Besides gold and the miners carving out what appears to be a 5 wave set, most of the indicators for the miners look decidedly bearish. RSI's for the most part have been descending and are having trouble even getting back towards 50. Only Newmont has managed to get back to it's 52 week high over the past few weeks. But what's interesting is that it has completed a broadening top formation (ie an expanding wedge). That's not a good sign for the gold market in general since Newmont has been the only real bright spot among the major gold miners. BVN has mimicked that formation but is just shy of completing a new monthly high. Seems to me that the reflation trade was on for the past 7 days and now it's time to replace it with the fear/safety trade for a while.
Interesting that the commercials dumped 29,000 gold futures shorts last week and added about 50% of that number in new longs. Their net short position dropped by a whopping 41K contracts which is the biggest one week drop since August of 2008. If one compares the current net commercial short position chart to that of summer 2008, they have a lot of similarities. In 2008 the net short position continued to unwind until it bottomed out in the fall with gold at $690. The other view of this is that the commericials were in a hurry to unwind their short positions "knowing" gold was going to turn around. Pick your poison. Gold can still rebound to $1229 without overlapping the initial move down from $1266.
This is a 3/10/30 yr bond week. It would be a convenient point to lay the safety trade back on. Gold could be back on track Thursday afternoon. Since this is also stock options expiration week it's also a convenient time to whack the gold stocks for their 5th leg down. The stock market has moved up nicely for the previous 7 sessions. Would imagine fund managers would be locking in some profits before expiration and taking some money off the table.
Edit: 3 yr bond auction Monday: $35B sold and 3.2 bid to cover.
Man gold is catching every bid afterhours. And cohodk, you are welcome on the swissy trade. I knew you couldn't resist. I did my damage on the Forex, not enough doors to get out of your trade.....but you did............ Houdini. I'm long Swiss Francs now at $93.68. Only real trade I have open. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>The comment was "as oversold as it can get". How can something be oversold/bought if you dont consider price? When I buy something, I trade the price, not the moving average or stochastic or ABC leg. Im not talking about new highs or lows, but I want to see something down more than 10% in 3 weeks to call it as oversold as it can get. Price is the only thing that matters, IMO.
$XAU bounced up to the flat 50dma Friday and today. Nothing oversold about that at all.
Gold also bounced up to the 50dma. Nothing particulary exciting about the pattern. >>
The actual quote was "Gold stocks are about as oversold as they get" which doesn't mean that the can't or don't get more oversold, just that they were at a typical bottoming point for being oversold. The implication was that stocks would reverse direction from that point, and exciting or not, that's what they did. The selloff is over - or at least taking a break for now. The momentum indicator for XAU has recovered from -15 to -3 today, but the price oscillator has not turned up yet (takes a few days to respond). Nothing about the price itself indicated that that XAU was ready to change its trend, which is what oversold/bought indicators are all about.
Pmcollector, your link is bad.
I'm expecting gold to move sometime here Tues-Thurs, and today's move over 1212-1214 looked promising, but it's disappointing that it has not gone anywhere since. If it drops back below 1210 or so then we'll just have to wait a bit longer. Resistance at 1219, support at 1208 and 1202.1 and 1191.
I dont want to get too technical about this but on the morning after your comment XAU opened at 173. It closed today at 174. It is no more oversold or overbought than last Thursday. I do have a rather strong feeling that you will see XAU truely oversold in the next 4-6 weeks. The selloff isnt close to being over.
Nothing about the price itself indicated that that XAU was ready to change its trend, which is what oversold/bought indicators are all about.
Again I'll ask, are you trading the price or the indicators? If your indicators were telling you XAU was as oversold as it can get, then I urge you to get new indicators. I dont say this to sound like a smarta$$, but IMHO, something cant be oversold unless there has been a massive change in price.
Gold broke the 50dma and now cant get back above it. You can wait to sell it at or lower price, or short it, like I did. GDX had a miserable close today. ABX with a massive bearish engulfing candle.
Edited to add. Closed 1/2 of remaining SHLD position today, will let rest ride for a few weeks. Still holding short GS puts--I believe they expire worthless. If not then I own it for 130.60. Closed copper short. Not that I dont think it is going lower, I do, but because I am going fishing with a fellow board member next week and want to be in a nearly 100% cash position. Gonna spend some of my Canadian dollar hoard.
<< <i>I dont want to get too technical about this but on the morning after your comment XAU opened at 173. It closed today at 174. It is no more oversold or overbought than last Thursday. I do have a rather strong feeling that you will see XAU truely oversold in the next 4-6 weeks. The selloff isnt close to being over. >>
Again I'll ask, are you trading the price or the indicators? If your indicators were telling you XAU was as oversold as it can get, then I urge you to get new indicators. I dont say this to sound like a smarta$$, but IMHO, something cant be oversold unless there has been a massive change in price. >>
Sounds like you're using a different definition of oversold than the investment books I have read. A stock doesn't have to go into the toilet to become oversold. Here's the chart with some of the indicators I use. If you bought XAU every time momentum went less than -10 and sold when it hit 10 you would have made money every time. It's a pretty reliable indicator because XAU doesn't get below -10 that often, so when it happens it's pretty realiable unless gold is just getting hammered.
