The chart looks like a front end loader bucket ready to be lifted....to $1300
Most of those momentum indicators have formed a bearish H&S over the past 20 months. And in the case of Trix (5,9) and Roc, those have formed descending triangles. The stochastics could be tracing out the right shoulder of a bullish IH&S. Decisions, decisions.
Was already to type a response when I read Roadrunner's which took away my thunder. Everyone of those momo indicators failed to validate the higher high in price.
Thats a pretty steep chart especially considering its logarithmic. Gold is gonna take a breather. Im pretty sure we will see $1000 again.
Today was definately not a borderline miserable day in stockland. Atrocious is more apt. And with CSCO's downbeat comments tonight, tomorrow should be fugly as well. Then we have a Friday in August. Anybody gonna be around to prop up prices?
Closed AMZN puts. Closed copper short. Closed Aussie $ short. Still holding BIDU puts, some short puts on PFE, MSFT, JPM. Long DZZ. Closed shorts way too early but im a bigger fan of cash. This is one of those times where it is better to not make money than to lose it.
SLV has been in an uncharacteristically tight range the last 4 months. It is now predictable. Over 18.50 and it makes an attempt at 21. Under 17 and it goes to 12. We should know the direction in the next 5-10 days.
I've seen c&h's turn into h&s's. Time will tell.
I mentioned the possibility of a massive H&S a few months ago. Should that formation prove then it targets $700, which is also the 2008 crisis low. I dont think this will happen, but the ingredients are there.
Sorry about that thunder-stealing Cohodk. I was "fishing" more than anything on those conflicting chart patterns and wanted to get some feedback....which you provided. Thanks.
But I still do think we'll get that front end loader gold lifting going in late August with a ramp up in September. I don't think we'll see $1000 but I won't rule out $1050-$1100 as a potential low. But that has to happen in the next 2 weeks as a lot of signs are pointing to a commodities turn in the vicinity of August 20th. Right now the commodity sector is getting hammered across the board (ags, base and precious metals, oil and gas, etc.). Not much being left out of the spanking. GSR continues to accelerate upwards along with VIXX as other liquidity indicators show accelerating outflows. The miners are showing the way down for gold and silver. I'm looking for up to another 7-10 days of this downtrend. There will be some great buys in PM's, miners, energy, and ags at that time. Nice island top in the S&P today. Monday's peak seemed to confirm the Cardinal Crossing however it's yet to show itself as a 1 in 1000 yr event. On the irrelevant bright side BDI continues to accelerate upwards indicating a light out of this tunnel.
Even if we get that bottoming around the 20th it might not turn all that quick for gold as options expiration and a bond week will be lurking only a few days later. The gold miners do tend to get punched on stock market options expiration (third Friday 8/20) so one might expect Friday the 20th to be a final August knock out for miners before they start to recover from their summer doldrums.
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......
Although gold's relationship with the USD is not reliable, and considering the beating that stocks took, gold did very well today.
I re-established my GLD calls on the drop to 1195 after I took profits Wed morning.
The rally today in the USD did not make sense other than a bounce was overdue and appropriate at 80.0. But the beating that SP500 took is not looking like any kind of a trend, just more consolidation. I think SP500 is a good speculative buy in the low 1080's tonight.
The next move in gold is still imminent, and for timing Thursday is looking to be a good candidate, otherwise maybe next Tues. Still waiting for that decisive breakout over 1210 to know for sure. Once we get it we know that $1300+ gold is right around the corner.
I mentioned the possibility of a massive H&S a few months ago. Should that formation prove then it targets $700, which is also the 2008 crisis low. I dont think this will happen, but the ingredients are there.
I wanted to make sure that I mentioned the possible h&s since the author used the words "SuperMonster", as it hasn't played-out yet. Although I declare my view as 'biased', the c&h looks to me as the more likely outcome. Its better to be prepared. Nothing would really surprise me at this point.
I don't think the gold move will hold right here, though running up into the $1220's could still be part of this pull back. Their still feels like there is one more leg down to complete. The bankers have been cashing in on letting gold see-saw between $1155 and $1215 so why shouldn't take every opportunity to keep this going back and forth? Impressed by moves in some of the miners today and on the surface seems bullish, or at least a final leg up in this month long rally. Gold/Euro turning the corner should be a plus for gold as well.
From ZeroHedge:
Goldman dedicates 9 pages to a regime change in which it goes openly bullish on gold. The report is attached, which we present without commentary but as always, if there is one flashing red light saying the peak price for any asset has been hit, it is a Strong Buy signal by Goldman. The report will likely result in a brief pop in spot over the next 24 hours as the idiot money rushes into the latest Goldman trap. Alas, it also means that GS is now offloading. Be very wary of market dynamics over the next month.
This article shows that in every significant gold correction of the past 9 years that gold has made its way back to an RSI of 45 and the COT net % short position has reached 30%. Gold is still a bit short of both of those at 55+ and 38 respectively. Gold did reach down to 48 RSI during the February drop. I tried every possible way to compute COT short % and I could not come up with the 38% that Schwenson does though only a couple % different...even went back through the last 2 reports. I do like this guy's way of laying out the charts.
A number of the better miners have traced out either expanding flat top triangles or descending widening wedges. Looks somewhat bearish to me with momentum tailing off. Newmont has traced out a broadening top formation over the past week or so similar to what Goldcorp did several weeks back. Only this time GLD, SLV and GDX don't have that same general shape so I'm a little skeptical. But I don't like to see any senior miner displaying this pattern during a multi-day pullback, especially so with Newmont which has been so strong this year. Best case would be that NEM closes some gaps in the 55.5-56.5 range and then recovers.
GDX and GDXJ have flat top triangles with 3 touches at the top while GLD has advanced another notch higher but on declining momentum. Overall the miners look like they have lost momentum since peaking last Friday. My bet would be to the bearish side for next week at least for miners and silver. Gold could hang or even move up as it is behaving as a safe haven right now. We did get a slight pop in gold on Thursday and Friday following the end of this week's bond auctions which has typically been the case. A bit odd that Gold Forward rates fell sharply, essentially all the way back to about their short term low seen on July 30th. In each case the low lease rate occurred two days after gold bottomed.
<Tomorrow is Friday the 13th. Toss in a Cardinal Cross and potential Hindenburg Omen>
The ole Triple Lindy................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......
While the S&P 50/200 day cross has been well written about what hasn't been are the 3 failed attempts to stay above the 200 dma, a failed rising bearish wedge on high volume, crossover on Macd, and a head and shoulders. The author also notes GDXJ/S&P ratio over the past few weeks. While it has been strong, it seems like that ratio is ready to take a breather, then resume before the month is over. Maybe one last gasp by the S&P to try and touch the underside of the 200 dma?
There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping the 20dma this indicator is very reliable.
<< <i>There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping the 20dma this indicator is very reliable. >>
I agree that the 200dma is too long a time frame to measure trends. I stick with 10-20-30 mda to catch the moves a bit earlier. The general trend of the market is down though... Edited to say "stock market" is down though. Gold and silver are still in uptrends.
