Gold @ $1267.10 @ 9:55am which I believe is a new intra day all time high. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Swiss Franc @ par with the USD$.....................finally.
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......
Kuch, I don't know how much further Aurizon could/will fall but it did hit 6.10 this morning on negative news concerning its pre-feasibility study on the Joanna project. For only a 2% change in recovery/chemical utilzation this seems a bit overblown. Maybe it's just a smoke screen of sorts for the company to delay things while they work up better financing or hope for higher gold prices.????? Not sure how much this stock will fall with gold now at ATH's. It was the only important junior or senior showing a down day. And judging from it's decline in the past few days, this news must have been teletraphed so somebody. Maybe this darling will now become a pariah based on this delay to their next major project. Or maybe it's just a way to shake the weak hands out and pick up some shares. Imo it doesn't seem to make them any less of a viable takeover/merger target.
8:31AM Aurizon Mines reports on progress on the feasibility study on its Joanna project near Rouyn, Quebec (AZK) 6.31 : The testwork completed to date indicates that the estimated overall gold recoveries, utilising the Albion process, would be 85.1%, compared to 86.8% estimated in the Pre-Feasibility Study. The presence of a large quantity of pyrrhotite in the Hosco ore results in increased oxygen consumption, and the presence of biotite and albite in the concentrate results in increased acid consumption. These factors would have an adverse impact on operating costs. Co has decided to evaluate three alternative recovery processes whilst continuing to review potential improvements to the Albion process as it is applied to the Hosco mineralogy. In particular, a detailed study will be performed to estimate the recoveries and reagent consumption utilising an autoclave. As a result of the additional metallurgical testwork, completion of the Feasibility Study will be delayed until mid 2011.
Dollar broke key support level of .815 and basically fell off a cliff this morning. And at some point silver will need to perform a re-test of that larger triangle. A little more oomph to gold prices and slabbed generic gold will start to accelerate rather quickly.
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Old Crazy Trader Stewart Thompson has some relatively sedate comments on gold and US dollar control. He also has been a proponent that miners and silver were in the process of confirming golds new summer highs. Today we had new all time highs in GDXJ, Newmont, Buenaventura, and Goldenstar. You have to start somewhere. GSS took out a 6 yr old high. Hey, it's not 2004-2006 anymore for the miners!
I'm late on this one but GSR has fallen well below its 2-1/2 yr old uptrend line. This could finally be comfirmation of the C leg down in this 3 yr trend.
Stefanmo's proprietary "dollar adjusted" gold model correctly called the breakout, the retouch, and the blast off. Nice job!
Gold Model V2.....and that's not a V2 rocket either....though it could be eventually
Gold had a fantastic day today, with a great breakout over resistance at the all time high. Gold will probably need all day Wednesday to consolidate the recent gains, but I think there is a chance the move can continue. If it continues higher, 1290 could be a good target, otherwise if it consolidates it's looking like there is enough energy to continue to 1330.
Stocks also had a good day but SP500 has not hit the 1128 target I had expected. So I think we could see some action up to 1228 Wed morning but little chance of going through. In fact, it should be a good shorting point, as we near Thursday which I expect to be a correction day... although I'm starting to think that the correction won't be as severe as maybe I had thought. A SP500 correction would take us back to at least 1100. In fact, there's a pennant breakout on the SP500 chart, so a test back down to the breakout point would bring us back to 1100.
Gold stocks are less predictable, but I'm thinking they might need to take a break and it's probably a good move to sell or lighten up on any spike on Wednesday, which is my plan.
Same with silver - I feel it's a bit topped out. $20.70 to $21.00 is a good near-term target, and I think I'll sell my one silver contract somewhere in there to lock in the gains since I don't track the silver market as carefully.
I haven't been posting my trades, but I was playing GLD and SPY calls in my 'fun money' account and have been pretty successful recently (especially after today). I'm still holding some SPY and GLD calls and I will look for a good chance to sell Wed morning.
RR, appreciate the update on AZK. I haven't made the move yet on shifting equities (Apple/Johnson and Johnson) to the miner asset class. But I feel the time is right and I shouldn't delay much longer. I've got to get a solid plan and work it. Goal for tomorrow - study AZK and GDXJ.
The yen is getting absolutely hammered today. It's long long long run was long in the tooth. I like the Swiss Franc now even more. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I like the CDNX chart to show the broader picture of the miners. What I see are a nice 5 legs up from Nov 2008 to Jan 2010, then a 6 month ABC correction. Appears to now be in it's 3rd or 5th leg up since turning back in July. I tend to think it's the 3rd leg as CDNX bottomed with commodities in early July, several weeks ahead of gold/silver.
Over the past 26 hours gold has sort of formed an expanding 5 wave broadening top pattern. Not perfect but the general shape. That may mark the completion of the AB legs with a C leg due to retest the breakout. Either that or it's doing a series of 3 leggers, having just completed the 4th set with a 5th left to go downward.
Some big gaps left yesterday morning in GLD, GDXJ and GDX with the gold jump. I sort of expect a quick drop at some point to cover at least the miners.
Edited to add: sure enough AZK bounded upwards from 6.01 and now back at 6.29.....make that 6.40.
Since Sept 1st gold making a fairly symmetric possible broadening top formation. This one is a couple of weeks long which gives it more weight. It's also at the end of 2 month up move with increasing/spikey volume over the past 2 weeks. That all fits though the middle peak for GLD was on declining volume. The other metals and commods don't show this pattern which is good. But GDX also shows it, but not GDXJ. And with silver not confirming it at all that pretty much leaves it as a wild card...and probably bogus. Gold appears to be in a bull flag since hitting $1276.
The Nzd/yen and Euro/Yen liquidity ratios went vertical today, finally catching up GSR and bond ratio HYG/LQD. Liquidity spiggots are opening wide it seems.
RR, I can't say that I can see what you're looking at. Do you have a way to draw on a chart and post it here? When you post the links to your charts, I still only see the same thing I've got on my charts... it would help greatly if you can draw in some lines or something.
What I see is that gold took a day or so here to consolidate its last move. Sometimes consolidations are more volatile, but sometimes - and I think it's more bullish - they consolidate in a tight formation like we're seeing. In fact, if anything, I see a bull penant. By tomorrow morning, gold will be fully consolidated and will be ready for the next move. Another consideration is that we have broken reistance at the former ATH of 1266.5 and maintained that level for 2 closes now, further solidifying and confirming the breakout.
For pivot points I'm getting different values for the mini and full contracts, and they are usually very close. Support for Thurs is at 1265.2, and resistance at 1269.3, 1273.9, 1278, and 1286.7. For the full contract, support is at 1246.2, 1261.3, and resistance at 1284.8, 1299.9, 1338.5.
I personally added contracts on this morning's dip to 1265. I can see a possibility of a dip tonight or a morning smackdown to 1261 or so, which would also be the bottom of the range for a 38.2% fib retracement depending on where you consider Tuesday's move to have started.
Anyway, Thursday is supposed to be "the big day" I've been talking about where we're supposed to see a low in stocks. Of course, it could come on Friday or Monday, but I'm starting to think there isn't so much to worry about. SP500 needs to consolidate it's move up as that trend is exhausted. We might see some upside to 1128 tomorrow morning, at which point I will go short. But I think the max downside will be about 993 which is a 38.2 % retracement of the move up from 1037.5 if we hit 1128. Thursday's also a good day for silver to peak out and retrace. I'm looking for one last spike to 20.70 to sell my contract. In preparation for Thursday, I did sell about 40% of my core gold stock positions today.
PC, I haven't delved into line drawing on charts yet. Eventually I'll get there. If you google "broadening top" you'll get a number of sites to show the pattern. And in the chart I posted the pattern is very obvious, even without lines. And in the end, we all should be able to look at charts and recognize obvious patterns w/o having to draw lines. Though I will admit the lines help to target precise price targets to shoot for.
KGC and AUY continue to show strength, KGC on the RBI acquistion/offer. Seems both shareholders are starting to undertand the value. AZK now to 6.60...a nice 10% rebound. While I didn't catch it at 6.01, I am back in it.
The above chart is an excellent study on near perfect 5/3 wave formations in the major movements of the GSR. Based on the current multi-year correction I would tend to agree that the next movement should be back towards the bottom trend channel line....in the 45-50 range. GSR is also exactly at the 50/200 dma cross (65.3) with both pointing downwards. And the 2-1/2 yr uptrend line has been clearly broken to the downside. The article also plots the waves over the past 30 yrs. The one comment at the bottom of the article gives a 2nd interesting view. Interesting too that the USDollar is also within a few tics of doing a 50/200 dma cross as well, only the 200 dma is still pointing upwards.