Yes, the timing of my post wasn't exactly in synch with my oberservation due to the large green candle XAU made that day. While it is only 1 point higher than the close on the day I made the comment, had you bought at open that day you'd be up $5.5 right now and you'd have been up over $10 at one point today. We'll have to see what the future holds, but there's a nice trend line going, and there's probably more money to be made.
Gold for Wednesday has support at 1200, 1209.3, and resistance at 1221.2 and 1230.5.
PC, I think the point I am trying to make is that the price determines the indicator. Price is the #1 indicator I use. Sometimes my indicators are flashing oversold, yet when I look at the price I can see further downside. As the price drops, the indicators become even more oversold. Had I entered a trade at first signal, I would now be scrambling to just break even.
Indicators vs price will also look a bit different if price is in a bull trend vs bear trend.
As I thought you were using a very short term indicator which can be subject to great volatility as had just happened---price dropped nearly 3% when the indicator said "buy". I generally use a longer time frame as to not suffer whiplash. Been there, done that too many times.
When I DT I use price, volume support and resistance and nothing else. It works well for me...............then again I've been known to trade from the top of fish crates. Long story
And WOW did gold just get turned back at the 50. Major technical selling came it at that point...
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Breakout imminent? The timing models are pointing to Wednesday for a big move, so Friday will probably be boring. But this penant is near its apex... 1214 has been stubborn. Support for Friday is at 1202.2, resistance at 1209.9, 1215.7, and 1223.4.
Not so boring today. I dont think this is the direction you were expecting. GDX and XAU were telling what was gonna happen.
Perryb's 25% chance could be realized.
YEN on verge of major breakout. Commodity currencies getting hammered. Canada trip just got 1.5% cheaper. Whoohoo!!
Bot SLV puts on Weds, sold just after open this morn. Nice double on a 3 day hold. Still have ZSL calls. GS puts will expire worthless. Sold them for 9.45. Sold something I dont have---evil me.
Yes. The "flagship" Newmont broadening top capped by a gapped up, near gravestone doji, and negative divergences, pretty much showed the way for this week. GDX, GDXJ, GLD are all now into the 4th day of the final leg down of this 5 wave correction that began on mid-June. As I've said before, these guys just love to do a final 5 waves down. Fwiw I am starting to see a number of junior gold miners getting close to the end of their ABC corrections from December. Later July is often a bottoming time. Most of the seniors look to be still have a bit further to drop imo. Kinross has fallen the furthest of any of them and is back to levels seen in April of 2009. Yamana seems to be bouncing against longer term resistance in the 9.3-9.6 range. I don't see a whole lot further for these 2 guys to go. Barrick, Goldcorp, Agnico-Eagle, Newmont, BVN, IAG, and EGO can still give a bunch more back. For better or for worse I nibbled some today on KGC, Gammon, and JAG. I think Gammon (GRS) may have turned the corner after being beaten to a pulp this year. It still has serious issues with one of it's mines placed into care/maintenance while it works out labor issues. But it is carving out what could be a rather decent H&S over the past 3 years. The risk is that the shorter term H&S of the past year could point to another 25% down.
Would expect one more push down from gold in this sequence....anywhere from $1163 to $1183? The Kitco timers are looking for a Monday turn date. If so, this should coincide with an interim bottom in PM's. With options expiration today for GLD and GDX, plus a bond week, a little whalloping was not unexpected. In two weeks we get a bit more of a negative set up with gold futures expiring, another bond week, and the usual end of month bankster-heist.
<< <i>Birthday last Tuesday..... spouse bought me 5 - 1 oz Engelhard bars. >>
Were they gold? If so, wow!!! What a generous wife!!!
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Would expect one more push down from gold in this sequence....anywhere from $1163 to $1183?
What about the next sequence? I think you need to at least change the second digit from a 1 to a 0.
GDX and XAU broke the uptrend lines from the Feb lows, as expected. GLD kissed that line and managed a small bounce. GLD seems to be zeroing in on the convergence of the 150 and 200dma and uptrend line from Jan 09. The 50dma will soon begin to turn lower.
Roadrunner, went back to try to follow you on this leg/wave thing. To me this looks like just the beginning of leg 3. For the life of me I cant interpret any possibility of an end of leg 5. I've been doing this for 25 years and just cant see what you see. Guess thats why I think wave theory is useless.
RR, another great informative post.... I'll wait for the final leg down 1163-1183 on Gold, then time to buy.
It's just an opinion. Gold "could" still see anything in the $1000-$1150 range as well. I'll spend some time this weekend looking over the carnage and see if my thoughts change any. GLD and SLV both saw sizeable gap downs in the morning leading me to think that we'll be back up to $1200+ in not too long. While the S&P tanked today, gold and it's friends starting tanking 3 days ago. So this looks like a turn is in progress. One concern is that the dollar has been dropping like a stone the past few weeks. What happens to PM's if it starts to recover a lot of the recently lost ground? While they can both go up together, you can't bet on it. GDX still has a nice gap open from April in the 44-45 range. That's a potential target for the summer low.
In looking at inflation and dividend adjusted charts of the 1930's vs the last decade, the stock market has already hit lows below the previous depression. The analysis hints that the lows may already be in. Interesting charts.
In looking at inflation and dividend adjusted charts of the 1930's vs the last decade, the stock market has already hit lows below the previous depression. The analysis hints that the lows may already be in. Interesting charts.
