don't think a $5 drop from here in gold sends it down $30.
Well, it has already led to an additional $16 drop. Charts are my business. People pay me money to read charts. I try to give some insight into my methods but of course I can not go into all the details. Some still say chart reading is a 50-50 proposition. I dont know how many more charts I need to post to prove otherwise. Maybe I should just stop?
You had that call dead on. No arguments there.
I was analyzing the Dollar, GLD and GDX charts very closely this morning in multiple time frames (hours/days/weeks) about an hour before the drop below $917 occured. The first $5 drop took it back to the upper teens. The dollar was actually rolling over and seemed peaked out already from the previous few days. So it wasn't the dollar imo that helped turn gold the other $10 today down to $906....probably the link to commodities and/or oil which had not been there in any force until this morning. I can't help but feel that gold/commodities or both were given a little shove as well. The bankers strongly re-upped their gold shorts last week and probably were doing the same so far this week which was a negative for gold. That was following several weeks of reducing their shorts. A trip to the $800's is a lot more likely (Ackerman's target).
The action today in gold looked well executed. London took it down for several hours into their close to around $916-$920 then a prompt drop to $910 just as London was closing or had closed and a 2nd whack straight down to $906 at 12:15 PM (lunchtime). If you're going to hit it, that's the way to do it. The chart is still the bottom line, so no matter how you get there, gold is at a new low point fishing for support.
The dollar certainly is still not any stronger. As I said last week, this is G8 kumbaya and bond week, so I'm not terribly surprised. The same sequence of events with PM's occured during the last G8 meeting. The bond auctions were just an added bonus. One has to pay for those bonds with money from somewhere and falling stocks and commodities fit the bill.
A good % of those 140 million that "were" employed is because of the fiat and credit that was sloshed around for so long, esp. in the paper-pushing jobs that PC refers to. The world demanded money laundering in various ways and we found new and unique ways to give it to them at considerable "paper" profits to the US. Along with that extra money at absurdly low interest rates allowed businesses of all sorts to misallocate money because people would spend on almost anything. Consumers demanding the newest and the best of everything. Boutique businesses in trinkets and services of all sorts popped up. The 140 million stayed fully employed as long as the "deeds" of the bankers were kept fully under wraps. We have a long ways to go to work off all the excess.
So it wasn't the dollar imo that helped turn gold the other $10 today down to $906....probably the link to commodities and/or oil which had not been there in any force until this morning. I can't help but feel that gold/commodities or both were given a little shove as well
It makes no difference why gold is down, the fact is it is down. I could see last week that gold was gonna drop. Dont you think others could have as well? Did I and others see the "manipulative" hand coming to play? Did we get the "secret" message?
The dollar may not be stronger, but it isnt weaker either. If the dollar remains stable, the "premium" paid for gold will drop. The YEN has been very strong. Why? Isnt this the weakest of all the major currencies?
<< <i>Well, it has already led to an additional $16 drop. Charts are my business. People pay me money to read charts. I try to give some insight into my methods but of course I can not go into all the details. Some still say chart reading is a 50-50 proposition. I dont know how many more charts I need to post to prove otherwise. Maybe I should just stop? >>
Don't take this the wrong way, but your comments are coming off as arrogant. You think that cutting and pasting a chart into the forum is proof of anything (except what's happend in the past)? We all look at the same charts as you do. Cutting and pasting a chart here is worthless without any commentary or interpretation, which you seldom provide. As I'm sure you agree, reading a chart is an art, not a science. When you start reading charts, it is 50-50, and as you develop skills and experience the odds tilt in your favor. But just because you can look at a chart and make a good interpretation, don't think the mere posting of a chart in the forum is going to communicate what you're seeing or expecting. Myself and I'm sure RR are always interested in alternate interpretations or reassurance in our own interpretations.
<< <i>I laugh when I read some of the crap that is posted in links to other "chartists". I really want to expose the errors in some of their analysis, but their errors are what I profit from. I would be a fool to set them straight. And in it probably would be in vain anyway as many chartists are so stcuk in their ways they would never see their error no matter how plainly I stated it. >>
I take it that you're referring to people not in this forum, you're referring to the people who create the charts that RR, I, and others link to from time to time. If you have differing interpretations, we would all like to see/hear it and appreciate it a lot.
<< <i>EVERYONE is employed and productive, regardless of how menial the task is
PC, this is called communism. >>
Really? Did we have communism in the US for the last couple of years? Because we had 5% unemployment (which is considered full employment) a few years ago and that wasn't communism.
<< <i>Yes I am aware of the "minor" tweaking of the indirect bid computation. I do not know how the number compares to the previous computation, nor do I really care. I have read the Treasury statement and the change seems to me to be very minor and has no real relavance to the indication of interest. >>
I wouldn't call it minor, I don't think it should be ignored, but I don't think we'll ever understand the impact of the change. All I know is that it went from 54.4% in May using the old calculation to 68.7% a couple weeks ago using the new calculation. That's a difference of 15% that's either due to true increased interest or the new calculation, or a combination of both. I don't think it's unreasonable to adjust the new numbers down by 5-10% to compare to the old numbers.
<< <i>Am I oversimplifying? Maybe, but I think Im proving a point. What does the "real" world want? China may produce the everyday junk we use in our daily lives, but the real stuff is still made in the USA. If we dont make anything, then why are we 90% employed? Thats 140 million people. And I would argue that a service economy may in fact be stronger than a manufacturing one as services are always in demand where as manufacturing is much more cyclically violent. >>
Real stuff? We've been making less and less "real stuff" and we continue to do so. Just like everything else, BRIC can make everything cheaper. Cat and Deere may make the best, but it's hard for companies to justify them when Komatsu is 1/2 to 1/3 the price. And India's got sompetition too. China's got competition for the Boeing 737 with the new ARJ21, and so does Brazil with the ERJ190.
The strongest economy would be one comprised of a good mix of manufacturing and services. If you're not manufacturing, you're importing. You can't have a growing service based economy unless you're exporting a lot of services. The US service economy is also declining as we are importing services from the emerging market (India) and exporting less and less. I think people are trying to find reason for why their expectations are not being met. I discussed this with Deadhorse last Spring when silver collapsed. People have a tendency to try to question everyone else, but they never question themselves.
It didn't look to me that gold was destined to get hammered today. In fact, as of yesterday the course it was following was eerily similar to the action in mid-April just before it left the $920's behind and headed for $990 again. Even after going back and reassessing everything again it didn't look pre-ordained to go down below the $912-$920 levels that had been around for some time. Even Goldman Sachs fell out of its bearish wedge only to bounce back to $150. And up to the last few days was still living at the $145 level....until today. But I don't get paid to analyze charts for anyone so obviously I'm missing things and/or interpreting things 180 deg out.
Not knowing what the bankers are specifically doing each day in the futures market (they control 75% or more of the total gold and silver shorts) doesn't help the shorter term trading picture. Gold moves as the bankers do. If you're not in sync with them, you're probably losing.
The 200 dma sits around $880. It would appear gold has to fully wash out from here to regain its footing
Arrogant? Perhaps. Usually correct? Yup. Call it what you like.
I am not going to provide propietary info for free on a public message board.
You think that cutting and pasting a chart into the forum is proof of anything (except what's happend in the past)? We all look at the same charts as you do. Cutting and pasting a chart here is worthless without any commentary or interpretation, which you seldom provide
Then why do people come up with different conclusions? When I look at a chart, I do not see the past, maybe thats the difference. Rather than me giving my interpretation, why dont you try to find out what I see. I can understand not trying if I am frequently wrong, but since Im not, why not try to discover what I read? Listen, I trained under a great trader at the Phila exchange. He once related a story to me that went something like this. He had a friend who knew he was very successful in the market. He asked him why, try as he might, he could never make money in the market. My trader friend responded, "Your not supposed to, thats my job." It took me awhile to realize what he was saying--although it appears quite obvious. You will understand this comment better when you answer this question---"What is the market?"
My interpretation of your comment of full employment was 100%, not 95% employment. Thats why I used the communism comparison. My point is that the USA does indeed make a lot tof the things the world needs and the world makes alot of the things the USA needs. Whats wrong with that? We could easily compete with the BRICs, but do you know anyone who wants to work for $150 a month? Do you know anyone who would like to live as the typical worker in Brazil or China? We need only blame ourselves for creating a culture of excess and want.