"Poets are the unacknowledged legislators of the world." PBShelley
<< <i>There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping the 20dma this indicator is very reliable. >>
This should have been written as.....
<< <i>There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping 200dma this indicator is very reliable. >>
Gold and silver are still in uptrends.
Until they arent. Would you rather sell during an uptrend or a downtrend? Oftentimes downtrends are not apparent until prices are already substantially lower.
My point about the death cross was that it now has some additional indicators to help support it. A matter of fact you could toss it out completely by removing the 50 dma from the chart and just look at the price action around the 200 dma which seems rather bearish for the upcoming month or two.
Cliff Droke basically said the same thing last week on the unreliability of the death cross by itself. But in the examples he presents on DC failures, none of them show 3 weak attempts to get back above the 200 dma followed by a final fast acceleration back under it. The current set-up may not spell the end of the longer term SM rally, but it could indicate a final C leg down over the next few months back to the 9000 range. It might not be "death," but it could definitely leave a mark.
There's a lot of call for an impending crash in the stock market. While the Hindenberg omen always predicts a market crash, it's only been right 25% of the time. In my opinion there are too many people seeing and expecting a crash to make it a high probability. But it is a possibility nonetheless. This level here at 1082 needs to hold, any significant breakdown below that would probably portend to further weakness. After all, 1082 is just a 38.2% fib retracement of the last move up (see chart). We may see a dip down to 1070 tonight, but that should be temporary.
I did buy some a couple of SPY calls late Friday to play a rebound, but I will probably be quick to take profits if there are any.
The weekly chart is primed for a new trend to start, and the short term chart is showing the current move is over. At a minimum, it looks to me like at least a small recovery is in store for SP500.
As far as gold, the immediate term still looks good, immediate target is 1228. Any dips down to support at 1213 are good buy opportunities tonight. For gold, support is at 1213.2, 1216.9, and resistance is at 1220.7, 1224, and 1231.5.
Goldman the highest of authorities (you can't spell God without Goldman) says go overweight in copper, gold and oil. What say you?
FYI- I'm in Vegas and I just dusted a hot leggy blonde (Bobby Douglas's daughter) in a drinking contest (Irish Car Bombs) so don't hold this against me
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'm just surprised she almost beat me. Chicago girls
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......
Goldman the highest of authorities (you can't spell God without Goldman) says go overweight in copper, gold and oil. What say you? >>
I think you should do some research into GS's calls and the accuracy of those calls. Writing a research report does not put $$$$ on the bottom line. Trading does. Where does GS have their money?
Roadrunner, is the 10 yr yield nearing the end of the 5th leg down?
Roadrunner, is the 10 yr yield nearing the end of the 5th leg down?
I don't know about the 5 legs down unless you mean this very last short term leg over the past 2-3 weeks. It does seem to be getting very near the end of this last short downtrend and possibly the 5 month one as well. What I see is more like a pair of 3 legged ABC's over the past 5 months. They can be shoe horned into 5 legs but they really don't fit EW criteria since that makes the 3rd leg the shortest which is not allowed. This current C leg of the 2nd ABC can be into the end of the 5th leg down over the past 10-15 days. The momentum has cascaded to an extreme. This 2nd ABC leg is in it's 9th week. Even the fall 2008 crash only lasted 9 weeks straight down. Support back to fall 2008 at the 2.50 level where this could end. The consolidating triangles in June and July tend to confuse the picture. I'm basically counting both of those months as sideways corrections to the primary downtrend. Curious that this corrective pattern closely mirrors the uptrend from late 2008 to early 2009...almost indentical so far.
Newmont is still tracking with that broadening top formation...now added on with a H&S. Unless this breaks to the upside I will have a bad feeling about the senior miners. But GDX (barely) and GDXJ both made slightly higher highs over last week's best. SLV still lagging and yet to take the highs from the previous 2 weeks. Note that 2 tenths more and GDXJ will have closed its only remaining upper gap at 29-29.2. - and also now well into its 5th leg up. Seems that this was the target all along way back at 25.10. GDX still has the lower gap at 45-46 beckoning from below. GLD now has a gap at around 118-118.4 to close up ($1200-$1210). For gold's action today to $1228 half of the senior miners sure looked lethargic. Barrick, Newmont, Goldcorp, Yamana all struggling to try and recover to last week's high....as the more favored EGO, IAG, BVN, and AEM moved up crisply. In my mind Newmont shows the way. The momentum in GLD, SLV, and miners still seems to be slowing even with higher highs today.
Quite a boring day in the markets, volume levels are really low in everything.
A nice ~$10 move in gold today took us up to $1228 and exhausted the energy for this move. I'm not expecting much for Tuesday... probably an oscillation between support here at 1224.2 and resistance at 1232.3. Other support is at 1219.5, and other resistance is at 1237.3 and 1250.1. I played the first oscillation pretty well this morning by selling 40% of my position at 1228.5, and restoring the position back in at 1224.
Stocks were boring today as the markets are stuck on the Fib retracement level here around 1080. But the short term pattern will be re-energized by tomorrow, so we may see a move on Tuesday. Bought SPY calls in anticipation of the move being upward. But I'll be ready to bail at any significant downside movement. Support here is at 1068.5, 1075, and resistance is at 1083.75, so I'd see any breach of 1068.5 to be a big red warning sign.
The bounce in the USD looks like it has amounted to nothing more than a 38.2% Fib retracement.
If I had to call it, I'd say the USD is headed back to at least 80.0, which may help push gold back to 1270. Using Ackerman's hidden pivot method this projects to a further downside target of 74.62. Such a move could easily propel gold to $1400+, and the timeframe for such a move would be over the next couple of months.
I think this first retrace in the dollar is only the first of 3 or 5 legs (ABC corrective or 1-2-3-4-5 impulsive). A 5 day pull back doesn't seem enough to retrace a 2 month drop, especially from a time perspective (11-12% time on this retrace). The dollar did an impressive 5 day impulsive move back up that seems anything but bearish.
My bellweather Newmont hung on for dear life by coming within 5 cents of taking out its broadening top pattern....coiling in what appears to be an ascending triangle pattern. A strong move is probably coming shortly. Momentum still waning and GDX/GDXJ/GLD still slowing grinding up however due to decent gains by approx half of their indexes. It's the other half that aren't participating that concerns me. Volume has been dropping for essentially 2 weeks on the miners and SLV during this upmove.
Edit: Today's late morning move in the S&P gave the miners a boost. Newmont finally took out it's previous high leaving the miners in a more bullish position.
Today seems to start a 4th wave pullback in volatility that coincides with a 4th wave in the SM that is giving it some lift. But not much of a lift. Some of the Ags and Oils doing good. Still another volatility leg up to come imo that could give the miners another hit downard before end of month.