The charts may be saying one thing, but the situation isn't quite the same. I feel that we are (probably) on thinner ice. The debt problem is severe, demographics are not favorable, the US is supporting a military superstructure around the world which is unsustainable, the entitlement class has grown large and is still growing and we have a bunch of politicians who would rather stuff their own pockets & play power-broker than worry about the economy.
Q: Are You Printing Money? Bernanke: Not Literally
The attached charts show what I'm getting at with a 5 legs down scenario starting from June 21st. One could also interpret them as a 3 wave ABC with the C currently in progress. The end result will be the same. I don't see this final leg going down to <$1100 until we get the bounce back from this overall first sequence down. It can bounce all the way to $1200+ again. Sure, this could just be the A'=ABC of a larger A'B'C' sequence to come. The GDX and GG charts show shadows on June 28th that are a tad higher than the 21st peaks, but the bodies are considerably lower. And if one factors in the additonal importance of GLD, SLV, and USERX a 5 wave set makes more sense. Hence, why I call this the 5th leg from June 21st. The CCI charts show a descending 5 waves with some negative divergences starting to show up. Tht gap in GDX around 44-45 looks quite inviting right now. And the gap just left behind around 118 ($1204) on GLD hints that on the bounce back from the 5 waves gold should at least revisit that area.
Gold<$1100 could occur in August or early September but for now I see this 5 leg sequence ending this week or latest by next week with gold futures options expiration/bond week. It's still also quite possible that gold bounces off the $1150-$1165 area and then heads back above $1260. I'm not holding my breath on that one, but I don't rule it out either. I see the 114-115 ($1163-$1173) area on GLD as having the most importance since that's where the initial breakout was stopped. And there have been multiple tests of that area as well. It also coincides with the bounce back into the January peak. Call it the top of a secondary "cup" if you will. But $1163-$1173 is where I think gold will be stopped on this initial 5 legged move down. One last possibility is that the entire gold/silver/miners movement since the first near "touch" at $1250 gold on May 12th has ALL been corrective. That means gold could be in the last leg of a 2-1/2 month ABC consolidation even though it did make new highs at $1266 on that B leg bounce. In fact one could stretch that and say PM's have been correcting since Dec 3rd and we're in the final C leg of a 6-7 month ABC. If you click on the "gallery view" of the USERX chart for example (or GLD, GDX,SLV) the waves down in May and July look far more impulsive than the jagged 3 legged move made in June. (click on the smaller charts to get the larger gallery view page). I often like to use the simpler line chart of USERX because it's a broad index fund and only has an end of day price. It certainly is not prone to the same degree of minute/hourly manipulation that GLD, SLV or gold/silver futures. And USERX shows broad strokes that sometimes gives more clarity to gold movements than the other players. The gallery views of silver and the miners all support a top back on May 12th. When liquidity is rushing from the pm's market as it has been since May 12th, then silver and the miners are better indicators of overall PM "wave counting"/direction than gold is. Gold only rebounded to new highs because of the excessively overdone Euro bashing in June. For all intensive purposes gold peaked on May 12th as well. The more I look at this pattern the more it makes sense to me. Gold is really still forming the handle on the slanted cup formed since December. GDX at 44 and Silver around $16 will give then nicely matching IH&S on which to spring from where the head was made back in December. The CDNX and 5 yr Treasury started their 5 legs back in late May.
Edited: here's an article by Toby O'Connor that came out the next day (20th). His timing model calls for a 23 week intermediate cycle low sometime this week or next. He figures $1155 or at least a 50% Fib retrace is required before moving on. It just doesn't look like there is time enough to drag gold into the sub-$1100 range. He also figures that the chances of going lower than $1044 (Feb low) are about 1% considering that it was probably an 8 year low.
Gold at a two month low vs the dollar Euro at a two month high vs the dollar
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
The timing models for gold point to a reversal on Tues or Wed. Although that doesn't mean we might not see a quick drop down before a really strong reversal. So we could see 1168 which a lot of people (too many, IMO), are expecting. If we do see 1168, I recommend backing up the truck. But I expect the upside energy to come rushing in today or tomorrow taking us back over $1200 for good (or at least a very long time). If instead the energy comes to the downside, time to bail or go short!
For Tues, support is at 1167.1, 1174.8, 1184.7, and resistance at 1192.4, 1202.3, and 1219.9.
Your Tues and Wed timing model would fit perfectly with gold futures/options expirations on those same days next week. That would be one last convenient opportunity to slap gold back. And don't forget the full moon on Monday.
<< <i>Your Tues and Wed timing model would fit perfectly with gold futures/options expirations on those same days next week. That would be one last convenient opportunity to slap gold back. And don't forget the full moon on Monday.
RR, the timing models and things I look at do not pay much attention to events. While I have to admit that the general market behavior is generally predictable during such events as expiration week and treasury auction weeks, there are exceptions so I try not to put too much into those trends. I do like that you remind us of those things. But my Tues & Wed call is for this week, not next week, but I also expect next week to be strong as well.
Gold's recovery today was nice to see, but it is too early to say if this is the reversal I had been looking for. So far, this is just a 38.2% retracement of the move down from a peak near 1220. If gold can move over 1194 definitively, then the reversal is most likely underway. But, being accompanied by the move in stocks (SP500) is encouraging. I am expecting follow-on energy tonight or tomorrow to take us over 1194 (and probably through 1200), in which case I'll add to positions.
