***SEPTEMBER 2010 Gold and Silver Stocks/Options/Futures trading thread***
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Congratulations to gold which has achieved the highest all time monthly closing in August (1249.0). Hard to argue against gold when we're back withing $20 of a new ATH and making a new monthly high.
My futures account gained 17.5% for August, which is a decent recovery from the beating I took in July. The number doesn't reflect the further decline in the account the first week of the month as I held onto contracts that later rebounded, so my account has really had a lot of movement the last few weeks. I almost exclusively trade GC and YG gold futures contracts in this account, but recently I added a silver contract as silver looked to good to ignore.
Gold has overcome the 1246 resistance level and appears to have support at 1248. New resistance levels are 1257 and 1266.5. Gold appears to have energy remaining to continue to move higher Wednesday/Thursday and should have good upside momentum through most next week. Pivot supports for Wednesday are at 1244.9, and resistance is at 1256.2, 1263.2, and 1281.5.
In this monthly chart, the upward channel has a top line of about $1350 for Sept, about $100 higher than today. The most reliable projections I've seen call for $1420-1500 gold, and I think we'll see those levels within 2 months (by Nov 1).
My futures account gained 17.5% for August, which is a decent recovery from the beating I took in July. The number doesn't reflect the further decline in the account the first week of the month as I held onto contracts that later rebounded, so my account has really had a lot of movement the last few weeks. I almost exclusively trade GC and YG gold futures contracts in this account, but recently I added a silver contract as silver looked to good to ignore.
Gold has overcome the 1246 resistance level and appears to have support at 1248. New resistance levels are 1257 and 1266.5. Gold appears to have energy remaining to continue to move higher Wednesday/Thursday and should have good upside momentum through most next week. Pivot supports for Wednesday are at 1244.9, and resistance is at 1256.2, 1263.2, and 1281.5.
In this monthly chart, the upward channel has a top line of about $1350 for Sept, about $100 higher than today. The most reliable projections I've seen call for $1420-1500 gold, and I think we'll see those levels within 2 months (by Nov 1).
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I think going forward I will spend a lot less time reading other analysts and just going with my own thoughts as indicators weaken. Those guys just keep messin' with my head, esp. the constant whine of bulls or bears on the Kitco forums. Buying gold and silver on extensive weakness is still the best way to play this market. Trying to outguess the banks, specs, and funds is getting to be more folly than fun. Buying the pullbacks and is a simple philosophy. Gold is still in a primary bull market. Ride the trend. I'm still at 100% in physical but 0% in miners which perturbs me to no end!
roadrunner
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>What was the all-time Comex close high?
Comex is GC and the high was $1266.50.
<Comex is GC>
I know that, but thanks.
<and the high was $1266.50>
I just didn't think gold ever closed above $1258. Gold closed at $1266.50? I missed that. MJ
edited for clarity.
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>Impressive action in gold and silver moving the opposite direction that the crowd anticipated. That's how it works.
I think going forward I will spend a lot less time reading other analysts and just going with my own thoughts as indicators weaken. Those guys just keep messin' with my head, esp. the constant whine of bulls or bears on the Kitco forums. Buying gold and silver on extensive weakness is still the best way to play this market. Trying to outguess the banks, specs, and funds is getting to be more folly than fun. Buying the pullbacks and is a simple philosophy. Gold is still in a primary bull market. Ride the trend. I'm still at 100% in physical but 0% in miners which perturbs me to no end!
roadrunner >>
The above comments are one of the best advices that you've given this forum
Gold well into a 5th weekly up candle which would be a rarity since it last happened over 3 yrs ago. Gold likes sequences of 3 and 4 weekly candles, but very rarely 5. Odds still favor pulling back before the week is out to bust up that string. I don't know if there's ever been 6 wks up in a row since the bull came back in 2002.
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......
Support for Thursday is at 1240.9, and resistance at 1248.7, 1253.5, 1261.3, and 1273.9.
Silver chugged nicely higher and hasn't given back much.
As far as stocks, strength came in out of nowhere and have started to show evidence that a reversal pattern has been put in. Stocks have exceeded what would be a 38.2% correction of the entire recent move down which is what I was waiting for. Continued strength will verify that the reversal is the real thing, and the doom and gloom everyone is predicting it out of the picture for the near term.
