***NOVEMBER 2010 Gold and Silver Stocks/Options/Futures trading thread***

ProofCollection

This is a continuation of the monthly trading thread for discussing relatively short or near term movements in precious metals and related securities.

October was a great month posting a $50 gain while accomplishing a significant pullback. My futures trading account took a hit with the retracement occurring a few dollars before my intended sell point, but I still ended the month with a 22.8% gain.

I do believe that the retracement and downside is mostly over and that the rally for gold and silver is set to resume. The first week of November is likely to be very volatile with the elections and QE news coming out, so I don't discount the possibility for a huge whipsaw decline to come in the next couple of days.

Timing patterns suggest that gold may not be ready to resume rapid upside growth just yet, it may need until about mid-month to really get going again. Gold target for Feb/Mar is $1800-2200.

Silver looks far more bullish and ready to move NOW. This may pull gold upward somewhat, but silver is likely to outperform gold.

I have fallen in love with the Palladium charts - it is moving NOW. I think we'll see $700 this month and $800 palladium very quickly after that. We just solidly broke the 2007 high at $600. Strangely Platinum is not following along, so something is happening that is unique to Palladium.

As for stocks in general, I think they will finally unleash to upside once QE2 and/or elections are over.

With many charts primed for big upside movement, I think the QE2 news or some other coincidental world event is going to be a whopper that is going to propel these markets like we can hardly imagine at the moment.

Below is the Palladium chart and gold weekly chart. The gold weekly chart has a clearly defined channel that we are at the top of, but have broken through before. The top of the second channel is ~1480, which is probably an achievable monthly target at this late stage of the parabolic blow-off.

ProofCollection

This is also in response to RR's post at the end of the October thread, but the topic is best described by APMEX's email I just got seconds ago:

Pre-Election. You can set your Gold and Silver position now, prior to the election results and the impact on the markets. Many professional traders are setting their positions over this weekend so that their portfolios are ready for what could be surprising results.

Pre-Fed Decision. Take advantage of this special opportunity to set your investments in Gold and Silver prior to the announcement next week from the U.S. Federal Reserve bank. In every market across the world, traders are preparing their Gold and Silver positions for this expected announcement by the Fed to perhaps increase the money supply of the U.S. economy in hopes of stimulating job growth. Traders consider the move inflationary and markets have reacted accordingly. Even U.S. Treasury “inflation protected” debt - debt instruments that increase in interest rate with the Consumer Price Index - sold this week at a current rate less than zero for the first time ever!

First, From all I've read it's pretty well established that the election will be a blowout for Republicans, which will bring some political stability to the nation and this will help the business environment (bullish for stocks). Only question is - is this priced in? Second, I don't feel that the QE announcement can or will disappoint. If it disappoints, it won't achieve it's objective. It's going to be significant. But more importantly, I think the public's impression of this will ignite the gold mania we've been hinting about. The last retracement wasn't scary, and more importantly I think the public's misconception and widely-advertised concept about gold being a hedge against inflation and the media attention to the billions or trillions of QE will send the public scurrying into gold and gold stocks. If it does disappoint, I don't see it having a huge down effect on gold. Perhaps we would finally get the retracement I've been looking for...

But another dynamic - and probably more important dynamic - of the QE announcement will be the fact that bond holders will line up to dump their holdings to the feds, and then dive head first, full steam ahead with their proceeds into commodities and stocks. Billions pouring into these markets in the near future will juice these market hard.

roadrunner

Things seem too rosy with APEX's theory. Their job is to sell metal at retail. I have to think this QE2 stuff is already priced in as well as the CFTC/silver rumblings. I can't see the FED announcing an ever bigger than expected QE2 package to toss more gasoline on to the fire. They still need investors to hand on to their bonds especially with a continued supply still predicted for quite some time. The last thing they need to do is to spark a max exodus from bonds into stocks....then their game is really over. They need only tell what they're going to do in the near future not for an entire year. They can let the dollar slowly slide but they need to support the TBond for as long as they can.