Support for tonight/Wed is at 1168, 1080.2, 1186.9, and resistance is at 1198.8, 1205.5, and 1224.1.
I favor global-international, 24/6 (rest on Sunday), ice hockey instead of paintball for "pseudo-WWIII" to fix the current economic crisis. Hockey, after all, is the ideal war substitute, and the 'coolest' war on earth. A modest proposal
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.
Way to go MJ. Swissie getting long in the tooth and downside/upside risk nearing parity. Ride it, but dont dig in those spurs.
How 'bout that pesky YEN? She gonna break that nearly 2-yr consolidation? Interesting repercussions if so. >>
The Yen has been absolute beast.......and Swiss trade has been a window casher. I like that
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
The bounce in the miners yesterday and this morning almost looked like a breakout and coincided with the bounce of gold off its 18 month trend line at $1175. Still, I was expecting a 5th leg in the miners over 2 weeks and so far they have only done 3. With the low volumes in the seniors on this 1-1/2 day bounce, 20/50 dma crosses in GLD/SLV/GDX/GDXJ over the past week, tend to suggest to me that the 5th leg in this sequence is still going to come and this bounce back is just a leg 4. Gold may indeed bounce around the $1180-$1200 range and still allow the miners the chance to drop one more time. But at this point I'm only 50/50 on the outcome. The hourly charts show GDX/GDXJ and GLD/SLV hitting the upper bands with momentum waning a bit. I'd lean towards the bearish side for now....esp with the 44-45 gap on GDX still beckoning. The end of this current bounce might end right around $1198-$1200 as GLD fills its down gap at around 117.5. This also is right about the top of the down trend channel.
One very curious thing about today's trading is the tiny volume in the miners, GLD and SLV. Basically, it's the lowest it's been all year, by a lot in most cases. This is somewhat similar to the December, Feb and April bottoms but even lower. Either way the sector is getting ready to move sharply one way or the other.
Copper with a sneaky 3% rally today and will run right into it's 50DMA. Look's like a nice spot to initiate new shorts at least for a scalp..............MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Thar she blows....5th leg down has commenced at around $1199 in this 8-13 day sequence. Let's see how strong the pull of GLD on the miners is....so far they aren't reacting much.
Update: 10-15 minutes later some miners have fallen sharply. The first wave down in this sequence was last night. So this is the 3rd wave down. This is still early for a whackdown for options expiration unless like Red Tiger likes to say, some get it going early to be the first to profit. The banksters are stealing everyone's pic-a-nic baskets once again. Credit for all the markets dumping at around 2:00 PM seems to be going to Gentle Ben. Seems to me the markets were ripe for a turn either way so why not do it on Ben's TV time and blame him?
While the miner's felt beaten down Monday, it didn't feel like a complete bust yet which is usually what it takes to end a deep correction. Now the potential has re-emerged for a next Tuesday-Wednesday follow-through. The miniscule volume this morning into early afternoon now makes sense as the wolves were quietly waiting for the sheep to finish entering the pen before the sell-off this afternoon. By end of day the volume should be up signficantly. In any event, the overall hit to the miners looks rather tame so far. Maybe this drop doesn't go all that deep?
Yes, interesting. The $15 drop (gold) seems pretty mild, and even non-eventful with gold holding well at 1184-1186. Not bad given that daily volatility seems to have a $10-15 range. There could be more downside coming but it doesn't look that weak, unless there's a second shoe to drop.
Market timing for stocks looks like a bottom to be established July 26-27, which is next Mon and Tues. This could affect gold as well.
This $15 drop from $1199 may only be part of this first leg down. Then there could be 2 additional large drops over the next several days to complete a larger 5 wave sequence.
Nice initial bump today back at $1202 riding along with the S&P. This move up closes all the gaps in GDX, GDXJ, and SLV. Just need $2 more to close the GLD gap. What's worrisome about the move is that a broadening top formation is apparent in some of the miners such as SLW, CDE, GG, RGLD, and GDXJ. It's there in GLD, GDX, and SLV but nowhere near as convincing looking as the others because of the first low. And the gap up to a vertical move almost looks too good to be true. Can you have a topping formation following a bounce off of a bottom?
There is also a bullish cup with handle formed over the last several days as well.
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Things are looking good for gold & stocks. This morning's move is encouraging but I'm not ready to claim bull run yet. 1194 was cleared definitively and we're currently re-testing the level, and it should portend to a run to 1211.5 using Ackerman's Hidden Pivot method. The charts are loaded with energy in short, medium and long time frames so gold is ready for another run.
The timing models are fairly precise but the difficulty comes in knowing which days "count" and when previous cycles end and start. Such as, do you count US holidays where world markets trade but the US does not? So it's entirely possible for the cycle to start today with a big burst of energy, and if that's the case I'll expect a follow on move this afternoon or evening to 1200's.
Yes MJ, with copper being so bullish and the SM jumping +200 pts one would think gold would be jumping as well. But gold seems to be holding back. With expirations only a couple of days away I don't think gold is out of the woods yet. But it's certainly possible that it has completed its 5 impulsive waves down since 6/21 and is now aiming at an ABC retrace well into the $1200's as PC suggests.