Support is at 1240.0, 1246.4, 1250.9, and resistance at 1257.3, 1261.8, and 1272.7.
Silver chugging away nicely, knocking on $20!
And stocks are continuing to recover nicely. I picked up SPY calls yesterday before market close and sold them early this morning for a small profit. I think SP500 at 1150 is not unreasonable in the next couple of weeks.
USD continues to weaken, but gradually.
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......
COT report shows the commercials piling on 20K of net shorts this past week. They've been adding about 18K net shorts each week with a total of 53K added in 3 wks. Pig pile baby.
Gold has moved up 5 weeks straight, which hasn't been seen since fall of 2007.
roadrunner
The USD has recovered a bit from 82.0 friday close to 82.7 at the moment with silver and gold holding steady over the sleepy holiday.
Supports it at 1247.1, 1250.6, and resistance at 1253.7, 1257.3, and 1263.9. I have another set of pivots that I think are suspect at 1237.8, 1247.2, 1260.9, 1270.3, 1293.4.
BB's for GVZ (Gold volatility) are getting very narrow. The last time they got near that narrow (4/27), volatility exploded upward and led to a +$90 move in gold. It won't be this tight for long.
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>Well someone's been hitting the gold bid button. $10 spike this morning. MJ >>
Yes, we've cleared the $1258 resistance area, I'm not sure if $1264-1267 will hold or not. Using hidden pivots, if we exceed 1261.6 today we may have more upside today.
If you missed out, load up at 1255.8 if we see it, which is a 38.2% retracement of this morning's move.
Silver spiking over $20 as well.
The government is a one trick pony. Plan A, B, C, and D are all the same - more money. Precious metals should benefit each time they announce a new spending plan.
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Thomson's latest missive out today. I like his explanation of the banker's derivatives game in #2. Generally he is saying the bankers are long gold in their core, but stacking up the shorts to take advantage of short term trading cycles.
roadrunner
Still have a couple positions in GLD left from '05 -- rinse and repeat.
Edited for correction: I was wrong... gold did triple since I bot this position... GLD did not... difference eaten up by fund managers.
<< <i>Caution....banksters at work
Thomson's latest missive out today. I like his explanation of the banker's derivatives game in #2. Generally he is saying the bankers are long gold in their core, but stacking up the shorts to take advantage of short term trading cycles.
roadrunner >>
"Generally he is saying the bankers are long gold in their core, but stacking up the shorts to take advantage of short term trading cycles."
roadrunner
...could you explain what this means in laymen terms RR thanx
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<< <i>Silver at the top end of it's rangeagain . Is it time to sell covered calls or buy puts or short slv? >>
How would we know?
Don't be out though when the music stops.
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That's what core positions are for.
This is also a bond week. Tues-Wed-Thursday. 3-10-30 yr bonds. A slight head wind but possibly enough to keep gold under it's all time high until Thursday/Friday.
roadrunner
USD not ready to give it up yet. Recovered nicely to over 83 today.
Silver is on a roll but has kind of hit a wall at $20. Thought it was on its way this morning but it stalled out. Silver can continue higher if it wants, but it may need to consolidate its 10 day $2.25 run. A fib retracement would bring it back to ~$19.16. It could retrace a smaller part of the move and only come down to ~19.60. This is not necessary though, it could put off the retracements and continue higher Wed.
Stocks are taking a breather, and may continue to do so. SP500 may need to complete a Fib retracement to 1080 which would be a good entry point.
A likely scenario might see an early Wed morning smackdown taking SP500 to 1080, gold to 1255, USD to 83.5, and a quick bounce for gold and SP500 from there.
<< <i>
<< <i>Silver at the top end of it's rangeagain . Is it time to sell covered calls or buy puts or short slv? >>
How would we know?
Don't be out though when the music stops. >>
I ask because everytime silver has traded around the $19 to $20 range it has sold off to $17--give or take a buck.
Gold completed a short term expanding 5 wave pattern this morning at around the SM open, then pulled back from $1264 for the rest of the day.