Gold and silver do tend to conduct ABC corrections and so far it looks like we're still in the "B" part. Gold did a perfect 5 waves down and usually that is accompanied by another down leg following a bounce. But I'm prepared for either eventuality. Gold has been putting in irregular ABC corrections recently (ie where the bounce leg actually exceeds the previous high) so we could easily see this bounce make a new all time high and still head back to $1300. Gold has retraced 62% of the recent drop and hit a point of resistance from the earlier run up. Silver has nearly retraced all of its drop (92%) and has formed a cup. It likely needs the handle added on which may not take it any lower than it's already seen.

Palladium is certainly juiced, though at some point has to come back and retest that $600-$635 breakout area. Note that copper is not participating....a warning sign? Palladium had broken above it's perfect cup formation. Copper and Platinum might still have to reach $4/$1750 to reach their former tops before proceeding bullishly onward.... then handles on those cups should be needed. If they are both making cup handles right now it's a very skewed formation. I haven't paid any attention to Palladium the past few months but it's weekly chart is amazing....a perfect cup formation with symmetrical "ears" on both sides. Doesn't get any more obvious that that....if you bother looking...which I didn't. That was an obvious play in hindsight with that last handle being tacked on.

Palladium's perfect winning cup

price of silver vs. unemployment rate

The analyst has linked these 2 unlikely parameters and found a close correlation over the past 40 years. They toss in the RSI in unemployment as a confirming indicator. Currently this analyst projects silver has just started a multi-year bull market. Only fault I can find is that he's using the govt's supplied lower figure. But that's still proportional to total unemployment.

roadrunner

ProofCollection

I'm a little nervous about gold going into the next couple of days. No doubt there will be a big move in one direction or the other - or first one direction then the other.

I think there's a good chance we might see 1300 tested in the next few days - even if just ever so briefly. I think Palladium is going to be stable, I'm going to keep my money there for the next few days until the direction in gold becomes apparent. I will go "all in" at GC 1300.

Support for gold for Tues at 1344.8, 1355.6, resistance at 1362.1.

I think markets will be quiet on Tuesday.

cohodk

Good to be nervous. When in doubt, stay out.

Gold knifing through those supports.

Double-top on silver? If so, would only project to about 21. Easy come, easy go.

ProofCollection

Glad to not be in the markets today, I saw the plunge coming but wasn't bold enough to short it. I think there is still more downside, and I think there are two scenarios going forward...

1. A whipsaw touching 1300 followed by a rocketship after the fed announcement, or just a rocketship and resumption of mega-rally.
2. Volatility, but no real direction until mid-month (Nov 19), during which we touch 1300.

I have a couple of bounce points for going long this afternoon with short stops... 1229.x, 1306.x, and 1325.0

Palladium has been solid, as expected, and I am still long PA.

jmski52

But another dynamic - and probably more important dynamic - of the QE announcement will be the fact that bond holders will line up to dump their holdings to the feds, and then dive head first, full steam ahead with their proceeds into commodities and stocks. Billions pouring into these markets in the near future will juice these market hard.

It makes sense that the Fed would accomodate some of their friends so that they could get out of some untenable bond positions. It fits their modus operandi.

On palladium, I don't know why palladium couldn't attempt a run at parity with platinum although I wouldn't expect it to reach full parity. It's happened once before, until the Russians started playing "chicken" with the auto manufacturers. It's a different generation of investors now, so why not an encore? It could happen, but I'll stick with platinum because we go "way back".

Justacommeman

Long gold @ $1340.40. MJ

edited to add................ Came back on me. Out with a small loss.

Justacommeman

Some TBT long @ $32.60 and more @ $33.61. MJ

Out @ $34.31.............That worked out really well. Winnings go towards my monthly gold purchase. MJ

roadrunner

Those falling knives have a habit of cutting right back these days. Triple silver top?

Some of the miners have been acting quite resistant the past weak with Eldorado leading the way: GSS, AEM, GG, SA, FRG, ABX, RGLD, IAG. Excellent after hours quarterly report from Yamana, their first one in a while. Their net by-product gold mining cost comes in around $150/oz thanks to both silver and copper. Expect them to jump tomorrow unless gold gets another beatdown overnight. HUI still hanging in the 520's. And it could easily sail away from this resistance point at any moment.

New RICO lawsuit against JPM/HSBC added to the pile today. It will only get deeper. Silver back over $25 tonight. Must have been a dull knife.

