Turns out my plan to sell all worked out pretty well, and I did end up buying back in about $10 lower. I don't know if the low is in yet though, so I've got a tight stop in place... but I think downside form here is limited to support which is at 1372.9.
The low could be in, as the predictions can easily be off by 24-48 hours. So this is where it gets fun... deciding whether to get back in or not and the futile effort of trying to nail the bottom.
Also not sure about silver. Silver's low could be in, but support is way down at 28.51. So I'm going to hope for a dip to those levels and pick up some contracts... probably at 28.60 just to be safe. Otherwise I'll wait until a surge starts and jump on board.
I am aware of some of the general negative talk, but I just don't see any of it materializing in this environment. SP500 is finally approaching its long-time 1250 target and may reach it soon, but SP500 is out of energy and needs to consolidate for another week... so I wouldn't expect too much out of stocks either way in the next week, and then we're up to the holiday.
<< <i>I dont think I ever mentioned that the sky is falling. I think you would agree that a 15% correction--that I alluded to--certainly is not "the end". I merely posted a chart with a long term trendline that was reached. I know that you are calling for a $500 run, but I think just as likely would be a $200 drop. My call may even be a bit less extreme than yours. You have been extremely bullish on gold and it has paid off for you--I think. Bull markets are exciting and greatly rewarding. >>
'The sky is falling' might be an over-dramatization, but even a 10-15% dip is pretty significant, and it's a little silly to keep suggesting that a big dip is coming every time gold simply backs off a new high $30-40. Yes, eventually gold will peak and fall and it will probably start with a $30-40 pullback, but to expect one every time is a bit over the top. During the final parabolic move there will probably be months where the candles will extend $200 or more from top to bottom while the net gain is only $50 or less... there will be extreme volatility for sure. I am starting to reconsider my call for a parabolic move ending in Feb/Mar. Gold isn't quite taking off like I have been expecting, which to me means that either the last 2-3 months will be more extreme than I am imagining, or that the move might be delayed a few months. But the important thing is that the blowoff top will be obvious as it will be marked by some HUGE up-moves.
<< <i>And that is precisely why I dont trade gold much. Quite franky it is not much of a "trading" vehicle. Oil, which I mentioned to you via PM, is much more volatile, and has similar, if not better, fundamentals. >>
When I say I trade it I don't know that that's an accurate characterization, as I tend to hold for weeks and months at a time, as I'm trying to play the bigger trend and ignore the minor moves - although I try to use the minor moves to play a little bit and add to the main core position. I'd do crude if I felt more comfortable with it. The thing is that I've been studying and following the metals for so long that I think I've got a good feel for them... I know where to read news and other trading gurus that I listen to. I could do the same with others vehicles, but I think I'll stick with what I know, especially during this parabolic move. Once the parabolic up-move and subsequent collapse and subsequent recovery is over, I'll probably look for something else.
BTW, if copper gets as low as $4.06 tonight or tomorrow, I'd recommend taking a stab and going long for a run to new highs.
Miners getting hit today along with gold. Not unexpected with stock market options expiration occuring Friday. Hitting them the day before happens quite often. European Summit in progress which also may be supplying some headwinds to precious metals. POMO not of much help today.
<< <i>Miners getting hit today along with gold. Not unexpected with stock market options expiration occuring Friday. Hitting them the day before happens quite often. European Summit in progress which also may be supplying some headwinds to precious metals. POMO not of much help today. >>
Yep, right on schedule for the XAU low. I jumped the gun assuming the low was in early. At least so far it appears the GC low in at 1361.6 and SI at 28.35, so it should be all up from here for the next week or so. No further lows predicted until next year, although that doesn't necessarily mean we won't go up for a few days and then continue lower.
Today's move down was NOT a new downtrend, it is a continuation of a daily consolidation which should be complete by Monday. Then it should be ready for another daily trend which I expect could take gold back up to $1400, maybe a tad higher. The only thing that concerns me is that there is an obvious A-B-C correction pattern which would project gold down to 1348.5 that has not completed. So we could very well see that level tonight or Friday, but I don't expect it to stay there or last long if it does. I think the low for Thursday hit as predicted. I do somehow think we'll fail to achieve that target ABC correction target (1348), but it's just a hunch and based mostly on the fact that the low was scheduled for Thursday, not Friday.
On the weekly timeframe, it is more apparent now that the past 8 weeks have also been part of a sideways-to-up (bullish) moving consolidation. This weekly consolidation will need a couple more weeks to get full energized. I'm guessing that this consolidation will end at the next predicted low for gold scheduled sometime Jan 3-7. This also fits in with the usual market-sleepiness that we see the last week or two of the year. The weekly and monthly charts are what really drive the big moves. My weekly RSI is sitting at a nice 57 (overbought is 70), and a couple more weeks will bring it down to the 40's which is where it was before the $350 move that started the last week of July.
Sorry folks, no big move before Xmas, and no big pullback either. I'm looking at a trading range of 1350-1450 for the next two weeks - yes - it may be possible to set new highs in the next few weeks, but it will be merely part of consolidation, and not any big new trend. This is a GREAT spot to add material for the next big move.
With this updated perspective, like I said a few posts ago, we're either looking at a) a shorter blow-off top for the parabolic move - like $1600ish, b) an utterly fantastic move that still takes us to $1900ish in 2 short months, or c) a drawn out parabolic move that takes until June or so to complete. Something in the back of my mind says that gold is going to do its best to disappoint anyone expecting to see $2000 - it will probably even come tantalizingly close in 2011, only just to tease us.
I was under the impression that you were trading on a more frequent basis. Gold is a great "swing" trade--week or two holding period. When i play it I usually sell short puts on dips. If I get put then I sell near the money calls. GLD is very good in that it trades weekly options, so I dont have to wait around for a month until the next expiration. And during times of consolidation, like now, its a great way to enhance return. This is just one advantage paper has over physical. At least until all the paper blows up.