<< <i>I think this first retrace in the dollar is only the first of 3 or 5 legs (ABC corrective or 1-2-3-4-5 impulsive). A 5 day pull back doesn't seem enough to retrace a 2 month drop, especially from a time perspective (11-12% time on this retrace). The dollar did an impressive 5 day impulsive move back up that seems anything but bearish. >>
I see what you're saying. I'm slightly concerned that the 38.2% retracement didn't quite make it, but it's close. I still think it's a normal retracement, and I think it looks so strong and bullish just because it came at the end of a non-stop slide from Jun 9 to Aug 6. Those retracements are an important part of any move up or down because it re-energizes the pattern for continued movement. We'll have to see.
I wouldn't blame the anemic volume on too much other than seasonality. I'm not sure how much weight to give to the volume.
Missed my play on gold today. I planned to unload 40% at 1231.3 and missed it by 3 ticks (YG). My planned re-entry at 1225.1 would have been almost ideal.
My SP500 calls are working out with a nice rally today. It appears that the SM rally may be back on, in which case, miners should start to do pretty well also.
RR, I have some long term holdings in mining stocks that I don't actively trade. What would be your opinion on trading AUY shares for IAG. AUY has just been a dog, while IAG is doing well. I don't spend as much time as I should studying the individual miners. Do you think IAG is a better bet than AUY over the next 6 months to a year?
Sometimes it's good to take a step back. Here is a monthly gold futures chart, and you can see why 1228 is an important level as it was the monthly high for Dec 09. A break of this level and a break of the ATH and this chart looks uber-bullish, IMHO.
Certainly AUY has been doggy for this entire year. IAG and EGO have been the "darlings" the past year or so. I've read a couple of analysts who thought IAG, EGO, and KGC were overplayed and needed rest for a while. KGC just got saddled with the RBI takeover that should keep it sidetracked for a while. EGO and IAG have not taken a breather since the bottom in Nov 2008. Unlike AUY they have not taken significant corrections and fallen out of their up channels. I think eventually AUY has to catch up some of that ground. While all 3 companies are in jurisdictions that are far from 100% safe I like Yamana in South America better vs. IAG in mostly West Africa and EGO in Turkey/China. Yamana's achilles heel the past 1-2 yrs has been the run of currency swaps and derivative's hits among other things that have eaten into their quarterly profits. The key question is AUY management taking care of those issues? EGO and IAG both have 40% of their production and reserves tied up in their biggest mine. Yamana's largest mine is only 20% of their total output. Personally I don't know if EGO's presence in China is a big plus or a negative. EGO's Kisladag Turkish mine (40% of total production) has always been a weak spot for me. Turkey is probably currently the most tenous political jurisdiction among these 3 miners....but on the positive side it's also a country that eventually will become a lot more stable and a major economic power.
When I look at the entire picture I guess I still like AUY as the underdog that is coming out of a deep correction. You could also spread that amount among all 3 miners. EGO and IAG have risen sharply over the past few weeks while AUY is still within 10% of it's July low. It's definitely lagging those other 2 by a ton, but for how much longer? In the long run all 3 will do well and the ups and downs will get evened out. EGO and IAG can't keep on marching straight upward forever. AUY seems to be breaking out of a 9 month falling bullish wedge which could help in the catch up game. Bill Matlack on Kitco rates the miners each week and he doesn't have any problem with Yamana and rates it slightly behind IAG: IAG 2.1, AUY 2.2, EGO 2.6. The financials of earnings per share, cash flow per share, etc. seem to support his ratings.
There are probably others here who know these companies far better than I do that could tender some opinions especially on how Wall Street views these companies.
I think this first retrace in the dollar is only the first of 3 or 5 legs (ABC corrective or 1-2-3-4-5 impulsive). A 5 day pull back doesn't seem enough to retrace a 2 month drop, especially from a time perspective (11-12% time on this retrace). The dollar did an impressive 5 day impulsive move back up that seems anything but bearish.
The dollar is going substantially higher over the next few years.
I think the dollar is also going substantially lower over the next few years as well. Just hard to figure which comes first...higher or lower.
Yeah, I've seen the P&F chart pointing lower for some time. But not all P&F charts play out either. Just like not all H&S play out either. Gold could indeed tack on a C leg to this 8 month correction and head to 1050. It could also keep rising to $1300-$1500 and then perform a major drop back to $1050 while correcting the entire up-move from $690. There are a lot of P&F charts for individual miners on downtrends pointing to zero. There are also quite a few in downtrends pointing to much higher levels. I find it hard to believe in either situation at the moment.
My call for the dollar (index) is only to the 70's over the next couple of months, as I don't think 80 will hold. Beyond that I'm not really sure. If it was the USD in terms of gold, I would definitely say lower, but in terms of relativity to a basket of currencies, it's too crazy to say, especially if the Euro gets dissolved or something else epic happens. For the most part, the USD would seem stuck in a range between 70 and 90.
Gold spent the day consolidating the last move up and is now energized for more movement. 1250 looks almost certain in the near future, but this 1250-1270 level will probabl give gold some good resistance, requiring a week or two to bust through to new all time highs. I may buy some GLD calls if gold is still in the 1220's Wed morning.
Stocks have broken free of the 1080 level and has more room to the upside. I'd have to say that SP500 at 1110 is probably likely in the next few days or next week. Holding my SPY calls for a while longer.
Edited to add: Support for Wed is at 1220.6, 1223.5, and resistance is at 1227.3, 1230.2, 1234, and 1240.7.
Nope and I don't use a slide rule or etch a sketch anymore either. My guess, no traders actually use the P & F for a trade basis. I was taught the system on graph paper as a kid. Gold doesn't have much to go before it busts that chart and then it will show a bullish price objective right? I'm a little rusty. I admit I do look at P & F's from time to time for the heck of it.
Your dollar call is very broad. The dollar may go up against the Euro and Pound but my guess it will lanquish against all the others badly. So, the UDX may actually show go up since the Euro and Pound comprise over 60% of the indexes weight. The dollar? pleh........... 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......
Nope and I don't use a slide rule or etch a sketch anymore either. My guess, no traders actually use the P & F for a trade basis. I was taught the system on graph paper as a kid. Gold doesn't have much to go before it busts that chart and then it will show a bullish price objective right? I'm a little rusty. I admit I do look at P & F's from time to time for the heck of it.
Your dollar call is very broad. The dollar may go up against the Euro and Pound but my guess it will lanquish against all the others badly. So, the UDX may actually show go up since the Euro and Pound comprise over 60% of the indexes weight. The dollar? pleh........... MJ >>
I dont use P&F charting either. Just a bunch of hugs and kisses to me. The P&F chart for SLV projects to 29. SLV will determine its next major move in the next week or so.
Regarding the dollar. I think the "dollar index" will go higher. The higher that index goes, the harder it will be for "rock based" currencies to appreciate. Especially since all are going to suffer a real estate crisis within the next 2 years.
It didn't occur to me yesterday when the Aden's article hit the street that it might be an untimely bullish call. But thinking about it this morning and reading their article they seem to be back to calling for a buy at a short term peak. At least one good piece of information in the article is the notation of 8 yr gold cycles going back to the 1960's. Fwiw I've seen a couple of decent analysts make note that the Nov. 2008 bottom in gold was an 8 yr bottom. That would tend to imply that another rip-roaring 30% sell off is a long ways off. While the Nov 2008 bottom came in a bit early at <8 yrs, it's now to the point that at 9-1/2 yrs it's well past its cycle time and very likely already in-place. The Nadlers of the world looking for another fall 2008 sell off back into the $600-$900 range might have a quite a wait on their hands.