Liquidity indicators jumping like crazy the past 3 days. GSR now into the 53's.

roadrunner

ProofCollection

Been too busy lately to post much. I watched today's action from the sidelines which probably saved me some money, but also disappointed me that I didn't take advantage of the sale prices (thought they might go lower). Would have been nice to take advantage of the $1 swing in silver.

I think the face that the swoon didn't make it any lower than the high 1320's is bullish and probably means that 1300 is out of the picture, but I don't want to get too bullish yet. Really, we need to exceed the low 1370's before we know that gold may be ready to run again, and the earliest that will happen will probably be next week. Silver is looking incredibly bullish and ready to run sooner, along with palladium. Copper's also within a few cents of breaking free. So I'm still skeptical, and I'm just planning to play some small swings for now, I'm not ready to load up for big gains. PA and SI are probably the best bets for the next couple of days.

Stocks are set to soar for a while, and I anticipate gold stocks will do well, there's a high predicted for gold stocks predicted for 11-11.

Justacommeman

The US dollar index is 75.83 as I type this. The UDX chart only updates end of day. MJ

74 needs to be tested. Three year weekly

three month daily

Layman's dollar chart with Stickman Ben illustrating. I learned early on that you don't fight the Fed in your trades

ProofCollection

I didn't say it last night, but I did load up a little on gold and silver and I still have my PA. Added to this morning in the middle of this big run, looks like we're off to the moon. Not sure why the delay between the news yesterday and this big move, but here it is, and it's for real.

Also bought 1 copper contract, I think it's ready to breakout and run...

roadrunner

Looks like O'Connor was right after all on the dollar when predicting a 4-8 day bounce. While it perturbated for a couple of weeks, it only rose for 4 days. He has been forecasting a dollar yearly bottom due in early December.

Yesterday's splunge in silver could be considered the handle that we had been waiting for. Can only imagine anyone who might have shorted silver during yesterday's pullback, only to be incinerated today during this $2/24 hr. swing. Had I still maintained the ZSL position I put on during last month's silver dip, I'd now be down 39%. New all time highs in GDX, GDXJ. 30 yr high in silver. Gold just looks to be waiting.

GlobalX starts trading a new ETF today for gold exploration companies...GLDX...$16/share. Mostly companies that are already sitting on substantial gold assets: Novagold, Rubicon, Seabridge, Keegan, Detour, Fronteer, Ventana, Colussus, Gabriel Resources, etc. None makeup more than 5% of the total. Initial basket of 30 juniors with the top dozen or so making up 50%. A number of these miners have shown huge increases recently so it would not surprise me to see this index languish for a bit.

roadrunner

ksammut

<< <i>Looks like O'Connor was right after all on the dollar when predicting a 4-8 day bounce. While it perturbated for a couple of weeks, it only rose for 4 days. He has been forecasting a dollar yearly bottom due in early December.

Yesterday's splunge in silver could be considered the handle that we had been waiting for.

GlobalX starts trading a new ETF today for gold exploration companies...GLDX...$16/share. Mostly companies that are already sitting on substantial gold assets: Novagold, Rubicon, Seabridge, Keegan, Detour, Fronteer, Ventana, Colussus, Gabriel Resources, etc. None makeup more than 5% of the total. Initially basket of 30 juniors with the top dozen or so making up 50%.

roadrunner >>



Purchased some today.

roadrunner

An interesting factoid from the JS site today concerning google search index ratings on some recent news events:

1. Gold's breakout yesterday - 2 pts
2. FED's $900 BILL decision - 5 to 10 pts
3. McDonald's reintroduction of the McRib sandwhich - 40 pts!!!!!!!!!!!!!

Anyone think that gold is in a bubble?

roadrunner

30AnvZ28

How/Where/What site do you guys use to buy/sell silver/gold ETF's?

Is the $25K minimun in place for ETF's if you go over the transaction limit and be labeled a "day trader"?

meluaufeet

Scottrade.....

website link

CoinCrazyPA

<< <i>How/Where/What site do you guys use to buy/sell silver/gold ETF's?

Is the $25K minimun in place for ETF's if you go over the transaction limit and be labeled a "day trader"? >>



I believe the rule applies, they trade the same as stocks.