Sold 1/2 ZSL position this morn for 45% gain. Other half should expire tomorrow for a 100% gain.
GLD did trade today under the 50dma, but managed to close above. It may have broken the uptrend line from the July low, but I'll give it a little wiggle room before confirmation. Bands are tightening, but still probably 8-10 trading days from increasing volatility. Momos are neutral so it looks rangebound until end of year--a good opportunity to play my strategy as mentioned above.
I suppose the effect, if any, has already been felt since it was released yesterday. So a 5000 oz silver contract requires about $10,500 instead of $10,000, and a 100 oz Palladium contract requires $5500 instead of about $5000. They didn't touch gold. They upped the requirements on copper as well.
I don't think this is an unusual or unwarranted step. They do adjust these requirements with volatility, and in the past 30 days silver has ranged $4-5, which is HUGE for silver which until recently traded mostly under $18.
And while I mention copper, it never quite hit my $4.06 buy-point from a few posts ago, getting no lower than $4.13. IMO, copper's about to scream... $5 copper, here we come! Not sure if I'll get in on it or not.
Gold has technically been in a correction since November 7th, it may not have a lot longer to go. Silver ended up making a higher high in December along with copper and palladium. Gold was sort of flat. The grains and softs were also a mixed bag. But in general the commodities have been correcting since early November. Gold now in a C leg of an ABC correction or a 5th leg of a running 5 wave correction from October. Either way, the time is running out.
I think plat has the clearest chart of all the PM's and shows it finishing up a handle on a cup formation (the "big dipper") that begain in May. It's now finishing up a 6 week symmetrical consolidating triangle that's nearly out of room. A strong move one way or the other is coming. Up seems the more likely based on the May-November pattern. Cu, Ag, AU showing similar but smaller triangles in December. Platinum still has a ways to go to reach the $2200 mark to reach the neckline of a multi-year cup formation.
$17 BILLION in FED POMO goes down on Monday. Then another $7 BILL on Tuesday. Could give the markets a big boost if the dollar stays down.
With new silver, pall, copper margin requirements in effect for Monday, silver is now the least leveraged comex contract at 13-1 with gold running at 22-1. Copper is 16-1 and Plat 17-1. This is silver's 3rd increase in a month. JPM and partners needs all the help they can get to slow the rout.
Gold, silver, and dollar all opened up sharply tonight. Dollar looks headed to 82 on an IH&S. Nice symmetrical triangle leading in to the head whose apex just retested on the right shoulder.
Gold closing a gap to $1385 that occured on Thursday's open. And there's yet another one from Wednesday's open up to around $1405. Once filled gold might be pushed back down yet again to the lower trading range.
An excellent video on Exeter's plans for their Caspiche project in Chile. I mention this only that I found it to be a superb 30 min presentation on all the factors a company needs to look at from taking a resource/reserve towards production including methods for valuing current and future project values. Any one considering junior mining stocks who are not well-versed in the nuts and bolts of the operation should take a look. I found it very helpful and learned a few things.
Metals continue to grind higher. Still not expecting a lot of action but just general upward movement through this week. The weekly chart is recharging quickly, we could be looking at a resumption of the up trend as early as next week, but my money is still on the first week of Jan.
BTW, Copper appears to have hit a new ALL TIME high today.
RR, what's your take on pre-1933 gold coins? The prices are still pretty low, and I have seen advertisements encouraging people to trade in their premium old-gold for non-premium gold, saying that the premiums will diminish as gold prices rise. What's your take/expectation on this? I guess my expectation is the opposite, that physical gold will start to become pretty scarce and premiums will rise... also that the stores are thinking the same thing, otherwise they wouldn't be trying to buy. My physical holdings are spread pretty evenly among modern US gold and MS61-MS64 Libs, Saints, and Indians, all purchased in 07-09.
Generic mint state gold other than MS64 T.1 gold dollars (lol) have certainly disappointed in 2010. Gold moved up 16% over the Dec 2009 high and generic gold barely got out of the starting gate. Levels are still considerably lower than when they peaked last December. Question now is what will it take to bring them back? Money seemed looser in 2009 as the stock market rallyed hard from March - Dec. 2009. That certainly help generic gold as did the 2009 run in gold from $865 to $1225. Will $1500 or even $1600 be enough to get generics just back to where they were a year ago? I don't really have an answer. If $1400 didn't help MS generic gold much, why should $1500? I figured that as gold went higher and higher that eventually a time would come to move entirely into bullion 100%. But I didn't even think that December 2009 (or even March 2008) could have been that time. Each successive gold bullion peak has brought successively underpeforming moves in MS generics (May 2006, March 2008, Dec 2009). It's not a good trend. The $20's were nicely promoted in fall 2009 along with the $10's....there was no such promotion yet this year. Has the supply of generics finally overwhelmed the numismatic market's ability to swallow them up or have all previous buyers finally gotten tired of the declining performance and moved on to bullion? Did the NGE bankruptcy play a role in 2010's performance by removing a major outlet for generics?
I think MS generic gold will at least match the performance of gold bullion until the next intermediate peak. So for that reason I'm still hanging in there. But there will be some hard questions to answer come next spring to early summer on whether to continue. I originally used generics for the leverage they provided to bullion. Well, that's been declining for 4 yrs now. I can get a lot better leverage & liquidity in gold stocks even if I only have a keystroked entry saying I own those shares. Prices on generics are definitely still low but that's no reason that can't continue to remain low. Most of the smaller denominations/grades peaked back in spring 2006 with the $20's peaking in late 2009. They seem to be partially capped by the performance of the overall rare coin market.