RR, I wasn't referring to the topping formation with the comments about the lines, I was more referring to your usually EW discussion in general. Sorry I wasn't clear.
Not long after I posted that last chart, the pennant breakout happened and took us to a new ATH just shy of $1280. Still think it's a topping formation RR? It wasn't a big move by any means, but it's taken us to the new range of 1273.5-1278 for the near term. A breakout from here will take us up to $1287, which I think is still possible this afternoon.
Wish I had waited until today to do my selling from yesterday, but that's why I didn't sell everything. Of course, you can never time these things perfectly.
I sold my silver contract at 20.70 this morning for a 125% gain, and I'm now short at $20.79 with a stop at $20.85. We could see silver rally to $21 at which point I may try another short. A long-overdue 38.2% retracement from today's high would require silver to come back to $19.68. This move has to be just about exhausted.
It was a technical "topping formation" that didn't pan out. And I also said that it was probably going to be bogus based on non-confirmation from silver and gdxj, as well as the bull pennant in gold that was forming. I mentioned the formation because it was so symmetric and obvious.
I'm not calling exhaustion yet in anything because the metals have a mind of their own. The charts have been giving a lot of false signals to whipsaw you out. My core physical stays put and I'm still trying to build more into my junior miner's position as they "cooperate." Added some juniors like Nevsum that were pushed back today. Lightened up some on AUY and KGC which are both quite a bit above their 20 day bands.
Singapore & Hong Kong March/April Hong kong/Long Beach JUNE Table #838 MACAU emgworldwide@gmail.com Cell: 512.808.3197 EMERGING MARKET GROUP PCGS, NGC, CCE & NCS, CGC, PSA, Auth. Dealer
I wouldn't short anything right now. I closed my short silver position at break-even. Silver is on a roll, and it's too risky to go short at this point. I think I'm going to avoid silver for the short term and stick with gold which is a more certain trade right now. Silver looks good to at least $22.50, but at some point it needs to consolidate this big move up. I had thought that point might be $20.70 - and it still could be - but I've decided not to bet against it and rather to not bet at all. If silver pulls back at all, I'm back in.
Gold moved up today but still has loads of energy to continue higher. I'm still looking at $1290 or $1330 by Monday COB. I'm staying in my over-leveraged position to ride this move to the max - at least until $1290 and then I'll back off a bit.
Look at last years' pattern around Oct. Gold moved up relentlessly with hardly a pullback. I'm not sure we're in that position at the moment but it feels almost like it, although it doesn't feel quite as aggressive - this move feels more sustainable. Last year I did VERY well being over-committed during that up-move and it worked well because of the lack of reversals. I hope I can duplicate that success again.
RR helped me realize this and what's important to identify here is that the GOLD MARKET HAS CHANGED. It's no longer behaving like normal. Gold (and other PM's) are on the move. Take advantage of it, and enjoy the ride.
I still think stocks need to consolidate the last move here and take a rest - I still expect a pullback to 1090 or so (SP500) - although I think it may be possible to head higher. Either way, I sold my stocks down yesterday, and I'll wait for a re-entry point here. The only question is how stocks will be have if the general market is down and gold is up.
AUY had a nice move today - I'm wondering if the market may have "rediscovered" AUY and recognized its value.
Both AUY and KGC have been "rediscovered" if only because both of them were so well-bashed into July/August. We're still a ways from quarterly report time so no fear yet of wild call reports from these guys that tank the stock for a period. AUY at almost $9.00 and KGC at <$15.00 a month or two ago were stupid cheap. I should have bought more and hung on.
With gold, silver, and miners coming out of cup w/handle formations, ascending triangles, and other bullish formations, I feel the upside far outweighs the downside right now. Some of the miners have worked 3-6 yrs to get back to this point. We could see GDX hitting 90-100 within a year or less. This doesn't mean that the very short term can't be bearish for miners right now.
Agree that shorting a 10 yr bull trend during one of the strongest parts of the year for PM's isn't the best strategy. It could work, but it makes more sense to me to ride the PM trend up when it's occuring and find other things to short that are on longer term downtrends (things other than commodities). Until GSR starts to apply the brakes and turn around, I wouldn't be shorting silver. But to me it looks like a yearly trend change has occured and GSR will be generally headed lower...favoring silver over gold for the longer term.
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Edited for Friday: lightened up considerably on the miners, for better or for worse (AUY, KGC, IAG, AZK, etc.). Not liking the technicals all that much right now. Maybe the brakes are finally hitting GSR. Silver after peaking on at $21+ did a perfect 5-3-5 drop for wave 1, and now has completed a 5 wave rebound to around $20.88. Possibly more downside to come since momentum is turning over as well. Gold's daily action since mid-May does show the broadening top pattern fwiw. Since this is options expiration day for the SM, the miners usually get hit today. So this is quite expected. Both SLV (19.5) and GLD (121+) have some gaps at their breakout points. SLV has a large gap way back at 18. This may be the start of the leg to help close those higher gaps.
We skip a bond week this time. The next one is a biggie since it coincides with gold futures expiration the week of 9/27-29.
A nice move up overnight to set a new all time high, but Friday was pretty boring overall. Today's pullback from the high was a 38.2% retracement of the move up from 1254. Everything still looks good, and gold is ready for more action on Monday. We came close to my 1290 target, and 1300 is pretty much 'in the bag.' My next target is 1330 and ultimately 1420 in October.
Silver and stocks finally showed a bit of weakness and had a break-even day. SP500 finally rallied to my 1130 target overnight. SP500 is out of energy and needs a few days to consolidate. I expect more weakness early next week. Hard for me to say if silver's going to take a break here or continue higher. Even harder to say how mining stocks will react to higher gold prices and stagnant or lower stock indexes. The long term charts for SP500 are still full of energy and ready to being a big new trend. I'm not sure the direction is very certain right now, but I have a feeling stocks are headed way higher... and it could be on the back of a declining USD. Wall street LOVES a weak dollar. In fact... Japan took measures this week to weaken the Yen against the dollar... have we seen the beginning (or resumption or continuation of) the race to the bottom? That would certainly fuel a strong move in gold and stocks.
For Monday, support is at 1271.1, resistance at 1277.8, 1282.3, 1289, 1300.2. For next week, support is at 1250.9, 1267.6, resistance at 1293, 1309.7, 1351.8.
As far as filling those gaps RR, they're so far back and the weekly trend has started so earnestly that it's hard to imagine that much of a derailment in the near term. I think we'll be looking at filling those gaps early next year after the parabola peaks. And I still discount GLD and SLV chart gaps because the underlying commodities trade around the clock, and the futures charts do hot have any gaps. I know you're worried about this topping out but this move is being done in a powerful, sustainable way. Get on the train and enjoy the ride! I know your vehicle of choice is the mining stocks, but you might want to consider an ETF (if you aren't already) for a more straightforward play.
PC, you'd be surprised how often all those gaps get filled with GLD and SLV, it's as if they have radar. They don't seem to care that gold trades 24 hrs per day. And the overseas trading is more for show...the NY trading is the go. The same gaps exist down about 5% on GDX and GDXJ as well. So I'm pretty confident with today's bearish engulfing and piercing candles in the miner ETF's that those gaps from Monday's jump get filled soon. S&P 500 and Dow have the same gaps too. GSR needs to reverse some and that will help to calm the overbought miners.
If you look at the charts of some of the miners who lead this rally (ABX and GG) they have been correcting for a couple of weeks. Laggards like AUY and KGC needed to catch up. And now that they have, they need to pull back some. AUY hitting 11.0 seemed to me to be the target for that stock. ABX, GG, IAG and some others falling back to their 50 dma will help GDX close that gap and help reset the miners somewhat. The other guys can just pull back to around the 20 dma. GDX was within $1 of it's 2008 all time high as well as nearly touching the upper trend channel. That would all be a good time to pull back to make another effort at the ATH. I didn't figure it would go on the first attempt considering it started way back at 47. And I don't expect the deep gaps in SLV at 18 for example to get filled any time soon, but I leave open the possibility. And SLV returning to 18 would ultimately retest the breakout of that large May-August triangle which often occurs...just a matter of how close it needs to get to the apex (ie pointy end) before rebounding. What swings me over to the corrective side for now is that gold futures as well as ABX show that 5 wave broadening top formation over the past several months. GDX just misses it by a hair on one bottom. There are also a lot of wedge formations with miners bouncing off key lines and resistance, and returning towards support. I think gold will follow for a bit. The dollar starting to strengthen along with the Cando, Aussie, Euro momentum moving the other way would also tend to support a PM's breather. All conjecture of course.