CoinCrazyPA

<< <i>

<< <i>How/Where/What site do you guys use to buy/sell silver/gold ETF's?

Is the $25K minimun in place for ETF's if you go over the transaction limit and be labeled a "day trader"? >>



I believe the rule applies, they trade the same as stocks. By the way I use Ameritrade. >>

30AnvZ28

Thanks guys. I have a scottrade account. I just have never traded silver or gold there.

ProofCollection

Wow, what a day for PMs. I participated with a smaller position because I was waiting for a better entry point that never came. I made about 50% on my entire futures account today, but I could have easily doubled it had I a full position. I think PMs are on fire beyond chart and TA rationality at the moment... Over the longer term the "rules" still apply, but in the shrot term anything is possible. Silver just will not relent, and has not put in a proper retracement since $17.75. I think there is a mania amongst those in-the-know (J6P still not participating) which is driving the action for Thurs and the next week). These metals are blowing through all price targets.

I'm going to try to add to positions on a test of support at 1377.6 tonight, but I'm starting to question whether that will happen or not. Gold "should" need a day to consolidate Thursday's move, but silver hasn't stopped, so maybe gold will keep going as well.

The one and only thing that concerns me is that this is clearly the delayed reaction from Wednesday's events/news. Why did it take a day to take effect? Kind of funny, a little suspicious.

Anyway, it would appear that this move should last at least until next Thursday, so don't be afraid to jump on and go long... any downside should be temporary and quick.

Palladium, Gold, Silver, Copper new fresh highs. Copper knocking on the door to $4, but I'm too excited by the other metals to mess with it unless/until it breaks $4.07 (high so far $3.985).

My SLW stock is the star performer of my portfolio, boosted of course by the POS.

For Thurs gold, support at 1361.8, 1377.6, resistance at 1408.5, 1424.3, 1471.

I have near-term targets at 1400 and 1427.5. $30 is in the bag for silver, I just don't know the timing. $713 palladium is in the bag as well.

goingbroke

Bernanke, 56, a former Princeton University economics professor who was appointed as Fed chairman by President George Bush in 2005, is a long-term scholar of the Great Depression. He has argued that the central bank's blunders helped worsen the financial crisis that began in 1929.

He has responded with the most-aggressive expansion of the Fed's power in its history, cutting interest rates, making Federal Reserve loans available to investment firms for the first time since the 1930s, and lowering the rates at which banks can borrow from the Fed.
the Fed is throwing petrol on the fire of surging commodity prices, which rose to a two-year high today. I urge students to scrap career plans for Wall Street or the City, London's financial district, and to study agriculture and mining instead.

roadrunner

That silver knife continues to cut up the cliff. $27 next. GSR now <52.....heading for 40's?
My former ZSL position would now be 44% underwater. I pity anyone who has been holding commodity shorts as of late.

roadrunner

botanist

Why has platinum been lagging during the recent upsurge in gold, silver and palladium?

roadrunner

Platinum is lagging probably because the guys that move these markets like to go through them one at a time to maximize their profits. Platinum should be joining very shortly. The various soft and hard commodities have moved up at different paces. One has to expect the same for metals.

roadrunner

ProofCollection

Platinum wasn't moving because platinum wasn't ready to move. But after Thursday's action, platinum is finally ready to join the party. I have projections up to $1900-1940 within the next 2 months or so, but it will probably be sooner as gold goes parabolic.

Last week was great for gold, and we are in for another bullish week. We have broken out of the lower channel and into the upper channel, the upper boundary of which is $1460. I zoomed in on the weekly chart a bit below, but the channels are pretty well established. The weekly trend appears to have a projection to about $1550, but the next goal is 1427.50, and I think we'll see that this week.

Silver is on fire as well. I hate to be overly optimistic, but I think we'll see $30 very soon.

For tonight/Mon, we have support at 1377.6, 1388.2, and resistance at 1404.4, 1415, 1441.8. So for Sun/Mon, I'd have to say that it looks clear for a test down to 1388.2 support, followed by a pop over 1400.

Copper over $4 next week is also a strong possibility.

roadrunner

Armstrong on how international capital flows will affect stocks

The author is anticipating a rising stock market over the next 5 yrs with the usual pull backs. Gold and stock will move upwards together. Should benefit the miners tremendously if that occurs. A good 10 minute read.