I think there's a large entry of first time buyers into physical gold (but not as large as it will get when the mania hits). It just seems that they are not being driven to the MS generics. I guess that could be a result of an increased amount of modern bullion available, since they've been pumping out AGEs and Buffs for almost 2 decades, not to mention the foreign gold. Either that or the $1400 price tag per ounce has peple convinced that # of ounces is more important than paying premiums. One could argue that today's gold buyers are somewhat educated and know what they are doing in choosing quantity over premium, but as J6P and the other uninformed join the mania, they can be easily steered into premium gold. Maybe. Just a theory. At some point I'm sure that premiums will start to jump/soar, but the timing of that will be impossible to predict.
I only bought the MS generics because the premium wasn't that high over bullion at the time, and really, it still isn't that bad. Of course, I made really big use of the Bing cash back which really helped me get good prices on the Bay.
BTW, DX (USD) on a run up over 81 as I type this, at the same time gold and silver are recovering from the day's earlier dip...
I was surprised at today's miner action but especially in the better junior miners that had been doing well: NSU, ANV, AZK, FRG, NG, UXG, RBY, GRS, EGI, THM, GBG. The seniors really didn't see this pull back. Quite a few of the better juniors closed under the 20 or even the 50 dma's. GDX was repelled away from the 20 dma while GDXJ & GLDX just closed under it. USERX, which often acts a nice overall gold market surrogate is in a 5th leg down heading towards the 50 dma. The 10 and 20 dma are crossing. It looks like it needs a longer 5th leg still to complete the pattern. It too bounced sharply away from the 20 dma today. RSI just broke below 50. And the uptrend line was just penetrated. I like to look at the USERX chart as it often defines the waves far better than some of the other indicies or ETF's. USERX dropping to 18.7 or nearer the bottom BB would be a good short term buy signal. GSR looks to be trying to make turn up from 47 after 5 steps down from mid-November. With expiration next week and 3 TBond auctions (Mon-Wed), I don't see why TPTB wouldn't take a whack at gold by mid-next week.
Very large GDXJ and GDX/SPY volume spikes today. The kind you only typically see at overbought peaks. Could be because of the low holiday trading volume but no matter how you cut it much more interest in mining shares than in the SPY. Also note the huge volume spike in GLD/SLV showing much more interest in the gold side (buying/selling). The volume ramping up on the Gold to Silver ratio over the past week is often indicative of an up turn in the ratio. Lots of negative momentum divergences as well to support that. Looking back to November/Dec 2009 to see if similar holiday GSR or GDX/SPY volume spikes occured and there was nothing even close. Volume could be a sign that the GDX/SPY trend is about to reverse. But I'd feel better if GSR weren't sending a conflicting volume signal.
I was going to post last night, but never did. The short term charts were loaded with energy and released to the downside - but really just for gold - silver hung on a lot better it seemed. So the short term charts will need a day to re-energize, but today's move won't register on the daily and weekly charts - in fact, it may energize them further. So the market is doing as I supsected, a recovery is well underway back to the 1380-1390 consolidation zone. I still think next week is going to be sleepy, but in light of your observations about volume, perhaps the last week of the year will be a scorcher... I'm really not expecting that though.
Butler suggests that the CME is the one giving JPM authorization to carry a huge short position because they are hedged long in otc derivatives. The CFTC doesn't review these positions. Butler has guessed for years that the Chinese might be the ones on the short side of JPM's derivative's contracts.
Chinese pulled off a 25 basis pt rate hike today that will take effect Sunday. The move may already be factored into the PM market price, but there still ought to be a momentum reaction or even just some "sell stop hunting" come Sunday night or Monday. On its own might have been insignificant but now it coincides with PM's expiration coming Tuesday-Wednesday and Mon-Wed TBond auctions, and closing out end of year books.
Pitboss, so far the reaction has been minimal, but that doesn't mean the reaction might not be delayed until tomorrow morning.
My thought is that since the Yuan is tied to the USD, and an increase in China's interest rate strengthen the yuan then by correlation it strengthens the dollar. I haven't read anyone else to agree with this theory, but I think it makes sense. And so far the USD is up... but it's still stuck below 81.5.
1377 is a key support level, and the early dip below this level and quick recovery is a sign of strength. I still expect this week to be sideways to sideways-to-up... perhaps ending the week up around $1400.
Support for tonight at 1371.5, resistance at 1380.2, 1387.9.
The Yuan is long longer tied to the dollar. It started the year at 6.80 against the Dollar. It's currently at 6.65 and manufactors are anticiapating it at 6.25 by May. Matter of fact if you were contracting to make smoething in China in US dollars today it would only valued at 6.25. In reality the Yuan just recently increased against the dollar by about 8% defacto by this move. Many US importers will now be paying in Yuan instead of Dollars for the first time...........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......
Matter of fact if you were contracting to make smoething in China in US dollars today it would only valued at 6.25. In reality the Yuan just recently increased against the dollar by about 8% defacto by this move. Many US importers will now be paying in Yuan instead of Dollars for the first time...........MJ
MJ, I don't know how else that would be interpreted as anything but inflationary. Do you figure that we might be in a currency war before long?
Q: Are You Printing Money? Bernanke: Not Literally
It may not be hard-pegged, but it is loosely pegged. According to Wikipedia:
/The RMB is now moved to a managed floating exchange rate based on market supply and demand with reference to a basket of foreign currencies. The daily trading price of the U.S. dollar against the RMB in the inter-bank foreign exchange market would be allowed to float within a narrow band of 0.3% around the central parity published by the People's Bank of China (PBC); in a later announcement published on May 18, 2007, the band was extended to 0.5%.
So there is a significant limitation on the RMB's ability to move against the USD, which is why I believe that strenght in the RMB would still prop up the USD because of the ability to exchange RMB for USD and vice versa.
It wasn't too long ago it was 7RMB per USD. Now at 6.2, that's quite a difference...