I'm kind of anxious about the results of the European stress test results today and it's effect on gold and currencies. I say 2-1 gold will take a beat down on release of the results. I'm not beating on it. With weak summer volume I'm just getting out of the way.
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Stress tests a non event and a dud so far...............MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Gold's drop back to the lower $1180's today didn't seem to have much of an effect on the miners today. I didn't see any that I follow that dropped to levels where I had to buy them. The COT report now has gold commerical short to long ratio of only 2.03, lowest level that I can recall since back in the doldrums of first half of 2009. Even their net shorts are at a yearly low as they approach 210,000 contracts net short. The banks covered a lot of shorts last week and added on a nice pile of longs. They probably already sold a lot of those longs on golds rise back to $1200. With gold's weakness today it's hard not to think that the banks won't take advantage of this by driving down gold into Tuesday's and Wed's expiration. If you were a bankster wouldn't you?
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Since the European banks have passed---LOL---the test, concern over the immediate collapse of the Euro should fade. It was this concern that pushed gold higher, but not exceeding the December highs, in recent months. So now we have no immediate fiat currency collapse concern and no inflation concern, unless the Chinese continue to raise wages. Jewelry is too expensive to the common man. Whats to push gold higher in the near term?
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Well while you were teasing the fish copper was running amuck
Better reign it in this week.................I'm pretty much done trading for the summer.................MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Whats to push gold higher in the near term? >>
That's what's interesting about currency and solvency events. There's no way to predict the timing or location of the next crisis du jour. No one gets a warning when the currency is about to be devalued overnight, or a major bank or company or country or institution is announcing bankruptcy. I'm not making any predictions - only pointing out that every few weeks there is a new crisis... not necessarily something unexpected but something that jolts the markets pretty good. Volatility is high, and "things" are far from stable. IMO, it's about time for a new crisis.
Let's not forget, Washington still needs to weaken the USD more. It's hard to have an economic recovery and increase exports with such a strong dollar, so the Fed is still looking for any opportunity to print more money. The extension of unemployment is a good start.
For gold for Monday, support is at 1179.9, 1192.2, and resistance is at 1200.9, 1213.2.
Gotta admit, last week was a bit disappointing and the rally did not start. But the charts are still loaded with energy and gold is ready to burst any moment... up or down... of course I'm expecting up. A 1 week delay in the start of the rally isn't taht uncommon for these timing models, so perhaps we'll see the next big move start early this week.
Comments
Besides gold and the miners carving out what appears to be a 5 wave set, most of the indicators for the miners look decidedly bearish. RSI's for the most part have been descending and are having trouble even getting back towards 50. Only Newmont has managed to get back to it's 52 week high over the past few weeks. But what's interesting is that it has completed a broadening top formation (ie an expanding wedge). That's not a good sign for the gold market in general since Newmont has been the only real bright spot among the major gold miners. BVN has mimicked that formation but is just shy of completing a new monthly high. Seems to me that the reflation trade was on for the past 7 days and now it's time to replace it with the fear/safety trade for a while.
Interesting that the commercials dumped 29,000 gold futures shorts last week and added about 50% of that number in new longs. Their net short position dropped by a whopping 41K contracts which is the biggest one week drop since August of 2008. If one compares the current net commercial short position chart to that of summer 2008, they have a lot of similarities. In 2008 the net short position continued to unwind until it bottomed out in the fall with gold at $690. The other view of this is that the commericials were in a hurry to unwind their short positions "knowing" gold was going to turn around. Pick your poison. Gold can still rebound to $1229 without overlapping the initial move down from $1266.
This is a 3/10/30 yr bond week. It would be a convenient point to lay the safety trade back on. Gold could be back on track Thursday afternoon. Since this is also stock options expiration week it's also a convenient time to whack the gold stocks for their 5th leg down. The stock market has moved up nicely for the previous 7 sessions. Would imagine fund managers would be locking in some profits before expiration and taking some money off the table.
Edit: 3 yr bond auction Monday: $35B sold and 3.2 bid to cover.
roadrunner
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>The comment was "as oversold as it can get". How can something be oversold/bought if you dont consider price? When I buy something, I trade the price, not the moving average or stochastic or ABC leg. Im not talking about new highs or lows, but I want to see something down more than 10% in 3 weeks to call it as oversold as it can get. Price is the only thing that matters, IMO.
$XAU bounced up to the flat 50dma Friday and today. Nothing oversold about that at all.
Gold also bounced up to the 50dma. Nothing particulary exciting about the pattern. >>
The actual quote was "Gold stocks are about as oversold as they get" which doesn't mean that the can't or don't get more oversold, just that they were at a typical bottoming point for being oversold. The implication was that stocks would reverse direction from that point, and exciting or not, that's what they did. The selloff is over - or at least taking a break for now. The momentum indicator for XAU has recovered from -15 to -3 today, but the price oscillator has not turned up yet (takes a few days to respond). Nothing about the price itself indicated that that XAU was ready to change its trend, which is what oversold/bought indicators are all about.
Pmcollector, your link is bad.
I'm expecting gold to move sometime here Tues-Thurs, and today's move over 1212-1214 looked promising, but it's disappointing that it has not gone anywhere since. If it drops back below 1210 or so then we'll just have to wait a bit longer. Resistance at 1219, support at 1208 and 1202.1 and 1191.