COT report for this past week shows commerical gold longs outpacing shorts by 2.5X. That's action counter to what they've been doing in the past, esp. with O/I rising by 10,000 contracts. In the recent past, at this point in the game the banks would be piling on the shorts until they break the market. Ratio has been declining and still at a relatively low 2.5 compared to the peak of last fall at 4.5 to 1. Tides are a changing.

Dollar seems to be targeting that 74.75 level achieved on that earlier flash crash. Funny how those flash crashes turn out to be the "truth" a short time later. TGB experienced such an odd crash on 10/14 that no one could explain. It turned out to be the price peak and the short term bottom all in one day....as well as a foreshadowing of negative permitting news on their mammoth Prosperity Mine that produced an honest 30% drop this past week.

roadrunner

ProofCollection

<< <i>The author is anticipating a rising stock market over the next 5 yrs with the usual pull backs. Gold and stock will move upwards together. Should benefit the miners tremendously if that occurs. A good 10 minute read. >>



Although I only skimmed it, I agree with this for the short term (and always have), not sure about the long term. When interest rates start to rise, the SM will stop rising unless the dollar keeps falling. Although all of this liquidity needs to go somewhere, and with bonds not being a good option, the money may go into stocks regardless.

I think there is a wild card and that is hyperinflation caused by a collapse of the USD. This will affect capital flows to the US and in the US, but just like Zimbabwe, the markets will soar in that scenario as well due to lack of dollar's value. Although such scenario would probably see an overall crash before the massive rise.

BigRick

Just sold 40 Dec 60 Calls today.

What's that P.T. Barnum said?

wayneme

well bigrick
i guess the question is who was it on your trade time will tell
best of luck lol

ProofCollection

Fantastic day for gold even despite the rise in the USD (DX), and it should be a fantastic week at least for Tues and Wednesday. The 1430-1440 target is practically in the bag, as well as I think we'll see $30 silver.

Letting my Palladium contracts run, immediate target at 727.5. Not adding any contracts here, I'd rather play gold & silver.

I'm looking for a 38.2% pullback of Monday's move, which calls for ~1401.5 tonight, which is probably about the best entry point you'll get for this week (perhaps 1398.x).

For Tuesday, support at 1394.3, 1402.3, resistance at 1418.1, 1426.1, 1449.9.

And finally, I'd like to thank SLW, the star of my IRA portfolio.

Honorable mention to GDXJ, HL, FRG, NGD, UXG, THM, as well as coal play PCX, uranium play UEC.

BigRick, Not sure if you're saying you closed open positions or opened a new position - whether your purchase was bull or bear. All I gotta say is it takes guts to short this bull right now.

ProofCollection

The only problem with those 38.2% retracement is you never know where to measure it. Looks like I was off by $1 and missed my optimal add-to point, but I still may get that chance tonight. I did add a few dollars higher though just to make sure, and I picked up more SI. I expect resistance around 28.40-28.60 tomorrow, but hard to say if it will matter the way silver is going. $30 is THE target.

Wanted to mention, copper futures just broke $4, and this portends more upside. A break of $4.07 IIRC will probably send it soaring.

roadrunner

NovaGold chart

Glad you had some NG ProofCollection. I think Kuch brought this stock up just after it hit 9.5-10 last month. I initially said it looked too toppy and ready to fall back. And it did, to around 8.5. At least at the time I recognized the multi-month cup formation and changed my outlook saying that NG could break away from that smaller cup. But what I did sort of dismiss or just miss was the multi-yr cup formation with a neckline up around 20. Well, now at 15+ NG is heading up towards that multi-year high to form a bigger cup. With a 75% gain in 3 wks this one has been stellar esp. with some huge connected money behind it. There are many other miners still in the early stages of finishing or trying to break away from their cups, both multi-month and multi-year formations. One by one they will get in step.

The game since July (or even Feb) has been to hang on for dear life and don't get shook off. There have been opportunities to re-enter but it's been tough. Picked up some mini-miners like KBX, RIC, TLR, and EGI last week that had pulled back to form handles. Nice to see them breaking back up now. But also missed out picking up MGH (PZG and others) when it dropped way back to form its handle. I had a 2nd shot on the restest of the neckline yesterday and again didn't pull the trigger for some reason....now 25% higher in 2 days....and 60% in 2 wks. A bad earnings report kills these guys dead in their tracks, even if they miss analyst earnings by a cent. IAG was one of my victims and it has been slow to recover while AUY out runs it.