Toby O'Connor on the USDollar cycles
TO is expecting a 3 yr bottom in the dollar next spring and a 1 yr bottom due later this year. Gold and commodities should get ample lift by the dollar's action. His article also discusses deflation vs. inflation. Inflation is showing up in the assets that the banksters are buying since they have seen the stimulus/ransom money first.
roadrunner
Today was a pretty mild consolidation day. I added to positions at 1255 and so far that looks to have been a good move. Gold is holding up well in spite of being bond week and recovery in the dollar (althouth the gold to USD relationship is unreliable at the moment).
The GVZ (gold volatility) index's BB's are so tight right now and have been for quite a while, it looks to me like gold is ready to explode.
Looking at XAU, the breakout I highlighted a while ago appears to be holding. And speaking of gold stocks, the McLellan newsletter I get talked about the Rydex fund GDM and compared prices and asset levels. The fund's asset levels are at a low level for the range in which the asset level oscillates. This indicates that there is a LOT of room and potential for funds like this to start loading up on mining stocks and push prices higher.
Silver is spending more and more time above the $20.0 mark...
Other timing models from the newsletter are pointing to a stock market low Sep 16-23 (next week) which has the potential to be really significant. I think I'm going to listen to this one and liquidate everything a few days before. This kind of coincides with my thoughts on gold where it's looking like this run has another week left in it. I'll be especially ready to sell if gold is anywhere near or approaching 1290 by then. One other observation they made though is that many investor sentiment indicators are showing that investors are about as pessimistic as they can get... at levels typically seen near bottoms/reversals. So I don't think Sep 16 will be devastating, but I think it could be significant, and I'll feel more comfortable with my money off the table. The chart (SP500) doesn't look that great:
I hope you and RR are correct about the Silver breakout. It's bound to happen sooner or later I'm sure.
Could you post a chart of the silver market like you have for the gold market?
Thanks in advance.
Mark
As you requested, daily silver chart breakout...
Kind of relflects/matches the XAU breakout.
<< <i>Support for gold for Thurs at 1252.6, resistance at 1258.6, 1262.4, and 1268.4.
As you requested, daily silver chart breakout...
Kind of relflects/matches the XAU breakout. >>
Thanks and yes, that's a nice run from high 17 to its current price. It appears to reach an overhead resistance spot here around $20. Hopefully we'll see it breakout at some point.
today's gold chart
Goldcorp seems to be leading the way possibly back to retest its uptrend line or the bottom downward channel. GDXJ has blown far above support and looks to be backing off to at least retest its breakout point.
Goldcorp chart
roadrunner
I thought this article was very interesting and will likely be the fuel for the parabolic finish we're heading into for gold: Morgan Stanley: Europe's Sovereign Debt Crisis Could Next Hit France And Germany
~1239 seems would be a good 38.2% fib retracement of the move up from ~1210, and it is also support for Friday. Support is at 1232.0, 1238.5, resistance at 1249.9, 1256.4, 1267.8.
Here's a bigger picture view of silver. We actually have a rising wedge breakout inside of a bigger rising wedge and a channel. I like how it looks
Top 5 Gold Stocks For High Gold Prices
Edited to add other interesting articles:
IMF sells 10 tonnes of gold to Bangladesh
Russia bought 16.8 tons a few weeks ago:
IMF Gold Assets Fall 16.85 Tons as Russia Adds to its Holdings
No Top In Sight for the Gold Market
Gold had better be successful on this attempted breakout, cuz it doesnt get any more picture perfect than this. Volume on GLD during the run from the July low is about 40% less than the volume on the move from the June high to July low.
Knowledge is the enemy of fear
Wouldn't one expect the volume in GLD during the from July-August to be generally on the low side because it's such a slow season for gold?
PC, I would generally agree with those 5 stock recommendations/comments. GG, IAG, AEM, KGC, RGLD may not be the fastest gainers next time around, but they are solid companies with strong financials, great deposits, and are well operated. KGC was at fire sale prices last month when the Red Back takeover was announced. At <$15/share it was a bargain. It recovered 20% in August but has since dropped back with most of the others. In the longer run though I think a GDXJ would fare better.