Perhaps the expectation I need to revist is why I try?
I wouldnt panic over today's drop in gold prices if I were a gold bull, because gold is simply continuing in its trading range. It's been stuck in this trading range for months.
As I've said before we need a solid break out above $1,000 to trigger a new bull run. Until then, the trading range will continue.
The trading range is 800 to 950. If you want to "trade it" go ahead. But as I've said many times, I don't want to trade the range. I want to buy when there is a break out and the market starts to make its new run.
There is a lot of room -- 150 dollars worth -- in this trading range to keep you traders happy. I hope you all make a lot of money "in the range."
I'm still waiting for a break out, but I just might nibble a little myself if gold drops to around 800 again.
You will understand this comment better when you answer this question---"What is the market?"
In line with my cynical nature, I honestly feel the "market" is JPM/GS along with the PPT and a number of other huge trading funds. Hence it's not a true market, at least not anymore. We're playing in a market that is not much different than a casino. The big players have sophisticated programs that automatically sway the market one way or the other. I know the market is not you or me and it's not J6P and his 401K. The little guy who invests the majority of the money is the fodder, and the big sharks are the feeders. I found it comical that GS is up in arms about an ex-trader who supposedly copied their proprietary high frequency trading software. GS is afraid that in the wrong hands such a program could be used to manipulate the market in the wrong ways. Who would have ever thought a program could be used in such evil ways? We should all be thankful that we have a patriotic company like GS that would never use their propietary trading program for manipulation of the markets in the wrong way. And the faster that their program is returned to them, the better I will sleep at night.
Be careful of what you nibble in this market MLA because this PM market always seems to find a way to bite back. While an additional $8 below the $912 mark is not a huge sum, the fact that we broke previous resistance so fast seems huge. The leg up back in April from $880 was no leg up, just corrective. That shifts us back to part of the February $1007 correction....now into its 5th month and probably all the way back to March 2008....C leg down in progress. The last good trend line is now multi-year support at around the $800 level. 200 day moving average lives at $880. Can the gold market turn around on a dime right here? I'll leave that up to others.
To answer the earlier question about the YEN. I suppose it's the "safe haven" currency play against the Euro/Dollar. It has gone absolutely crazy today with a mammoth move. A flight to liquidity. We've been saying that the Treasury needs to sell a ton of bonds so they would have liked to see the reflation tried fail with stocks and commodities taking it on the chin. Since the bond sales are ultimately weakness for the dollar, the current flight to the YEN makes sense. The GSR moving away from 61 for the past month has hinted at liquidity leaving the market. The Treasury now has all the money it needs to sell those bonds.
"I actually like the deal with the UNG. It is now possible that instead of trading at NAV--net asset value--it could really trade at a premium and perhaps a strong one if natty begins to perk up. Summer is historically low so no real surprise at the current weakness. A 3% move is nothing for this and I trade it all the time. In fact I am long today. Natural gas was down 2% today, UNG down 2.5%. UNG was down cuz natty was down. No other reasons needed for the drop."
I have been kennly interested in the price action of UNG, it is at new lows for the entire move and i'm sure contango is also a negative factor, although I don't see it as a major factor(?). I know it has very little technical support here but I have made the decision to build a reasonably large percentage postion in my portfolio (10%) I have been buying every day the last 3 days and if it keeps dropping I am commited to buy more, time will tell if this is wise or pure folly.
FWIW, I am of the mind that cohodk, is one of the most pragmatic, unbiased and accurate contibutors to this board.
<< <i>Arrogant? Perhaps. Usually correct? Yup. Call it what you like.
I am not going to provide propietary info for free on a public message board. >>
Cohodk, I don't know anything about you or your record, or what you do for a living. Maybe you've explained this before and you've probably been around a lot longer than I so others are more familiar with who you are, but myself and other newcomers know little about you. Please forgive me if I am skeptical of an Internet board poster who makes terse predictions without any substantiation.
I provide my opinions and observations on here for free as all of us do. I find RR's comments far more valuable as he makes his observations and explains why he thinks what he does. I don't always agree with it, but at least knowing his reasoning I can make my own judgment. And others can accept or disregard my logic as well.
I don't know what proprietary information you have and what you'd stand to lose by backing up a prediction every now and then, but that's your choice.
<< <i>Then why do people come up with different conclusions? When I look at a chart, I do not see the past, maybe thats the difference. Rather than me giving my interpretation, why dont you try to find out what I see. I can understand not trying if I am frequently wrong, but since Im not, why not try to discover what I read? >>
Everyone comes up with different conclusions, that's what I'm saying. Why do you think you can post a chart in the forum and everyone here is going to read your mind and come to whatever it is that is your conclusion? How do I know how often you are wrong or not? These trading threads have only been going for a couple of months. I would love to know what you're seeing/reading, but you never seem to explain anything. I don't know if you're looking at chart patterns, bollinger bands, trading ranges, moving averages, inflection points, oscillators, Fib retracements, support and resistance, or any combination of these, or maybe something I didn't mention. This is why we all see different things.
<< <i>My point is that the USA does indeed make a lot tof the things the world needs and the world makes alot of the things the USA needs. Whats wrong with that? >>
Nothing is wrong with that as long as it's true. The problem is that there is a dangerous trade imbalance that is only getting worse. An economy cannot grow (without phony fiat currency manipulation) if it is consuming more than it is producing. It may work for short periods of time, but it is unsustainable.
I prefer to post all ideas with the reasoning behind them. If my logic is wrong, someone can correct it or shoot holes through it. If it makes sense, others could confirm it or like PC said, agree or disagree with it. Putting stuff down in writing is often my way of working things out. I can often see holes in the analysis once I'm reading it. Since often times it's my first time through the material, I see a potential benefit to lay it out for others to possibly learn from. If some board members want to label it as useless astrology type mumbo jumbo alakazam, it's their choice. Much of this trading stuff was total mumbo jumbo to me a year ago. Today, I can at least converse in the TA language and read other people's analysis and approve or disregard it.
Cohodk's market views, even if only a few sentences in passing are highly regarded around here. I encourge the continued posting of his charts for us to assess.
Let me clarify, I don't want to discourage the posting of charts. However, if you anyone posts a chart, please do not assume that I am going to see what you want me to see unless you add a few words to your post.
Todays action was disappointing. As I had pointed out the trend had energized and was ready for a move, but it went down instead of up. The current trend is now pretty much exhausted, and we can reasonably expect a brief consolidation for the next day or so between $905 and $920. If gold recovers quickly back above $920 (by Noon Thurs), then the current bullish pattern is intact and this was merely a double bottom with a brief overshoot, but if not, then we should prepare for $890. A lot of writers seem to be looking at a gold bottom on or near July 14, about a week from now.
Not anticipating the decline, on last night's dip to $920 I re-established my full position and brought my cost average down to approx $925. I'm going to watch for $920 closely tonight and tomorrow for a chance to exit my futures position completely (or at a minimum, reduce by 1/2). This should get me out with a minor $5 loss. Gold will have to really show some strength around $920 to convince me to stay. I'm sure it will find a way to fool me.
Resistance is at $922.2, Pivot at $913.5, and support at $901.30.
> Let me clarify, I don't want to discourage the posting of charts
I agree. Nothing wrong with posting charts. What is difficult to appreciate are supposedly serious hit and run cryptic predictions or a market analysis full of condescension towards anyone who might fail to agree :::sigh::: you can lead them to the water but you just can't make them drink.
I'd say whatever positive trend remained has been smashed for the time being. Bond prices are in control now and we just have to wait and see when the yields finally stop falling. It won't be tomorrow with a 30 yr bond auction up next. Plus tomorrow is day 2 of the G8, no dollar or treasury bashing allowed. As an aside, Hal Turner was recently imprisoned on that huge "phony" US bond story. It seems odd they arrested someone for the news. Seems odd that no one in official status from the US has gone over there to look at the bonds. It seems internet photos, regardless of how they ware obtained, is the evidence. Maybe that story has more legs than we thought. JS doesn't normally post fictitious stories on his site.