PC- out dated Wiki information. In June this year the official/unofficial peg was lifted. Unfortunately it effects me directly and I feel it.
jmski- Let's put it this way........the importer will either have to pass all or some of the price increase to the end use US customer or take a hit in their margins. In theory it should EITHER put pressure on US equities since profits of US companies that manufactor in China would be hit OR consumer spending in the US should go down. The company(s) I design for are either taking quality out of the product to keep prices static or are directly passing the increase trough in their wholesale or First Cost prices. Some will take a combination approach of the last sentence. You will hear about Chinese products being up 10% or so in about June 2011.
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......
MJ, it's not that I don't believe you, I just haven't seen, and can't find, any news articles to corroborate that. If you or anyone can find anything I'd like to read it. If true, it means the China is no longer manipulating their currency, which has been and AFAIK continues to be a big political issue...
PC- I face it everyday. I just Goggled and it brought up several news stories.......... Here's one that the CSM ran ( it will be the same as hundreds of others)
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 mentioned that last two times that TBT was in the buy zone and I took that opportunity to add to my position. This looks like another good entry point to me and is in a greating buying zone. FWIW
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......
Thanks MJ, don't know how I ever missed that or why I couldn't find it.
Here's an eye-opening video of Trim Tabs CEO on CNBC from Dec 23: Highlights: 1. Admission that feds are using QE to manipulate SM - what will happen when it ends? 2. State, city, and counties and municipal bonds are in SERIOUS trouble 3. People selling stocks to pay bills 4. No source for new jobs or new job growth to take us back to pre-08 levels. 5. Big flows of funds to non-US equities, commodities
I think with todays' action it's pretty clear that we're in for a boring sideways week, but I expect the first week of Jan to be exciting.
No problem PC. The yuan story is still flying under the radar. Rick Santelli made a little faux pas on the yuan today that is common.
Thanks for the video. I missed it.
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>No problem PC. The yuan story is still flying under the radar. Rick Santelli made a little faux pas on the yuan today that is common. >>
Not sure how that flew under the radar like that - it was a HUGE issue.
Anyway, gold, silver, palladium, platinum, and copper have all had significant, convincing moves overnight, so I think the consolidation is over. I'll feel a little more confident when it goes just a bit higher than where it is now, but so far it's looking promising. I think gold's about maxed out for the day though, with resistance at 1410 and support at 1395.7.
<No problem PC. The yuan story is still flying under the radar. Rick Santelli made a little faux pas on the yuan today that is common. >>
Not sure how that flew under the radar like that - it was a HUGE issue>
It's hard for some to get a handle on this. While China will allow the yuan to appreciate against the dollar they will do it on their terms. Therefore, it really doesn't float freely. China will decide on when to pull the plug. However, the reality it already has when factories are quoting a 6.20 exchange rate as THEY expect the government to make the move in the next three months. That's the real world. Interestingly enough the HK dollar is still fixed in lockstep with the dollar.................now back to pm trading
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 am AMAZED by PM stock performance today. I'm starting to get excited, which is usually bad, but my stock portfolio gained back today most of what it lost since gold peaked several weeks ago. And the losses I reference aren't due to trading - I've held them all of these positions for months now - I'm just talking about the normal retracement stocks have had as PMs retraced during the consolidation. Many issues are still lower than what they peaked out at, but I've had other stocks that have sort of made up for it... AUY looking promising (looking for a solid close over 13.06 to indicate big upside potential) and MGH really starting to breakout.
What's REALLY looking good is IAG... a LONG weekly pennant is drawing to its apex... Ready to explode to $30+? RR, what do you think?
IAG has been building a pennant/flag for the past 13 months. And that flag is flying from a fairly steep flagpole that started from $2/share at the Nov 2008 washout bottom. Looks pretty bullish to me. I mentioned this pattern a few months back when it was at $15 or $16/share. Some production issues hampered IAG in the 3rd quarter such as a broken ball mill on their brand new mine and increased costs per ounce. IAG could easily add $8 from here on that flag alone, and up to $12-$16 if that flag is at the halfway point of the current long term move. Funny, that the stockcharts P&F chart is now projecting a $10.5 bearish target for IAG.
I look back at the past few months and see stocks that I had significant positions in but let them get away too early for "fear" of losing a small profit or even taking a small loss on an extended correction. All of these eventually blasted off:
PZG, MDW, KBX, XPL, KGN, THM, NSU, FRG, MFN, GRS, CDY, CDR, NAK, UXG, EGI, BRD, HMY. Need to learn to be better in holding on when the big move is just around the corner. My biggest gaffe was with Rubicon which I held 2000 shares of just 2 wks before it went up 33% in a day on its Red Lake resource update...something I figured was coming eventually. I "saved" 20c per share on that brief downturn ($40) but never bought back in. Missed out on the $2.00 jump (+$4000).
TF's blog has made note of the frequent Tuesday and Wed tops & Friday bottoms in PM's the past several months. One likely reason is that a Tuesday smackdown would show up in that week's COT report. So better to wait until later in the week (Wed-Friday) so your tracks aren't even visible until over a week later. Tomorrow is options expiration for gold, silver, pall, copper. I don't think all the gains of today will hold. But we'll see. Miners were explosive today, especially the juniors (GDXJ and GLDX). Platinum miners PLG, ANO, and others exploded with a vengeance today. Yup....I sold those 2 just two days ago expecting some futher downside. Same old story.
<< <i>Silver's first >$30 close in over 30 yrs. >>
Hate to bust your party, but silver comex futures closed at $30.125 on Dec 6.
Still, a bullish sign to see the second close over $30. And per the video from a few posts back, it's not unreasonable to expect a $2-3 run here to maintain historical trends.
Not per this continuous silver futures chart. Today's day much more bullish than anything in early December. Anyways I got it from TF's blog and figured it was accurate. But I can still party.
meluaufeet, nice silver chart link. Wish I had seen that back on the 24th. Good analysis by that guy with his count of three 14 day consolidations. Called today's rise right on the button.