I dont want to get too technical about this but on the morning after your comment XAU opened at 173. It closed today at 174. It is no more oversold or overbought than last Thursday. I do have a rather strong feeling that you will see XAU truely oversold in the next 4-6 weeks. The selloff isnt close to being over.
Nothing about the price itself indicated that that XAU was ready to change its trend, which is what oversold/bought indicators are all about.
Again I'll ask, are you trading the price or the indicators? If your indicators were telling you XAU was as oversold as it can get, then I urge you to get new indicators. I dont say this to sound like a smarta$$, but IMHO, something cant be oversold unless there has been a massive change in price.
Gold broke the 50dma and now cant get back above it. You can wait to sell it at or lower price, or short it, like I did. GDX had a miserable close today. ABX with a massive bearish engulfing candle.
Edited to add. Closed 1/2 of remaining SHLD position today, will let rest ride for a few weeks. Still holding short GS puts--I believe they expire worthless. If not then I own it for 130.60. Closed copper short. Not that I dont think it is going lower, I do, but because I am going fishing
Knowledge is the enemy of fear
<< <i>I dont want to get too technical about this but on the morning after your comment XAU opened at 173. It closed today at 174. It is no more oversold or overbought than last Thursday. I do have a rather strong feeling that you will see XAU truely oversold in the next 4-6 weeks. The selloff isnt close to being over. >>
Again I'll ask, are you trading the price or the indicators? If your indicators were telling you XAU was as oversold as it can get, then I urge you to get new indicators. I dont say this to sound like a smarta$$, but IMHO, something cant be oversold unless there has been a massive change in price. >>
Sounds like you're using a different definition of oversold than the investment books I have read. A stock doesn't have to go into the toilet to become oversold. Here's the chart with some of the indicators I use. If you bought XAU every time momentum went less than -10 and sold when it hit 10 you would have made money every time. It's a pretty reliable indicator because XAU doesn't get below -10 that often, so when it happens it's pretty realiable unless gold is just getting hammered.
Yes, the timing of my post wasn't exactly in synch with my oberservation due to the large green candle XAU made that day. While it is only 1 point higher than the close on the day I made the comment, had you bought at open that day you'd be up $5.5 right now and you'd have been up over $10 at one point today. We'll have to see what the future holds, but there's a nice trend line going, and there's probably more money to be made.
Gold for Wednesday has support at 1200, 1209.3, and resistance at 1221.2 and 1230.5.
Indicators vs price will also look a bit different if price is in a bull trend vs bear trend.
As I thought you were using a very short term indicator which can be subject to great volatility as had just happened---price dropped nearly 3% when the indicator said "buy". I generally use a longer time frame as to not suffer whiplash. Been there, done that too many times.
Knowledge is the enemy of fear
And WOW did gold just get turned back at the 50. Major technical selling came it at that point...
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
US dollar daily
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
GLD daily
US dollar
Only trade I currently have open. Swiss Franc long against the dollar. I like this
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Will the fourth time be the charm? Gold's trouble with the 50................Summertime volume can be sketchy. MJ
GLD daily
US dollar
Only trade I currently have open. Swiss Franc long against the dollar. I like this >>
Way to go MJ. Swissie getting long in the tooth and downside/upside risk nearing parity. Ride it, but dont dig in those spurs.
How 'bout that pesky YEN? She gonna break that nearly 2-yr consolidation? Interesting repercussions if so.
Knowledge is the enemy of fear
Perryb's 25% chance could be realized.
YEN on verge of major breakout. Commodity currencies getting hammered. Canada trip just got 1.5% cheaper. Whoohoo!!
Bot SLV puts on Weds, sold just after open this morn. Nice double on a 3 day hold. Still have ZSL calls. GS puts will expire worthless. Sold them for 9.45. Sold something I dont have---evil me.
You guys gonna have fun next week.
Knowledge is the enemy of fear
Would expect one more push down from gold in this sequence....anywhere from $1163 to $1183? The Kitco timers are looking for a Monday turn date. If so, this should coincide with an interim bottom in PM's. With options expiration today for GLD and GDX, plus a bond week, a little whalloping was not unexpected. In two weeks we get a bit more of a negative set up with gold futures expiring, another bond week, and the usual end of month bankster-heist.
Newmont chart - broadening top megaphone - 3 higher highs, 2 lower lows
Birthday last Tuesday..... spouse bought me 5 - 1 oz Engelhard bars.
Things are alittle crazy today, including the gold price, is it a full moon?
<< <i>Birthday last Tuesday..... spouse bought me 5 - 1 oz Engelhard bars. >>
Were they gold? If so, wow!!! What a generous wife!!!
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
What about the next sequence? I think you need to at least change the second digit from a 1 to a 0.
GDX and XAU broke the uptrend lines from the Feb lows, as expected. GLD kissed that line and managed a small bounce. GLD seems to be zeroing in on the convergence of the 150 and 200dma and uptrend line from Jan 09. The 50dma will soon begin to turn lower.
Roadrunner, went back to try to follow you on this leg/wave thing. To me this looks like just the beginning of leg 3. For the life of me I cant interpret any possibility of an end of leg 5. I've been doing this for 25 years and just cant see what you see. Guess thats why I think wave theory is useless.