Looking at the GSR there is just no relenting in the force of this move. The Trix, Momentum, and Stochastics are all locked down in a strong bullish mode with not even a hint of yet turning. This paints the same picture as the bond prices. Not having paid a whole lot of attention to the GSR prior to June, this is one trend that I should have paid more attention to when it angled up and hung there since early June. This was the flight of liquidity warning. Maybe the dollar wasn't ringing in unison but other things were. In hindsight, COT short position was still too huge and several analysts mentioned that often. The fact that last week's typical Friday report was delayed to Monday because of the holiday didn't help. That report showed the COT reloading heavily back up on the shorts. Staying long was going against the driving force in the futures. When this week's report comes out they will likely be unloading the shorts again in preparation for the next turnaround. Along with Cohodk, Bob Hoye called the $948 top last week as the final hurrah for a while. That failure to go higher killed the potential of an early July rally.
Funny that I read a lot of different sites too. The final July turnaround for gold announcements first centered on last week, then this week, especially Monday.....then it was Tuesday...then Wednesday....and of course now Thursday. Sinclair's bottom in the 3rd week of June and then last week's the bottom is now in just reiterated the same nonsense that the charts weren't yet verifying. So if bottom callers are now looking for July 14th (Bastille Day?) we'll just have to take it as it comes. ....and waiting for a less risky opportunity to re-enter.
It just may be smarter to ignore all the sites and go with one's own analysis and gut. The constant chatter from both camps is more a distraction than a help. And it's ironic that a week or two or ago I was telling Cohodk that so many of these top newsletter guys were coming out with calls of a strong turnaround any minute that it probably meant they were all wrong. There didn't seem to be enough pain yet on the June/July correction....well now we have a better taste of that. I was reminded of Kinross today that had a wide gap around $17.50 and how I felt it would be hard to get back down there from the $19's. It got back down there today! Another thing I noted is that on multiple occasions, on the days before the miner smackdowns, TRE has often been one day early. They did this again yesterday by knocking TRE down 13%. Today TRE was up 5% while the others were whacked. It's almost as if they want JS to suffer his pain earlier. Regardless of what one may think of the stock, I've seen TRE react 180 deg out from the larger producing miners too many times over the past few months...whether it's early or late, they are often out of synch with what's coming next.
<< <i>It just may be smarter to ignore all the sites and go with one's own analysis and gut. The constant chatter from both camps is more a distraction than a help. And it's ironic that a week or two or ago I was telling Cohodk that so many of these top newsletter guys were coming out with calls of a strong turnaround any minute that it probably meant they were all wrong. There didn't seem to be enough pain yet on the June/July correction....well now we have a better taste of that. I was reminded of Kinross today that had a wide gap around $17.50 and how I felt it would be hard to get back down there from the $19's. It got back down there today! Another thing I noted is that on multiple occasions, on the days before the miner smackdowns, TRE has often been one day early. They did this again yesterday by knocking TRE down 13%. Today TRE was up 5% while the others were whacked. It's almost as if they want JS to suffer his pain earlier. Regardless of what one may think of the stock, I've seen TRE react 180 deg out from the larger producing miners too many times over the past few months...whether it's early or late, they are often out of synch with what's coming next. >>
Things are getting tricky. That's why I all along had a plan to just get in at a good buy point and weather any tests down. Of course, I'd prefer not to if I can see them coming.
Gold is hitting $919 as I type, so the recovery to $920 is coming through like I expected.
The one thing that I can be sure of, is that when gold does take off, it will take off with the fewest people on board as possible. It's going to do everything it can to shake the longs before it goes.
I don't think gold will have the energy to punch through $920, so I think I will proceed with my plan to sell at $920, although I may regret trying to old out for that extra dollar.
I might consider nibbling next week as well, but they would be very small nibbles. Unwinding of the reflation trade took a breather today from the previous trend of strong Yen, strong bonds. Note how the dollar has started falling apart again now that the bond auctions are essentially over...funny how that works. The dollar retested its lower trendline today and BB's are tightened up so suspect it may finally try to break free from the 80.9 level.
PC, did you get your $920? I see that we came within cents of that number today in the spot market so you may have just eeked it out in the futures.
RR, I didn't get $920. Futures gold only hit $919, so I still have a full position.
I'm not convinced that this is a bad thing or that gold is ready to break down further. It could go either way (duh).
I've now read several sites with timing calls on a reversal starting Friday (tomorrow), Jul 14, and Jul 22.
And if you look at the pattern today it could be seen as a reversal if you draw a line at $910... there's definitely a level of support there that could and should hold overnight and tomorrow.
To be honest I'm probably stuck in a holding pattern until things develop more. The chart is almost loaded with energy after today's consolidation, so another move (either way) could happen tomorrow.
One point I'll also make. A couple of weeks ago I set buy price targets on a bunch of gold stocks by looking at support and resistance levels. Some of the support levels were pretty far down from where the stock was at the time... One of those situations where you look and you don't really think you'll get an entry point there. Well, yesterday a lot of the stocks hit that support level.
I think there's a decent chance that this is it for the decline... but I'm not too confident about that yet.
Yes. It's always good to know when the auctions are taking place. The promise of more stimulus should undo the dollar...it amazes me that it has remained resilient in the face of the massive amounts of printing the Fed and Treasury has approved. Dat aint a gud thang for da dollar.
"Poets are the unacknowledged legislators of the world." PBShelley
Keep posting your charts AND please tell us the specific pattern you are looking at. As many have written here, Technical Analysis is an ART and not a SCIENCE and you may see things in the patterns that others don't see. Keep your thoughts coming.
And regarding the recent retreat in gold prices: this is the reason I am critical of any buy and hold strategy. I want to buy when prices are moving up, not when they are going sideways or down.
And regarding price averaging: only price average UP. When you price average DOWN you are really throwing good money after bad.
cohodk's charting skills are so far over my head that I wouldn't know the difference if he stated something 180 degrees from what he really thinks............ Daily trading and TA are deep water for me, but I still want to know what cohodk thinks.
We lost that $5 on the gold chart, and does that still mean a $100 drop in gold? I'd be surprised.
Q: Are You Printing Money? Bernanke: Not Literally
Cohodk made a call of a $50 drop coming when gold closed at $940 on 6/26 (after peaking at $948) earlier that same day. So far we've seen $35 which is good enough for the trend. The $5 came in when gold was walking the lower multi-month trend line from last November. A $5 push from that lower level was Cohodk's cue that another $15 move was coming. We saw that drop as well.
But nothing about a $100 drop yet. First let's get to the original $50 at $890.
Saw no changes in today's charts that said gold was strengthening. Momentum still negative, RSI still down, stochastics starting to flatten out but not quite yet. Could still be a week or more left to get them to turn up. Still of concern in the GSR which is still trending exponentially since June 1st. No slowing today as it hit the 72 mark. Recall that during our visits to gold in the $860's to $900 we saw GSR move in the 69-74 range. We're not far from that now. To support GSR's flight to safety (Yen, Bonds, and some dollar) I still see a general downtrend in the bond yield charts ($UST20y) with the dollar hanging sideways with a slight uptrend slant over the past 6 weeks. Almost expecting one last hurrah for it to make an attempt at 82 before calling it quits. But I don't know if that would be weeks or even months.
Bollinger bands on the dollar, gld, gdx, 20 yr bond yield etc. are tight waiting to move one way or the other. GSR BB's are still widening in the 10 day but turning over a bit in the 20 day. A change of direction in gold/dollar seems to be imminent and I'd go with dollar weakness and some gold strength.
And regarding the recent retreat in gold prices: this is the reason I am critical of any buy and hold strategy. I want to buy when prices are moving up, not when they are going sideways or down. And regarding price averaging: only price average UP. When you price average DOWN you are really throwing good money after bad.
Anyone buying following the strong retreats from $948, $932, $920, $905 would have done quite well as long as they sold back in. Gold has a tendency to bounce sharply back following sharp corrective waves (what you call whipsaw). Fwiw the big banks buy more shorts as the price goes up...doing just the opposite as you recommend. Yet they are the ones who make money in gold during upswings and downswings while the specs (mostly long all the time) lose money chasing the price up. Chasing the price up, esp. after a new high is made, imo is not a sound strategy. Many successful traders buy on as the price falls after each major price change. Individual traders do whatever works for them. But everything I see posted from traders shows that they buy on weakness and sell on strength. It's one thing to have bought into gold at $320 when it was near rock bottom and ride it out for a triple. It's entirely different imo to want to buy back in at $1050+ and ride that expecting similar results to the first time. The whipsaw will kill many Johnny-come-lately's. Whipsawing will occur on this next upside as well.