Junior miner First Majestic Silver now on the NYSE as "AG." I missed this change.
Data providers sometimes have errors, or they calculate the daily candles differently. Here's the hourly chart for the time in question. The dashed line is the end of the trading day, but it's not quite accurate because trading goes until 3:15 I believe and re-opens at 4:00pm (my time - MST). But even if you go by midnight 12-6, in all time zones it is over $30.00.
So the charts are looking great for gold (and SI). We definitively broke out over the 1397 level again, although this time is doesn't look or feel like a false breakout like we had on Dec 14. So we should be ready to go, full steam ahead. Short term charts are exhausted and should need a day to re-energize and would best do this by re-testing 1397 from above, so I expect a move back down tonight at which I will load up to the hilt (corresponds to $30.00 in silver). The daily chart is full of energy, and the weekly chart is also full of energy, but I expect a move up to 1420-1430 to continue to energize the long term charts and not use up long term energy.
Gold support is at 1391, 1399.2, resistance at 1415.4, 1423.6, 1448. Silver support is at 29.617, 29.993, resistance at 30.707, 31.08, 32.17.
I have a mid-term target in palladium at 791, but it (and PL) look ready to go higher, along with copper.
How many of you have use used a French Curve in your trading? Trace me as guilty. I use them in designing shoes as well...............weird actually..................MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Today was another solid move for GC and SI and PA, and gold will be ready for more upside on Thursday. We're within $20 of an ATH for gold, and came within .03 from a 30 year high in SI. Likely targets for gold are 1442 and then beyond that we can expect 1600. Regardless, Tuesday was day 1 of what is likely to be at least a 2 week move, so the next 2 weeks should be good.
Palladium hit a new 10 year high at $796, and I believe it has potential up to $848.
I picked up a handful of IAG calls thanks to Cohodk's observation. KGC also looks to be forming a nice pennant as well.
An interesting article posted today that shows how the GSR responded during market peaking in 1979, 2006, and from 2009-2010. Blows some holes in some commonly held beliefs.
I think I got a little excited about Tues and Wednesday's moves, but now I think they are just part of the consolidation. The "real" action should occur next week as I had discussed a while ago, and for now I think we could see either a retracement to 1397 or a move up to 1420 to close out the week, and the year.
I'm sure the PTB will try their best to close the year out at under the round numbers of $1400 and $30. Let's see how successfull they are. Today got them within shooting distance. For this week the TBond auctions and POMO injections are done. POMO starts up again on Monday with $7-9 BILL. Today was generally a weak attempt at repelling PM's and miners.
The dollar is not cooperating at the moment as it has penetrated a H&S neckline formed over the past 2 weeks. The 80 line was breached and there were 3 attempts back up to it with all of them failing. A move to 79 might be in the cards which would give this rounding top formation a very symmetrical look. That would give the PM's some additional short term momentum. I like the way copper rebounded out of the hit to the metals today. KGC also has a nice symmetrical 1 yr consolidation similar to IAG.
Gold to silver ratio hit the 45's this week and is currently in the low 46's. The trend still seems to be downward. Fwiw I called for a GSR of approx 45 back in the January predictions thread when it was >60. It has traced out a partial ABC pattern since the fall 2008 peak at 93. That A leg took it down around 37 points. A similar drop on this C leg in progress would take it to 37. But there ought to be a few zigs and zags on the way there as so far this leg has been almost a straight shot down.
Still amazed at the action in Xings, Shzs, Chgs, etc. Is there a symbol for Zing, Zang, or KaChing that I can get into?? What's so special about flourite (CaFl), copper, tin and lead that sent SHZS soaring?
Edited to add: Oil pushed back down to conveniently fill a tiny gap left over from Dec. 20th.
After that third touch back to 80 yesterday the dollar was gone. Now fighting to stay above the next support line at the 79.2 level. After this many days down it should be ripe for a rebound. But I wouldn't bet any money on it with so many other bearish factors working against it (end of gold options expiration week, TBond auctions over, POMO starts again on Monday, roll into the new year with Comex gold deliveries now due, etc.)
Peaking at the 45.9 GSR level once again this morning.
XING filled that gap perfectly. Is it now ready to ZING again?
Comments
Knowledge is the enemy of fear
China Sells Long-Term Bonds In October As Foreign Inflows Moderate, Fed Untouchable At Top Of US Paper Holders List
http://inflation.us/jpmorgancoveringsilver.html
JP Morgan Covering Silver Short Position
Turns out my plan to sell all worked out pretty well, and I did end up buying back in about $10 lower. I don't know if the low is in yet though, so I've got a tight stop in place... but I think downside form here is limited to support which is at 1372.9.
The low could be in, as the predictions can easily be off by 24-48 hours. So this is where it gets fun... deciding whether to get back in or not and the futile effort of trying to nail the bottom.
Also not sure about silver. Silver's low could be in, but support is way down at 28.51. So I'm going to hope for a dip to those levels and pick up some contracts... probably at 28.60 just to be safe. Otherwise I'll wait until a surge starts and jump on board.
I am aware of some of the general negative talk, but I just don't see any of it materializing in this environment. SP500 is finally approaching its long-time 1250 target and may reach it soon, but SP500 is out of energy and needs to consolidate for another week... so I wouldn't expect too much out of stocks either way in the next week, and then we're up to the holiday.
<< <i>I dont think I ever mentioned that the sky is falling. I think you would agree that a 15% correction--that I alluded to--certainly is not "the end". I merely posted a chart with a long term trendline that was reached. I know that you are calling for a $500 run, but I think just as likely would be a $200 drop. My call may even be a bit less extreme than yours. You have been extremely bullish on gold and it has paid off for you--I think. Bull markets are exciting and greatly rewarding. >>
'The sky is falling' might be an over-dramatization, but even a 10-15% dip is pretty significant, and it's a little silly to keep suggesting that a big dip is coming every time gold simply backs off a new high $30-40. Yes, eventually gold will peak and fall and it will probably start with a $30-40 pullback, but to expect one every time is a bit over the top.
