when someone hops onboard "hot" gold as it peaks following its first run past $1050. A bunch of people are going to buy in, and get smoked by the hard pull back, especially if it falls back under $1000. 90% of them will not be around for the 2nd leg up. The Nadler's of the world will be cheering them on to sell before gold falls all the way back to $650 again.
Also just as wrong: Fixating on the gold chart in late 1976 following an 18 month/-50% consolidation...or the long pull backs following the 2004, 2006, and 2008 peaks.
roadrunner
<< <i>Years ago (and I mean about 24 years ago) I once showed two stock charts to my six year old son.
I explained to him that the lines on the paper show what has happened to the price of the stocks. then I asked him--- which stock is better?
One stock chart was choppy-- up and down, up and down.
The second stock chart showed a steady slope upward.
My son pointed to the chart with the upward slope and said "this one, Daddy."
Why? I asked him.
"Because its going up."
Of course he was right. But the important thing is that you don't need rocket science or lots of theory to figure it out.
If it ain't going up, it ain't going up.
Let me know when it does. >>
I see it just a little differently. One chart WENT up. The other WENT sideways. I see too many people---and you only have to look back at the thread in FEB/Mar 2008 to see examples---of buying something that has already had a good move. Think about this---how often is is the horse that is in the lead at the 3/4 mark, the eventual winner?
Knowledge is the enemy of fear
The chart that MoneyLA and his son saw 2 dozen years ago, before the vast manipulation of the major markets by Wall Street, probably doesn't even exist any more. And if such a chart does exist, it's probably in a market of little interest where manipulators and hedge funds don't bother to tread.
I don't need a rocket scientist to show me that gold has gone up the past 8 years. When it's much higher than today, it will be even more choppy/volatile looking and therefore even less attractive to a 6 year old and maybe even to the rocket scientist and economist as well. But no one ever promised us a pretty gold chart. If it were pretty and that simple then everyone would have been onboard the train from the start at $255, only to find that the wheels were removed.
roadrunner