There was a pretty hard bounce as well back in the mid-$13's but it didn't hold up. The gold to silver ratio is a measure of overall market liquidity (ie heading to cash). And as long as it is trending sharply upwards, money is flowing into the Yen, dollar, treasuries, and somewhat to gold. Silver, oil, and commodities will continue to get whacked while gold suffers less.
I see some strong support for silver around $11.75. The Silver to Gold ratio (inverse of GSR) has support strong support at a level equivalent to a GSR of 75-77. With gold at $890, silver at around $11.85 gives a GSR of 75. If the gold low is already in at $905, then silver meeting its 200 day moving average at $12.10 gets the GSR of 75. That $12.10 would also be close to a 50% retracement of the Nov-June move from $8 to $16.
The flight to liquidity drags gold and silver stocks down also. The GSR just has a huge rise over the past week so a bounce for silver and gold here would not be unexpected. But I think any bounce would be followed by more downside during August.
GSR now challenging 73 shortly after the Monday open. This portends that another drop is coming. And after 6 down Mondays in succession, why not a 7th.
Not to get much more carried away with the topic, but just wanted to express that I think posting a chart, whether analysis provided or not--is a ABSOLUTE statement of fact.
Writing---"When the Chinese discover the $1 trillion US $ they are holding are worthless.", is to me nothing more than "censored" opinion. This is just how I view the world, almost like a series of 0's and 1's. It works well for me and Im not gonna change, but I do welcome others' viewpoints and comments as they influence my perspective and cognition . As soon as my investment returns over the last 7 years have been audited I will make them available to anyone interested. Just send a PM.
Back to the market.
We have seen quite a rout in commodities the last 4 weeks or so. Bollinger bands are getting tight on the US dollar and I believe it is about to make a fairly substantial move. Which way, I have not yet committed. Silver down near the 200dma looks tradeable. Oil is also near its 200dma. GLD is trading along the 150dma. Momos are still in the crapper, but we could/should see some kind of a rally in the next week-10 days.
<< <i>Not to get much more carried away with the topic, but just wanted to express that I think posting a chart, whether analysis provided or not--is a ABSOLUTE statement of fact. >>
I don't dispute this, I just question the value. Any one of us can pull up a chart. Is there something special about your charts that I might not be aware of? I can post that the sky is blue, and while true, it is of little value to any discussion since anyone can make this observation by poking their head out the window. I don't mind you posting the charts and I encourage you to do so if you feel so compelled, I just don't think it tells me anything that I haven't already seen by looking at charts on my own.
RR, I'm going to say that I see things going the other way. Equities are poised for a nice run, and a nice run has started this morning. Lately, gold performance has tended to shadow the stock market. If this week turns out to be good for equities, it will be good for gold too.
The Aden's sister's reprint of their June 26th article appeared today (and once again a top occured at the same time). That's a bad omen for the next few days.
Gold did get a small smack right after 10 am down to $907. Anything can go in the short term. But would like to see a decent reversal in GSR and 10/30 yr interest rates (or dollar) to show a real trend change. Take advantage of the short term bounce. If it lasts a retest of the broken up-trend line around $920-$926 would make sense. Momentum and Stochastics still have more bottoming to do. The RSI is just about there though. I note Newmont hit very close to 30 today and BVN wasn't far behind. Darlings of the last run (Newmont, BVN, IAG) got hammered the hardest over the past 2 weeks. The HUI came close to breaking 300 today which would break key resistance. For now it's clear again.
RR, I see what you're saying. Today's run to $920 could be the run to $920 that I was expecting a few days ago, and this is either a good opportunity to get out or the first stop in the run to $1000+. $918 appears to be a level of support for now.
Because of how equities are positioned, I'm going to maintain my position that equities are ready to run, and that gold will follow along. I expect S&P 500 at some point either now or the next few months to return to 1060 as this is an important Fib retracement that needs to happen.
Today's "bullish" move in equities was initiated by analyst Meredith Whitney giving Goldman Sachs some bullish praise. No doubt GS will have some good earnings to report since they were making hundreds of millions (or billions) of dollars while high frequency trading the stock market and keeping their $30 TRILL in otc derivatives marked to myth. How this is bullish for the entire market remains to be seen.
I don't see anyone currently figuring on near-term return to $1000 gold. A retrace of the $948-$904 June drop is the best I would expect from here (+$20 to +$25). The reflation trade with commodities is back on the shelf as long as the Yen is strong, the dollar is holding, and interest rates are stable or falling. But today was a good 1 day move to get all those indicators to start reversing. Letl's see if it holds up. A move to $925 gold would make sense.
Today's move was pretty much shut down at $920, a major support/resistance level. The trend from today still appears to have more energy and more strength - i don't htink it is done. I expect it will be able to punch through $920 Tuesday, maybe Wed at the latest. This is critical. There's still room for gold to surge up another $10 or more from here in this initial move.
RR's observations do weigh on my sentiment here as his observations are valid as well. This could be just a fake out, but today's action looked too bullish to be a fake-out. However, a failure to punch through $920 means that one of the later timing models is probably correct and we'll see $890 again sometime over the next 2 weeks.
The legitimacy of the equities move today doesn't matter to me a whole lot. I'm in the camp that you have to kind of throw out event-driven justifications if you're going to read charts. sometimes the market goes up on good news, sometimes it goes down on good news. The market's reaction to any given news is difficult to predict but easy to explain after the move is over. The ECRI index is looking promising and I think some data is going to start turning around (legitimate or not) and economic activity may actually start to pick up here soon. I do question the legitimacy and longevity, but I do expect a market rally in the near future, and I expect it to be good for gold.
RR's observations do weigh on my sentiment here as his observations are valid as well. This could be just a fake out, but today's action looked too bullish to be a fake-out. However, a failure to punch through $920 means that one of the later timing models is probably correct and we'll see $890 again sometime over the next 2 weeks.
I have new information that trumps roadrunner's or ProofCollection's analyses for at least the next 3 weeks. I bought some gold sovereigns today; therefore I expect a few weeks of price deterioration in the gold market. Sorry, guys.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>I have new information that trumps roadrunner's or ProofCollection's analyses for at least the next 3 weeks. I bought some gold sovereigns today; therefore I expect a few weeks of price deterioration in the gold market. Sorry, guys. >>
That only happens when I buy... since I didn't buy any recently, it will surely go up!
<< <i>... a failure to punch through $920 means that one of the later timing models is probably correct and we'll see $890 again sometime over the next 2 weeks.
.... >>
got dry powder, hoping for 890.00!
Do your best to avoid circular arguments, as it will help you reason better, because better reasoning is often a result of avoiding circular arguments.
Gold punched through $920 rather easily last night, this now should provide pretty good support. We're encountering pretty good resistance at $926.5. It's now made 2 attempts, and the slow steady climb of the gold price leads me to think this pattern has the energy to break through $926.5. If this happens, $933 is the next resistance level. I wouldn't be surprised to see gold end the day in the $930-933 range. Gold continues to follow equities which continue to plug higher.
The gold turn was helped by the downturn in the Yen, upturns in the Canadian dollar (commodity leader) and longer term bond yields. Some of these have or nearly have completed fairly long corrective patterns down since early June. It's within reason that a bump up could be in the cards for a bit.
<< <i>The gold turn was helped by the downturn in the Yen, upturns in the Canadian dollar (commodity leader) and longer term bond yields. Some of these have or nearly have completed fairly long corrective patterns down since early June. It's within reason that a bump up could be in the cards for a bit. >>
Gold is looking good, but didn't crack $927 today. I think it will break through tonight/tomorrow and return to the $930-944 range it was in before the recent drop started. I don't expect any drop below $920, but that would be a big sign that this move is temporary - I don't think it is. I expect $944 to be a formidable barrier like it was before. We'll know "it's on" after a breakout over $944. The sooner it gets over $930 again, the more confident I'll fell that $890 is not in the cards.
CPI up, there goes gold (good for my longs, bad for the itch wanting to get some more on a dip.) Oh, well. If had bought at 909, prob be 870 now LOL. Russ and I have the same knack for buy high and sell low. Patience, patience.
Do your best to avoid circular arguments, as it will help you reason better, because better reasoning is often a result of avoiding circular arguments.