During the final parabolic move there will probably be months where the candles will extend $200 or more from top to bottom while the net gain is only $50 or less... there will be extreme volatility for sure.
I am starting to reconsider my call for a parabolic move ending in Feb/Mar. Gold isn't quite taking off like I have been expecting, which to me means that either the last 2-3 months will be more extreme than I am imagining, or that the move might be delayed a few months. But the important thing is that the blowoff top will be obvious as it will be marked by some HUGE up-moves.
<< <i>And that is precisely why I dont trade gold much. Quite franky it is not much of a "trading" vehicle. Oil, which I mentioned to you via PM, is much more volatile, and has similar, if not better, fundamentals. >>
When I say I trade it I don't know that that's an accurate characterization, as I tend to hold for weeks and months at a time, as I'm trying to play the bigger trend and ignore the minor moves - although I try to use the minor moves to play a little bit and add to the main core position.
I'd do crude if I felt more comfortable with it. The thing is that I've been studying and following the metals for so long that I think I've got a good feel for them... I know where to read news and other trading gurus that I listen to. I could do the same with others vehicles, but I think I'll stick with what I know, especially during this parabolic move. Once the parabolic up-move and subsequent collapse and subsequent recovery is over, I'll probably look for something else.
BTW, if copper gets as low as $4.06 tonight or tomorrow, I'd recommend taking a stab and going long for a run to new highs.
roadrunner
<< <i>Miners getting hit today along with gold. Not unexpected with stock market options expiration occuring Friday. Hitting them the day before happens quite often. European Summit in progress which also may be supplying some headwinds to precious metals. POMO not of much help today. >>
Yep, right on schedule for the XAU low. I jumped the gun assuming the low was in early. At least so far it appears the GC low in at 1361.6 and SI at 28.35, so it should be all up from here for the next week or so. No further lows predicted until next year, although that doesn't necessarily mean we won't go up for a few days and then continue lower.
On the weekly timeframe, it is more apparent now that the past 8 weeks have also been part of a sideways-to-up (bullish) moving consolidation. This weekly consolidation will need a couple more weeks to get full energized. I'm guessing that this consolidation will end at the next predicted low for gold scheduled sometime Jan 3-7. This also fits in with the usual market-sleepiness that we see the last week or two of the year. The weekly and monthly charts are what really drive the big moves. My weekly RSI is sitting at a nice 57 (overbought is 70), and a couple more weeks will bring it down to the 40's which is where it was before the $350 move that started the last week of July.
Sorry folks, no big move before Xmas, and no big pullback either. I'm looking at a trading range of 1350-1450 for the next two weeks - yes - it may be possible to set new highs in the next few weeks, but it will be merely part of consolidation, and not any big new trend. This is a GREAT spot to add material for the next big move.
With this updated perspective, like I said a few posts ago, we're either looking at a) a shorter blow-off top for the parabolic move - like $1600ish, b) an utterly fantastic move that still takes us to $1900ish in 2 short months, or c) a drawn out parabolic move that takes until June or so to complete. Something in the back of my mind says that gold is going to do its best to disappoint anyone expecting to see $2000 - it will probably even come tantalizingly close in 2011, only just to tease us.
And better advice I could never give.
I was under the impression that you were trading on a more frequent basis. Gold is a great "swing" trade--week or two holding period. When i play it I usually sell short puts on dips. If I get put then I sell near the money calls. GLD is very good in that it trades weekly options, so I dont have to wait around for a month until the next expiration. And during times of consolidation, like now, its a great way to enhance return. This is just one advantage paper has over physical. At least until all the paper blows up.
Sold 1/2 ZSL position this morn for 45% gain. Other half should expire tomorrow for a 100% gain.
GLD did trade today under the 50dma, but managed to close above. It may have broken the uptrend line from the July low, but I'll give it a little wiggle room before confirmation. Bands are tightening, but still probably 8-10 trading days from increasing volatility. Momos are neutral so it looks rangebound until end of year--a good opportunity to play my strategy as mentioned above.
Knowledge is the enemy of fear
Re: PM News articles, Analysis and Commentaries
Postby silvermotor on Fri Dec 17, 2010 12:40 am
After the close of comex trading, the crooked CME raised the limits on silver again as obviously too much physical silver is being demanded globally.
Linky_2
SM
I suppose the effect, if any, has already been felt since it was released yesterday. So a 5000 oz silver contract requires about $10,500 instead of $10,000, and a 100 oz Palladium contract requires $5500 instead of about $5000. They didn't touch gold. They upped the requirements on copper as well.
I don't think this is an unusual or unwarranted step. They do adjust these requirements with volatility, and in the past 30 days silver has ranged $4-5, which is HUGE for silver which until recently traded mostly under $18.
And while I mention copper, it never quite hit my $4.06 buy-point from a few posts ago, getting no lower than $4.13. IMO, copper's about to scream... $5 copper, here we come! Not sure if I'll get in on it or not.
I think plat has the clearest chart of all the PM's and shows it finishing up a handle on a cup formation (the "big dipper") that begain in May. It's now finishing up a 6 week symmetrical consolidating triangle that's nearly out of room. A strong move one way or the other is coming. Up seems the more likely based on the May-November pattern. Cu, Ag, AU showing similar but smaller triangles in December. Platinum still has a ways to go to reach the $2200 mark to reach the neckline of a multi-year cup formation.
Platinum chart
$17 BILLION in FED POMO goes down on Monday. Then another $7 BILL on Tuesday. Could give the markets a big boost if the dollar stays down.