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 dont think gold has any "slow" seasons anymore. Fear, greed, panic, apathy, ect, know no calendars. I was only stating fact in that the recent rally in gold has not been accompanied by increased buying pressure from GLD. Momos have not confirmed the move either.
This week is probably important for gold as the "potential" double top will lose its symmetry, and my thought for a down year will be in jeopardy. A DT here would project to about 1040-1050 in coming months, at which point I would claim victory in my prognostication, but the clock is ticking.
If gold does DT, then its chart should be a mandatory case study for all wannabe traders, investors, stackers.
Knowledge is the enemy of fear
If gold double tops, I suspect it will still come back strong from that and only improve its chances of rebounding sharply towards that $1350-$1500 range. The first half of 2011 looks to be the time that gold will shine. Slowing it down through October or even into December will only mean a very exciting January-June season. While gold could be toying with double topping the rest of the PM's seem to be still consolidating from the original run from 2008-2009. It doesn't seem to me that gold will sit out while those others start their 3rd leg up. I could still see another test of that uptrend line into $1213-$1226 before a final move up. And I'm more than aware that bankers are piling on the shorts though this past week they didn't really do anything. Increased buying pressure in GLD may not always be a good indicator of true gold buying. I think at some point demand will shift mainly to physical or to the funds that have strict inventory requirements on their gold (PHYS, CEF, GCU, etc.). GLD is becoming a weak sister as time goes on. None of the key management figures in GLD apparently own any shares. The fund's CEO owns physical gold and other sources, but no GLD....some vote of confidence huh? You mean the cheap fees to enter and exist GLD wasn't enough to get him into it...I wonder why?? Richard Russell has been around for over 80 yrs. He too is no believer in GLD.
Gold only needs to break the $1090 by the end of the year to make it yet another consecutive up year. I think it's got that in the bag already. And if that happens, I think I will be vindicated as well, plus it would set up for a most exciting 2011. Gold could certainly hit $1050 between now and December, but it seems unlikely it would stay there. A more likely scenario of not making another yearly high would be to make a final run to $1300-$1350 by November and then get slammed back to under $1090, ultimately correcting the entire move from $865 to $1350. With gold having made an important low in July ($1155) with even lower momentum than in Feb, suggests that it's not ready to hard bottom again any time soon. The last 2 bottoms were 5 months apart with the July one ending up close to the 200 dma. Gold is only at 7%>200 dma. It just doesn't seem a likely place to put in a top when past ones occurred around 15-20%>200 dma.
roadrunner
Added: whoops, that's the silver chart that I was talking about.
I knew it would happen.
<< <i>I dont think gold has any "slow" seasons anymore. Fear, greed, panic, apathy, ect, know no calendars. I was only stating fact in that the recent rally in gold has not been accompanied by increased buying pressure from GLD. Momos have not confirmed the move either. >>
I'm with RR in that there are seasonal cycles in other countries and volume is pretty low in the summer, but I agree that in this era of volatility that anything can happen any time. I thought I mentioned this in an earlier post, but the fact that prices are up and fund asset levels have not increased with the price increase means there's a lot of room for more money to pile in. But I guess the opposite argument can be made that the price is "artificially" high. I think the reality is that gold prices are what they are because of foreign purchasing or currency issues more than anything else. So what would cause gold to reverse right here? Foreign currencies could move adversely, or foreign gold buying could dry up or turn to selling or domestic selling/liquidation. This is further exemplified by the low physical premiums for (mostly pre-1933) gold right now indicating low domestic demand. If you look at funds like GDM, their asset levels are about as low as they typically get. It's hard to imagine funds like that selling off more assets. Instead, the reverse is probably more likely, especially as we head into the fall.
And we have further evidence that the resolution will be higher, not lower... the recent penant breakout of both XAU and silver. It would be hard to imagine a big drop coming after a decisive penant breakout from these two.
<< <i>If gold does DT, then its chart should be a mandatory case study for all wannabe traders, investors, stackers. >>
That's the problem with interpreting some formations in real time, such as a DT. You don't know it's a DT until after it has fully formed.