Knowledge is the enemy of fear
It's just an opinion. Gold "could" still see anything in the $1000-$1150 range as well. I'll spend some time this weekend looking over the carnage and see if my thoughts change any. GLD and SLV both saw sizeable gap downs in the morning leading me to think that we'll be back up to $1200+ in not too long. While the S&P tanked today, gold and it's friends starting tanking 3 days ago. So this looks like a turn is in progress. One concern is that the dollar has been dropping like a stone the past few weeks. What happens to PM's if it starts to recover a lot of the recently lost ground? While they can both go up together, you can't bet on it. GDX still has a nice gap open from April in the 44-45 range. That's a potential target for the summer low.
In looking at inflation and dividend adjusted charts of the 1930's vs the last decade, the stock market has already hit lows below the previous depression. The analysis hints that the lows may already be in. Interesting charts.
GD 2 vs. GD3
rodarunner
The charts may be saying one thing, but the situation isn't quite the same. I feel that we are (probably) on thinner ice. The debt problem is severe, demographics are not favorable, the US is supporting a military superstructure around the world which is unsustainable, the entitlement class has grown large and is still growing and we have a bunch of politicians who would rather stuff their own pockets & play power-broker than worry about the economy.
I knew it would happen.
The attached charts show what I'm getting at with a 5 legs down scenario starting from June 21st. One could also interpret them as a 3 wave ABC with the C currently in progress. The end result will be the same. I don't see this final leg going down to <$1100 until we get the bounce back from this overall first sequence down. It can bounce all the way to $1200+ again. Sure, this could just be the A'=ABC of a larger A'B'C' sequence to come. The GDX and GG charts show shadows on June 28th that are a tad higher than the 21st peaks, but the bodies are considerably lower. And if one factors in the additonal importance of GLD, SLV, and USERX a 5 wave set makes more sense. Hence, why I call this the 5th leg from June 21st. The CCI charts show a descending 5 waves with some negative divergences starting to show up. Tht gap in GDX around 44-45 looks quite inviting right now. And the gap just left behind around 118 ($1204) on GLD hints that on the bounce back from the 5 waves gold should at least revisit that area.
Gold<$1100 could occur in August or early September but for now I see this 5 leg sequence ending this week or latest by next week with gold futures options expiration/bond week. It's still also quite possible that gold bounces off the $1150-$1165 area and then heads back above $1260. I'm not holding my breath on that one, but I don't rule it out either. I see the 114-115 ($1163-$1173) area on GLD as having the most importance since that's where the initial breakout was stopped. And there have been multiple tests of that area as well. It also coincides with the bounce back into the January peak. Call it the top of a secondary "cup" if you will. But $1163-$1173 is where I think gold will be stopped on this initial 5 legged move down. One last possibility is that the entire gold/silver/miners movement since the first near "touch" at $1250 gold on May 12th has ALL been corrective. That means gold could be in the last leg of a 2-1/2 month ABC consolidation even though it did make new highs at $1266 on that B leg bounce. In fact one could stretch that and say PM's have been correcting since Dec 3rd and we're in the final C leg of a 6-7 month ABC. If you click on the "gallery view" of the USERX chart for example (or GLD, GDX,SLV) the waves down in May and July look far more impulsive than the jagged 3 legged move made in June. (click on the smaller charts to get the larger gallery view page). I often like to use the simpler line chart of USERX because it's a broad index fund and only has an end of day price. It certainly is not prone to the same degree of minute/hourly manipulation that GLD, SLV or gold/silver futures. And USERX shows broad strokes that sometimes gives more clarity to gold movements than the other players. The gallery views of silver and the miners all support a top back on May 12th. When liquidity is rushing from the pm's market as it has been since May 12th, then silver and the miners are better indicators of overall PM "wave counting"/direction than gold is. Gold only rebounded to new highs because of the excessively overdone Euro bashing in June. For all intensive purposes gold peaked on May 12th as well. The more I look at this pattern the more it makes sense to me. Gold is really still forming the handle on the slanted cup formed since December. GDX at 44 and Silver around $16 will give then nicely matching IH&S on which to spring from where the head was made back in December. The CDNX and 5 yr Treasury started their 5 legs back in late May.
various gold charts and misc.
Edited: here's an article by Toby O'Connor that came out the next day (20th). His timing model calls for a 23 week intermediate cycle low sometime this week or next. He figures $1155 or at least a 50% Fib retrace is required before moving on. It just doesn't look like there is time enough to drag gold into the sub-$1100 range. He also figures that the chances of going lower than $1044 (Feb low) are about 1% considering that it was probably an 8 year low.
Gold's various cycles
Schiff - do wars really bring prosperity?
roadrunner
Gold at a two month low vs the dollar
Euro at a two month high vs the dollar
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
For Tues, support is at 1167.1, 1174.8, 1184.7, and resistance at 1192.4, 1202.3, and 1219.9.
roadrunner
<< <i>Your Tues and Wed timing model would fit perfectly with gold futures/options expirations on those same days next week. That would be one last convenient opportunity to slap gold back. And don't forget the full moon on Monday.
roadrunner >>
LOL
Gold's recovery today was nice to see, but it is too early to say if this is the reversal I had been looking for. So far, this is just a 38.2% retracement of the move down from a peak near 1220. If gold can move over 1194 definitively, then the reversal is most likely underway. But, being accompanied by the move in stocks (SP500) is encouraging. I am expecting follow-on energy tonight or tomorrow to take us over 1194 (and probably through 1200), in which case I'll add to positions.