Today gold foward rates fell way off to their lowest since April 21st. Is this forecasting lower prices to come later this week? The miners have fairly often taken some hits during stock options expiration week. So I'd expect some resistance the rest of the week with GDX and GDXJ. This morning's brief hit just might have been the first shot across the bow and a nice fishing expedition for stops. With silver taking the biggest hit GSR has exploded right back up. My guess is this is the start of the 5th leg up for GSR to head back to 68-70.
Very nice buying opp this morning, picked up another contract and those GLD calls when gold was at around 1221. We popped over 1230 to 1231.6, and while it's pulled back at the moment to 1229.5, this show of strenght projects higher to at least 1240 for today, and likely 1250 by the end of the week.
<Regarding the dollar. I think the "dollar index" will go higher. The higher that index goes, the harder it will be for "rock based" currencies to appreciate. Especially since all are going to suffer a real estate crisis within the next 2 years>
Rock based currencies---yep. At least they have something others want. The US can't continue to export debt forever as the national treasure can they? It seems to me that we have been buying a lot of our own debt lately. Nice gig if you can get it. When the US had their housing crisis the dollar actually got stronger. Food for thought. FYI- I'lll will call wolf on your unilateral housing crisis call. I'm not biting. 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 US dollar strengthened during the housing crisis because that crisis brought the entire world economy to a halt and the US dollar was the safest asset on the globe. Food for thought? Those much sought after "rocks" plummeted in value by upwards of 75%.
The Aussie real estate bubble is caused by excess demand, or so they say. If thats the case and prices remain high and even continue higher, what happens when all that demand is met? When everyone owns a house, who else is left to buy? Best cure for high prices is high prices. Canada will see the real estate bubble first.
No matter how much something is wanted, there becomes a price at which it is no longer wanted. You know this MJ, you know how it works. Believe me I would love to see the dollar at 50 and copper at 9 and oil at 200. The potential for MASSIVE profits would then be insane. But it aint gonna happen.
I am sensing a rather dramatic move to occur in all asset classes within the next few weeks. Maybe starting in the next 48 hours.
"big moves in all asset classes, maybe in the next 48 hours." Is there something we should know? Is it the Cardinal Cross? Is it China's refusal to buy our Bonds? Is it people are finally realizing that when the Fed is forced to buy our bonds, the Ponzi Plan is up?
<< <i>"big moves in all asset classes, maybe in the next 48 hours." Is there something we should know? Is it the Cardinal Cross? Is it China's refusal to buy our Bonds? Is it people are finally realizing that when the Fed is forced to buy our bonds, the Ponzi Plan is up?
Currency Induced Cost Push Inflation. >>
I'll assume those are rhetorical questions.
Looks like its starting already. INDU down 200, gold down $10 from its high, silver down 34c. Canadian dollar down 1.11% Copper down 1.5%.
The trade everyone hated this year--30 yr US Treasuries, up almost 20% including interest payments. Why would China wanna sell the best performing asset on the planet?
I mentioned a couple of days ago, the 5th leg up in the GSR started....and now accelerating. Flight to safety trade back on. But I didn't think gold would respond by continuing to head up into the $1230's. We'll see if she hangs. I still want to pick up some cheap miners in the near future and many of the prime candidates are now up 20-30%.
Based on those 4 first legs, it doesn't appear that this last leg should last that long. But Cohodk's comments might imply this could have some legs...ie could be the 1st overall leg of a major acceleration change. I look back to the Sept-Feb GSR and it sort of follows the same pattern. Back then it made an ABC with a very choppy A leg that was impossible to figure out at the time. That same choppy action finished up in June with GSR peaking out around 71. The move from end of last year finished with a month long C leg that went parabolic The overall GSR trend of the past 6-12 months looks like a bullish ascending triangle. If GSR blows through the top line of 70, look out above! Removing the Feb peak of 74 and drawing in a a basic channel could predict a GSR up to 75-78. One could go back to early 2009 and form a symmetrical triangle that is now getting long in the tooth looking for resolution. The longer term triangle would hint at a resolution to the downside as GSR completes it's yr long B corrective leg and commences a long C wave down. The shorter term triangle hints that more action is needed in this c leg before possibly completing a year long abc = B.
If I had to pick a course I'd go with the longer term symmetrical triangle over the 6 month ascending triangle. But no money riding on that decision.
With tommorow options expiration some rocking of the boat today and tommorow seems appropriate. Next week being a bond week as well as a gold/silver options expiration week just might induce some coat tail dragging that keeps the PM's on guard for the next 5 days. Last year at this time the miners were whipsawed back and forth during expiration week but then took off as Sept started. Gold was held in check for a couple of days but had been advancing for the 2nd half of August 2009.
<< <i>I'll assume those are rhetorical questions. >>
Please don't assume, I am not clear what you are talking about. Are you referring to a possible strike by Israel against Iran before their nuclear program goes online next week? Or something else? Without further clarification, your statement is pretty useless - at least to me. You can call the market up, down, or sideways, but unless you say why it means nothing to me.
<< <i>Looks like its starting already. INDU down 200, gold down $10 from its high, silver down 34c. Canadian dollar down 1.11% Copper down 1.5%. >>
Still not sure what you're expecting. Cu and Si recovered quite well. Gold ended the day where it started. Stocks took a hit.
<< <i>The trade everyone hated this year--30 yr US Treasuries, up almost 20% including interest payments. Why would China wanna sell the best performing asset on the planet? >>
It couldn't have anything to do with the Fed's policy of monetizing the debt would it? I could never imagine investing in a country that is actively and openly monetizing its debt, with no realistic plans to reduce spending and stop the spiral which will only lead to more printing. IMO, China's only buying time while they exit the dollar in an orderly and least disruptive fashion possible. That 0.6% interest rate must hard to resist!
RR, even though you post links to your charts, I still have a hard time picking out the legs you are referring to. Any chance you can draw on them? Once I found Tinypic.com, I have found it very easy to upload and post charts to the forum.
Some timing models suggest that today could have been a top for gold. If that is the case, a 38.2% correction on gold (from 1050) would take it down to ~$1210. But in a smaller time frame, today's peak at ~1240 and retracement to ~1230 was merely a 38.2% retracement of the move up from ~1219. I still anticipate a near term move to 1250 in gold, at which point I will reduce my holdings and wait for a small pullback.
As far as stocks, there is a lot of gloom and doom out there. Too much, IMO, but such gloom can become a self-fulfilling prophecy. Perhaps a move by Israel against Iran in the next few days could trigger such event. There is a lot of energy for a big trend in stocks right now to start. The only question is, which direction? Rick Ackerman is really predicting a whopper (down). Still I think a prudent move is to reduce stock holdings if you're in real deep (long term holdings), but not necessarily a run for the hills, yet...