SLV chart If you redraw a less steep sym triangle on SLV's breakout back to May, instead of the one already drawn in back from Feb, last night's top in SLV exactly reached the projected top of the triangle's breakout. A retest of the triangle's top line or at least that next lower gap would seem in order. The actual triangular consolidation appears to be from May...not Feb. Target should have been reached.
A pretty quiet day for gold although it did make new highs - 1286 for the Mini contract and later that day 1285.2 for the full size contract. Still, everything's looking bullish and there is a lot of energy available for the next move. I like the way the resistance pivot points are lined up for tomorrow - I think Tuesday will see a $15-30 gain, up to $1310 perhaps. At a minimum I think $1290 is a lock for tonight/Tuesday, the only question is will we merely touch it or burst through it?
Silver's hanging out and consolidating in place. It could be topping out or preparing for the next run higher. I'd feel more comfortable if we could see a Fib retracement here as a point to get back in. Otherwise I'll have to try to identify the next breakout move (which would probably be a solid move over 21.10) and jump back on.
Stocks (SP500) surged higher past the 1230 resistance with a nice close, which means stocks are probably ready to push higher. It's a situation where the short term charts are exhausted but the longer term charts have started a trend.
The low for stocks that I predicted last Thursday didn't really materialize as a big pullback low. We had a bit of a pullback Friday which may have been it. If that's the case, then that low may mean stocks are ready to push much higher and the pennant breakout is going to continue for a few more weeks. I'm not ready to re-establish my positions just yet, but I am tempted...
RR - about the gaps getting filled - I know what you're saying. I'm just wondering if I started my own gold ETF that only traded for 2 hours a day, would that chart need to fill every gap, which would be numerous because of the short trading period? It just seems like it shouldn't work for the 'sub-charts'... I'd like to see a study or some solid research into the 'fill the gap' rule as it applies to tradeables that mirror or are derived from other charts and have reduced trading periods. I guess what's interesting about the gap-fill rule is that it can never be dis-proven... just because a gap hasn't filled doesn't mean it won't be filled some day...
One only has to look at GDX and GDXJ which are very closely linked with gold. And very often they have gaps on the open to coincide with gold's move from the night before. Yet surprisingly, they leave very few gaps open by the time the next large correction comes along. Just on a guess I'd say that 80%+ or more of the gaps are filled, and essentially most all the intra-day ones. From that standpoint GLD is not all that diff. from GDX and GDXJ imo.
The ski-system guy, Jeff Kern said his system gave a significant multi-month high in mining stocks last Thursday on his 2yr back testing model. That's generally how I feel though I'd say maybe a multi-week high that could be worked off in a week or two. But bullion doesn't have to be linked at all with miners. Next week is options expiration for gold and a bond week. And I could see those looking to get a head start on it reacting as early as this Thursday or Friday...though Monday/Tuesday are the key days.
<< <i> But bullion doesn't have to be linked at all with miners. Next week is options expiration for gold and a bond week. And I could see those looking to get a head start on it reacting as early as this Thursday or Friday...though Monday/Tuesday are the key days. >>
That's the problem I'm having... Gold can go one way, SP500 could go another, what will gold stocks do? Too unpredictable in this market.
Gold stocks in general are having been forming a long term corrective pattern similar to what gold went through and what silver is going through now. That's where there ultimately going. And by ultimately, I mean by next spring. It's not all that long a period to almost double up (50-150%) on many selected juniors and some seniors.
Gold's holding up pretty well relative to silver, and finally silver's giving us a good pullback. Silver looks destined to hit 20.38 at least. Gold's holding firm at 1275 so far, but SP500 is up...
Forgot to post the numbers last night. Support for gold is at 1271.7, 1275.3, resistance at 1280.5, 1284.6, 1289.3, and 1298.1.
Edited to add: I think todays' FOMC announcement could be the spark to release the pent-up energy in gold. Get ready for a nice run!
GDX just dove down to fill yesterday's and Thursday's opening hour gaps which leaves last Tuesday's as the next target. GDXJ has a bit more work to go but a number of the juniors have been dropping for days so that should follow. Those GLD gaps are also in the targets. The first one from yesterday's open was just picked off and the next one is just below 124...then the big one from 121.5-123. BB's are already rolling over and Chaikin Money Flows have been diving for weeks. I was a couple of hours early on Friday afternoon with my ZSL purchase and yesterday morning's last silver bump gave me the willies so I bailed when it got back to <$100 loss. But the slightly longer term roll over in momentum visible since last Th-Friday is now taking over. Had I paid more attention to the 5-15 min charts rather than the hourly I wouldn't have established that position until yesterday morning when momentum (rsi, w%r, macd) more convincingly flattened and bottomed.
GLD and Gold still show that symmetric 4 month broadening top pattern. It hasn't gone away/been confirmed or denied yet. At some point, gold-silver-miners dropping back 5-12% to retest those breakouts would be a healthy thing for their continuing advance. GSR has been slowly turning back up which may be the signal that gold will start to outpace silver for a while (ie advance faster or drop less than silver). GSR appears that it may have completed it's 3 week leg down and is going to retrace some of that 8 pt drop from 68 to 60. A retest of that 18 month uptrend line would be a good spot. That would be about 65 and also the 200 dma as well as a 50/62% FIB.
Edit for 3 pm. Wow, just when you thought it was safe to go into the "short" waters a massive spike up in the futures were put on, gold almost hit $1289.90 and silver retouched the $21 level. There was enough draw down today to shake out a lot of longs, then to encourage new shorts, then to obliterate them in about 5 minutes. It's a hard game to call. Sure glad I didn't lay down anything new today. Was this in response to something BB said today. Best policy is still to buy low on big dips and hang on for the ride, or you get bucked off.
<< <i>Gold's holding up pretty well relative to silver, and finally silver's giving us a good pullback. Silver looks destined to hit 20.38 at least. Gold's holding firm at 1275 so far, but SP500 is up...
Forgot to post the numbers last night. Support for gold is at 1271.7, 1275.3, resistance at 1280.5, 1284.6, 1289.3, and 1298.1.
Edited to add: I think todays' FOMC announcement could be the spark to release the pent-up energy in gold. Get ready for a nice run! >>
<< <i>Edit for 3 pm. Wow, just when you thought it was safe to go into the "short" waters a massive spike up in the futures were put on, gold almost hit $1289.90 and silver retouched the $21 level. There was enough draw down today to shake out a lot of longs, then to encourage new shorts, then to obliterate them in about 5 minutes. It's a hard game to call. Sure glad I didn't lay down anything new today. Was this in response to something BB said today. Best policy is still to buy low on big dips and hang on for the ride, or you get bucked off. >>
I almost got bucked off... I sold about 7% of my gold futures contracts close to today's low, but bought back it back at 1283.5 and sold 15% at 1290.5 to make up for it. Hoping for a few dollar pullback to re-establish those contracts. Also sold half of my GLD calls today. I will have to analyze everything in more detail tonight.
Today marked the start of a new trend in gold with the FOMC meeting news. But the move did not use up much energy, and it has quite a bit more room to run. $1310 is likely the next target, and I think we could easily see it by Friday. I think $1300 is a lock for tonight or tomorrow.
As far as stocks go, I really like the way that SP500 held up today, and I think the danger of a near-term big correction is pretty small right now. If SP500 can stay over 1125 we're in good shape, although the index still needs more time to consolidate recent gains.
As far as gold stocks go, I think I'm ready to climb back aboard. Tomorrow morning, depending on how things look, I'm getting back into the positions I sold last week. With the SP500 and DJIA looking stable for now and gold looking ready for more upside and the dollar getting clobbered, I think it's appropriate to get back in.
Support for gold at 1275.8, 1283.9, and resistance at 1296.9, 1305, and 1326.1.
Those looking to get back in should take advantage of any move into the mid 1280's.
There were some good discounts this morning on the miners during the dip down. But most of that was erased on the post 2 pm bounce back. FRG, XRA, AUY, UXG, MFN and especially NXG all showed some good pull backs today that didn't last. If you blinked you missed them. I'm not convinced the downtrend or sideways action of the past week is now broken. The banksters will make this bull very hard to ride. They want to be the only ones onboard when it jumps. They took out a lot of long miner stops today as well as a pile of freshly bought shorts. If I were them and wanted to make the most money, I'd be loaded up on miner shorts but telegraphing that they are going to yet new highs...then pull the plug on the next advance. Next week should be a more difficult week for gold imo with expiration and bond sales. I figure they have a couple more days to suck more fresh longs into the mix before pushing miners back. Or not. And had I stayed hedged 15% in ZSL through today I would have had a brief profit this morning, followed by a even bigger loss by the close. Thankfully, I closed it yesterday.
