<< <i>So I think today told us a lot. I don't think gold is quite ready to zoom off, but it is definitely capable shoudl the whitehouse or China say the right sentence or a 9-11 anniverary terrorist event happen.
Luckily (at least so far) I was able to resist buying, although it was hard.
I'm still expecting the near term "low" for gold to occur Wed-Fri, and I'm hoping it's going to touch $960 again, but I plan to load up at $970. I will be watching any declines very closely to buy on any dips. It'll be a tough judgement call, but I wouldn't have a problem buying at 980 either and riding a decline to $960 or so.
Silver appears to be topping out, but I hate to discount it because I think if gold runs, silver will too. Not sure what to think there, but silver has had a great run and I think it needs to consolidate. >>
Tuesday was interesting. "They" managed to beat gold futures down off $1000, but silver went up 1.4% and platinum up 2.4% for the day. That may mean that the selling in gold was somewhat artificial and gold alone was targeted. If silver and platinum (and oil) had all sold off to near neutral, that would mean the selling was more likely to be real.
Gold is certainly extended and overbought and a high risk buy at the moment. Still, it is hard to say if gold will give a dip for those left behind to get on board. The most frustrating scenario for many long term gold bulls would be very shallow intraday dips like Tuesday's action, or no dip at all. If this up move is a "big one" no real dip would be the most likely scenario. A person can see Tuesday's action as bullish, bearish or neutral, often times depending on what position they have. Because you are out, you are more likely to see it meaning more downside. Because I am in, albeit with small trading positions, I am more likely to see it as bullish. It's human nature, kind of like ownership adding a grading point when grading a coin.
The stock market rally off the March lows hasn't given many pullback opportunities for those that missed that boat to get on board. Folks have been waiting for dips, while the market has mostly powered on higher. Some have missed the entire 50%+ rally, still waiting for a decent dip. Similar moves have happened in commodity markets, and some traders have missed entire multi-month moves, because they refused to buy strength.
As the old chart guy on TV used to say, "we will know in the fullness of time."
I'm seeing a pennant formation on the hourly chart, starting Tuesday morning, and getting tighter. Currently it's range bound between ~1002 and ~996. I'm thinking this could resolve around closing time or tonight. Presumably, it will be a bullish resolution. I'm going to buy a half position with a stop under the pennant.
I purchased some gold stocks today on the pullback from yesterday. AUY appeared to be on sale and still quite a ways from its 2009 high. A number of the other miners have already set new 2009 highs such as BVN, IAG, AEM, GSS, KGC, etc. So anyone not near new highs is lagging.
With the dollar dropping below 77.00 for the first time since last September that's not good for fiat. Bonds are weaker too with rates creeping back up again. As RedTiger mentioned oil, copper, platinum are all acting bullish as is the general SM. The Gold to silver ratio is hanging around the 60.01 area right now which is very bullish as well considering gold and silver are just flat lining right now. GSR briefly bounced back in the 61's yesterday but is back again like a resistant rash. It's just begging to head back into the 50's for the first time since summer 2008. Gold hanging around the upper $990's and higher sure seems to indicate it doesn't want to leave.
We are now in the middle of the bond sales and it looks like the best the PPT can do is to keep the status quo. So what happens late Thursday and on Friday with no assistance? The potential for metals to explode upwards next week is real and more likely than a rout. September is often the strongest month of the year for metals so it doesn't seem likely that we've already seen the best.
Edit:
The $28 BILL 10 yr bond auction got a "good" grade overall. Not gangbusters, but did the job. Tomorrow's 30 yr sale is much smaller. What seemed cheap on the gold stocks was cheaper by mid-afternoon as the dollar turned back from a new interim low. Oh well. If they are cheaper tomorrow, I'll look for some more to buy.
I bailed. I sold my long GLD position by unwinding the Oct 95/105 vertical call spread. They turned up the heat and I got out of the kitchen when GLD broke 97. I also had trouble with my Internet access today, and that added to my concerns. Another factor is that sentiment over at Kitco commentary seems to be a bit bubblier today. Another down day on GLD, and I could have watched all my profit melt away. The psychological damage of letting a decent winner turn into a loser, I find to be detrimental to my trading.
A 40% profit is nothing to sneeze at. However, when buying options, it isn't something to aim for, because the dollar amounts are small, and on average, two out of three trades will tend to be losers. Time decay works against the option buyer.
I still have a tiny position on GDX (short puts) where time is working for me.
<< <i>Actually, the fed *did* support a strong dollar. This mantra ended about 8-12 months ago if I recall correctly. That's when things changed with stimulus packages, monetization of debt, and other actions. Nowadays, you no longer hear this mantra. >>
What mantra?
"Poets are the unacknowledged legislators of the world." PBShelley
A weak currency benefits the largest debtors. When the controller of the currencies strength happens to also be the largest debtor I think there is only one way for it to go.
Tthe only thing that keeps the dollar from a wipeout crash is that it is measured against a bunch of other fiat currencies.
<< <i>Actually, the fed *did* support a strong dollar. This mantra ended about 8-12 months ago if I recall correctly. That's when things changed with stimulus packages, monetization of debt, and other actions. Nowadays, you no longer hear this mantra. >>
What mantra? >>
If you don't remember then you certainly missed it. A strong dollar means low price on imported goods. Our economy is/was built on consumption and low prices.
Well the penant that started to form failed and I got out with a tight stop.
Now that it is Thursday, and the bottom that is supposed to come yesterday, today or Friday, it's clear that $990 is still the important support level. If we break $990, we'll probably see $960 (if it gets that low). Otherwise, the $990's is a good entry point.
Given the strength that I'm seeing, I'm thinking that $990 will hold up, but a fast break down to $960 would be a nice gift, but I don't think I'm that lucky.
<< <i>Well the penant that started to form failed and I got out with a tight stop.
Now that it is Thursday, and the bottom that is supposed to come yesterday, today or Friday, it's clear that $990 is still the important support level. If we break $990, we'll probably see $960 (if it gets that low). Otherwise, the $990's is a good entry point.
Given the strength that I'm seeing, I'm thinking that $990 will hold up, but a fast break down to $960 would be a nice gift, but I don't think I'm that lucky. >>
When did you get back in? I see no mention on this thread.
Anyway, $990 is broken on spot. To me, next support looks $10 lower on one of the moving average lines (about 96.00 on GLD, $980 on spot), and looks to me like a low risk entry. The pullback is natural and normal action on a bullish breakout.
/edit to add: the pullback is also how breakouts fail...