With new silver, pall, copper margin requirements in effect for Monday, silver is now the least leveraged comex contract at 13-1 with gold running at 22-1. Copper is 16-1 and Plat 17-1.
This is silver's 3rd increase in a month. JPM and partners needs all the help they can get to slow the rout.
roadrunner
Gold closing a gap to $1385 that occured on Thursday's open. And there's yet another one from Wednesday's open up to around $1405. Once filled gold might be pushed back down yet again to the lower trading range.
dollar index
An excellent video on Exeter's plans for their Caspiche project in Chile. I mention this only that I found it to be a superb 30 min presentation on all the factors a company needs to look at from taking a resource/reserve towards production including methods for valuing current and future project values. Any one considering junior mining stocks who are not well-versed in the nuts and bolts of the operation should take a look. I found it very helpful and learned a few things.
XRA's project plans
roadrunner
BTW, Copper appears to have hit a new ALL TIME high today.
I think MS generic gold will at least match the performance of gold bullion until the next intermediate peak. So for that reason I'm still hanging in there. But there will be some hard questions to answer come next spring to early summer on whether to continue. I originally used generics for the leverage they provided to bullion. Well, that's been declining for 4 yrs now. I can get a lot better leverage & liquidity in gold stocks even if I only have a keystroked entry saying I own those shares. Prices on generics are definitely still low but that's no reason that can't continue to remain low. Most of the smaller denominations/grades peaked back in spring 2006 with the $20's peaking in late 2009. They seem to be partially capped by the performance of the overall rare coin market.
roadrunner
I only bought the MS generics because the premium wasn't that high over bullion at the time, and really, it still isn't that bad. Of course, I made really big use of the Bing cash back which really helped me get good prices on the Bay.
BTW, DX (USD) on a run up over 81 as I type this, at the same time gold and silver are recovering from the day's earlier dip...
USERX chart
Some interesting long term charts here such as 15 yr Newmont cup and handle, FCX, Copper 5 yr, etc. Worth a look.
Xiphos trading
roadrunner
roadrunner
Merry Xmas to all!
Butler suggests that the CME is the one giving JPM authorization to carry a huge short position because they are hedged long in otc derivatives. The CFTC doesn't review these positions. Butler has guessed for years that the Chinese might be the ones on the short side of JPM's derivative's contracts.
roadrunner
Chinese pulled off a 25 basis pt rate hike today that will take effect Sunday. The move may already be factored into the PM market price, but there still ought to be a momentum reaction or even just some "sell stop hunting" come Sunday night or Monday. On its own might have been insignificant but now it coincides with PM's expiration coming Tuesday-Wednesday and Mon-Wed TBond auctions, and closing out end of year books.
roadrunner
What kind of reaction should this bring?
My thought is that since the Yuan is tied to the USD, and an increase in China's interest rate strengthen the yuan then by correlation it strengthens the dollar. I haven't read anyone else to agree with this theory, but I think it makes sense. And so far the USD is up... but it's still stuck below 81.5.
1377 is a key support level, and the early dip below this level and quick recovery is a sign of strength. I still expect this week to be sideways to sideways-to-up... perhaps ending the week up around $1400.
Support for tonight at 1371.5, resistance at 1380.2, 1387.9.
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......
MJ, I don't know how else that would be interpreted as anything but inflationary. Do you figure that we might be in a currency war before long?
I knew it would happen.
/The RMB is now moved to a managed floating exchange rate based on market supply and demand with reference to a basket of foreign currencies. The daily trading price of the U.S. dollar against the RMB in the inter-bank foreign exchange market would be allowed to float within a narrow band of 0.3% around the central parity published by the People's Bank of China (PBC); in a later announcement published on May 18, 2007, the band was extended to 0.5%.
So there is a significant limitation on the RMB's ability to move against the USD, which is why I believe that strenght in the RMB would still prop up the USD because of the ability to exchange RMB for USD and vice versa.
It wasn't too long ago it was 7RMB per USD. Now at 6.2, that's quite a difference...
jmski- Let's put it this way........the importer will either have to pass all or some of the price increase to the end use US customer or take a hit in their margins. In theory it should EITHER put pressure on US equities since profits of US companies that manufactor in China would be hit OR consumer spending in the US should go down. The company(s) I design for are either taking quality out of the product to keep prices static or are directly passing the increase trough in their wholesale or First Cost prices. Some will take a combination approach of the last sentence. You will hear about Chinese products being up 10% or so in about June 2011.
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......
Yuan
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......
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......
Here's an eye-opening video of Trim Tabs CEO on CNBC from Dec 23:
Highlights:
1. Admission that feds are using QE to manipulate SM - what will happen when it ends?
2. State, city, and counties and municipal bonds are in SERIOUS trouble
3. People selling stocks to pay bills
4. No source for new jobs or new job growth to take us back to pre-08 levels.
5. Big flows of funds to non-US equities, commodities
I think with todays' action it's pretty clear that we're in for a boring sideways week, but I expect the first week of Jan to be exciting.
Palladium is on the move however...
Thanks for the video. I missed it.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>No problem PC. The yuan story is still flying under the radar. Rick Santelli made a little faux pas on the yuan today that is common. >>
Not sure how that flew under the radar like that - it was a HUGE issue.
Anyway, gold, silver, palladium, platinum, and copper have all had significant, convincing moves overnight, so I think the consolidation is over. I'll feel a little more confident when it goes just a bit higher than where it is now, but so far it's looking promising. I think gold's about maxed out for the day though, with resistance at 1410 and support at 1395.7.
Not sure how that flew under the radar like that - it was a HUGE issue>
It's hard for some to get a handle on this. While China will allow the yuan to appreciate against the dollar they will do it on their terms. Therefore, it really doesn't float freely. China will decide on when to pull the plug. However, the reality it already has when factories are quoting a 6.20 exchange rate as THEY expect the government to make the move in the next three months. That's the real world. Interestingly enough the HK dollar is still fixed in lockstep with the dollar.................now back to pm trading
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......