Yeah, I saw those discounts Tues morning but I didn't take advantage. I hear what you're saying about the banksters, bond sales, etc., but in a move like we're in, none of that seems to matter. Remember, the rules are different when gold is "on the move." If gold hits $1330 in the next few days I can see that gold will need to consolidate its gains and retrace that move, but if the gains continue to be slow and steady I think it can keep going. Regardless, I don't see these stocks taking a significant hit in the near term... Yes, there may be another "sale" in the next few days, but I have to realize that my ability to time any such re-entry more optimally seems to be lacking. I'll have to see what it looks like in the morning after we just hit another new ATH just an hour ago (1295.8).
Gold is still looking great, and the consolidation has been very bullish with very little pullback. A little surprised we didn't burst through 1298 today, but we did make our 2nd attempt at this level. I think it's likely we'll penetrate 1300 tonight or tomorrow, with the next high probably at the next to resistance points, 1303 or 1313, although there's really no reason it couldn't go higher other than it would be out of character for the recent behavior.
Support for gold is at 1283.6, 1288.5, 1293.3 and resistance at 1298.2, 1303, 1312.7.
The earliest reversal or decline I'm seeing for gold could be next Wednesday, so we should be good until then.
I think silver could be on the verge of making another move, but it might not happen until Monday. It's been stuck at $21+/- for about a week and so the last move should be about fully consolidated (although the whole move up still needs a 38.2% fib retracement). We've made two strong attempts at 21.27, so the next attempt could burst through. In the last few days I've sold silver contracts at 21.25 and re-bought at around 21.05 making a little bit of extra money but nothing huge.
Support for silver is at 20.70, 20.96, and resistance is at 21.44 and 21.74.
sold half my SLW at 26.40 today, which may mark a short term top.
Stocks (SP500) are probably going to spend a few more days consolidating between 1120 and 1135ish. I bought SPY calls this morning when it was down to 1119, but I failed to get out as I was hoping for a touch of 1135 today that we didn't get. I think we'll see 1130-1135 tomorrow at which point I'll exit so I don't carry the calls over the weekend and lock in a small profit.
With options expiration next Monday, that's the most likely day to start some PM hits along with Tuesday. If things are still even keel by Wednesday then there's little chance of any appreciable continued downward action imo. Bond auctions on Tuesday-Thursday next week.
Markets looking good this morning with gold over $1300 and silver exceeding the March 2008 high which implies more upside ahead. I'm conflicted because I still see more upside in the next few days but RR's observations are not to be ignored. The thing is - USD broke key support - under 80.0 decisively which probably means more immediate downside in the USD which probably translates to higher stocks and higher gold and silver.
I'll be cutting back on gold positions at 1310 which still might be possible today, and silver might have some more life in it here up to $22.50 in the next few days.
I bought some ES puts today with the ES (SP500) at ~1140 as I don't think SP500 is ready to roll beyond this point quite yet, although the weaker dollar may push it higher.
The PM markets are on a roll, and the weekly charts are looking FANTASTIC. There's a heck of a channel in both gold and silver. On gold, the channel upper boundary is about $1350 as I have it drawn, and for silver the upper boundary is about $23.50. Of course, if it takes a few more weeks to hit the upper boundary the boundary will be higher yet.
I was a bit disappointed in gold today that it didn't have more energy to burst through $1300.0 and leave it behind for good, but the way it held up real well above 1298 was impressive and bullish by itself, and typical of the moves we've seen recently.
I find it interesting that even though the USD index (DX) took a beating and broke critical support, it did not seem to help boost gold much. The relationship between Gold and the USD is still unpredictable and unreliable, as a 1 point loss in DX should have seen gold up $20. But looking at things from the weekly perspective, I think there's great odds that next week will be another nice green candle for gold - my only question and concern is if there will be any kind of a significant tail down lasting a day or two or less that might whipsaw me out of positions. But being that gold's volatility is low and gold is behaving differently now, I'm not too concerned, but that doesn't mean things can't or won't change. A 38.2% retracement of the move from 1272 would bring us back to ~1290. A worst case retracement of the entire move from 1155.6 would bring us to 1246, but that shouldn't be necessary yet. These 38.2% retracements only seem to need to come after big sudden bursts of energy, and we've been seeing slow, steady, sustainable ascension.
I didn't see too much press about $1300 gold, but I think it may pick up over the weekend and early next week and could fuel a busy a Monday or Tuesday.
Stocks surprised me with a little more upside than I was expecting, but I think 1144 will hold up as a resistance point, and this was only the 2nd attempt on this level in recent weeks so a 3rd is probably necessary and could take a few days while we execute a pennant/triangle consolidation. However, if the markets surprise us next week, it's a good sign to jump back on. I'm still holding my SPY puts over the weekend, and I will try to bail on a $10-15 drop early next week.
RR's concerns about bond week and other comments I've read about September being an 'up' month for stocks being rare weighs on mind heavily, but I just don't see a big threat looming... any downside I think will be quick and reasonable. Timing models call for a top in stocks Sep 28-30 and a bottom in gold on Oct 1. But remember that Sometimes a bottom is what prices go down into, and sometimes it is what they go up out of...
Very interesting article RR, thanks. The quality of it was poor and it looks like it was written 50 years ago, but a decent read even if I didn't quite follow all of it. I agree on a lot of things and disagree on others. I thought it gave some good insight into what to expect after Mar/Apr 2011, because that's all I have any expecations for at the moment. My expectations are and always have been a parabolic move coming to a blowoff top next spring - Mar/Apr 2011, and of course a massive decline afterwards. He mentions June 2011 as another turning point, and that certainly is reasonable, and he also seems to say (if I understand it right) that such lows may be around $1000 or even $800. Then a resumption of the bull move until 2016 or 2017 (can't remember what year he said). According to what he says an upper limit for this parabolic move would be 1480-1660, which I think is definitely a good ball park.
One important point he made that I've made before is that every bull move begins with a fake-out. I believe this move going to next Mar/Apr will be the fake-out, because so many will take it in the shorts when the parabolic move crashes us back down to and probably below $1000. Then the multi-year solid bull run can begin.
He neglects to mention the hyperbolic move that we're in, but it seems like the hyperbolic move actually fits in with what he's saying so there's no need for him to identify it. I believe in the pi cycles and the 8.2-unit cycles, but I disagree on the 11 year cycle. I also didn't like or agree with how he drew some of his charts and lines and channels, but I'll be the first to admit that this guy probably has far more charting knowledge and experience than I.
All I know is that if I can withstand the volatility and not get too over-leveraged, I can make life-changing amounts of money in the next 9 months or so riding gold both up AND down. The hard part will truly be at the top of the parabola, as the daily moves will be huge and that will be where big amounts can be made quickly. People often ask when I plan to sell (physical holdings), and that question is difficult to answer. I think they expect a dollar figure, but I think a dollar figure would be a mistake to have as a target (although there's nothing wrong with it and it's never bad to lock in profits). I think the picture will be clearer next Feb/Mar, and there will be some good timing indicators and like with most parabolic moves, there will be a double top. The challenge is of course to play this move in real-time as it's happening.
The man is writing from prison with an old manual typewriter so that accounts for the low quality and hand drawn charts. But I too thought is overall historic view and charting of gold is what's important, rather than precise timing. Last year he was calling for a top in June 2012, and now he's expecting a bottom. So you have take all that in stride. But he does put together the last 100 yrs and make it all rhyme. I just read the JS weekend update and see that he generally disagrees with MA on gold's fundamentals.
I think trying to call a parabolic top in 2011 for one's trading accounts will be very difficult. More than likely one will be shaken off fairly early or hanging on way too long. The swings in sentiment are going to be brutal and cause newcomers to even question why they bothered to get involved in PM's.
<< <i>I think trying to call a parabolic top in 2011 for one's trading accounts will be very difficult. More than likely one will be shaken off fairly early or hanging on way too long. The swings in sentiment are going to be brutal and cause newcomers to even question why they bothered to get involved in PM's. >>
Ah, that makes sense... I didn't know about the prison part.