An update on my positions... I sold all of my SPY calls yesterday at a small profit after I saw that it was having a hard time overcoming 1200. I did buy GLD calls with gold around 1220, and I am up a little now with gold at ~1233, but was up a lot more this morning. Due to travel I wasn't paying that close of attention, but I don't think I would have sold anyway. I'm not expecting much for Friday, I will probably sell most of the calls just to avoid holding them over the weekend.
PC, above I put in a GSR line chart that shows the 5 legs over the past 14 trading days. But the legs are still apparent in the candle stick chart as well, but not as obvious. You can also see the pattern in the RSI, StochRSI, W%R, and even Stoch. This current 2 week move seems about over. But it also could be just the first leg back up for an extended move that encompasses 3 or 5 total legs. Bonds may be hot, but the dollar still has some retracing to do imo which will keep the SM and miners subdued a while longer....possibly all the way through next week. At least that would follow the typical outline of monthly expirations and bond weeks. I think we're just too close now to not be affected. Friday and early Monday could very well be one last breath where gold does reach your $1250 number. Those days often move counter to the bond week drop.
Read Roger Weigand today who has been fairly accurate for gold over the past 5 yrs. He sees one more bought of weakness to as low as $1175 before gold comes out for the fall head banging season. He's expecting $1325-$1375 before the year is out. While I think the SM and commods could take a decent correction very soon, I'm not figuring on a deleveraging crash in 2010. I think QE2 is slowly slinking into the nooks and crannies via means not apparent by money supply or consumer price inflation....but via speculative asset inflation. By Sept/Oct it should be more apparent. I'm still miffed I got shaken out of my miners just as their month rally got underway....now waiting/hoping for better prices on a pullback. I don't expect some of the hotter juniors/intermediates like Aurizon, USGold, Allied Nevada, FRG, Rubicon, Eldorado, and IMG to come back all that much. They broke away for the party back in July.
This guy agrees with Weigand on a drop back to $1175, even possibly $1155. But he disagrees in that by the end of the year he figures gold will pull back to $1040 to correct the current 21 month uptrend from November 2008. That would end the streak of yearly advances at 9. Bannister gold forecast
And for the bigger picture to show the 2-1/2 yr ABC in progress. It doesn't seem to make sense to me that after a year long A leg drop, that it took almost a full year to complete the B. It's possible the C leg (triangle) has been in progress since early Feb. with a final and third touch to come around the 70 line....then will break back towards the 50's for gold's fall rally. This same basic pattern where the C leg never really dropped but just consolidated also occured to gold in spring-summer 2009 (ie some precedent).
Comments
Gold still capped at the 50dma.
Knowledge is the enemy of fear
Gold. The SuperMonster Cup & Handle In Play Now
I've seen c&h's turn into h&s's. Time will tell.
Most of those momentum indicators have formed a bearish H&S over the past 20 months. And in the case of Trix (5,9) and Roc, those have formed descending triangles. The stochastics could be tracing out the right shoulder of a bullish IH&S. Decisions, decisions.
roadrunner
Thats a pretty steep chart especially considering its logarithmic. Gold is gonna take a breather. Im pretty sure we will see $1000 again.
Today was definately not a borderline miserable day in stockland. Atrocious is more apt. And with CSCO's downbeat comments tonight, tomorrow should be fugly as well. Then we have a Friday in August. Anybody gonna be around to prop up prices?
Closed AMZN puts. Closed copper short. Closed Aussie $ short. Still holding BIDU puts, some short puts on PFE, MSFT, JPM. Long DZZ. Closed shorts way too early but im a bigger fan of cash. This is one of those times where it is better to not make money than to lose it.
SLV has been in an uncharacteristically tight range the last 4 months. It is now predictable. Over 18.50 and it makes an attempt at 21. Under 17 and it goes to 12. We should know the direction in the next 5-10 days.
I've seen c&h's turn into h&s's. Time will tell.
I mentioned the possibility of a massive H&S a few months ago. Should that formation prove then it targets $700, which is also the 2008 crisis low. I dont think this will happen, but the ingredients are there.
Knowledge is the enemy of fear
But I still do think we'll get that front end loader gold lifting going in late August with a ramp up in September. I don't think we'll see $1000 but I won't rule out $1050-$1100 as a potential low. But that has to happen in the next 2 weeks as a lot of signs are pointing to a commodities turn in the vicinity of August 20th. Right now the commodity sector is getting hammered across the board (ags, base and precious metals, oil and gas, etc.). Not much being left out of the spanking. GSR continues to accelerate upwards along with VIXX as other liquidity indicators show accelerating outflows. The miners are showing the way down for gold and silver. I'm looking for up to another 7-10 days of this downtrend. There will be some great buys in PM's, miners, energy, and ags at that time. Nice island top in the S&P today. Monday's peak seemed to confirm the Cardinal Crossing however it's yet to show itself as a 1 in 1000 yr event. On the irrelevant bright side BDI continues to accelerate upwards indicating a light out of this tunnel.
Even if we get that bottoming around the 20th it might not turn all that quick for gold as options expiration and a bond week will be lurking only a few days later. The gold miners do tend to get punched on stock market options expiration (third Friday 8/20) so one might expect Friday the 20th to be a final August knock out for miners before they start to recover from their summer doldrums.
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......
roadrunner
I re-established my GLD calls on the drop to 1195 after I took profits Wed morning.
The rally today in the USD did not make sense other than a bounce was overdue and appropriate at 80.0. But the beating that SP500 took is not looking like any kind of a trend, just more consolidation. I think SP500 is a good speculative buy in the low 1080's tonight.
The next move in gold is still imminent, and for timing Thursday is looking to be a good candidate, otherwise maybe next Tues. Still waiting for that decisive breakout over 1210 to know for sure. Once we get it we know that $1300+ gold is right around the corner.
I mentioned the possibility of a massive H&S a few months ago. Should that formation prove then it targets $700, which is also the 2008 crisis low. I dont think this will happen, but the ingredients are there.
I wanted to make sure that I mentioned the possible h&s since the author used the words "SuperMonster", as it hasn't played-out yet. Although I declare my view as 'biased', the c&h looks to me as the more likely outcome. Its better to be prepared. Nothing would really surprise me at this point.
Using SDS as a hedge.
<< <i>
Thats a pretty steep chart especially considering its logarithmic. Gold is gonna take a breather. Im pretty sure we will see $1000 again.
. >>
Put me in for 10 ounces if that happens !
I plan to close 75% of my options a few minutes after opening bell, hoping the POG can maintain or go higher over the next 45m.
From ZeroHedge:
Goldman dedicates 9 pages to a regime change in which it goes openly bullish on gold. The report is attached, which we present without commentary but as always, if there is one flashing red light saying the peak price for any asset has been hit, it is a Strong Buy signal by Goldman. The report will likely result in a brief pop in spot over the next 24 hours as the idiot money rushes into the latest Goldman trap. Alas, it also means that GS is now offloading. Be very wary of market dynamics over the next month.