Gold may have succumbed to profit taking and has slipped to $992.50/oz. It constantly rebounded to challenge $1000/oz yesterday and if this happens again, gold is likely to regain its momentum and challenge the March 2008 record highs of just over $1,030/oz. If the profit taking continues, fresh investors will possibly wait in the wings to gauge the best entry point.
However, the dollar is continuing to weaken and although gold's movements in the short term may be dictated by currency movements, the news that Barrick, the world's largest gold producer, is to close the majority of its hedge book is another bullish factor. It signals that Barrick are confident that gold prices are going higher and thus the need to drastically reduce their hedge book.
This and continuing concerns regarding the outlook for the dollar should keep investor sentiment towards gold very positive. There continues to be the possibility of a short squeeze whereby large institutions with sizeable short positions are forced to buy back their short positions (in the same way that Barrick had to close their hedge book) causing a sharp increase in the price.
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Buy GLD, via selling the Oct 94 puts, stock around 97.28. This is more my style, time decay on my side, much less upside, much more downside. 94 is the break out point and chart support.
Gold and silver appear to be pulling out of the bond week funk just about on schedule. I held my small position in gold stocks even as they sank into this morning. Just another surfing expedition for stops that was very successful since it was run down to $982 overnight.
GSR briefly at 59.88 and dollar still finding it hard to crack 77.00 and stay there. The GSR keeps coming back to tap 59.99 which means it's gonna blow past it soon. PM's don't want to go away. Generic gold coins continuing to strengthen as well.
I'm starting to be convinced that we saw "the bottom" that I was expecing yesterday at $984ish. There's still a chance for a sharp decline to the $960's but that chance is growing smaller.
I entered about 1/3 position earlier today and I'm looking to hopefully to add a bit to bump up to about 60% on a pull back to the mid $990's. I think gold is ready and poised to move again, and it's not worth waiting for a more significant pullback - the risk is too great - and that if there is a pullback, I'll ride it out.
Resistance is 1004.6 and 1011 with support at $994 and $987.5. Gold is knocking on 1004.6 as I speak, not sure if I'll get a pull back or not but I'm going to try to remain patient.
Tiger - sorry if I'm not explicit about when I buy and sell. Sometimes I just like to make observations, most of the time I do what I talk about, but sometimes I get impulsive and play things at the last minute. I don't recommend anyone copy my trades, as everyone should do their own analysis and come to their own conclusions. I to OK in trading, but as an example, I gave back some of my recent profits in the last few days by mis-timing things and bailing at the wrong moments.
BTW, silver is following along and has broken $16.80 yet again, which seems to correlate to $1000 gold.
Tiger - sorry if I'm not explicit about when I buy and sell. Sometimes I just like to make observations, most of the time I do what I talk about, but sometimes I get impulsive and play things at the last minute. I don't recommend anyone copy my trades, as everyone should do their own analysis and come to their own conclusions. . >>
ProofCollection, it is certainly understandable. I guess I am of the school of just tell me what you are doing, and a short bit about the reasoning behind the action. In my book, if a picture (or chart) can be worth a 1000 words, a real money trade reported in real time right after it happens, can be worth a 1000 forum predictions, and a 1000 paragraphs of fundamental back story.
In hindsight, this breakout and pullback have been straightforward, a text book example. However, in real time, you and I can both testify that it wasn't so easy to trade. I got shaken out on Wednesday, in part because of the stress and uncertainty caused by Internet connection problems. I can endorse for getting back in GLD at a higher price, even though the new position doesn't have much upside. I was tempted to layer on another vertical call spread today on top of my short puts in GLD and GDX, but didn't pull the trigger.
<< <i>Actually, the fed *did* support a strong dollar. This mantra ended about 8-12 months ago if I recall correctly. That's when things changed with stimulus packages, monetization of debt, and other actions. Nowadays, you no longer hear this mantra. >>
What mantra? >>
If you don't remember then you certainly missed it. A strong dollar means low price on imported goods. Our economy is/was built on consumption and low prices.
<< <i>You're missing my point. What "mantra" are you talking about? Don't tell me I missed it. Articulate the mantra so I know what you're talking about.
FYI, a lower dollar means foriegn nations buy more of our goods on the cheap. >>
Read the article I linked to, it explains it better than I ever could.
FWIW, I added contracts last night on a dip to $998. We just had a breakout over resistance at ~$1004. I'm at 60% of position and thinking about adding. WIll definitely do so on a definitive breakout ofver $1010, which we've almost got.
Bot more GLD via a vertical call spread Oct 99/104, long the Oct 99 call, short the Oct 104, GLD around 99.0 when I got filled, now lower than that so I am underwater on this trade for the moment.
The morning gap up is where I would cover any shorts if I were short. Often times this kind of move is a good indicator of more room to run. First upside target is GLD 102 or about spot gold $1040. I see no need for a stop loss on a vertical call spread.
This move in GLD is testing me. Greed and fear ebb and flow on these intraday whipsaws and hunting for stops. I remind myself that the trend is up, and the old cliche that the trend is my friend. My trading style tends to be that of a "singles hitter," content with small profits on low risk, low reward trades, as opposed to a "home run" slugger that swings for the fences and takes on big risk for big reward. I remind myself that big moves (only time will tell if this is a big move) tend to be rare, and to take a shot at some bigger profits, while the door is open and the indicators that I track are lined up.
The moves in the dollar and treasuries arent really making a lot of sense to me. Oil and its derivatives--heating oil and gasoline--are interesting looking charts (rolling over?). Gold has the potential to work out here, but other commods could be breaking down. Soft commods are near 52 wk lows. I will be quick to buy gold on a breakout, but am still cautious.
The move this past week appeared to one of safety and liquidty. In this case PM's were right along treasuries and the Yen. With bond yields dropping a lot that would have usually meant hammering gold. For now, PM's are considered safe.
COT numbers up to 9/8/09:
Gold open interest increased a whopping +67K to jump to 452,000 futures contracts which is the largerst position by far this year. As I recall O/I reached about 550,000 in March 2008. With options tossed in the O/I was >600,000. The commercial short to long ratio went from a strong 3.64 to a mind-numbing 4.12! One can only guess what it ended at today. Maybe 4.4 to 4.5? The commercials added 57,000 shorts and 2700 longs. Silver went through a similar commercial change with 6500 shorts added and 1800 longs sold. The short to long ratio exceeded 3 for the first time in a while (3.15). The commercials seem to mean business but the specs are hanging in there.