For those that are interested in details about my plans to play the parabolic move, I'll elaborate. I learned a lot when I mis-played last year's fall run to $1200. I still came out OK, but I lost a TON of profits. I feel these are lessons that one can only really learn with first-hand experience. My futures account is funded solely with profits from last year's run, so I'm playing with 'house' money at this point.
I've figured out what my "core" position will be all the way up and beyond 1600, should gold come to that. The 'core' position is designed to allow me to grow from what is currently about a $50 margin to a $150 or larger margin. That is, the POG can drop $50 before my account is under any pressure to sell. During times where I am confident about the near term direction of gold being up, I plan to play an "over-leveraged" position using the "margin money" on a short term basis and using stop limits to amp up gains and play mini-trends. Come next March, I'm definitely going to stop any over-leveraging as the risk will be too great, and I may even cut back on the 'core' position. That doesn't mean that I'll absorb the entire margin of losses before selling any core position, or that I won't play with less-than core position if things get dicey.
The key difference is that this time, I plan to withdraw money from my account as it goes up. As I hit each $10k or $20-25k milestone, I plan to withdraw 25%. This way I lock in my profits, yet my account still grows at a good rate to compound the gains. That is the plan anyway...
BTW, support for Monday is at 1286.5, 1292.2, 1296.9, and resistance is at 1302.6, 1307.3, and 1317.7. SP500 is off and roaring here Sunday night... it looks like my shorting of the ES was a bad call and I will close or reduce that position Monday morning if it doesn't turn around.
A pretty disappointing day as gold was ready to go, but everything was super flat all day. I'm a little concerned about a retracement this week, but the concern is really minor as it shouldn't be anything too serious. Targets for a retracement would be 1245.5, 1260, 1267, 1275, or 1290 depending on how much of the move up needs to be retraced.
Support for tonight/Tuesday is at 1285.3, 1291.3, 1293.5, and resistance at 1297.3, 1299.5, 1303.3, 1309.3. Based on the tight range, Tuesday is likely to be boring as well.
Silver's retracing a bit. Hard to say at this point if the retracement will get more serious and take us back down to the low 19's, which is where a 38.2% retracement will eventually have to happen. I don't think it's time for that yet. Tonight we've already done a fib retracement of the move up from 21.00, so this might be the extent of silver's weakness for now with sideways action for the next few days.
Stocks are not likely to go anywhere and may see a little bit more weakness, but I'm not really expecting anything major.
Although I have to admit, this week would be as good as any for a nice end of the month or early October surprise. If such a move does happen, it's likely to be fast and temporary, IMO.
Judging on how the miners have been behaving I still expect more downside Tuesday and possibly Wednesday. I'd say that the bond and options expiration are showing their effect though minor so far. Silver has just completed 5 legs down from around $21.60 so I'd expect a bounce here into the morning session. If the miners can't be knocked back tomorrow then that's an awfully bullish sign going forward. A number of the miners have been in a correcting mode for over 2 weeks, and some have just started pulling back over the past few days. Generally, they've all started their next leg down as they end a consolidation period. Expecting some better buys out of these guys on Tuesday: uxg,frg,ego,iag,xra,thm,nsu,jag,ric,gbg.
The bullish percentage of GDM stocks is at nose bleed levels and it has almost completed it's 3rd upward move. Maybe one more thrust up before a more significant correction. This is usually about where runs end, not begin. But nothing says the bullishness can't lock in for longer than anyone expects. The last BPGDM move lasted 3 months (Feb to May) with a 3 month correction. This current move is only about 2 months old. Macd is about ready to cross over but that also occured in April-May and still managed to hang on for a month after that first cross/touch.
The author compares the Naz and Oil bubbles to the S&P (1982-2000) and gold moves (2001-2010). It's pretty clear than gold has basically mirrored the advance of the S&P during that time with relatively low volatility as compared to the other 2 confirmed bubbles. I never really saw this before but the S&P took its first big dump in 1987, six yrs into the bull. Gold also took its first major dump about 6 yrs into its bull run. An interesting link.
<< <i>This week looks like a good set-up for a correction... could be starting tonight... we'll have to wait to see how it trades in London. >>
I don't think this is any kind of correction. Just a consolidation or fib retracement. A big burst of negative energy came in so far but I think we've seen the extent of it for now. Of course, we'll have to see where it goes from here. Kind of nice to see this come in at this point, as it will prepare gold to move up higher. It's very bullish to see the buying step in and take it back up $10 almost instantly. VERY BULLISH.
This is one good reason why I tend to trade without tight stops - although I always ensure I have a way I can trade and have instant alerts to wake me in the middle of the night.
You're up late tonight, RR.... At least I'm on the West coast
Looks like my call was good on that swoon just being a (mighty!) quick retracement. Good to get that out of the way, and with gold now clearing 1300 and 1303 definitively, gold could be poised for more highs this week. Maybe we'll get to see 1330-1340 before the week is out.
Was briefly watching the morning smackdown in some of my selected miners and got pulled away for a bit. By the time I returned the opportunity evaporated. Missed an easy 5% on a number of miners that I was tracking. UXG and others were ripe for plucking. Thought this softness would last for at least few hours like most of these expiration's hits do.
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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>Gold @ $1267.10 @ 9:55am which I believe is a new intra day all time high. MJ >>
Looks like I made a good call with this $20 move. The new ATH is 1269.2 so far, as of 7:00am (PST)... We just might see 1275 today.
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......
8:31AM Aurizon Mines reports on progress on the feasibility study on its Joanna project near Rouyn, Quebec (AZK) 6.31 : The testwork completed to date indicates that the estimated overall gold recoveries, utilising the Albion process, would be 85.1%, compared to 86.8% estimated in the Pre-Feasibility Study. The presence of a large quantity of pyrrhotite in the Hosco ore results in increased oxygen consumption, and the presence of biotite and albite in the concentrate results in increased acid consumption. These factors would have an adverse impact on operating costs. Co has decided to evaluate three alternative recovery processes whilst continuing to review potential improvements to the Albion process as it is applied to the Hosco mineralogy. In particular, a detailed study will be performed to estimate the recoveries and reagent consumption utilising an autoclave. As a result of the additional metallurgical testwork, completion of the Feasibility Study will be delayed until mid 2011.
AZK chart
Dollar broke key support level of .815 and basically fell off a cliff this morning. And at some point silver will need to perform a re-test of that larger triangle.
A little more oomph to gold prices and slabbed generic gold will start to accelerate rather quickly.
roadrunner
Right on schedule
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......
GLD P&F chart reverses
Reversals in P & F charting are scarce. I personally don't put much credence in the P & F methodology.
Still the mining bellweather and a classic chart move
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......
Old Crazy Trader Stewart Thompson has some relatively sedate comments on gold and US dollar control. He also has been a proponent that miners and silver were in the process of confirming golds new summer highs. Today we had new all time highs in GDXJ, Newmont, Buenaventura, and Goldenstar. You have to start somewhere. GSS took out a 6 yr old high. Hey, it's not 2004-2006 anymore for the miners!
I'm late on this one but GSR has fallen well below its 2-1/2 yr old uptrend line. This could finally be comfirmation of the C leg down in this 3 yr trend.
Stefanmo's proprietary "dollar adjusted" gold model correctly called the breakout, the retouch, and the blast off. Nice job!
Gold Model V2.....and that's not a V2 rocket either....though it could be eventually
Gold chart - Jesse's cup and handle....with lid...time to start popping off that lid.
roadrunner
Stocks also had a good day but SP500 has not hit the 1128 target I had expected. So I think we could see some action up to 1228 Wed morning but little chance of going through. In fact, it should be a good shorting point, as we near Thursday which I expect to be a correction day... although I'm starting to think that the correction won't be as severe as maybe I had thought. A SP500 correction would take us back to at least 1100. In fact, there's a pennant breakout on the SP500 chart, so a test back down to the breakout point would bring us back to 1100.
Gold stocks are less predictable, but I'm thinking they might need to take a break and it's probably a good move to sell or lighten up on any spike on Wednesday, which is my plan.
Same with silver - I feel it's a bit topped out. $20.70 to $21.00 is a good near-term target, and I think I'll sell my one silver contract somewhere in there to lock in the gains since I don't track the silver market as carefully.
I haven't been posting my trades, but I was playing GLD and SPY calls in my 'fun money' account and have been pretty successful recently (especially after today). I'm still holding some SPY and GLD calls and I will look for a good chance to sell Wed morning.
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......
CDNX chart
I like the CDNX chart to show the broader picture of the miners. What I see are a nice 5 legs up from Nov 2008 to Jan 2010, then a 6 month ABC correction. Appears to now be in it's 3rd or 5th leg up since turning back in July. I tend to think it's the 3rd leg as CDNX bottomed with commodities in early July, several weeks ahead of gold/silver.