This article shows that in every significant gold correction of the past 9 years that gold has made its way back to an RSI of 45 and the COT net % short position has reached 30%. Gold is still a bit short of both of those at 55+ and 38 respectively. Gold did reach down to 48 RSI during the February drop. I tried every possible way to compute COT short % and I could not come up with the 38% that Schwenson does though only a couple % different...even went back through the last 2 reports. I do like this guy's way of laying out the charts.
Schwenson gold charts
Tomorrow is Friday the 13th. Toss in a Cardinal Cross and potential Hindenburg Omen. Shake vigorously to achieve the desired texture.
roadrunner
GDX and GDXJ have flat top triangles with 3 touches at the top while GLD has advanced another notch higher but on declining momentum. Overall the miners look like they have lost momentum since peaking last Friday. My bet would be to the bearish side for next week at least for miners and silver. Gold could hang or even move up as it is behaving as a safe haven right now. We did get a slight pop in gold on Thursday and Friday following the end of this week's bond auctions which has typically been the case. A bit odd that Gold Forward rates fell sharply, essentially all the way back to about their short term low seen on July 30th. In each case the low lease rate occurred two days after gold bottomed.
roadrunner
The ole Triple Lindy................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><Tomorrow is Friday the 13th. Toss in a Cardinal Cross and potential Hindenburg Omen>
The ole Triple Lindy................MJ >>
Soon you will see the "Kelly Effect". Meeting with the PPT in 2 weeks.
Knowledge is the enemy of fear
S&P death cross confirmed
roadrunner
Knowledge is the enemy of fear
<< <i>There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping the 20dma this indicator is very reliable. >>
I agree that the 200dma is too long a time frame to measure trends. I stick with 10-20-30 mda to catch the moves a bit earlier. The general trend of the market is down though...
Edited to say "stock market" is down though. Gold and silver are still in uptrends.
<< <i>There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping the 20dma this indicator is very reliable. >>
This should have been written as.....
<< <i>There has been much written to debunk the "death cross". They say it is unreliable. The problem is that it doesnt confirm many times because the 200dma is often still trending upwards. When the 50dma crosses a downward sloping 200dma this indicator is very reliable. >>
Gold and silver are still in uptrends.
Until they arent. Would you rather sell during an uptrend or a downtrend? Oftentimes downtrends are not apparent until prices are already substantially lower.
Knowledge is the enemy of fear
Cliff Droke basically said the same thing last week on the unreliability of the death cross by itself. But in the examples he presents on DC failures, none of them show 3 weak attempts to get back above the 200 dma followed by a final fast acceleration back under it. The current set-up may not spell the end of the longer term SM rally, but it could indicate a final C leg down over the next few months back to the 9000 range. It might not be "death," but it could definitely leave a mark.
Cliff Droke of the death cross
roadrunner
I did buy some a couple of SPY calls late Friday to play a rebound, but I will probably be quick to take profits if there are any.
The weekly chart is primed for a new trend to start, and the short term chart is showing the current move is over. At a minimum, it looks to me like at least a small recovery is in store for SP500.
As far as gold, the immediate term still looks good, immediate target is 1228. Any dips down to support at 1213 are good buy opportunities tonight. For gold, support is at 1213.2, 1216.9, and resistance is at 1220.7, 1224, and 1231.5.
Goldman the highest of authorities (you can't spell God without Goldman) says go overweight in copper, gold and oil. What say you?
FYI- I'm in Vegas and I just dusted a hot leggy blonde (Bobby Douglas's daughter) in a drinking contest (Irish Car Bombs) so don't hold this against me
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>There's a lot of call for an impending crash in the stock market. >>
There are also plenty of calls for nominal highs just in time for the November elections. We shall soon see. I guess both can be correct.
*** MJ: be smart or play safe my friend.
I'm just surprised she almost beat me. Chicago girls
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>I invented safe. >>
Just put the stash in the 'room safe' or 'casino-safe' before you do what you gotta do.
<< <i>Hey cohodk
Goldman the highest of authorities (you can't spell God without Goldman) says go overweight in copper, gold and oil. What say you? >>
I think you should do some research into GS's calls and the accuracy of those calls.
Roadrunner, is the 10 yr yield nearing the end of the 5th leg down?
FWIW---I did get long UCO on Friday.
Knowledge is the enemy of fear
I don't know about the 5 legs down unless you mean this very last short term leg over the past 2-3 weeks. It does seem to be getting very near the end of this last short downtrend and possibly the 5 month one as well. What I see is more like a pair of 3 legged ABC's over the past 5 months. They can be shoe horned into 5 legs but they really don't fit EW criteria since that makes the 3rd leg the shortest which is not allowed. This current C leg of the 2nd ABC can be into the end of the 5th leg down over the past 10-15 days. The momentum has cascaded to an extreme. This 2nd ABC leg is in it's 9th week. Even the fall 2008 crash only lasted 9 weeks straight down. Support back to fall 2008 at the 2.50 level where this could end. The consolidating triangles in June and July tend to confuse the picture. I'm basically counting both of those months as sideways corrections to the primary downtrend. Curious that this corrective pattern closely mirrors the uptrend from late 2008 to early 2009...almost indentical so far.
TNX daily and weekly charts
Newmont is still tracking with that broadening top formation...now added on with a H&S. Unless this breaks to the upside I will have a bad feeling about the senior miners. But GDX (barely) and GDXJ both made slightly higher highs over last week's best. SLV still lagging and yet to take the highs from the previous 2 weeks. Note that 2 tenths more and GDXJ will have closed its only remaining upper gap at 29-29.2. - and also now well into its 5th leg up. Seems that this was the target all along way back at 25.10. GDX still has the lower gap at 45-46 beckoning from below. GLD now has a gap at around 118-118.4 to close up ($1200-$1210). For gold's action today to $1228 half of the senior miners sure looked lethargic. Barrick, Newmont, Goldcorp, Yamana all struggling to try and recover to last week's high....as the more favored EGO, IAG, BVN, and AEM moved up crisply. In my mind Newmont shows the way. The momentum in GLD, SLV, and miners still seems to be slowing even with higher highs today.
roadrunner
A nice ~$10 move in gold today took us up to $1228 and exhausted the energy for this move. I'm not expecting much for Tuesday... probably an oscillation between support here at 1224.2 and resistance at 1232.3. Other support is at 1219.5, and other resistance is at 1237.3 and 1250.1. I played the first oscillation pretty well this morning by selling 40% of my position at 1228.5, and restoring the position back in at 1224.
Stocks were boring today as the markets are stuck on the Fib retracement level here around 1080. But the short term pattern will be re-energized by tomorrow, so we may see a move on Tuesday. Bought SPY calls in anticipation of the move being upward. But I'll be ready to bail at any significant downside movement. Support here is at 1068.5, 1075, and resistance is at 1083.75, so I'd see any breach of 1068.5 to be a big red warning sign.
If I had to call it, I'd say the USD is headed back to at least 80.0, which may help push gold back to 1270. Using Ackerman's hidden pivot method this projects to a further downside target of 74.62. Such a move could easily propel gold to $1400+, and the timeframe for such a move would be over the next couple of months.