The dollar futures also went wild with open interest increasing from 30,351 to 38,153. A net 7573 longs were added to increase the long to short comm. ratio from 1.10 to 1.62. So the shift to a short ratio is again delayed. Basically, the 7000 shorts that were added last week, were now balanced out by a similar amount of longs added this week.
<< <i>The move this past week appeared to one of safety and liquidty. In this case PM's were right along treasuries and the Yen. With bond yields dropping a lot that would have usually meant hammering gold. For now, PM's are considered safe.
COT numbers up to 9/8/09:
Gold open interest increased a whopping +67K to jump to 452,000 futures contracts which is the largerst position by far this year. As I recall O/I reached about 550,000 in March 2008. With options tossed in the O/I was >600,000. The commercial short to long ratio went from a strong 3.64 to a mind-numbing 4.12! One can only guess what it ended at today. Maybe 4.4 to 4.5? The commercials added 57,000 shorts and 2700 longs. Silver went through a similar commercial change with 6500 shorts added and 1800 longs sold. The short to long ratio exceeded 3 for the first time in a while (3.15). The commercials seem to mean business but the specs are hanging in there.
The dollar futures also went wild with open interest increasing from 30,351 to 38,153. A net 7573 longs were added to increase the long to short comm. ratio from 1.10 to 1.62. So the shift to a short ratio is again delayed. Basically, the 7000 shorts that were added last week, were now balanced out by a similar amount of longs added this week. >>
This doesn't surprise me. Many investors are betting that the historic trading ranges will continue, that gold will fail at $1000 and the dollar will rebound. It's not a bad bet, even though I don't think it will work out this time. Eventually things will de-couple, and they may be in the process of doing so. I personally think we're about to enter the final leg of a large parabolic move in gold, and things are going to get irrational.
As far as today's close, we ended the week over $1000, which is bullish. For next week, I anticipate a possible test back down to $990-$998, which will be the last chance to load up under $1000. I don't see it going lower than $990, there is simply too much strength. I don't think this is a all-in moment though, caution is still in order. The next two milestones are ~$1010 and ~$1030. Once we break $1030 decidedly, the price move will be amazing as the shorts scramble to cover once they realize the play off of the $1000 ceiling that worked so many times before is over.
I present the COT data for information to be used at one's own risk. Trusting govt reports on the amount of paper assets is a potentially risky proposition. No one knows how much real gold and silver are backing the Comex and where it comes from. Most all of it could be naked paper. At some point in time, and maybe way sooner than most think, the game could blow up in the commercial's faces.
As far as next week it seems logical to me that we have another peak around mid-week with yet another small pull back followed by another higher run into 9/21-9/25. This week makes a good setup to take down gold during bond week (Tu-Th), end of week G-20 meeting, and gold futures expiration (Friday). It's a great place for an ambush. The dollar picks up strength again in October and PM's weaken. After the November elections PM's return.
Whether we see Ron Rosen's extensive "C" down wave in gold remains to be seen. Right now he's one of the few sitting out there with the prediction that gold will head to $600-$850. The striking thing about this is that up until a month ago his entire timing system was staunchly bullish and calling for a major all time high early next year. One has to buy into the idea that the November 2008 - Sept. 2009 move up in gold is a 10 month "B" corrective wave following the 9 month "A" wave from March 2008. For that to fit, the move up from Nov-Feb was the a, the Feb-April the b, and the April-Sept the c (abc of . I don't discount it, yet am not agreeing with it either. A "C" wave down could fit with another deflationary deleveraging event later this year or early in 2010. But I prefer master cyclician Clif Droke's view that 2009 will remain strong in equities due to the influence of the peaking 10 yr cycle (ie no deleveraging event this year).
<< <i>FWIW, I added contracts last night on a dip to $998. We just had a breakout over resistance at ~$1004. I'm at 60% of position and thinking about adding. WIll definitely do so on a definitive breakout ofver $1010, which we've almost got. >>
Be sure to use stop orders on breakouts though. Sometimes stop orders exist just above the breakout level so that if they get hit there's a thrust up and then a pullback...and it's kind of a fake breakout. Just MHO.
"Poets are the unacknowledged legislators of the world." PBShelley
<< <i>Resistance levels for Monday are ~1014.7 and 1021.8, support is at ~1006 and 999.5.
I think I might add on any dip to $1000. Worst case I see a dip to the mid $990's. >>
Gold spot broke below $1000, but now is above that. Trade war talk after tariffs announcement on tires, helps buoy the dollar. The UBS analyst comments to sell gold, mentioned in another thread is also a weight. I am getting hit hard on my GLD positions.
One of my favorite (ie volatile) junior miners has pulled back 10% since last week. Added 6500 shares on this morning's sharp pull back. A few of the better miners like KGC, BVN, AEM, EGO, IAG are still hanging pretty high from last week telling me that they aren't ready to give back much yet. The move down to $992 last night was a distinct 5 waves. So another push up from here fits even against the heavy weight of COT commercial shorts.
I mentioned recently that this guy went from pure bull to intermediate bear. He now feels that we're in the B corrective wave of an ABC pattern that started in March 2008. And that the peak of this B wave will occur this month. He shows that in each of the gold moves ever two years that peaks have occured in an ascending Fib sequence. Gold has already sequenced up through 5, 8, 13, 21. The 34th is due this month, hence his call for a peak...an all time high one at that. But then it's time for a stiff C leg down that should retrace into the $550-$750 range.
While I don't agree with his labeling of the #1 leg from 1999-2001 it really doesn't affect the fact that a leg 2 or leg 4 correction was due after March 2008. The only question is has gold completed a satisfactory correction of waves over the past 18 months or is there more to come to get a more classic ABC?
The problem with wave theory, as you've pointed out, is that you never know exactly where to start counting the waves, and getting it wrong can lead to vastly different readings.
This morning gold was stuck between support and pivot at 993.5 and 1002. It has just broken out over 1002, but it really needs to breakout over 1004.
Resistance is at $1010 followed by 1018. Once we can break 1010 is should be a quick ride to $1030 where we face the final test for this breakout.
Equities have been on fire. There's no doubt in my mind that S&P 1060 is coming soon, and I don't think it will be much of a barrier. Equities are in a bull move right now - for whatever reason- that just can't be stopped. S&P500 should hit 1250 in the next few months or next spring.
I didn't mention it, but the ECRI indicator from last week is higher than it's ever been. This should portend to a bull equities market through the spring. I was previously on board the "big drop in the fall" crowd, but I have disembarked. As a disclaimer, I don't think this rally is genuine, all I know is that it's happening and it's real and it's a mistake not to be in the markets right now.