Over the past 26 hours gold has sort of formed an expanding 5 wave broadening top pattern. Not perfect but the general shape. That may mark the completion of the AB legs with a C leg due to retest the breakout. Either that or it's doing a series of 3 leggers, having just completed the 4th set with a 5th left to go downward.
Some big gaps left yesterday morning in GLD, GDXJ and GDX with the gold jump. I sort of expect a quick drop at some point to cover at least the miners.
Edited to add: sure enough AZK bounded upwards from 6.01 and now back at 6.29.....make that 6.40.
roadrunner
Since Sept 1st gold making a fairly symmetric possible broadening top formation. This one is a couple of weeks long which gives it more weight. It's also at the end of 2 month up move with increasing/spikey volume over the past 2 weeks. That all fits though the middle peak for GLD was on declining volume. The other metals and commods don't show this pattern which is good. But GDX also shows it, but not GDXJ. And with silver not confirming it at all that pretty much leaves it as a wild card...and probably bogus. Gold appears to be in a bull flag since hitting $1276.
The Nzd/yen and Euro/Yen liquidity ratios went vertical today, finally catching up GSR and bond ratio HYG/LQD. Liquidity spiggots are opening wide it seems.
Liquidity ratio charts
roadrunner
What I see is that gold took a day or so here to consolidate its last move. Sometimes consolidations are more volatile, but sometimes - and I think it's more bullish - they consolidate in a tight formation like we're seeing. In fact, if anything, I see a bull penant. By tomorrow morning, gold will be fully consolidated and will be ready for the next move. Another consideration is that we have broken reistance at the former ATH of 1266.5 and maintained that level for 2 closes now, further solidifying and confirming the breakout.
For pivot points I'm getting different values for the mini and full contracts, and they are usually very close.
Support for Thurs is at 1265.2, and resistance at 1269.3, 1273.9, 1278, and 1286.7. For the full contract, support is at 1246.2, 1261.3, and resistance at 1284.8, 1299.9, 1338.5.
I personally added contracts on this morning's dip to 1265. I can see a possibility of a dip tonight or a morning smackdown to 1261 or so, which would also be the bottom of the range for a 38.2% fib retracement depending on where you consider Tuesday's move to have started.
Anyway, Thursday is supposed to be "the big day" I've been talking about where we're supposed to see a low in stocks. Of course, it could come on Friday or Monday, but I'm starting to think there isn't so much to worry about. SP500 needs to consolidate it's move up as that trend is exhausted. We might see some upside to 1128 tomorrow morning, at which point I will go short. But I think the max downside will be about 993 which is a 38.2 % retracement of the move up from 1037.5 if we hit 1128. Thursday's also a good day for silver to peak out and retrace. I'm looking for one last spike to 20.70 to sell my contract. In preparation for Thursday, I did sell about 40% of my core gold stock positions today.
KGC and AUY continue to show strength, KGC on the RBI acquistion/offer. Seems both shareholders are starting to undertand the value. AZK now to 6.60...a nice 10% rebound. While I didn't catch it at 6.01, I am back in it.
30 year gold to silver ratio chart
The above chart is an excellent study on near perfect 5/3 wave formations in the major movements of the GSR. Based on the current multi-year correction I would tend to agree that the next movement should be back towards the bottom trend channel line....in the 45-50 range. GSR is also exactly at the 50/200 dma cross (65.3) with both pointing downwards. And the 2-1/2 yr uptrend line has been clearly broken to the downside. The article also plots the waves over the past 30 yrs. The one comment at the bottom of the article gives a 2nd interesting view. Interesting too that the USDollar is also within a few tics of doing a 50/200 dma cross as well, only the 200 dma is still pointing upwards.
GSR death cross
roadrunner
Not long after I posted that last chart, the pennant breakout happened and took us to a new ATH just shy of $1280. Still think it's a topping formation RR? It wasn't a big move by any means, but it's taken us to the new range of 1273.5-1278 for the near term. A breakout from here will take us up to $1287, which I think is still possible this afternoon.
Wish I had waited until today to do my selling from yesterday, but that's why I didn't sell everything. Of course, you can never time these things perfectly.
I sold my silver contract at 20.70 this morning for a 125% gain, and I'm now short at $20.79 with a stop at $20.85. We could see silver rally to $21 at which point I may try another short. A long-overdue 38.2% retracement from today's high would require silver to come back to $19.68. This move has to be just about exhausted.
It was a technical "topping formation" that didn't pan out. And I also said that it was probably going to be bogus based on non-confirmation from silver and gdxj, as well as the bull pennant in gold that was forming. I mentioned the formation because it was so symmetric and obvious.
I'm not calling exhaustion yet in anything because the metals have a mind of their own. The charts have been giving a lot of false signals to whipsaw you out. My core physical stays put and I'm still trying to build more into my junior miner's position as they "cooperate." Added some juniors like Nevsum that were pushed back today. Lightened up some on AUY and KGC which are both quite a bit above their 20 day bands.
roadrunner
which, who would you use?
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Gold moved up today but still has loads of energy to continue higher. I'm still looking at $1290 or $1330 by Monday COB. I'm staying in my over-leveraged position to ride this move to the max - at least until $1290 and then I'll back off a bit.
Look at last years' pattern around Oct. Gold moved up relentlessly with hardly a pullback. I'm not sure we're in that position at the moment but it feels almost like it, although it doesn't feel quite as aggressive - this move feels more sustainable. Last year I did VERY well being over-committed during that up-move and it worked well because of the lack of reversals. I hope I can duplicate that success again.
RR helped me realize this and what's important to identify here is that the GOLD MARKET HAS CHANGED. It's no longer behaving like normal. Gold (and other PM's) are on the move. Take advantage of it, and enjoy the ride.
I still think stocks need to consolidate the last move here and take a rest - I still expect a pullback to 1090 or so (SP500) - although I think it may be possible to head higher. Either way, I sold my stocks down yesterday, and I'll wait for a re-entry point here. The only question is how stocks will be have if the general market is down and gold is up.
AUY had a nice move today - I'm wondering if the market may have "rediscovered" AUY and recognized its value.
With gold, silver, and miners coming out of cup w/handle formations, ascending triangles, and other bullish formations, I feel the upside far outweighs the downside right now. Some of the miners have worked 3-6 yrs to get back to this point. We could see GDX hitting 90-100 within a year or less. This doesn't mean that the very short term can't be bearish for miners right now.
Agree that shorting a 10 yr bull trend during one of the strongest parts of the year for PM's isn't the best strategy. It could work, but it makes more sense to me to ride the PM trend up when it's occuring and find other things to short that are on longer term downtrends (things other than commodities). Until GSR starts to apply the brakes and turn around, I wouldn't be shorting silver. But to me it looks like a yearly trend change has occured and GSR will be generally headed lower...favoring silver over gold for the longer term.
__________________
Edited for Friday: lightened up considerably on the miners, for better or for worse (AUY, KGC, IAG, AZK, etc.). Not liking the technicals all that much right now. Maybe the brakes are finally hitting GSR. Silver after peaking on at $21+ did a perfect 5-3-5 drop for wave 1, and now has completed a 5 wave rebound to around $20.88. Possibly more downside to come since momentum is turning over as well. Gold's daily action since mid-May does show the broadening top pattern fwiw. Since this is options expiration day for the SM, the miners usually get hit today. So this is quite expected. Both SLV (19.5) and GLD (121+) have some gaps at their breakout points. SLV has a large gap way back at 18. This may be the start of the leg to help close those higher gaps.
We skip a bond week this time. The next one is a biggie since it coincides with gold futures expiration the week of 9/27-29.
roadrunner
Silver and stocks finally showed a bit of weakness and had a break-even day. SP500 finally rallied to my 1130 target overnight. SP500 is out of energy and needs a few days to consolidate. I expect more weakness early next week. Hard for me to say if silver's going to take a break here or continue higher. Even harder to say how mining stocks will react to higher gold prices and stagnant or lower stock indexes. The long term charts for SP500 are still full of energy and ready to being a big new trend. I'm not sure the direction is very certain right now, but I have a feeling stocks are headed way higher... and it could be on the back of a declining USD. Wall street LOVES a weak dollar. In fact... Japan took measures this week to weaken the Yen against the dollar... have we seen the beginning (or resumption or continuation of) the race to the bottom? That would certainly fuel a strong move in gold and stocks.