WE hit my price target for this move. The pattern has to be exhausted now with 3 solid up days. I think we're going to need a few days to consolidate at this level. Key is to watch for a breakout over $944. Not sure what would consitute full breakdown. Probably a drop below $929 or $920.
Gold stocks will probably continue to rise as they have some catching up to do if they are to recover to the pre-recent-drop levels.
but we could/should see some kind of a rally in the next week-10 days.
Well, theres I rally I was looking for. Can it keep going? Maybe. For me it doesnt matter. Trying to trade $5 moves in gold will most likely result in failure. I look for the quick $30-40+ moves. When I see 'em I trade 'em then sit. Whether the next $30 moves occurs here or higher or lower, I dont know...yet. But when it is apparent, I'll add my 2c.
<< <i>but we could/should see some kind of a rally in the next week-10 days.
Well, theres I rally I was looking for. Can it keep going? Maybe. For me it doesnt matter. Trying to trade $5 moves in gold will most likely result in failure. I look for the quick $30-40+ moves. When I see 'em I trade 'em then sit. Whether the next $30 moves occurs here or higher or lower, I dont know...yet. But when it is apparent, I'll add my 2c. >>
From Monday to today we had a $30 move. Did you get it on it?
<< <i>but we could/should see some kind of a rally in the next week-10 days.
Well, theres I rally I was looking for. Can it keep going? Maybe. For me it doesnt matter. Trying to trade $5 moves in gold will most likely result in failure. I look for the quick $30-40+ moves. When I see 'em I trade 'em then sit. Whether the next $30 moves occurs here or higher or lower, I dont know...yet. But when it is apparent, I'll add my 2c. >>
From Monday to today we had a $30 move. Did you get it on it? >>
I mentioned silver on Monday as trying to bounce off the 200dma so I traded AGQ--the ultra long silver etf.
I've been more of a "manipulator", er, trader of oil through UCO the last few days. Sold 1/2 my position just now at 10.13, but plan on holding the rest for the $10.50 range. Other than a small position in UNG--which isnt doing anything--and a small put position on an individual stock, I am all cash.
<< <i>I mentioned silver on Monday as trying to bounce off the 200dma so I traded AGQ--the ultra long silver etf.
I've been more of a "manipulator", er, trader of oil through UCO the last few days. Sold 1/2 my position just now at 10.13, but plan on holding the rest for the $10.50 range. Other than a small position in UNG--which isnt doing anything--and a small put position on an individual stock, I am all cash. >>
So the answer is no? You're like my wife. She always gives me answers to every question except the one I asked... lol.
So I'm very happy with the gold move. I'm actually not expecting gold to pause too long at this level. I think we may see it pop over $944 on Thursday. I thought it looked really bullish how it hugged $940 really tightly all day. Tonight I expect support to hold up at $935. Resistance is $946.2
I'm debating whether to add to my position on a breakout over $946 or even on this dip to $936. I might buy a silver contract instead.
Comments
Well, it has already led to an additional $16 drop. Charts are my business. People pay me money to read charts. I try to give some insight into my methods but of course I can not go into all the details. Some still say chart reading is a 50-50 proposition. I dont know how many more charts I need to post to prove otherwise. Maybe I should just stop?
You had that call dead on. No arguments there.
I was analyzing the Dollar, GLD and GDX charts very closely this morning in multiple time frames (hours/days/weeks) about an hour before the drop below $917 occured. The first $5 drop took it back to the upper teens. The dollar was actually rolling over and seemed peaked out already from the previous few days. So it wasn't the dollar imo that helped turn gold the other $10 today down to $906....probably the link to commodities and/or oil which had not been there in any force until this morning. I can't help but feel that gold/commodities or both were given a little shove as well. The bankers strongly re-upped their gold shorts last week and probably were doing the same so far this week which was a negative for gold. That was following several weeks of reducing their shorts. A trip to the $800's is a lot more likely (Ackerman's target).
The action today in gold looked well executed. London took it down for several hours into their close to around $916-$920 then a prompt drop to $910 just as London was closing or had closed and a 2nd whack straight down to $906 at 12:15 PM (lunchtime). If you're going to hit it, that's the way to do it. The chart is still the bottom line, so no matter how you get there, gold is at a new low point fishing for support.
The dollar certainly is still not any stronger. As I said last week, this is G8 kumbaya and bond week, so I'm not terribly surprised. The same sequence of events with PM's occured during the last G8 meeting. The bond auctions were just an added bonus. One has to pay for those bonds with money from somewhere and falling stocks and commodities fit the bill.
A good % of those 140 million that "were" employed is because of the fiat and credit that was sloshed around for so long, esp. in the paper-pushing jobs that PC refers to. The world demanded money laundering in various ways and we found new and unique ways to give it to them at considerable "paper" profits to the US. Along with that extra money at absurdly low interest rates allowed businesses of all sorts to misallocate money because people would spend on almost anything. Consumers demanding the newest and the best of everything. Boutique businesses in trinkets and services of all sorts popped up. The 140 million stayed fully employed as long as the "deeds" of the bankers were kept fully under wraps. We have a long ways to go to work off all the excess.
roadrunner
It makes no difference why gold is down, the fact is it is down. I could see last week that gold was gonna drop. Dont you think others could have as well? Did I and others see the "manipulative" hand coming to play? Did we get the "secret" message?
The dollar may not be stronger, but it isnt weaker either. If the dollar remains stable, the "premium" paid for gold will drop. The YEN has been very strong. Why? Isnt this the weakest of all the major currencies?
Knowledge is the enemy of fear
<< <i>Well, it has already led to an additional $16 drop. Charts are my business. People pay me money to read charts. I try to give some insight into my methods but of course I can not go into all the details. Some still say chart reading is a 50-50 proposition. I dont know how many more charts I need to post to prove otherwise. Maybe I should just stop? >>
Don't take this the wrong way, but your comments are coming off as arrogant. You think that cutting and pasting a chart into the forum is proof of anything (except what's happend in the past)? We all look at the same charts as you do. Cutting and pasting a chart here is worthless without any commentary or interpretation, which you seldom provide. As I'm sure you agree, reading a chart is an art, not a science. When you start reading charts, it is 50-50, and as you develop skills and experience the odds tilt in your favor. But just because you can look at a chart and make a good interpretation, don't think the mere posting of a chart in the forum is going to communicate what you're seeing or expecting. Myself and I'm sure RR are always interested in alternate interpretations or reassurance in our own interpretations.
<< <i>I laugh when I read some of the crap that is posted in links to other "chartists". I really want to expose the errors in some of their analysis, but their errors are what I profit from. I would be a fool to set them straight. And in it probably would be in vain anyway as many chartists are so stcuk in their ways they would never see their error no matter how plainly I stated it. >>
I take it that you're referring to people not in this forum, you're referring to the people who create the charts that RR, I, and others link to from time to time. If you have differing interpretations, we would all like to see/hear it and appreciate it a lot.
<< <i>EVERYONE is employed and productive, regardless of how menial the task is
PC, this is called communism. >>
Really? Did we have communism in the US for the last couple of years? Because we had 5% unemployment (which is considered full employment) a few years ago and that wasn't communism.
<< <i>Yes I am aware of the "minor" tweaking of the indirect bid computation. I do not know how the number compares to the previous computation, nor do I really care. I have read the Treasury statement and the change seems to me to be very minor and has no real relavance to the indication of interest. >>
I wouldn't call it minor, I don't think it should be ignored, but I don't think we'll ever understand the impact of the change. All I know is that it went from 54.4% in May using the old calculation to 68.7% a couple weeks ago using the new calculation. That's a difference of 15% that's either due to true increased interest or the new calculation, or a combination of both. I don't think it's unreasonable to adjust the new numbers down by 5-10% to compare to the old numbers.
<< <i>Am I oversimplifying? Maybe, but I think Im proving a point. What does the "real" world want? China may produce the everyday junk we use in our daily lives, but the real stuff is still made in the USA. If we dont make anything, then why are we 90% employed? Thats 140 million people. And I would argue that a service economy may in fact be stronger than a manufacturing one as services are always in demand where as manufacturing is much more cyclically violent. >>
Real stuff? We've been making less and less "real stuff" and we continue to do so. Just like everything else, BRIC can make everything cheaper. Cat and Deere may make the best, but it's hard for companies to justify them when Komatsu is 1/2 to 1/3 the price. And India's got sompetition too. China's got competition for the Boeing 737 with the new ARJ21, and so does Brazil with the ERJ190.