Support for tonight/Wed is at 1168, 1080.2, 1186.9, and resistance is at 1198.8, 1205.5, and 1224.1.
<< <i>...
Schiff - do wars really bring prosperity?
roadrunner >>
I favor global-international, 24/6 (rest on Sunday), ice hockey instead of paintball for "pseudo-WWIII" to fix the current economic crisis. Hockey, after all, is the ideal war substitute, and the 'coolest' war on earth. A modest proposal
<< <i>
<< <i>Will the fourth time be the charm? Gold's trouble with the 50................Summertime volume can be sketchy. MJ
GLD daily
US dollar
Only trade I currently have open. Swiss Franc long against the dollar. I like this >>
Way to go MJ. Swissie getting long in the tooth and downside/upside risk nearing parity. Ride it, but dont dig in those spurs.
How 'bout that pesky YEN? She gonna break that nearly 2-yr consolidation? Interesting repercussions if so. >>
The Yen has been absolute beast.......and Swiss trade has been a window casher. I like that
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
One very curious thing about today's trading is the tiny volume in the miners, GLD and SLV. Basically, it's the lowest it's been all year, by a lot in most cases. This is somewhat similar to the December, Feb and April bottoms but even lower. Either way the sector is getting ready to move sharply one way or the other.
roadrunner
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Thar she blows....5th leg down has commenced at around $1199 in this 8-13 day sequence. Let's see how strong the pull of GLD on the miners is....so far they aren't reacting much.
Update: 10-15 minutes later some miners have fallen sharply. The first wave down in this sequence was last night. So this is the 3rd wave down. This is still early for a whackdown for options expiration unless like Red Tiger likes to say, some get it going early to be the first to profit. The banksters are stealing everyone's pic-a-nic baskets once again. Credit for all the markets dumping at around 2:00 PM seems to be going to Gentle Ben. Seems to me the markets were ripe for a turn either way so why not do it on Ben's TV time and blame him?
While the miner's felt beaten down Monday, it didn't feel like a complete bust yet which is usually what it takes to end a deep correction. Now the potential has re-emerged for a next Tuesday-Wednesday follow-through. The miniscule volume this morning into early afternoon now makes sense as the wolves were quietly waiting for the sheep to finish entering the pen before the sell-off this afternoon. By end of day the volume should be up signficantly. In any event, the overall hit to the miners looks rather tame so far. Maybe this drop doesn't go all that deep?
roadrunner
Market timing for stocks looks like a bottom to be established July 26-27, which is next Mon and Tues. This could affect gold as well.
roadrunner
There is also a bullish cup with handle formed over the last several days as well.
roadrunner
Which is good for this (aussie)
and for this (cando)
and bad for the this which got pummeled today. Where does that leave gold? Good question...............MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
The timing models are fairly precise but the difficulty comes in knowing which days "count" and when previous cycles end and start. Such as, do you count US holidays where world markets trade but the US does not? So it's entirely possible for the cycle to start today with a big burst of energy, and if that's the case I'll expect a follow on move this afternoon or evening to 1200's.
Gold prices boring
roadrunner
I'm not beating on it. With weak summer volume I'm just getting out of the way.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
roadrunner
copper
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>A couple new copper trading vehicles. MJ
copper >>
SCHWEEEETT!!!!
I guess they are not trading yet.
Since the European banks have passed---LOL---the test, concern over the immediate collapse of the Euro should fade. It was this concern that pushed gold higher, but not exceeding the December highs, in recent months. So now we have no immediate fiat currency collapse concern and no inflation concern, unless the Chinese continue to raise wages. Jewelry is too expensive to the common man. Whats to push gold higher in the near term?
Knowledge is the enemy of fear
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Because it's shiny >>
Fish like shiny things, except at the lake I just 4 days exploring.
Knowledge is the enemy of fear
Better reign it in this week.................I'm pretty much done trading for the summer.................MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Whats to push gold higher in the near term? >>
That's what's interesting about currency and solvency events. There's no way to predict the timing or location of the next crisis du jour. No one gets a warning when the currency is about to be devalued overnight, or a major bank or company or country or institution is announcing bankruptcy. I'm not making any predictions - only pointing out that every few weeks there is a new crisis... not necessarily something unexpected but something that jolts the markets pretty good. Volatility is high, and "things" are far from stable. IMO, it's about time for a new crisis.
Let's not forget, Washington still needs to weaken the USD more. It's hard to have an economic recovery and increase exports with such a strong dollar, so the Fed is still looking for any opportunity to print more money. The extension of unemployment is a good start.
For gold for Monday, support is at 1179.9, 1192.2, and resistance is at 1200.9, 1213.2.
Gotta admit, last week was a bit disappointing and the rally did not start. But the charts are still loaded with energy and gold is ready to burst any moment... up or down... of course I'm expecting up. A 1 week delay in the start of the rally isn't taht uncommon for these timing models, so perhaps we'll see the next big move start early this week.
<< <i>Charts are breaking down for gold and silver. Looks like a serious pullback in the works. >>
Pullback-yes
Serious- I doubt it