What's REALLY looking good is IAG... a LONG weekly pennant is drawing to its apex... Ready to explode to $30+? RR, what do you think?
The Silver Log (12.24.2010) -15th Day Breakout (Youtube/endlessmountain)
IAG has been building a pennant/flag for the past 13 months. And that flag is flying from a fairly steep flagpole that started from $2/share at the Nov 2008 washout bottom. Looks pretty bullish to me. I mentioned this pattern a few months back when it was at $15 or $16/share. Some production issues hampered IAG in the 3rd quarter such as a broken ball mill on their brand new mine and increased costs per ounce. IAG could easily add $8 from here on that flag alone, and up to $12-$16 if that flag is at the halfway point of the current long term move. Funny, that the stockcharts P&F chart is now projecting a $10.5 bearish target for IAG.
I look back at the past few months and see stocks that I had significant positions in but let them get away too early for "fear" of losing a small profit or even taking a small loss on an extended correction. All of these eventually blasted off:
PZG, MDW, KBX, XPL, KGN, THM, NSU, FRG, MFN, GRS, CDY, CDR, NAK, UXG, EGI, BRD, HMY. Need to learn to be better in holding on when the big move is just around the corner. My biggest gaffe was with Rubicon which I held 2000 shares of just 2 wks before it went up 33% in a day on its Red Lake resource update...something I figured was coming eventually. I "saved" 20c per share on that brief downturn ($40) but never bought back in. Missed out on the $2.00 jump (+$4000).
TF's blog has made note of the frequent Tuesday and Wed tops & Friday bottoms in PM's the past several months. One likely reason is that a Tuesday smackdown would show up in that week's COT report. So better to wait until later in the week (Wed-Friday) so your tracks aren't even visible until over a week later. Tomorrow is options expiration for gold, silver, pall, copper. I don't think all the gains of today will hold. But we'll see. Miners were explosive today, especially the juniors (GDXJ and GLDX). Platinum miners PLG, ANO, and others exploded with a vengeance today. Yup....I sold those 2 just two days ago expecting some futher downside. Same old story.
roadrunner
<< <i>Silver's first >$30 close in over 30 yrs.
Hate to bust your party, but silver comex futures closed at $30.125 on Dec 6.
Still, a bullish sign to see the second close over $30. And per the video from a few posts back, it's not unreasonable to expect a $2-3 run here to maintain historical trends.
Not per this continuous silver futures chart. Today's day much more bullish than anything in early December. Anyways I got it from TF's blog and figured it was accurate. But I can still party.
meluaufeet, nice silver chart link. Wish I had seen that back on the 24th. Good analysis by that guy with his count of three 14 day consolidations. Called today's rise right on the button.
Junior miner First Majestic Silver now on the NYSE as "AG." I missed this change.
roadrunner
So the charts are looking great for gold (and SI). We definitively broke out over the 1397 level again, although this time is doesn't look or feel like a false breakout like we had on Dec 14. So we should be ready to go, full steam ahead. Short term charts are exhausted and should need a day to re-energize and would best do this by re-testing 1397 from above, so I expect a move back down tonight at which I will load up to the hilt (corresponds to $30.00 in silver). The daily chart is full of energy, and the weekly chart is also full of energy, but I expect a move up to 1420-1430 to continue to energize the long term charts and not use up long term energy.
Gold support is at 1391, 1399.2, resistance at 1415.4, 1423.6, 1448.
Silver support is at 29.617, 29.993, resistance at 30.707, 31.08, 32.17.
I have a mid-term target in palladium at 791, but it (and PL) look ready to go higher, along with copper.
Knowledge is the enemy of fear
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>FYI:
The Silver Log (12.24.2010) -15th Day Breakout (Youtube/endlessmountain) >>
Nice!!!!!!! Where were you on Monday?
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......
Palladium hit a new 10 year high at $796, and I believe it has potential up to $848.
I picked up a handful of IAG calls thanks to Cohodk's observation. KGC also looks to be forming a nice pennant as well.
thanks
<< <i>how far out on the iag options i like feb at the money not sure if its a enough time your thoughts
thanks >>
Personally I would go out at least 6 months. But I most likely would not hold until expiration. And I may utilize a short put strategy.
Knowledge is the enemy of fear
An interesting article posted today that shows how the GSR responded during market peaking in 1979, 2006, and from 2009-2010. Blows some holes in some commonly held beliefs.
roadrunner
The dollar is not cooperating at the moment as it has penetrated a H&S neckline formed over the past 2 weeks. The 80 line was breached and there were 3 attempts back up to it with all of them failing. A move to 79 might be in the cards which would give this rounding top formation a very symmetrical look. That would give the PM's some additional short term momentum. I like the way copper rebounded out of the hit to the metals today. KGC also has a nice symmetrical 1 yr consolidation similar to IAG.
USD chart
Gold to silver ratio hit the 45's this week and is currently in the low 46's. The trend still seems to be downward. Fwiw I called for a GSR of approx 45 back in the January predictions thread when it was >60. It has traced out a partial ABC pattern since the fall 2008 peak at 93. That A leg took it down around 37 points. A similar drop on this C leg in progress would take it to 37. But there ought to be a few zigs and zags on the way there as so far this leg has been almost a straight shot down.
Still amazed at the action in Xings, Shzs, Chgs, etc. Is there a symbol for Zing, Zang, or KaChing that I can get into?? What's so special about flourite (CaFl), copper, tin and lead that sent SHZS soaring?
Edited to add: Oil pushed back down to conveniently fill a tiny gap left over from Dec. 20th.
roadrunner
Peaking at the 45.9 GSR level once again this morning.
XING filled that gap perfectly. Is it now ready to ZING again?
roadrunner