I dont believe in wave theory at all. I find it "noisy" and useless. JMHO.
I don't think this rally is genuine, all I know is that it's happening and it's real and it's a mistake not to be in the markets right now.
I probably agree with all of this. Historically when a market drops by 40% or move, the subsequent rebound is about 71%. So we may have room to go. That said, since I dont fully understand all that is happening---I see a thin, one sided(buying) market, I am not participating. The market can go up another 2000pts, but I will largely be a sideliner. From a historical perspective--in 1929 the market bottomed in November, it than rallied smartly through May 1930 (6 months), then in June it cratered. All this time the number of bank failures was slowly building. I think there were 600 banks that went under in 1930, of which 400 occured in Nov and Dec. So far we have had a manageble trickle of failures. We'll see what the next 6 months brings.
On an aside, from where I sit in a sleepy town less than 100 miles south of Canada, I dont see any real damage that has been caused by this "recession". Only 1 person I know lost his job (electrician) for 2 months. He is back to work with another company and now has plenty of work. No one has lost their house to forclosure. The Apple store at the mall was PACKED last weekend. The stock market has regained all of its losses since the LEH collapse. Gold is back to its highs, the dollar and interest rates at lows. This concerns me, as I believe we need to have pain as a result of the damage caused. And I dont see any pain other than in a small percentage of the country, which fed on overpriced real estate. Its almost as though nothing happened. I am wary of the "unintended consequence."
The Apple store at the mall was PACKED last weekend.
I was in Cape Cod for a week, last week, and it seemed much busier than the last time I was there (2007, in the exact same location). I thought this was very strange, given the supposed state of the economy... Perhaps people are taking more modest vacations, and that = Cape Cod.
That being said, I am nontheless dubious of this year's stock market surge. The IRA I actually have control of (not much) is all in double-inverse Dow. We'll see how that turns out.
odd. official report says recession is "over" and gold gets the signal to go up.
i would have expected the reverse.
Gold relates to money supply and the value of the dollar, and not so much to business activity. The govt uses money supply to try and stimulate business activity but that doesn't always work, for instance like now when businesses have had to cut back due to lack of demand. That increase in money supply isn't static tho - it enters the economy and competes with other money, causing increases in prices. It's that type of monetary inflation expectations that causes gold to trend upwards.
this is bizzaro world!
Yeah, firstly the recession has barely begun. It can't be over if we are still losing hundreds of thousands of jobs per month. It's perverse for the govt to say that it's over. Another reason that gold is going up is because nobody can trust anything the govt says these days. At least gold can't lie to your face.
Q: Are You Printing Money? Bernanke: Not Literally
My wife just got back from our local coin store ans she told me their were 5 people in line looking to buy gold. I dont know if its important but I have never seen a line at our store before.
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Nice little break out today in gold stocks. My favorite junior moved up a lot so far today. I bought 3000 shares late yesterday and another 1000 this morning and things started heading back up. GSR sitting around 59.3 and looks pretty solid with gold at $1009 and silver at $17.00. Higher lows all around.
Gold indicates currency problems and lack of confidence in the govt itself. There is nothing Bizzaro about this. The recession (or "IT" if you will) is not over, regardless of the patronizing you may hear. The 800 TRILLION pound gorilla is still sitting in the room with us and he's out of bananas...and hungry! Regardless of it what it is, or what you call it, it's saying that there is something afoot. The Chinese are no small part of it either. And they don't plan to be patsies to the bankers like J6P was.
So gold had a great day today, but was stopped at 1010 as I expected. I think it does have enough energy left to sprint up to 1030 fairly soon, today or tomorrow. Then once it gets there - it will take some brass balls to hang on to short positions with gold on the verge of breaking out over $1030. I think ti will be an awesome site to see the massive short positions unwound and band-wagon investors like MoneyLA trying to catch a running train.
Silver broke the critical $16.80 level fairly decisively, but it could retreat again.
And another report that showed that Congress is likely to be voting to extend the debt ceiling yet again very soon, after a $2T increase in less than a year.
Additionally - I read an article saying that we should expect a request for more troops for AfPak.
And if that weren't enough - consider that China is probably completely done buying US Debt now that the trade war has been started over tires.
I think all or most of it has had an effect. Bob Hoye did some research on the record COT commercial short levels now in play and determined that when the RSI hit lows like this a half dozen times in the past 15 yrs a retest of the breakout (or 20 day ema) occured fairly soon (ie within days or a few weeks). Those levels right now would be $948 or $968. Correspondingly the RSI of the specs is at >70.
I came within a few minutes of bailing out of a hunk of my gold stocks today but decided against it once I saw silver slither past $17.00 a few minutes later with a low but steady 59.2 GSR. The charts didn't look bad either. In particular the RSI's for the stocks were at much lower levels than where they broke out last week (at the same price). I got faked out of my last position on 8/31 for a measly 5% gain and decided not to follow that path again. Yeah, those COT stats weigh heavy. But even with all that gold is still sitting atop the $1007-$1010 seemingly without a care in the world. And at the same time the SM moved to a new high, oil is moving up, and the dollar moved down to a new interim low while most commodity currencies moved up. This feels different than March 2008. Tonnes of commercial ammo have been used up over the past 18 months...especially physical gold.
I forgot to comment on Red Tiger's comments the other day: "Greed and fear ebb and flow on these intraday whipsaws and hunting for stops. " I couldn't have said it better.
Support for Wed lies at $998 and $1005. Resistance is at 1016.6, 1023, and 1041.
I am highly certain that retesting the all-time high of 1030-1035 is a lock for the near future. But will i scap my pants by a whipsaw before it happens? Maybe, but I'm encouraged by today's action. It ascended to 1011 and then spent the day in the tight range going no lower than 1008. That's incredibly bullish. Then there's the fact that we never really broke $990 once we got above $990.
The large short COT report is actually encouraging to me. This negative sentiment - and the fear from gold bulls associated with it - will be incredible fuel for a breakout. There are a lot of very big reasons to expect a pullback right now. However, I don't suppose previous breakouts - in any stock or commodity - were ever in such a position that a breakout was completely obvious and without signs of an impending correction. This is much different than any previous time gold was in this neighborhood.
Edited to add: The PCGS price guid rasied the price of gold buffaloes and generic $20's again this week...
Yep. We might just get 1030-1035 as soon as tomorrow. With 1040 being the resistance point, we may even get a spike to 1040.