Gammon imo came out with a very good report yesterday with large improvements across the board, even with their strike-plagued El Cubo mine mothballed. El Cubo has been priced in for months yet the market decided to push Gammon back down even though it is improving and making good money. I guess it's report wasn't as good as all the other miners that don't have an idled mine. With silver priced in, it's net gold cost per ounce is -$100/oz. Hard to beat that. Even AUY is only at +$115 or so, the industry leader for the larger caps. Today it's GoldenStar getting whacked because of a poor earning's report (3rd qtr production off 20%, gold cost per ounce up 40%, net $1.8M loss for the qtr even with a 30% higher gold price). In GSS's case they attribute the down qtr to heavy rainfall, and lowered ore grades and processing. In any event not a story shareholders want to hear. It almost makes sense to sell these guys off just before earnings day and then buy them back the next day or whenever things settle out. In most cases it seems that the share price in the current environment is very optimistic going into earning's season and probably wouldn't go much higher even if the report was glowing. I did that with JAG which reports after close today. It has formed a smaller cup and has broke above the neckline. But it's also had trouble with it's more recent quarterly reports. If this one has any weakness at all it will get knocked back to at least the neckline, or even to retest the downtrend line. But it's also time to form a handle and a weaker report would coincide perfectly with that.

JAG chart

MJ, I just found out a side benefit of the Cando being on parity with the dollar. When I go to Kitco and look at their miner summary report, I don't have to convert C$ to US$ in my head...they're the same number now. How easy is that!

roadrunner

ProofCollection

I've held MGH for a long time, years. These miners that get whacked because of earnings are great buys, IMO, because the recent PM price movements had no part in the Q3 results. Q4 should look stellar, depending on how hedged their production is (even if just hedged a few months).

roadrunner

In the case of GSS since it just bounced off its upper trend line, and it's production issues from last quarter could easily fall into this quarter as well. I would probably wait until I see it hit the bottom trend line again before jumping in. But it has been a media darling and could easily shake this setback off. It's sort of ironic that the companys who actually producing real metal for the market probably carry more risk than non-producers like NovaGold that are years from establishing a mine. Those non-producing juniors only have to keep expanding their known resources/reserves to keep the buyers interested. It's not like they can have a real bad earnings report. Gold bullion never has a bad earnings report. But watch out if permitting gets held up such as Taseko just experienced with their Prosperity mine. Those are game changers, at least in the intermediate term. That's one big advantage that GDX, GDXJ, and now GLDX all have. One bad earning's report or permitting setback won't make a dent in the overall averages.

Stewart Thomson on Weiner Land

roadrunner

pmcollectour

The rise in precious metals continues as global investors pile into the market, even as the physical market is stagnant, says Miguel Perez-Santalla of Heraeus. He says there is little real growth in consumption from the industrial sector and shrinking demand from jewelry users. “The charts are the guides at the moment and direction is the only real compass. But a compass that is stuck on North can lead you off the cliff. The global economy sure is part of the driver but in reality there has been improvements from all sectors and the precious metals markets seems to have blinders on like a race horse with no concern for direction,” he says. Talk that there is a shortage of gold supply for monetary purposes will “actually bring to reality that it is not a currency and at that time that lack of liquidity will create a collapse of the price,” he says.

Justacommeman

Back in TBT (short 20+ Treasuries) in a good way. I had a trade kick in today at $35.45. It also came with volume. I love the move it put in on Nov 3 ( caught that for a DT only). Tomorrow there is 30 year auction. MJ

TBT

ProofCollection

What a day in the markets! What was looking to be an incredible day for my accounts turned out to be disastrous. During the rapid move up in silver the last day or so, I over-leveraged in silver and my account was doing VERY VERY well until the rug got pulled out. I liquidated pretty quickly, but the damage has been done. Still, I'm still better off than I was when I started the month so I really can't complain. Where is captain Foresight when you need him. I had thought that since we were so close to teh $30.00 target that we'd actually get there before seeing a huge correction. I would have been in great shape had we made it up just a bit higher.