The strongest economy would be one comprised of a good mix of manufacturing and services. If you're not manufacturing, you're importing. You can't have a growing service based economy unless you're exporting a lot of services. The US service economy is also declining as we are importing services from the emerging market (India) and exporting less and less.
I think people are trying to find reason for why their expectations are not being met. I discussed this with Deadhorse last Spring when silver collapsed. People have a tendency to try to question everyone else, but they never question themselves.
Not knowing what the bankers are specifically doing each day in the futures market (they control 75% or more of the total gold and silver shorts) doesn't help the shorter term trading picture. Gold moves as the bankers do. If you're not in sync with them, you're probably losing.
The 200 dma sits around $880. It would appear gold has to fully wash out from here to regain its footing
roadrunner
I am not going to provide propietary info for free on a public message board.
You think that cutting and pasting a chart into the forum is proof of anything (except what's happend in the past)? We all look at the same charts as you do. Cutting and pasting a chart here is worthless without any commentary or interpretation, which you seldom provide
Then why do people come up with different conclusions? When I look at a chart, I do not see the past, maybe thats the difference. Rather than me giving my interpretation, why dont you try to find out what I see. I can understand not trying if I am frequently wrong, but since Im not, why not try to discover what I read? Listen, I trained under a great trader at the Phila exchange. He once related a story to me that went something like this. He had a friend who knew he was very successful in the market. He asked him why, try as he might, he could never make money in the market. My trader friend responded, "Your not supposed to, thats my job." It took me awhile to realize what he was saying--although it appears quite obvious. You will understand this comment better when you answer this question---"What is the market?"
My interpretation of your comment of full employment was 100%, not 95% employment. Thats why I used the communism comparison. My point is that the USA does indeed make a lot tof the things the world needs and the world makes alot of the things the USA needs. Whats wrong with that? We could easily compete with the BRICs, but do you know anyone who wants to work for $150 a month? Do you know anyone who would like to live as the typical worker in Brazil or China? We need only blame ourselves for creating a culture of excess and want.
Perhaps the expectation I need to revist is why I try?
Knowledge is the enemy of fear
As I've said before we need a solid break out above $1,000 to trigger a new bull run. Until then, the trading range will continue.
The trading range is 800 to 950. If you want to "trade it" go ahead. But as I've said many times, I don't want to trade the range. I want to buy when there is a break out and the market starts to make its new run.
There is a lot of room -- 150 dollars worth -- in this trading range to keep you traders happy. I hope you all make a lot of money "in the range."
I'm still waiting for a break out, but I just might nibble a little myself if gold drops to around 800 again.
www.AlanBestBuys.com
www.VegasBestBuys.com
In line with my cynical nature, I honestly feel the "market" is JPM/GS along with the PPT and a number of other huge trading funds. Hence it's not a true market, at least not anymore. We're playing in a market that is not much different than a casino. The big players have sophisticated programs that automatically sway the market one way or the other. I know the market is not you or me and it's not J6P and his 401K. The little guy who invests the majority of the money is the fodder, and the big sharks are the feeders. I found it comical that GS is up in arms about an ex-trader who supposedly copied their proprietary high frequency trading software. GS is afraid that in the wrong hands such a program could be used to manipulate the market in the wrong ways. Who would have ever thought a program could be used in such evil ways? We should all be thankful that we have a patriotic company like GS that would never use their propietary trading program for manipulation of the markets in the wrong way. And the faster that their program is returned to them, the better I will sleep at night.
Be careful of what you nibble in this market MLA because this PM market always seems to find a way to bite back. While an additional $8 below the $912 mark is not a huge sum, the fact that we broke previous resistance so fast seems huge. The leg up back in April from $880 was no leg up, just corrective. That shifts us back to part of the February $1007 correction....now into its 5th month and probably all the way back to March 2008....C leg down in progress. The last good trend line is now multi-year support at around the $800 level. 200 day moving average lives at $880. Can the gold market turn around on a dime right here? I'll leave that up to others.
To answer the earlier question about the YEN. I suppose it's the "safe haven" currency play against the Euro/Dollar. It has gone absolutely crazy today with a mammoth move. A flight to liquidity. We've been saying that the Treasury needs to sell a ton of bonds so they would have liked to see the reflation tried fail with stocks and commodities taking it on the chin. Since the bond sales are ultimately weakness for the dollar, the current flight to the YEN makes sense. The GSR moving away from 61 for the past month has hinted at liquidity leaving the market. The Treasury now has all the money it needs to sell those bonds.
roadrunner
"I actually like the deal with the UNG. It is now possible that instead of trading at NAV--net asset value--it could really trade at a premium and perhaps a strong one if natty begins to perk up. Summer is historically low so no real surprise at the current weakness. A 3% move is nothing for this and I trade it all the time. In fact I am long today. Natural gas was down 2% today, UNG down 2.5%. UNG was down cuz natty was down. No other reasons needed for the drop."
I have been kennly interested in the price action of UNG, it is at new lows for the entire move and i'm sure contango is also a negative factor, although I don't see it as a major factor(?). I know it has very little technical support here but I have made the decision to build a reasonably large percentage postion in my portfolio (10%) I have been buying every day the last 3 days and if it keeps dropping I am commited to buy more, time will tell if this is wise or pure folly.
FWIW, I am of the mind that cohodk, is one of the most pragmatic, unbiased and accurate contibutors to this board.
<< <i>Arrogant? Perhaps. Usually correct? Yup. Call it what you like.
I am not going to provide propietary info for free on a public message board. >>
Cohodk, I don't know anything about you or your record, or what you do for a living. Maybe you've explained this before and you've probably been around a lot longer than I so others are more familiar with who you are, but myself and other newcomers know little about you. Please forgive me if I am skeptical of an Internet board poster who makes terse predictions without any substantiation.
I provide my opinions and observations on here for free as all of us do. I find RR's comments far more valuable as he makes his observations and explains why he thinks what he does. I don't always agree with it, but at least knowing his reasoning I can make my own judgment. And others can accept or disregard my logic as well.
I don't know what proprietary information you have and what you'd stand to lose by backing up a prediction every now and then, but that's your choice.
<< <i>Then why do people come up with different conclusions? When I look at a chart, I do not see the past, maybe thats the difference. Rather than me giving my interpretation, why dont you try to find out what I see. I can understand not trying if I am frequently wrong, but since Im not, why not try to discover what I read? >>
Everyone comes up with different conclusions, that's what I'm saying. Why do you think you can post a chart in the forum and everyone here is going to read your mind and come to whatever it is that is your conclusion? How do I know how often you are wrong or not? These trading threads have only been going for a couple of months. I would love to know what you're seeing/reading, but you never seem to explain anything. I don't know if you're looking at chart patterns, bollinger bands, trading ranges, moving averages, inflection points, oscillators, Fib retracements, support and resistance, or any combination of these, or maybe something I didn't mention. This is why we all see different things.
<< <i>My point is that the USA does indeed make a lot tof the things the world needs and the world makes alot of the things the USA needs. Whats wrong with that? >>
Nothing is wrong with that as long as it's true. The problem is that there is a dangerous trade imbalance that is only getting worse. An economy cannot grow (without phony fiat currency manipulation) if it is consuming more than it is producing. It may work for short periods of time, but it is unsustainable.
> FWIW, I am of the mind that cohodk, is one of the most pragmatic, unbiased and accurate contibutors to this board.
To each his own. I'm of the view he is more than a bit full of himself.
Cohodk's market views, even if only a few sentences in passing are highly regarded around here. I encourge the continued posting of his charts for us to assess.
roadrunner
Todays action was disappointing. As I had pointed out the trend had energized and was ready for a move, but it went down instead of up. The current trend is now pretty much exhausted, and we can reasonably expect a brief consolidation for the next day or so between $905 and $920. If gold recovers quickly back above $920 (by Noon Thurs), then the current bullish pattern is intact and this was merely a double bottom with a brief overshoot, but if not, then we should prepare for $890. A lot of writers seem to be looking at a gold bottom on or near July 14, about a week from now.