Normally I'd expect a consolidation at 1030, but what if the shorts start to get scared and start buying? I can't imagine how nerve-racking it would be to be short with gold knocking on the all-time high. While there's a lot of precedence on your side that prices will simply retreat back down into the range, the risk would be too much to allow me to sleep comfortably.
Gold spent most of the day hanging in a tight range, and tonight has broken out a bit to test resistance at 1025.5 but it has not punched through yet. Gold probably needs a few more hours to get ready for it's next move to 1031-1033 which is the next resistance level. Of course, 1033 is do or die. I don't think gold will be ready to punch through 1033 decisively until next week. Silver even hit $17.68.
Gold support levels are 1010 and 1016.6, resistance at 1025.5 and 1031.5 and 1044.
I'm a bit concerned on how gold peeled back all day from the overseas high of $1024 last night. By the time we woke up it was already being brought down in London. Over the course of today's session it did a very distinct and extented 5 legs down followed by a $1118 retrace and then pullback to the $1011 resistance area. The low for the day at $1008 was under the $1011 support. The GSR pulled back to the upper 58's after reaching 58.2. 5 legs down, initially breaking important support, and weak gold stocks today often implies another leg down (AB and then C). Both the gold and dollar charts for the day show a down trend with lower highs....but I know both aren't headed down together. Ok...so which will it be?
Friday is the triple or quadruple witching day for the SM. I note Warren Bevan's article of today that mentions a lot of GLD option contracts out of the money that need to be pulled down to allow the banksters/funds to make their dough. If that's what they need, I don't see why not. The gold stocks and GLD/SLV were pulled down fairly easily today in a nice steady motion. It's rare than one strong down day in the gold stocks is not followed by another. They did have a nice 5 up wave move into mid-week and were lingering near their top until jsut after the open today. I would think that Warren's point makes sense that a quick sweep down into the $900's might be in the cards to catch some stops. The neckline of the past 18 months was broken above so it would make sense that a retest back towards the breakout point of last week or the apex of the triangle could be in the cards. A dollar double bottom today at 76.2 would fit with that. What did Bob Hoye say this week?.....Everytime the RSI on the commercial Gold short interest got this high, gold always moved back to the breakout point or 20 day ema. But at best this would be a quick pullback with a spring right back to challenge $1033 fairly "soon." With so much happening next week (G-20 late in the week, bond auctions, gold futures expiration) it would seem to be the perfect time to initiate a pig-pile takedown. Can gold mount a rally with all that going on and an even larger short interest position by the bankers? Would not be surprised to see a short/long ratio as high as 4.5 to 4.8.
Comments
<< <i>So I think today told us a lot. I don't think gold is quite ready to zoom off, but it is definitely capable shoudl the whitehouse or China say the right sentence or a 9-11 anniverary terrorist event happen.
Luckily (at least so far) I was able to resist buying, although it was hard.
I'm still expecting the near term "low" for gold to occur Wed-Fri, and I'm hoping it's going to touch $960 again, but I plan to load up at $970. I will be watching any declines very closely to buy on any dips. It'll be a tough judgement call, but I wouldn't have a problem buying at 980 either and riding a decline to $960 or so.
Silver appears to be topping out, but I hate to discount it because I think if gold runs, silver will too. Not sure what to think there, but silver has had a great run and I think it needs to consolidate. >>
Tuesday was interesting. "They" managed to beat gold futures down off $1000, but silver went up 1.4% and platinum up 2.4% for the day. That may mean that the selling in gold was somewhat artificial and gold alone was targeted. If silver and platinum (and oil) had all sold off to near neutral, that would mean the selling was more likely to be real.
Gold is certainly extended and overbought and a high risk buy at the moment. Still, it is hard to say if gold will give a dip for those left behind to get on board. The most frustrating scenario for many long term gold bulls would be very shallow intraday dips like Tuesday's action, or no dip at all. If this up move is a "big one" no real dip would be the most likely scenario. A person can see Tuesday's action as bullish, bearish or neutral, often times depending on what position they have. Because you are out, you are more likely to see it meaning more downside. Because I am in, albeit with small trading positions, I am more likely to see it as bullish. It's human nature, kind of like ownership adding a grading point when grading a coin.
The stock market rally off the March lows hasn't given many pullback opportunities for those that missed that boat to get on board. Folks have been waiting for dips, while the market has mostly powered on higher. Some have missed the entire 50%+ rally, still waiting for a decent dip. Similar moves have happened in commodity markets, and some traders have missed entire multi-month moves, because they refused to buy strength.
As the old chart guy on TV used to say, "we will know in the fullness of time."
With the dollar dropping below 77.00 for the first time since last September that's not good for fiat. Bonds are weaker too with rates creeping back up again. As RedTiger mentioned oil, copper, platinum are all acting bullish as is the general SM. The Gold to silver ratio is hanging around the 60.01 area right now which is very bullish as well considering gold and silver are just flat lining right now. GSR briefly bounced back in the 61's yesterday but is back again like a resistant rash. It's just begging to head back into the 50's for the first time since summer 2008. Gold hanging around the upper $990's and higher sure seems to indicate it doesn't want to leave.
We are now in the middle of the bond sales and it looks like the best the PPT can do is to keep the status quo. So what happens late Thursday and on Friday with no assistance? The potential for metals to explode upwards next week is real and more likely than a rout. September is often the strongest month of the year for metals so it doesn't seem likely that we've already seen the best.
Edit:
The $28 BILL 10 yr bond auction got a "good" grade overall. Not gangbusters, but did the job. Tomorrow's 30 yr sale is much smaller. What seemed cheap on the gold stocks was cheaper by mid-afternoon as the dollar turned back from a new interim low. Oh well. If they are cheaper tomorrow, I'll look for some more to buy.
roadrunner
A 40% profit is nothing to sneeze at. However, when buying options, it isn't something to aim for, because the dollar amounts are small, and on average, two out of three trades will tend to be losers. Time decay works against the option buyer.
I still have a tiny position on GDX (short puts) where time is working for me.
<< <i>Actually, the fed *did* support a strong dollar. This mantra ended about 8-12 months ago if I recall correctly. That's when things changed with stimulus packages, monetization of debt, and other actions. Nowadays, you no longer hear this mantra. >>
What mantra?
Tthe only thing that keeps the dollar from a wipeout crash is that it is measured against a bunch of other fiat currencies.