My bellweather Newmont hung on for dear life by coming within 5 cents of taking out its broadening top pattern....coiling in what appears to be an ascending triangle pattern. A strong move is probably coming shortly. Momentum still waning and GDX/GDXJ/GLD still slowing grinding up however due to decent gains by approx half of their indexes. It's the other half that aren't participating that concerns me. Volume has been dropping for essentially 2 weeks on the miners and SLV during this upmove.
Edit: Today's late morning move in the S&P gave the miners a boost. Newmont finally took out it's previous high leaving the miners in a more bullish position.
Today seems to start a 4th wave pullback in volatility that coincides with a 4th wave in the SM that is giving it some lift. But not much of a lift. Some of the Ags and Oils doing good. Still another volatility leg up to come imo that could give the miners another hit downard before end of month.
roadrunner
<< <i>I think this first retrace in the dollar is only the first of 3 or 5 legs (ABC corrective or 1-2-3-4-5 impulsive). A 5 day pull back doesn't seem enough to retrace a 2 month drop, especially from a time perspective (11-12% time on this retrace). The dollar did an impressive 5 day impulsive move back up that seems anything but bearish. >>
I see what you're saying. I'm slightly concerned that the 38.2% retracement didn't quite make it, but it's close. I still think it's a normal retracement, and I think it looks so strong and bullish just because it came at the end of a non-stop slide from Jun 9 to Aug 6. Those retracements are an important part of any move up or down because it re-energizes the pattern for continued movement. We'll have to see.
I wouldn't blame the anemic volume on too much other than seasonality. I'm not sure how much weight to give to the volume.
Missed my play on gold today. I planned to unload 40% at 1231.3 and missed it by 3 ticks (YG). My planned re-entry at 1225.1 would have been almost ideal.
My SP500 calls are working out with a nice rally today. It appears that the SM rally may be back on, in which case, miners should start to do pretty well also.
RR, I have some long term holdings in mining stocks that I don't actively trade. What would be your opinion on trading AUY shares for IAG. AUY has just been a dog, while IAG is doing well. I don't spend as much time as I should studying the individual miners. Do you think IAG is a better bet than AUY over the next 6 months to a year?
When I look at the entire picture I guess I still like AUY as the underdog that is coming out of a deep correction. You could also spread that amount among all 3 miners. EGO and IAG have risen sharply over the past few weeks while AUY is still within 10% of it's July low. It's definitely lagging those other 2 by a ton, but for how much longer? In the long run all 3 will do well and the ups and downs will get evened out. EGO and IAG can't keep on marching straight upward forever. AUY seems to be breaking out of a 9 month falling bullish wedge which could help in the catch up game. Bill Matlack on Kitco rates the miners each week and he doesn't have any problem with Yamana and rates it slightly behind IAG: IAG 2.1, AUY 2.2, EGO 2.6. The financials of earnings per share, cash flow per share, etc. seem to support his ratings.
There are probably others here who know these companies far better than I do that could tender some opinions especially on how Wall Street views these companies.
Financial comparison to miners
roadrunner
I think this first retrace in the dollar is only the first of 3 or 5 legs (ABC corrective or 1-2-3-4-5 impulsive). A 5 day pull back doesn't seem enough to retrace a 2 month drop, especially from a time perspective (11-12% time on this retrace). The dollar did an impressive 5 day impulsive move back up that seems anything but bearish.
The dollar is going substantially higher over the next few years.
Knowledge is the enemy of fear
Yeah, I've seen the P&F chart pointing lower for some time. But not all P&F charts play out either. Just like not all H&S play out either. Gold could indeed tack on a C leg to this 8 month correction and head to 1050. It could also keep rising to $1300-$1500 and then perform a major drop back to $1050 while correcting the entire up-move from $690. There are a lot of P&F charts for individual miners on downtrends pointing to zero. There are also quite a few in downtrends pointing to much higher levels. I find it hard to believe in either situation at the moment.
roadrunner
Gold spent the day consolidating the last move up and is now energized for more movement. 1250 looks almost certain in the near future, but this 1250-1270 level will probabl give gold some good resistance, requiring a week or two to bust through to new all time highs. I may buy some GLD calls if gold is still in the 1220's Wed morning.
Stocks have broken free of the 1080 level and has more room to the upside. I'd have to say that SP500 at 1110 is probably likely in the next few days or next week. Holding my SPY calls for a while longer.
Edited to add:
Support for Wed is at 1220.6, 1223.5, and resistance is at 1227.3, 1230.2, 1234, and 1240.7.
<< <i>Anybody do point and figure charting?
<< <i>
Nope and I don't use a slide rule or etch a sketch anymore either.
Your dollar call is very broad. The dollar may go up against the Euro and Pound but my guess it will lanquish against all the others badly. So, the UDX may actually show go up since the Euro and Pound comprise over 60% of the indexes weight. The dollar? pleh........... 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>
<< <i>Anybody do point and figure charting?
<< <i>
Nope and I don't use a slide rule or etch a sketch anymore either.
Your dollar call is very broad. The dollar may go up against the Euro and Pound but my guess it will lanquish against all the others badly. So, the UDX may actually show go up since the Euro and Pound comprise over 60% of the indexes weight. The dollar? pleh........... MJ >>
I dont use P&F charting either. Just a bunch of hugs and kisses to me.
Regarding the dollar. I think the "dollar index" will go higher. The higher that index goes, the harder it will be for "rock based"
Knowledge is the enemy of fear
Aden Sisters again
Today gold foward rates fell way off to their lowest since April 21st. Is this forecasting lower prices to come later this week? The miners have fairly often taken some hits during stock options expiration week. So I'd expect some resistance the rest of the week with GDX and GDXJ. This morning's brief hit just might have been the first shot across the bow and a nice fishing expedition for stops. With silver taking the biggest hit GSR has exploded right back up. My guess is this is the start of the 5th leg up for GSR to head back to 68-70.
roadrunner
Rock based currencies---yep. At least they have something others want. The US can't continue to export debt forever as the national treasure can they? It seems to me that we have been buying a lot of our own debt lately. Nice gig if you can get it. When the US had their housing crisis the dollar actually got stronger. Food for thought. FYI- I'lll will call wolf on your unilateral housing crisis call. I'm not biting. 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 Aussie real estate bubble is caused by excess demand, or so they say. If thats the case and prices remain high and even continue higher, what happens when all that demand is met? When everyone owns a house, who else is left to buy? Best cure for high prices is high prices. Canada will see the real estate bubble first.
No matter how much something is wanted, there becomes a price at which it is no longer wanted. You know this MJ, you know how it works. Believe me I would love to see the dollar at 50 and copper at 9 and oil at 200. The potential for MASSIVE profits would then be insane. But it aint gonna happen.
I am sensing a rather dramatic move to occur in all asset classes within the next few weeks. Maybe starting in the next 48 hours.
Knowledge is the enemy of fear
Currency Induced Cost Push Inflation.
<< <i>"big moves in all asset classes, maybe in the next 48 hours." Is there something we should know? Is it the Cardinal Cross? Is it China's refusal to buy our Bonds? Is it people are finally realizing that when the Fed is forced to buy our bonds, the Ponzi Plan is up?