Not anticipating the decline, on last night's dip to $920 I re-established my full position and brought my cost average down to approx $925. I'm going to watch for $920 closely tonight and tomorrow for a chance to exit my futures position completely (or at a minimum, reduce by 1/2). This should get me out with a minor $5 loss. Gold will have to really show some strength around $920 to convince me to stay. I'm sure it will find a way to fool me.
Resistance is at $922.2, Pivot at $913.5, and support at $901.30.
> Let me clarify, I don't want to discourage the posting of charts
I agree. Nothing wrong with posting charts. What is difficult to appreciate are supposedly serious hit and run cryptic predictions or a market analysis full of condescension towards anyone who might fail to agree :::sigh::: you can lead them to the water but you just can't make them drink.
Looking at the GSR there is just no relenting in the force of this move. The Trix, Momentum, and Stochastics are all locked down in a strong bullish mode with not even a hint of yet turning. This paints the same picture as the bond prices. Not having paid a whole lot of attention to the GSR prior to June, this is one trend that I should have paid more attention to when it angled up and hung there since early June. This was the flight of liquidity warning. Maybe the dollar wasn't ringing in unison but other things were. In hindsight, COT short position was still too huge and several analysts mentioned that often. The fact that last week's typical Friday report was delayed to Monday because of the holiday didn't help. That report showed the COT reloading heavily back up on the shorts. Staying long was going against the driving force in the futures. When this week's report comes out they will likely be unloading the shorts again in preparation for the next turnaround. Along with Cohodk, Bob Hoye called the $948 top last week as the final hurrah for a while. That failure to go higher killed the potential of an early July rally.
Funny that I read a lot of different sites too. The final July turnaround for gold announcements first centered on last week, then this week, especially Monday.....then it was Tuesday...then Wednesday....and of course now Thursday. Sinclair's bottom in the 3rd week of June and then last week's the bottom is now in just reiterated the same nonsense that the charts weren't yet verifying. So if bottom callers are now looking for July 14th (Bastille Day?) we'll just have to take it as it comes. ....and waiting for a less risky opportunity to re-enter.
It just may be smarter to ignore all the sites and go with one's own analysis and gut. The constant chatter from both camps is more a distraction than a help. And it's ironic that a week or two or ago I was telling Cohodk that so many of these top newsletter guys were coming out with calls of a strong turnaround any minute that it probably meant they were all wrong. There didn't seem to be enough pain yet on the June/July correction....well now we have a better taste of that. I was reminded of Kinross today that had a wide gap around $17.50 and how I felt it would be hard to get back down there from the $19's. It got back down there today! Another thing I noted is that on multiple occasions, on the days before the miner smackdowns, TRE has often been one day early. They did this again yesterday by knocking TRE down 13%. Today TRE was up 5% while the others were whacked. It's almost as if they want JS to suffer his pain earlier. Regardless of what one may think of the stock, I've seen TRE react 180 deg out from the larger producing miners too many times over the past few months...whether it's early or late, they are often out of synch with what's coming next.
roadrunner
<< <i>It just may be smarter to ignore all the sites and go with one's own analysis and gut. The constant chatter from both camps is more a distraction than a help. And it's ironic that a week or two or ago I was telling Cohodk that so many of these top newsletter guys were coming out with calls of a strong turnaround any minute that it probably meant they were all wrong. There didn't seem to be enough pain yet on the June/July correction....well now we have a better taste of that. I was reminded of Kinross today that had a wide gap around $17.50 and how I felt it would be hard to get back down there from the $19's. It got back down there today! Another thing I noted is that on multiple occasions, on the days before the miner smackdowns, TRE has often been one day early. They did this again yesterday by knocking TRE down 13%. Today TRE was up 5% while the others were whacked. It's almost as if they want JS to suffer his pain earlier. Regardless of what one may think of the stock, I've seen TRE react 180 deg out from the larger producing miners too many times over the past few months...whether it's early or late, they are often out of synch with what's coming next. >>
Things are getting tricky. That's why I all along had a plan to just get in at a good buy point and weather any tests down. Of course, I'd prefer not to if I can see them coming.
Gold is hitting $919 as I type, so the recovery to $920 is coming through like I expected.
The one thing that I can be sure of, is that when gold does take off, it will take off with the fewest people on board as possible. It's going to do everything it can to shake the longs before it goes.
I don't think gold will have the energy to punch through $920, so I think I will proceed with my plan to sell at $920, although I may regret trying to old out for that extra dollar.
PC, did you get your $920? I see that we came within cents of that number today in the spot market so you may have just eeked it out in the futures.
roadrunner
Note how the dollar has started falling apart again now that the bond auctions are essentially over...funny how that works.
Also worth repeating:
when gold does take off, it will take off with the fewest people on board as possible.
I knew it would happen.
I'm not convinced that this is a bad thing or that gold is ready to break down further. It could go either way (duh).
I've now read several sites with timing calls on a reversal starting Friday (tomorrow), Jul 14, and Jul 22.
And if you look at the pattern today it could be seen as a reversal if you draw a line at $910... there's definitely a level of support there that could and should hold overnight and tomorrow.
To be honest I'm probably stuck in a holding pattern until things develop more. The chart is almost loaded with energy after today's consolidation, so another move (either way) could happen tomorrow.
One point I'll also make. A couple of weeks ago I set buy price targets on a bunch of gold stocks by looking at support and resistance levels. Some of the support levels were pretty far down from where the stock was at the time... One of those situations where you look and you don't really think you'll get an entry point there. Well, yesterday a lot of the stocks hit that support level.
I think there's a decent chance that this is it for the decline... but I'm not too confident about that yet.
And regarding the recent retreat in gold prices: this is the reason I am critical of any buy and hold strategy. I want to buy when prices are moving up, not when they are going sideways or down.
And regarding price averaging: only price average UP. When you price average DOWN you are really throwing good money after bad.
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We lost that $5 on the gold chart, and does that still mean a $100 drop in gold? I'd be surprised.
I knew it would happen.
But nothing about a $100 drop yet. First let's get to the original $50 at $890.
Saw no changes in today's charts that said gold was strengthening. Momentum still negative, RSI still down, stochastics starting to flatten out but not quite yet. Could still be a week or more left to get them to turn up. Still of concern in the GSR which is still trending exponentially since June 1st. No slowing today as it hit the 72 mark. Recall that during our visits to gold in the $860's to $900 we saw GSR move in the 69-74 range. We're not far from that now. To support GSR's flight to safety (Yen, Bonds, and some dollar) I still see a general downtrend in the bond yield charts ($UST20y) with the dollar hanging sideways with a slight uptrend slant over the past 6 weeks. Almost expecting one last hurrah for it to make an attempt at 82 before calling it quits. But I don't know if that would be weeks or even months.
Bollinger bands on the dollar, gld, gdx, 20 yr bond yield etc. are tight waiting to move one way or the other. GSR BB's are still widening in the 10 day but turning over a bit in the 20 day. A change of direction in gold/dollar seems to be imminent and I'd go with dollar weakness and some gold strength.
And regarding the recent retreat in gold prices: this is the reason I am critical of any buy and hold strategy. I want to buy when prices are moving up, not when they are going sideways or down. And regarding price averaging: only price average UP. When you price average DOWN you are really throwing good money after bad.
Anyone buying following the strong retreats from $948, $932, $920, $905 would have done quite well as long as they sold back in. Gold has a tendency to bounce sharply back following sharp corrective waves (what you call whipsaw). Fwiw the big banks buy more shorts as the price goes up...doing just the opposite as you recommend. Yet they are the ones who make money in gold during upswings and downswings while the specs (mostly long all the time) lose money chasing the price up. Chasing the price up, esp. after a new high is made, imo is not a sound strategy. Many successful traders buy on as the price falls after each major price change. Individual traders do whatever works for them. But everything I see posted from traders shows that they buy on weakness and sell on strength. It's one thing to have bought into gold at $320 when it was near rock bottom and ride it out for a triple. It's entirely different imo to want to buy back in at $1050+ and ride that expecting similar results to the first time. The whipsaw will kill many Johnny-come-lately's. Whipsawing will occur on this next upside as well.
roadrunner
I'm calling it a bottom. We'll see next week.