<< <i>
<< <i>Actually, the fed *did* support a strong dollar. This mantra ended about 8-12 months ago if I recall correctly. That's when things changed with stimulus packages, monetization of debt, and other actions. Nowadays, you no longer hear this mantra. >>
What mantra? >>
If you don't remember then you certainly missed it. A strong dollar means low price on imported goods. Our economy is/was built on consumption and low prices.
Strong Dollar Mantra
Now that it is Thursday, and the bottom that is supposed to come yesterday, today or Friday, it's clear that $990 is still the important support level. If we break $990, we'll probably see $960 (if it gets that low). Otherwise, the $990's is a good entry point.
Given the strength that I'm seeing, I'm thinking that $990 will hold up, but a fast break down to $960 would be a nice gift, but I don't think I'm that lucky.
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<< <i>Well the penant that started to form failed and I got out with a tight stop.
Now that it is Thursday, and the bottom that is supposed to come yesterday, today or Friday, it's clear that $990 is still the important support level. If we break $990, we'll probably see $960 (if it gets that low). Otherwise, the $990's is a good entry point.
Given the strength that I'm seeing, I'm thinking that $990 will hold up, but a fast break down to $960 would be a nice gift, but I don't think I'm that lucky. >>
When did you get back in? I see no mention on this thread.
Anyway, $990 is broken on spot. To me, next support looks $10 lower on one of the moving average lines (about 96.00 on GLD, $980 on spot), and looks to me like a low risk entry. The pullback is natural and normal action on a bullish breakout.
/edit to add: the pullback is also how breakouts fail...
However, the dollar is continuing to weaken and although gold's movements in the short term may be dictated by currency movements, the news that Barrick, the world's largest gold producer, is to close the majority of its hedge book is another bullish factor. It signals that Barrick are confident that gold prices are going higher and thus the need to drastically reduce their hedge book.
This and continuing concerns regarding the outlook for the dollar should keep investor sentiment towards gold very positive. There continues to be the possibility of a short squeeze whereby large institutions with sizeable short positions are forced to buy back their short positions (in the same way that Barrick had to close their hedge book) causing a sharp increase in the price.
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GSR briefly at 59.88 and dollar still finding it hard to crack 77.00 and stay there. The GSR keeps coming back to tap 59.99 which means it's gonna blow past it soon. PM's don't want to go away. Generic gold coins continuing to strengthen as well.
Edited to correct 78.00 to 77.00.
roadrunner
I entered about 1/3 position earlier today and I'm looking to hopefully to add a bit to bump up to about 60% on a pull back to the mid $990's. I think gold is ready and poised to move again, and it's not worth waiting for a more significant pullback - the risk is too great - and that if there is a pullback, I'll ride it out.
Resistance is 1004.6 and 1011 with support at $994 and $987.5. Gold is knocking on 1004.6 as I speak, not sure if I'll get a pull back or not but I'm going to try to remain patient.
Tiger - sorry if I'm not explicit about when I buy and sell. Sometimes I just like to make observations, most of the time I do what I talk about, but sometimes I get impulsive and play things at the last minute. I don't recommend anyone copy my trades, as everyone should do their own analysis and come to their own conclusions. I to OK in trading, but as an example, I gave back some of my recent profits in the last few days by mis-timing things and bailing at the wrong moments.
BTW, silver is following along and has broken $16.80 yet again, which seems to correlate to $1000 gold.
<< <i>
Tiger - sorry if I'm not explicit about when I buy and sell. Sometimes I just like to make observations, most of the time I do what I talk about, but sometimes I get impulsive and play things at the last minute. I don't recommend anyone copy my trades, as everyone should do their own analysis and come to their own conclusions. . >>
ProofCollection, it is certainly understandable. I guess I am of the school of just tell me what you are doing, and a short bit about the reasoning behind the action. In my book, if a picture (or chart) can be worth a 1000 words, a real money trade reported in real time right after it happens, can be worth a 1000 forum predictions, and a 1000 paragraphs of fundamental back story.
In hindsight, this breakout and pullback have been straightforward, a text book example. However, in real time, you and I can both testify that it wasn't so easy to trade. I got shaken out on Wednesday, in part because of the stress and uncertainty caused by Internet connection problems. I can endorse for getting back in GLD at a higher price, even though the new position doesn't have much upside. I was tempted to layer on another vertical call spread today on top of my short puts in GLD and GDX, but didn't pull the trigger.
We will see what tomorrow brings.
<< <i>
<< <i>
<< <i>Actually, the fed *did* support a strong dollar. This mantra ended about 8-12 months ago if I recall correctly. That's when things changed with stimulus packages, monetization of debt, and other actions. Nowadays, you no longer hear this mantra. >>
What mantra? >>
If you don't remember then you certainly missed it. A strong dollar means low price on imported goods. Our economy is/was built on consumption and low prices.
Strong Dollar Mantra >>
You're missing my point. What "mantra" are you talking about? Don't tell me I missed it. Articulate the mantra so I know what you're talking about.
FYI, a lower dollar means foriegn nations buy more of our goods on the cheap.
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<< <i>You're missing my point. What "mantra" are you talking about? Don't tell me I missed it. Articulate the mantra so I know what you're talking about.
FYI, a lower dollar means foriegn nations buy more of our goods on the cheap. >>
Read the article I linked to, it explains it better than I ever could.
The morning gap up is where I would cover any shorts if I were short. Often times this kind of move is a good indicator of more room to run. First upside target is GLD 102 or about spot gold $1040. I see no need for a stop loss on a vertical call spread.
This move in GLD is testing me. Greed and fear ebb and flow on these intraday whipsaws and hunting for stops. I remind myself that the trend is up, and the old cliche that the trend is my friend. My trading style tends to be that of a "singles hitter," content with small profits on low risk, low reward trades, as opposed to a "home run" slugger that swings for the fences and takes on big risk for big reward. I remind myself that big moves (only time will tell if this is a big move) tend to be rare, and to take a shot at some bigger profits, while the door is open and the indicators that I track are lined up.
Knowledge is the enemy of fear
COT numbers up to 9/8/09:
Gold open interest increased a whopping +67K to jump to 452,000 futures contracts which is the largerst position by far this year. As I recall O/I reached about 550,000 in March 2008. With options tossed in the O/I was >600,000. The commercial short to long ratio went from a strong 3.64 to a mind-numbing 4.12! One can only guess what it ended at today. Maybe 4.4 to 4.5? The commercials added 57,000 shorts and 2700 longs. Silver went through a similar commercial change with 6500 shorts added and 1800 longs sold. The short to long ratio exceeded 3 for the first time in a while (3.15). The commercials seem to mean business but the specs are hanging in there.