Currency Induced Cost Push Inflation. >>
I'll assume those are rhetorical questions.
Looks like its starting already. INDU down 200, gold down $10 from its high, silver down 34c. Canadian dollar down 1.11% Copper down 1.5%.
The trade everyone hated this year--30 yr US Treasuries, up almost 20% including interest payments. Why would China wanna sell the best performing asset on the planet?
Knowledge is the enemy of fear
Based on those 4 first legs, it doesn't appear that this last leg should last that long. But Cohodk's comments might imply this could have some legs...ie could be the 1st overall leg of a major acceleration change. I look back to the Sept-Feb GSR and it sort of follows the same pattern. Back then it made an ABC with a very choppy A leg that was impossible to figure out at the time. That same choppy action finished up in June with GSR peaking out around 71. The move from end of last year finished with a month long C leg that went parabolic The overall GSR trend of the past 6-12 months looks like a bullish ascending triangle. If GSR blows through the top line of 70, look out above! Removing the Feb peak of 74 and drawing in a a basic channel could predict a GSR up to 75-78. One could go back to early 2009 and form a symmetrical triangle that is now getting long in the tooth looking for resolution. The longer term triangle would hint at a resolution to the downside as GSR completes it's yr long B corrective leg and commences a long C wave down. The shorter term triangle hints that more action is needed in this c leg before possibly completing a year long abc = B.
If I had to pick a course I'd go with the longer term symmetrical triangle over the 6 month ascending triangle. But no money riding on that decision.
GSR using GLD/SLV
With tommorow options expiration some rocking of the boat today and tommorow seems appropriate. Next week being a bond week as well as a gold/silver options expiration week just might induce some coat tail dragging that keeps the PM's on guard for the next 5 days. Last year at this time the miners were whipsawed back and forth during expiration week but then took off as Sept started. Gold was held in check for a couple of days but had been advancing for the 2nd half of August 2009.
roadrunner
<< <i>I'll assume those are rhetorical questions. >>
Please don't assume, I am not clear what you are talking about. Are you referring to a possible strike by Israel against Iran before their nuclear program goes online next week? Or something else? Without further clarification, your statement is pretty useless - at least to me. You can call the market up, down, or sideways, but unless you say why it means nothing to me.
<< <i>Looks like its starting already. INDU down 200, gold down $10 from its high, silver down 34c. Canadian dollar down 1.11% Copper down 1.5%. >>
Still not sure what you're expecting. Cu and Si recovered quite well. Gold ended the day where it started. Stocks took a hit.
<< <i>The trade everyone hated this year--30 yr US Treasuries, up almost 20% including interest payments. Why would China wanna sell the best performing asset on the planet? >>
Not sure why, but the news keeps telling us they are diversifying away from the dollar: China Doubles Korea Bond Holdings as Asia Switches From Dollar
It couldn't have anything to do with the Fed's policy of monetizing the debt would it? I could never imagine investing in a country that is actively and openly monetizing its debt, with no realistic plans to reduce spending and stop the spiral which will only lead to more printing. IMO, China's only buying time while they exit the dollar in an orderly and least disruptive fashion possible. That 0.6% interest rate must hard to resist!
RR, even though you post links to your charts, I still have a hard time picking out the legs you are referring to. Any chance you can draw on them? Once I found Tinypic.com, I have found it very easy to upload and post charts to the forum.
Some timing models suggest that today could have been a top for gold. If that is the case, a 38.2% correction on gold (from 1050) would take it down to ~$1210. But in a smaller time frame, today's peak at ~1240 and retracement to ~1230 was merely a 38.2% retracement of the move up from ~1219. I still anticipate a near term move to 1250 in gold, at which point I will reduce my holdings and wait for a small pullback.
As far as stocks, there is a lot of gloom and doom out there. Too much, IMO, but such gloom can become a self-fulfilling prophecy. Perhaps a move by Israel against Iran in the next few days could trigger such event. There is a lot of energy for a big trend in stocks right now to start. The only question is, which direction? Rick Ackerman is really predicting a whopper (down). Still I think a prudent move is to reduce stock holdings if you're in real deep (long term holdings), but not necessarily a run for the hills, yet...
An update on my positions... I sold all of my SPY calls yesterday at a small profit after I saw that it was having a hard time overcoming 1200. I did buy GLD calls with gold around 1220, and I am up a little now with gold at ~1233, but was up a lot more this morning. Due to travel I wasn't paying that close of attention, but I don't think I would have sold anyway. I'm not expecting much for Friday, I will probably sell most of the calls just to avoid holding them over the weekend.
Then it shall be. Sorry. The signs are there. Not trying to sound like an arrogant arse, its just the way it is.
Ok, i'll give a hint. An apple
run for the hills
I did that at end of April, as I wrote.
Knowledge is the enemy of fear
PC, above I put in a GSR line chart that shows the 5 legs over the past 14 trading days. But the legs are still apparent in the candle stick chart as well, but not as obvious. You can also see the pattern in the RSI, StochRSI, W%R, and even Stoch. This current 2 week move seems about over. But it also could be just the first leg back up for an extended move that encompasses 3 or 5 total legs. Bonds may be hot, but the dollar still has some retracing to do imo which will keep the SM and miners subdued a while longer....possibly all the way through next week. At least that would follow the typical outline of monthly expirations and bond weeks. I think we're just too close now to not be affected. Friday and early Monday could very well be one last breath where gold does reach your $1250 number. Those days often move counter to the bond week drop.
Read Roger Weigand today who has been fairly accurate for gold over the past 5 yrs. He sees one more bought of weakness to as low as $1175 before gold comes out for the fall head banging season. He's expecting $1325-$1375 before the year is out. While I think the SM and commods could take a decent correction very soon, I'm not figuring on a deleveraging crash in 2010. I think QE2 is slowly slinking into the nooks and crannies via means not apparent by money supply or consumer price inflation....but via speculative asset inflation. By Sept/Oct it should be more apparent. I'm still miffed I got shaken out of my miners just as their month rally got underway....now waiting/hoping for better prices on a pullback. I don't expect some of the hotter juniors/intermediates like Aurizon, USGold, Allied Nevada, FRG, Rubicon, Eldorado, and IMG to come back all that much. They broke away for the party back in July.
This guy agrees with Weigand on a drop back to $1175, even possibly $1155. But he disagrees in that by the end of the year he figures gold will pull back to $1040 to correct the current 21 month uptrend from November 2008. That would end the streak of yearly advances at 9.
Bannister gold forecast
And for the bigger picture to show the 2-1/2 yr ABC in progress. It doesn't seem to make sense to me that after a year long A leg drop, that it took almost a full year to complete the B. It's possible the C leg (triangle) has been in progress since early Feb. with a final and third touch to come around the 70 line....then will break back towards the 50's for gold's fall rally. This same basic pattern where the C leg never really dropped but just consolidated also occured to gold in spring-summer 2009 (ie some precedent).
GSR weekly line chart
roadrunner