Edited to add:
Support for gold is at 1231.8, 1239.7, 1246.4, and resistance at 1254.3, 1261, 1275.6
I dont think the individual holdings of the managers of GLD mean anything at all. There may be provisions against holding. Even I think gold will have its blowoff top, but I know I have time to get in, so why buy now?
I also agree that the timing for gold will be later in 2011 going into 2012. Wait till we hear all the political rhetoric in 2012!!
What would casue gold to drop now? I dont know. What caused it to drop 15% in 2 months from Dec 09 to Feb 10?
True, that we dont know something has happened until it has happened, but in my line of work, preparedness is everything. I dont want to be holding the bag if/when patterns are confirmed. Its much easier to play catch-up after missing 5% to the upside, than it is when suffering a 20% loss. I'll prepare for the pattern and change course if it doesnt materialize. Right now I own DZZ, but did cover long GLD puts, after a 2-day hold, on Friday.
Im not so sure we have evidence of a resolution higher as it has not been confirmed by the mining stocks, which historically have led the price of gold. GDX and XAU are up against the downtrend lines connecting the highs of the last 2 years. The longer term--5yr--chart of gold is still showing a rising wedge pattern.
Knowledge is the enemy of fear
<< <i> Increased buying pressure in GLD may not always be a good indicator of true gold buying. >>
Maybe there are more people like me that are converting GLD into physical. The longer you hold GLD -- in my opinion -- the less you like it.
<< <i>This week is probably important for gold as the "potential" double top will lose its symmetry, and my thought for a down year will be in jeopardy >>
Time will tell... either way you have consistently gave reasons for your position; personally I respect that.
The discussion about gold shares (equity) is well deserved and under-discussed imo. I'll be the first to admit that I own NONE... but do have a couple of positions in silver wheaton SLW -- its been a ride that I'll never forget.
The above article quotes the WGC that 2nd QTR Indian gold demand was 123 tons, even as gold rose to $1261 towards the end of June. Nearly 500 tons per year still seems pretty impressive to me with the bulk of that being jewelry demand vice investment demand. A $1200 pog has now been in the minds of buyers for about 9 months now. It's become "normal." What caused gold to drop from $1226 from last December? For one thing it went to 26% above the 200 dma which has often marked euphoric levels. The March 2008 peak came in at 32% above. We're no nowhere near those kinds of levels. One could say gold is cheap compared to trend right now. 25% above today's 200 dma is $1455. And a rising dma during an uptrend would probably take that to above $1500. Sinclair is still hoping to get his $1650 by January 14th.
Look back at the 3 last lows in gold on the intermediate term uptrend line: $930.....$1044.....$1155. Each of those spots felt like the roof was going to cave in and then things reversed sharply. Those bottoms are 5-1/2 to 6 months apart. I don't think the next intermediate bottom is due until the end of the year, possibly even into Febuary.
The miners are right there knocking at the door. GDX now has a "quintuple" top if you toss in March 2008. GDXJ has already broken out to new all time highs as juniors are leading the seniors up. GDX has been consolidating in a rectangle since May and an ascending triangle since the December 2009 peak. It just seems like it's a matter of time before they bust out. They've been technically lagging bullion since 2006 when bullion became the go to guy in the financial crisis. Their roles will reverse soon enough.
GDX chart - consolidating
GDXJ chart - breakout
roadrunner
Stocks (SP500) had a great day, and things look good for a continued rally Tues and possibly Wednesday. SPY hitting $1228-1230 is probably a certainty with a possibility for going a tad higher. This 1228-1230 level is critical - a burst through this level will indicate more upside, and a failure here would indicate more downside. Again... Thursday may not be pretty.
I'm torn here because I expect a correction of stocks on Thursday, and I'm uncertain about the affect on gold - it could be good or bad, or bad and then good - hard to say.
Silver looks like it might be ready to roll some more as well. $20.70 anyone?
For Tuesday gold, support is at 1229.5, 1238, 1242.2, 1248.5, and resistance at 1250.5, 1255, 1263.5.
I have a second set of points which may come into play and extends higher... support at 1234.8, 1251, and resistance at 1261.6, 1276.5, and 1303.3.