The dollar futures also went wild with open interest increasing from 30,351 to 38,153. A net 7573 longs were added to increase the long to short comm. ratio from 1.10 to 1.62. So the shift to a short ratio is again delayed. Basically, the 7000 shorts that were added last week, were now balanced out by a similar amount of longs added this week.
roadrunner
<< <i>The move this past week appeared to one of safety and liquidty. In this case PM's were right along treasuries and the Yen. With bond yields dropping a lot that would have usually meant hammering gold. For now, PM's are considered safe.
COT numbers up to 9/8/09:
Gold open interest increased a whopping +67K to jump to 452,000 futures contracts which is the largerst position by far this year. As I recall O/I reached about 550,000 in March 2008. With options tossed in the O/I was >600,000. The commercial short to long ratio went from a strong 3.64 to a mind-numbing 4.12! One can only guess what it ended at today. Maybe 4.4 to 4.5? The commercials added 57,000 shorts and 2700 longs. Silver went through a similar commercial change with 6500 shorts added and 1800 longs sold. The short to long ratio exceeded 3 for the first time in a while (3.15). The commercials seem to mean business but the specs are hanging in there.
The dollar futures also went wild with open interest increasing from 30,351 to 38,153. A net 7573 longs were added to increase the long to short comm. ratio from 1.10 to 1.62. So the shift to a short ratio is again delayed. Basically, the 7000 shorts that were added last week, were now balanced out by a similar amount of longs added this week. >>
This doesn't surprise me. Many investors are betting that the historic trading ranges will continue, that gold will fail at $1000 and the dollar will rebound. It's not a bad bet, even though I don't think it will work out this time. Eventually things will de-couple, and they may be in the process of doing so. I personally think we're about to enter the final leg of a large parabolic move in gold, and things are going to get irrational.
As far as today's close, we ended the week over $1000, which is bullish. For next week, I anticipate a possible test back down to $990-$998, which will be the last chance to load up under $1000. I don't see it going lower than $990, there is simply too much strength. I don't think this is a all-in moment though, caution is still in order. The next two milestones are ~$1010 and ~$1030. Once we break $1030 decidedly, the price move will be amazing as the shorts scramble to cover once they realize the play off of the $1000 ceiling that worked so many times before is over.
As far as next week it seems logical to me that we have another peak around mid-week with yet another small pull back followed by another higher run into 9/21-9/25. This week makes a good setup to take down gold during bond week (Tu-Th), end of week G-20 meeting, and gold futures expiration (Friday). It's a great place for an ambush. The dollar picks up strength again in October and PM's weaken. After the November elections PM's return.
Whether we see Ron Rosen's extensive "C" down wave in gold remains to be seen. Right now he's one of the few sitting out there with the prediction that gold will head to $600-$850. The striking thing about this is that up until a month ago his entire timing system was staunchly bullish and calling for a major all time high early next year. One has to buy into the idea that the November 2008 - Sept. 2009 move up in gold is a 10 month "B" corrective wave following the 9 month "A" wave from March 2008. For that to fit, the move up from Nov-Feb was the a, the Feb-April the b, and the April-Sept the c (abc of
roadrunner
<< <i>FWIW, I added contracts last night on a dip to $998. We just had a breakout over resistance at ~$1004. I'm at 60% of position and thinking about adding. WIll definitely do so on a definitive breakout ofver $1010, which we've almost got. >>
Be sure to use stop orders on breakouts though. Sometimes stop orders exist just above the breakout level so that if they get hit there's a thrust up and then a pullback...and it's kind of a fake breakout. Just MHO.
I think I might add on any dip to $1000. Worst case I see a dip to the mid $990's.
<< <i>Resistance levels for Monday are ~1014.7 and 1021.8, support is at ~1006 and 999.5.
I think I might add on any dip to $1000. Worst case I see a dip to the mid $990's. >>
Gold spot broke below $1000, but now is above that. Trade war talk after tariffs announcement on tires, helps buoy the dollar. The UBS analyst comments to sell gold, mentioned in another thread is also a weight. I am getting hit hard on my GLD positions.
Seeing resistance at $1005. If we can break that the next resistance should be 1014. I don't think we'll break 1014 today.
roadrunner
I mentioned recently that this guy went from pure bull to intermediate bear. He now feels that we're in the B corrective wave of an ABC pattern that started in March 2008. And that the peak of this B wave will occur this month. He shows that in each of the gold moves ever two years that peaks have occured in an ascending Fib sequence. Gold has already sequenced up through 5, 8, 13, 21. The 34th is due this month, hence his call for a peak...an all time high one at that. But then it's time for a stiff C leg down that should retrace into the $550-$750 range.
While I don't agree with his labeling of the #1 leg from 1999-2001 it really doesn't affect the fact that a leg 2 or leg 4 correction was due after March 2008. The only question is has gold completed a satisfactory correction of waves over the past 18 months or is there more to come to get a more classic ABC?
roadrunner
This morning gold was stuck between support and pivot at 993.5 and 1002. It has just broken out over 1002, but it really needs to breakout over 1004.
Resistance is at $1010 followed by 1018. Once we can break 1010 is should be a quick ride to $1030 where we face the final test for this breakout.
Equities have been on fire. There's no doubt in my mind that S&P 1060 is coming soon, and I don't think it will be much of a barrier. Equities are in a bull move right now - for whatever reason- that just can't be stopped. S&P500 should hit 1250 in the next few months or next spring.
I didn't mention it, but the ECRI indicator from last week is higher than it's ever been. This should portend to a bull equities market through the spring. I was previously on board the "big drop in the fall" crowd, but I have disembarked. As a disclaimer, I don't think this rally is genuine, all I know is that it's happening and it's real and it's a mistake not to be in the markets right now.
I don't think this rally is genuine, all I know is that it's happening and it's real and it's a mistake not to be in the markets right now.
I probably agree with all of this. Historically when a market drops by 40% or move, the subsequent rebound is about 71%. So we may have room to go. That said, since I dont fully understand all that is happening---I see a thin, one sided(buying) market, I am not participating. The market can go up another 2000pts, but I will largely be a sideliner. From a historical perspective--in 1929 the market bottomed in November, it than rallied smartly through May 1930 (6 months), then in June it cratered. All this time the number of bank failures was slowly building. I think there were 600 banks that went under in 1930, of which 400 occured in Nov and Dec. So far we have had a manageble trickle of failures. We'll see what the next 6 months brings.