For Monday, support is at 1271.1, resistance at 1277.8, 1282.3, 1289, 1300.2.
For next week, support is at 1250.9, 1267.6, resistance at 1293, 1309.7, 1351.8.
As far as filling those gaps RR, they're so far back and the weekly trend has started so earnestly that it's hard to imagine that much of a derailment in the near term. I think we'll be looking at filling those gaps early next year after the parabola peaks. And I still discount GLD and SLV chart gaps because the underlying commodities trade around the clock, and the futures charts do hot have any gaps. I know you're worried about this topping out but this move is being done in a powerful, sustainable way. Get on the train and enjoy the ride! I know your vehicle of choice is the mining stocks, but you might want to consider an ETF (if you aren't already) for a more straightforward play.
If you look at the charts of some of the miners who lead this rally (ABX and GG) they have been correcting for a couple of weeks. Laggards like AUY and KGC needed to catch up. And now that they have, they need to pull back some. AUY hitting 11.0 seemed to me to be the target for that stock. ABX, GG, IAG and some others falling back to their 50 dma will help GDX close that gap and help reset the miners somewhat. The other guys can just pull back to around the 20 dma. GDX was within $1 of it's 2008 all time high as well as nearly touching the upper trend channel. That would all be a good time to pull back to make another effort at the ATH. I didn't figure it would go on the first attempt considering it started way back at 47. And I don't expect the deep gaps in SLV at 18 for example to get filled any time soon, but I leave open the possibility. And SLV returning to 18 would ultimately retest the breakout of that large May-August triangle which often occurs...just a matter of how close it needs to get to the apex (ie pointy end) before rebounding. What swings me over to the corrective side for now is that gold futures as well as ABX show that 5 wave broadening top formation over the past several months. GDX just misses it by a hair on one bottom. There are also a lot of wedge formations with miners bouncing off key lines and resistance, and returning towards support. I think gold will follow for a bit. The dollar starting to strengthen along with the Cando, Aussie, Euro momentum moving the other way would also tend to support a PM's breather. All conjecture of course.
SLV chart
If you redraw a less steep sym triangle on SLV's breakout back to May, instead of the one already drawn in back from Feb, last night's top in SLV exactly reached the projected top of the triangle's breakout. A retest of the triangle's top line or at least that next lower gap would seem in order. The actual triangular consolidation appears to be from May...not Feb. Target should have been reached.
ABX chart
roadrunner
Silver's hanging out and consolidating in place. It could be topping out or preparing for the next run higher. I'd feel more comfortable if we could see a Fib retracement here as a point to get back in. Otherwise I'll have to try to identify the next breakout move (which would probably be a solid move over 21.10) and jump back on.
Stocks (SP500) surged higher past the 1230 resistance with a nice close, which means stocks are probably ready to push higher. It's a situation where the short term charts are exhausted but the longer term charts have started a trend.
The low for stocks that I predicted last Thursday didn't really materialize as a big pullback low. We had a bit of a pullback Friday which may have been it. If that's the case, then that low may mean stocks are ready to push much higher and the pennant breakout is going to continue for a few more weeks. I'm not ready to re-establish my positions just yet, but I am tempted...
RR - about the gaps getting filled - I know what you're saying. I'm just wondering if I started my own gold ETF that only traded for 2 hours a day, would that chart need to fill every gap, which would be numerous because of the short trading period? It just seems like it shouldn't work for the 'sub-charts'... I'd like to see a study or some solid research into the 'fill the gap' rule as it applies to tradeables that mirror or are derived from other charts and have reduced trading periods. I guess what's interesting about the gap-fill rule is that it can never be dis-proven... just because a gap hasn't filled doesn't mean it won't be filled some day...
The ski-system guy, Jeff Kern said his system gave a significant multi-month high in mining stocks last Thursday on his 2yr back testing model. That's generally how I feel though I'd say maybe a multi-week high that could be worked off in a week or two. But bullion doesn't have to be linked at all with miners. Next week is options expiration for gold and a bond week. And I could see those looking to get a head start on it reacting as early as this Thursday or Friday...though Monday/Tuesday are the key days.
roadrunner
<< <i> But bullion doesn't have to be linked at all with miners. Next week is options expiration for gold and a bond week. And I could see those looking to get a head start on it reacting as early as this Thursday or Friday...though Monday/Tuesday are the key days. >>
That's the problem I'm having... Gold can go one way, SP500 could go another, what will gold stocks do? Too unpredictable in this market.
roadrunner
Posted at Kitco Homepage
Metals & Mining Analysts' Ratings & Estimates - Seniors (Bill Matlack 9/20/10)
Metals & Mining Analysts' Ratings & Estimates - Juniors (Bill Matlack 9/20/10)
Forgot to post the numbers last night. Support for gold is at 1271.7, 1275.3, resistance at 1280.5, 1284.6, 1289.3, and 1298.1.
Edited to add: I think todays' FOMC announcement could be the spark to release the pent-up energy in gold. Get ready for a nice run!
GLD and Gold still show that symmetric 4 month broadening top pattern. It hasn't gone away/been confirmed or denied yet. At some point, gold-silver-miners dropping back 5-12% to retest those breakouts would be a healthy thing for their continuing advance. GSR has been slowly turning back up which may be the signal that gold will start to outpace silver for a while (ie advance faster or drop less than silver). GSR appears that it may have completed it's 3 week leg down and is going to retrace some of that 8 pt drop from 68 to 60. A retest of that 18 month uptrend line would be a good spot. That would be about 65 and also the 200 dma as well as a 50/62% FIB.
Edit for 3 pm. Wow, just when you thought it was safe to go into the "short" waters a massive spike up in the futures were put on, gold almost hit $1289.90 and silver retouched the $21 level. There was enough draw down today to shake out a lot of longs, then to encourage new shorts, then to obliterate them in about 5 minutes. It's a hard game to call. Sure glad I didn't lay down anything new today. Was this in response to something BB said today. Best policy is still to buy low on big dips and hang on for the ride, or you get bucked off.
roadrunner
<< <i>Gold's holding up pretty well relative to silver, and finally silver's giving us a good pullback. Silver looks destined to hit 20.38 at least. Gold's holding firm at 1275 so far, but SP500 is up...
Forgot to post the numbers last night. Support for gold is at 1271.7, 1275.3, resistance at 1280.5, 1284.6, 1289.3, and 1298.1.
Edited to add: I think todays' FOMC announcement could be the spark to release the pent-up energy in gold. Get ready for a nice run! >>
Dayum....
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<< <i>Edit for 3 pm. Wow, just when you thought it was safe to go into the "short" waters a massive spike up in the futures were put on, gold almost hit $1289.90 and silver retouched the $21 level. There was enough draw down today to shake out a lot of longs, then to encourage new shorts, then to obliterate them in about 5 minutes. It's a hard game to call. Sure glad I didn't lay down anything new today. Was this in response to something BB said today. Best policy is still to buy low on big dips and hang on for the ride, or you get bucked off. >>
I almost got bucked off... I sold about 7% of my gold futures contracts close to today's low, but bought back it back at 1283.5 and sold 15% at 1290.5 to make up for it. Hoping for a few dollar pullback to re-establish those contracts. Also sold half of my GLD calls today. I will have to analyze everything in more detail tonight.
As far as stocks go, I really like the way that SP500 held up today, and I think the danger of a near-term big correction is pretty small right now. If SP500 can stay over 1125 we're in good shape, although the index still needs more time to consolidate recent gains.
As far as gold stocks go, I think I'm ready to climb back aboard. Tomorrow morning, depending on how things look, I'm getting back into the positions I sold last week. With the SP500 and DJIA looking stable for now and gold looking ready for more upside and the dollar getting clobbered, I think it's appropriate to get back in.
Support for gold at 1275.8, 1283.9, and resistance at 1296.9, 1305, and 1326.1.
Those looking to get back in should take advantage of any move into the mid 1280's.
roadrunner
Support for gold is at 1283.6, 1288.5, 1293.3 and resistance at 1298.2, 1303, 1312.7.
The earliest reversal or decline I'm seeing for gold could be next Wednesday, so we should be good until then.
I think silver could be on the verge of making another move, but it might not happen until Monday. It's been stuck at $21+/- for about a week and so the last move should be about fully consolidated (although the whole move up still needs a 38.2% fib retracement). We've made two strong attempts at 21.27, so the next attempt could burst through. In the last few days I've sold silver contracts at 21.25 and re-bought at around 21.05 making a little bit of extra money but nothing huge.