Gold accomplished a very nice 38.2% retracement from 1315.6, so that gives us firm footing to proceed higher. Unlike silver, which still has a big correction due, IMO. Today's action does nothing to 'ruin' the bullish charts, although certainly more downside would be a big red flag - although I think we've seen the extent of the downside for now. Note that gold did react at $1420... one of the price targets I've been mentioning for months (but I had recently revised to 1327 and higher).

I'm not sure what this does for the timing patterns, I need to spend some time looking at them again. Thursday is still supposed to be a top for the XAU (and thus it can be assumed for gold as well), so perhaps Wed will just see a 38.2% retracement of Tuesday's $2.925 drop from the peak, which would take us to $27.53.

Today's move gives me some new possible upside projections in silver up to $31.82 and $1481 in gold, but regardless, $33.00 silver is still a good near-term target, it just might take a little longer to get there.

So far, the gold weekly candle for this week is just a doji...

ProofCollection

Thought I'd mention Palladium has a good projection up to $787.50.

Support for gold at 1375.2, 1399.8, resistance at 1417.3, 1441.9.

Support for silver at 25.783, 27.55, resistance at 28.708. Wed could easily be see $1 tacked on to present levels (~27.55).

roadrunner

Tuesday:

Well, things were looking quite chipper in the morning. But by late afternoon all those gains were losses. I nibbled on GSS when it hit the lower trend line after a -16% earnings hit this morning, but it continued downward when gold and silver were hit at 1 pm. A large number of my mining positions are in miners that haven't really taken part as strongly as the likes if UXG, FRG, AZK, NG, THM, etc. Most of those leaders got waxed-off today. Some of mine actually went up but most took a 3-5% haircut. I'll be buying more as this weakness continues. Will it be days or weeks? One clue that this might only be a short term hit is that gold has typically reached blow off peaks at 25-30% > 200 dma. Today's high of 17% was barely above the 16% recorded on Oct. 14th when gold first hit the mid-$1350's. Hardly super bullishness territory. And GDX tends to peak at 35-40% or higher. It reached a 27% figure today. That coupled with fall seasonality having 4-8 weeks left suggests an intermediate or short term correction rather than a blow off top. Blow off tops in gold usually don't occur within 5 minutes of an announcement of a 30% rise in the silver margin requirements. Today generic gold only saw some minor hits of 1.5% or so. Let's hope they continue to hang in there. They had barely just gotten off the ground so it would be surprising to see them getting pummeled like bullion or gold stocks which have seen large advances since July.

Wednesday:

Wonder if the G20 meeting Thurs/Friday was a lighting rod for putting the brakes on silver & gold Tuesday? The last thing the G's want is gold running amock during their big-wig get together. And what President would want to have their currency in a downtrend during such a meeting if it was avoidable? Serving up a margin change could have met all the requirements while avoiding impropriety. And nothing like a little smackdown to make the Wed and Thursday bond auctions more of a "success."

roadrunner

ProofCollection

A pretty ho-hum day in the markets as the big moves from yesterday consolidated. The blame was put on the change in margin requirements per contract and there are a lot of manipulation theories being thrown about, but I have seen them do this on many ocassions (they also adjust it down) based on volatility. Their move is not unusual, and I think it is a healthy thing. I welome it - I can't buy or sell as many contracts, but that's good because it also helps to limit my losses and forces me to be a bit more conservative - I need that. There is no denying that metals are becoming incrasingly volatile.

Caught a nice trade in copper in the hour or so before writing this, and nailed a 2% move from 3.99 to 4.07. I took partial profits and I am still hanging on with a stop for guaranteed profits. I think copper is ready to go, and I'm going to give it room and let it run, potentially to $4.40 but more surely to 4.15 and then on to challenge the all time high.

5m HG chart that went on to 4.07 after I captured this:
Copper Chart

SUMORADA

ProofCollection

I gotta tell ya, I really look forward to reading your post"s.......do you ever sleep, or take a day for yourself, throw a burger on the grill..I think your sharing all of your hard work and opinions as well as others on this board that do the same, is way cool.!