On an aside, from where I sit in a sleepy town less than 100 miles south of Canada, I dont see any real damage that has been caused by this "recession". Only 1 person I know lost his job (electrician) for 2 months. He is back to work with another company and now has plenty of work. No one has lost their house to forclosure. The Apple store at the mall was PACKED last weekend. The stock market has regained all of its losses since the LEH collapse. Gold is back to its highs, the dollar and interest rates at lows. This concerns me, as I believe we need to have pain as a result of the damage caused. And I dont see any pain other than in a small percentage of the country, which fed on overpriced real estate. Its almost as though nothing happened. I am wary of the "unintended consequence."
Knowledge is the enemy of fear
go up.
i would have expected the reverse.
this is bizzaro world!
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<< <i>odd. official report says recession is "over" and gold gets the signal to
go up.
i would have expected the reverse.
this is bizzaro world! >>
Gold is the canary in the mint shaft. Inflation is coming.
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I was in Cape Cod for a week, last week, and it seemed much busier than the last time I was there (2007, in the exact same location). I thought this was very strange, given the supposed state of the economy... Perhaps people are taking more modest vacations, and that = Cape Cod.
That being said, I am nontheless dubious of this year's stock market surge. The IRA I actually have control of (not much) is all in double-inverse Dow. We'll see how that turns out.
i would have expected the reverse.
Gold relates to money supply and the value of the dollar, and not so much to business activity. The govt uses money supply to try and stimulate business activity but that doesn't always work, for instance like now when businesses have had to cut back due to lack of demand. That increase in money supply isn't static tho - it enters the economy and competes with other money, causing increases in prices. It's that type of monetary inflation expectations that causes gold to trend upwards.
this is bizzaro world!
Yeah, firstly the recession has barely begun. It can't be over if we are still losing hundreds of thousands of jobs per month. It's perverse for the govt to say that it's over. Another reason that gold is going up is because nobody can trust anything the govt says these days. At least gold can't lie to your face.
I knew it would happen.
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How to invest during a depression. One suggestion is to buy gold.
http://www.ehow.com/how_4555661_invest-depression.html
Gold indicates currency problems and lack of confidence in the govt itself. There is nothing Bizzaro about this. The recession (or "IT" if you will) is not over, regardless of the patronizing you may hear. The 800 TRILLION pound gorilla is still sitting in the room with us and he's out of bananas...and hungry! Regardless of it what it is, or what you call it, it's saying that there is something afoot. The Chinese are no small part of it either. And they don't plan to be patsies to the bankers like J6P was.
roadrunner
Silver broke the critical $16.80 level fairly decisively, but it could retreat again.
Some noteworthy news today:
The feb bought $2B in treasuries
And another report that showed that Congress is likely to be voting to extend the debt ceiling yet again very soon, after a $2T increase in less than a year.
Additionally - I read an article saying that we should expect a request for more troops for AfPak.
And if that weren't enough - consider that China is probably completely done buying US Debt now that the trade war has been started over tires.
Silver $17.05 $17.10 0.09
Platinum $1,322.50 $1,332.50 11.80
Palladium $290.50 $295.50 -1.80
Updated:9/15/2009 5:31:53 PM CST
For some reason nobody seems to like that Palladium stuff I sure am glad I didnt buy any!
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I came within a few minutes of bailing out of a hunk of my gold stocks today but decided against it once I saw silver slither past $17.00 a few minutes later with a low but steady 59.2 GSR. The charts didn't look bad either. In particular the RSI's for the stocks were at much lower levels than where they broke out last week (at the same price). I got faked out of my last position on 8/31 for a measly 5% gain and decided not to follow that path again. Yeah, those COT stats weigh heavy. But even with all that gold is still sitting atop the $1007-$1010 seemingly without a care in the world. And at the same time the SM moved to a new high, oil is moving up, and the dollar moved down to a new interim low while most commodity currencies moved up. This feels different than March 2008. Tonnes of commercial ammo have been used up over the past 18 months...especially physical gold.
roadrunner
I couldn't have said it better.
Support for Wed lies at $998 and $1005. Resistance is at 1016.6, 1023, and 1041.
I am highly certain that retesting the all-time high of 1030-1035 is a lock for the near future. But will i scap my pants by a whipsaw before it happens? Maybe, but I'm encouraged by today's action. It ascended to 1011 and then spent the day in the tight range going no lower than 1008. That's incredibly bullish. Then there's the fact that we never really broke $990 once we got above $990.
The large short COT report is actually encouraging to me. This negative sentiment - and the fear from gold bulls associated with it - will be incredible fuel for a breakout.
There are a lot of very big reasons to expect a pullback right now. However, I don't suppose previous breakouts - in any stock or commodity - were ever in such a position that a breakout was completely obvious and without signs of an impending correction. This is much different than any previous time gold was in this neighborhood.
Edited to add: The PCGS price guid rasied the price of gold buffaloes and generic $20's again this week...
1017 Gold
17.26 Silver.
And climbing.
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Normally I'd expect a consolidation at 1030, but what if the shorts start to get scared and start buying? I can't imagine how nerve-racking it would be to be short with gold knocking on the all-time high. While there's a lot of precedence on your side that prices will simply retreat back down into the range, the risk would be too much to allow me to sleep comfortably.
Gold support levels are 1010 and 1016.6, resistance at 1025.5 and 1031.5 and 1044.
Friday is the triple or quadruple witching day for the SM. I note Warren Bevan's article of today that mentions a lot of GLD option contracts out of the money that need to be pulled down to allow the banksters/funds to make their dough. If that's what they need, I don't see why not. The gold stocks and GLD/SLV were pulled down fairly easily today in a nice steady motion. It's rare than one strong down day in the gold stocks is not followed by another. They did have a nice 5 up wave move into mid-week and were lingering near their top until jsut after the open today. I would think that Warren's point makes sense that a quick sweep down into the $900's might be in the cards to catch some stops. The neckline of the past 18 months was broken above so it would make sense that a retest back towards the breakout point of last week or the apex of the triangle could be in the cards. A dollar double bottom today at 76.2 would fit with that. What did Bob Hoye say this week?.....Everytime the RSI on the commercial Gold short interest got this high, gold always moved back to the breakout point or 20 day ema. But at best this would be a quick pullback with a spring right back to challenge $1033 fairly "soon." With so much happening next week (G-20 late in the week, bond auctions, gold futures expiration) it would seem to be the perfect time to initiate a pig-pile takedown. Can gold mount a rally with all that going on and an even larger short interest position by the bankers? Would not be surprised to see a short/long ratio as high as 4.5 to 4.8.
roadrunner