Support for silver is at 20.70, 20.96, and resistance is at 21.44 and 21.74.
sold half my SLW at 26.40 today, which may mark a short term top.
Stocks (SP500) are probably going to spend a few more days consolidating between 1120 and 1135ish. I bought SPY calls this morning when it was down to 1119, but I failed to get out as I was hoping for a touch of 1135 today that we didn't get. I think we'll see 1130-1135 tomorrow at which point I'll exit so I don't carry the calls over the weekend and lock in a small profit.
roadrunner
I'll be cutting back on gold positions at 1310 which still might be possible today, and silver might have some more life in it here up to $22.50 in the next few days.
I bought some ES puts today with the ES (SP500) at ~1140 as I don't think SP500 is ready to roll beyond this point quite yet, although the weaker dollar may push it higher.
I was a bit disappointed in gold today that it didn't have more energy to burst through $1300.0 and leave it behind for good, but the way it held up real well above 1298 was impressive and bullish by itself, and typical of the moves we've seen recently.
I find it interesting that even though the USD index (DX) took a beating and broke critical support, it did not seem to help boost gold much. The relationship between Gold and the USD is still unpredictable and unreliable, as a 1 point loss in DX should have seen gold up $20. But looking at things from the weekly perspective, I think there's great odds that next week will be another nice green candle for gold - my only question and concern is if there will be any kind of a significant tail down lasting a day or two or less that might whipsaw me out of positions. But being that gold's volatility is low and gold is behaving differently now, I'm not too concerned, but that doesn't mean things can't or won't change. A 38.2% retracement of the move from 1272 would bring us back to ~1290. A worst case retracement of the entire move from 1155.6 would bring us to 1246, but that shouldn't be necessary yet. These 38.2% retracements only seem to need to come after big sudden bursts of energy, and we've been seeing slow, steady, sustainable ascension.
I didn't see too much press about $1300 gold, but I think it may pick up over the weekend and early next week and could fuel a busy a Monday or Tuesday.
Stocks surprised me with a little more upside than I was expecting, but I think 1144 will hold up as a resistance point, and this was only the 2nd attempt on this level in recent weeks so a 3rd is probably necessary and could take a few days while we execute a pennant/triangle consolidation. However, if the markets surprise us next week, it's a good sign to jump back on. I'm still holding my SPY puts over the weekend, and I will try to bail on a $10-15 drop early next week.
RR's concerns about bond week and other comments I've read about September being an 'up' month for stocks being rare weighs on mind heavily, but I just don't see a big threat looming... any downside I think will be quick and reasonable. Timing models call for a top in stocks Sep 28-30 and a bottom in gold on Oct 1. But remember that Sometimes a bottom is what prices go down into, and sometimes it is what they go up out of...
An interesting article with a perspective on shorting gold here.
Armstrong's longer term charts (11 and 64 year) are interesting and the only reason I linked the above.
roadrunner
One important point he made that I've made before is that every bull move begins with a fake-out. I believe this move going to next Mar/Apr will be the fake-out, because so many will take it in the shorts when the parabolic move crashes us back down to and probably below $1000. Then the multi-year solid bull run can begin.
He neglects to mention the hyperbolic move that we're in, but it seems like the hyperbolic move actually fits in with what he's saying so there's no need for him to identify it. I believe in the pi cycles and the 8.2-unit cycles, but I disagree on the 11 year cycle. I also didn't like or agree with how he drew some of his charts and lines and channels, but I'll be the first to admit that this guy probably has far more charting knowledge and experience than I.
All I know is that if I can withstand the volatility and not get too over-leveraged, I can make life-changing amounts of money in the next 9 months or so riding gold both up AND down. The hard part will truly be at the top of the parabola, as the daily moves will be huge and that will be where big amounts can be made quickly. People often ask when I plan to sell (physical holdings), and that question is difficult to answer. I think they expect a dollar figure, but I think a dollar figure would be a mistake to have as a target (although there's nothing wrong with it and it's never bad to lock in profits). I think the picture will be clearer next Feb/Mar, and there will be some good timing indicators and like with most parabolic moves, there will be a double top. The challenge is of course to play this move in real-time as it's happening.
I think trying to call a parabolic top in 2011 for one's trading accounts will be very difficult. More than likely one will be shaken off fairly early or hanging on way too long. The swings in sentiment are going to be brutal and cause newcomers to even question why they bothered to get involved in PM's.
roadrunner
<< <i>I think trying to call a parabolic top in 2011 for one's trading accounts will be very difficult. More than likely one will be shaken off fairly early or hanging on way too long. The swings in sentiment are going to be brutal and cause newcomers to even question why they bothered to get involved in PM's. >>
Ah, that makes sense... I didn't know about the prison part.
For those that are interested in details about my plans to play the parabolic move, I'll elaborate. I learned a lot when I mis-played last year's fall run to $1200. I still came out OK, but I lost a TON of profits. I feel these are lessons that one can only really learn with first-hand experience. My futures account is funded solely with profits from last year's run, so I'm playing with 'house' money at this point.
I've figured out what my "core" position will be all the way up and beyond 1600, should gold come to that. The 'core' position is designed to allow me to grow from what is currently about a $50 margin to a $150 or larger margin. That is, the POG can drop $50 before my account is under any pressure to sell. During times where I am confident about the near term direction of gold being up, I plan to play an "over-leveraged" position using the "margin money" on a short term basis and using stop limits to amp up gains and play mini-trends. Come next March, I'm definitely going to stop any over-leveraging as the risk will be too great, and I may even cut back on the 'core' position. That doesn't mean that I'll absorb the entire margin of losses before selling any core position, or that I won't play with less-than core position if things get dicey.
The key difference is that this time, I plan to withdraw money from my account as it goes up. As I hit each $10k or $20-25k milestone, I plan to withdraw 25%. This way I lock in my profits, yet my account still grows at a good rate to compound the gains. That is the plan anyway...
BTW, support for Monday is at 1286.5, 1292.2, 1296.9, and resistance is at 1302.6, 1307.3, and 1317.7.
SP500 is off and roaring here Sunday night... it looks like my shorting of the ES was a bad call and I will close or reduce that position Monday morning if it doesn't turn around.
1245.5, 1260, 1267, 1275, or 1290 depending on how much of the move up needs to be retraced.
Support for tonight/Tuesday is at 1285.3, 1291.3, 1293.5, and resistance at 1297.3, 1299.5, 1303.3, 1309.3. Based on the tight range, Tuesday is likely to be boring as well.
Silver's retracing a bit. Hard to say at this point if the retracement will get more serious and take us back down to the low 19's, which is where a 38.2% retracement will eventually have to happen. I don't think it's time for that yet. Tonight we've already done a fib retracement of the move up from 21.00, so this might be the extent of silver's weakness for now with sideways action for the next few days.
Stocks are not likely to go anywhere and may see a little bit more weakness, but I'm not really expecting anything major.
Although I have to admit, this week would be as good as any for a nice end of the month or early October surprise. If such a move does happen, it's likely to be fast and temporary, IMO.
The bullish percentage of GDM stocks is at nose bleed levels and it has almost completed it's 3rd upward move. Maybe one more thrust up before a more significant correction. This is usually about where runs end, not begin. But nothing says the bullishness can't lock in for longer than anyone expects. The last BPGDM move lasted 3 months (Feb to May) with a 3 month correction. This current move is only about 2 months old. Macd is about ready to cross over but that also occured in April-May and still managed to hang on for a month after that first cross/touch.
Bullish Percent GDM/GDX
roadrunner
The author compares the Naz and Oil bubbles to the S&P (1982-2000) and gold moves (2001-2010). It's pretty clear than gold has basically mirrored the advance of the S&P during that time with relatively low volatility as compared to the other 2 confirmed bubbles. I never really saw this before but the S&P took its first big dump in 1987, six yrs into the bull. Gold also took its first major dump about 6 yrs into its bull run. An interesting link.
roadrunner
<< <i>This week looks like a good set-up for a correction... could be starting tonight... we'll have to wait to see how it trades in London. >>
I don't think this is any kind of correction. Just a consolidation or fib retracement. A big burst of negative energy came in so far but I think we've seen the extent of it for now. Of course, we'll have to see where it goes from here. Kind of nice to see this come in at this point, as it will prepare gold to move up higher. It's very bullish to see the buying step in and take it back up $10 almost instantly. VERY BULLISH.
This is one good reason why I tend to trade without tight stops - although I always ensure I have a way I can trade and have instant alerts to wake me in the middle of the night.
You're up late tonight, RR.... At least I'm on the West coast
roadrunner