I'm a caveman when it comes to charts, futures trading etc. but every now and then because of you folks I see a glimmer of light...thank you.

Eric

Justacommeman

Finally! My currency trifecta has came in and my instincts, stubbornness and research served me well................this time

The Canadian dollar just reached parity with the USD dollar again and joined the Swiss Franc and the Aussie dollar at par or better.



MJ

gsa1fan

I agree SUMORADA I have learned many things from these posts.

Most time I stay totally confused but every now and then I can follow what's going on.

ProofCollection

Thanks guys, I'm glad you all are enjoying the posts. I'm addicted to trading, and I'm not always like this but when the market is like it is now, I end up spending a lot of time staring at the charts. They are mesmerizing when they are moving like they are and there's a lot of money to be made, if only I can manage to hold onto some of the gains. I'm not at the computer the whole time though, I have alerts on my Blackberry so I'm always in touch.

I do have some financial goals with my trading activities, one of which is to go with my wife on a 3 week African safari which I was really close to accomplishing until yesterday. But there's still a lot of move left and I'm sure I'll be able to reach my goals shortly. Paying for the safari isn't the obstacle though, it is the reward for paying off some debt and and hitting some savings milestones. I wage the constant battle of leaving funds in my account to grow it vs. taking some out to stash away in savings.

My only hope is that no one completely listens to what I say and loses money because of it, although overall my track record the past several months seems to have been pretty good.

roadrunner

Have a feeling we're going to see $1360's on gold and $25's for silver before another advance can restart. This would be retesting the rapid breakout that occured on Nov. 4th. The massive volume spike Tuesday on the GDX:SPY ratio was a fairly bearish sign. We'll have to see how it plays out.

10 yr to 2 yr TBond yield ratio

While not foolproof on exact timing or shorter term moves, the ratio of 10/2 yr bond yields dipping down to touch the 40 wk moving average has usually resulted in a great starting point for an extended PM's run. The current drop has alreadu pulled back to the 50 dma and just above the 5.7 ratio from the first leg up from the spring bottom. Pullbacks to the 50 dma have targeted the short term bottoms since July. The fall 2008 deleveraging crash throws a slight wrench into this however. 3Month Libor has been rock steady at 0.29% for months which doesn't seem to indicate a deleveraging scare on the immediate horizon.

roadrunner

roadrunner

Silver's past peaks

A thoughtful analysis of silver's 5 peaks in this decade. The current run met most of the same parameters of the earlier peaks. The exceptions however were a fall peak vice a spring high. And the fact that gold has not run anywhere near where is should have to reach previous overbought levels vs. the 200 dma. A worthwhile read. In any event, tread cautiously.

roadrunner

BigRick

"...I took partial profits and I am still hanging on with a stop for guaranteed profits..."

PC, what do you do if the gap at opening blows past your stop?

roadrunner

Rechecked that 10/2 yr TBond ratio after today's close and it's quite close to hitting the 200 dma.

In the bigger picture we have SM expiration next Friday, bond auctions the Mon-Wed before Thanksgiving, and gold/silver futures expiration the Tuesday before Thanksgiving. Seems unlikely the commericals will let all that go by without a good-sized hit sometime from Thursday to Tuesday.

Note that GLD effectively filled its gap down at the $1360 level. This also served to retest the breakout from the sym. triangle that formed in October which was about the half way point of this move towards $1450. On the other side GDX, GDXJ, and SLV have big gaps a bit lower to fill before proceeding on. In the case of the miners they almost never leave such wide gaps before proceeding back up. So sometime next week I'd expect those gaps to be covered. $25.00 Silver will close its gap and 2 pts lower on the 2 miner indexes will close their gaps.

Assorted charts with gaps

roadrunner

ProofCollection

<< <i>"...I took partial profits and I am still hanging on with a stop for guaranteed profits..."

PC, what do you do if the gap at opening blows past your stop? >>



Futures trade around the clock with only about an hour per day where they don't trade, and it is very rare for the markets to re-open in the afternoon with any kind of significant gap. The other exception is Friday afternoon to Sun night, but in the end I didn't hold that position more than a half a day so it wasn't an issue.

But either way, in your scenario my stop would have triggered and I would have sold much lower than the stop level and perhaps I would have taken a loss. Such is the risk with trading.