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I see some strong support for silver around $11.75. The Silver to Gold ratio (inverse of GSR) has support strong support at a level equivalent to a GSR of 75-77. With gold at $890, silver at around $11.85 gives a GSR of 75. If the gold low is already in at $905, then silver meeting its 200 day moving average at $12.10 gets the GSR of 75. That $12.10 would also be close to a 50% retracement of the Nov-June move from $8 to $16.
The flight to liquidity drags gold and silver stocks down also. The GSR just has a huge rise over the past week so a bounce for silver and gold here would not be unexpected. But I think any bounce would be followed by more downside during August.
roadrunner
roadrunner
Yep
Not to get much more carried away with the topic, but just wanted to express that I think posting a chart, whether analysis provided or not--is a ABSOLUTE statement of fact.
Writing---"When the Chinese discover the $1 trillion US $ they are holding are worthless.", is to me nothing more than "censored" opinion. This is just how I view the world, almost like a series of 0's and 1's. It works well for me and Im not gonna change, but I do welcome others' viewpoints and comments as they influence my perspective and cognition . As soon as my investment returns over the last 7 years have been audited I will make them available to anyone interested. Just send a PM.
Back to the market.
We have seen quite a rout in commodities the last 4 weeks or so. Bollinger bands are getting tight on the US dollar and I believe it is about to make a fairly substantial move. Which way, I have not yet committed. Silver down near the 200dma looks tradeable. Oil is also near its 200dma. GLD is trading along the 150dma. Momos are still in the crapper, but we could/should see some kind of a rally in the next week-10 days.
Knowledge is the enemy of fear
<< <i>Not to get much more carried away with the topic, but just wanted to express that I think posting a chart, whether analysis provided or not--is a ABSOLUTE statement of fact. >>
I don't dispute this, I just question the value. Any one of us can pull up a chart. Is there something special about your charts that I might not be aware of? I can post that the sky is blue, and while true, it is of little value to any discussion since anyone can make this observation by poking their head out the window. I don't mind you posting the charts and I encourage you to do so if you feel so compelled, I just don't think it tells me anything that I haven't already seen by looking at charts on my own.
RR, I'm going to say that I see things going the other way. Equities are poised for a nice run, and a nice run has started this morning. Lately, gold performance has tended to shadow the stock market. If this week turns out to be good for equities, it will be good for gold too.
The Aden's sister's reprint of their June 26th article appeared today (and once again a top occured at the same time). That's a bad omen for the next few days.
Gold did get a small smack right after 10 am down to $907. Anything can go in the short term. But would like to see a decent reversal in GSR and 10/30 yr interest rates (or dollar) to show a real trend change. Take advantage of the short term bounce. If it lasts a retest of the broken up-trend line around $920-$926 would make sense. Momentum and Stochastics still have more bottoming to do. The RSI is just about there though. I note Newmont hit very close to 30 today and BVN wasn't far behind. Darlings of the last run (Newmont, BVN, IAG) got hammered the hardest over the past 2 weeks. The HUI came close to breaking 300 today which would break key resistance. For now it's clear again.
roadrunner
Because of how equities are positioned, I'm going to maintain my position that equities are ready to run, and that gold will follow along. I expect S&P 500 at some point either now or the next few months to return to 1060 as this is an important Fib retracement that needs to happen.
I don't see anyone currently figuring on near-term return to $1000 gold. A retrace of the $948-$904 June drop is the best I would expect from here (+$20 to +$25). The reflation trade with commodities is back on the shelf as long as the Yen is strong, the dollar is holding, and interest rates are stable or falling. But today was a good 1 day move to get all those indicators to start reversing. Letl's see if it holds up. A move to $925 gold would make sense.
roadrunner
RR's observations do weigh on my sentiment here as his observations are valid as well. This could be just a fake out, but today's action looked too bullish to be a fake-out. However, a failure to punch through $920 means that one of the later timing models is probably correct and we'll see $890 again sometime over the next 2 weeks.
The legitimacy of the equities move today doesn't matter to me a whole lot. I'm in the camp that you have to kind of throw out event-driven justifications if you're going to read charts. sometimes the market goes up on good news, sometimes it goes down on good news. The market's reaction to any given news is difficult to predict but easy to explain after the move is over. The ECRI index is looking promising and I think some data is going to start turning around (legitimate or not) and economic activity may actually start to pick up here soon. I do question the legitimacy and longevity, but I do expect a market rally in the near future, and I expect it to be good for gold.
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I have new information that trumps roadrunner's or ProofCollection's analyses for at least the next 3 weeks. I bought some gold sovereigns today; therefore I expect a few weeks of price deterioration in the gold market. Sorry, guys.
I knew it would happen.
<< <i>I have new information that trumps roadrunner's or ProofCollection's analyses for at least the next 3 weeks. I bought some gold sovereigns today; therefore I expect a few weeks of price deterioration in the gold market. Sorry, guys.
That only happens when I buy... since I didn't buy any recently, it will surely go up!
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
<< <i>... a failure to punch through $920 means that one of the later timing models is probably correct and we'll see $890 again sometime over the next 2 weeks.
.... >>
got dry powder, hoping for 890.00!
roadrunner
<< <i>The gold turn was helped by the downturn in the Yen, upturns in the Canadian dollar (commodity leader) and longer term bond yields. Some of these have or nearly have completed fairly long corrective patterns down since early June. It's within reason that a bump up could be in the cards for a bit. >>
Gold is looking good, but didn't crack $927 today. I think it will break through tonight/tomorrow and return to the $930-944 range it was in before the recent drop started. I don't expect any drop below $920, but that would be a big sign that this move is temporary - I don't think it is. I expect $944 to be a formidable barrier like it was before. We'll know "it's on" after a breakout over $944. The sooner it gets over $930 again, the more confident I'll fell that $890 is not in the cards.
Gold stocks will probably continue to rise as they have some catching up to do if they are to recover to the pre-recent-drop levels.
Well, theres I rally I was looking for. Can it keep going? Maybe. For me it doesnt matter. Trying to trade $5 moves in gold will most likely result in failure. I look for the quick $30-40+ moves. When I see 'em I trade 'em then sit. Whether the next $30 moves occurs here or higher or lower, I dont know...yet. But when it is apparent, I'll add my 2c.
Knowledge is the enemy of fear
<< <i>but we could/should see some kind of a rally in the next week-10 days.
Well, theres I rally I was looking for. Can it keep going? Maybe. For me it doesnt matter. Trying to trade $5 moves in gold will most likely result in failure. I look for the quick $30-40+ moves. When I see 'em I trade 'em then sit. Whether the next $30 moves occurs here or higher or lower, I dont know...yet. But when it is apparent, I'll add my 2c.
From Monday to today we had a $30 move. Did you get it on it?
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mariner67, and Mikes coins
<< <i>
<< <i>but we could/should see some kind of a rally in the next week-10 days.
Well, theres I rally I was looking for. Can it keep going? Maybe. For me it doesnt matter. Trying to trade $5 moves in gold will most likely result in failure. I look for the quick $30-40+ moves. When I see 'em I trade 'em then sit. Whether the next $30 moves occurs here or higher or lower, I dont know...yet. But when it is apparent, I'll add my 2c.
From Monday to today we had a $30 move. Did you get it on it? >>
I mentioned silver on Monday as trying to bounce off the 200dma so I traded AGQ--the ultra long silver etf.
I've been more of a "manipulator", er, trader of oil through UCO the last few days. Sold 1/2 my position just now at 10.13, but plan on holding the rest for the $10.50 range. Other than a small position in UNG--which isnt doing anything--and a small put position on an individual stock, I am all cash.
Knowledge is the enemy of fear
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
<< <i>I mentioned silver on Monday as trying to bounce off the 200dma so I traded AGQ--the ultra long silver etf.
I've been more of a "manipulator", er, trader of oil through UCO the last few days. Sold 1/2 my position just now at 10.13, but plan on holding the rest for the $10.50 range. Other than a small position in UNG--which isnt doing anything--and a small put position on an individual stock, I am all cash. >>
So the answer is no? You're like my wife. She always gives me answers to every question except the one I asked... lol.
So I'm very happy with the gold move. I'm actually not expecting gold to pause too long at this level. I think we may see it pop over $944 on Thursday. I thought it looked really bullish how it hugged $940 really tightly all day. Tonight I expect support to hold up at $935. Resistance is $946.2
I'm debating whether to add to my position on a breakout over $946 or even on this dip to $936. I might buy a silver contract instead.