***MARCH 2011 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
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This is a continuation of the monthly thread for discussing relatively short or near term movements in precious metals and related securities.
It's getting interesting... gold and silver at new highs today. Will post more later. Just wanted to start the March thread.
It's getting interesting... gold and silver at new highs today. Will post more later. Just wanted to start the March thread.
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Today GDX powered past its 35-39 back day prices. USERX and GDXJ will go past theirs tomorrow if they hold steady about where they are (ie USERX > 19.00). These are very bullish signals for the gold sector in general. Once that 35-39 day signal flips it usually means a multi-month run is in store. In looking back to the July-Sept breakout the current pattern is nearly identical. Right now we are at a similar point to the last week of August 2010. When USERX and GDX take out their former highs (20.5 / 64) it will be the final confirmation.
Had been sitting on Brigus (BRD) for the past couple of weeks waiting for it to bottom and turn around. Continued to add towards the bottom. Today's +15% move was a nice reward for patience....+23% in the last 3 days. After missing major moves in MDW, CGR, TLR, KBX and others over the past weeks to months, it's nice to finally hang in there for once. MGN finally started to move with the rest of the silvers today so that was a nice gain. I totally missed the GPL run. And my position in KGC is sitting at the starting gate waiting for a tow....lol.
Anyone stepping up to buy the widow-maker? (ie ZSL). GSR of 40 or even 39 are within striking distance.
Gold chart - August vs. Feb
The above link is well analyzed and shows the similarity in the last 2 gold consolidations. These Rambus charts are superb.
Gold chart dissected - last 2 yrs - nice reference
Silver chart dissection - 3 yrs
GDX vs Gold - breaking the diamond - Rambus
roadrunner
Rambus charting
NY Times article on silver manipulation claims
roadrunner
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Update for Wed.
Maybe time to retire this thread. Not much action these days. Market is getting scary though. Seems all is hanging on the coiling SPY and oil prices.
SPY is getting ready to breakout. Whichever way will probably determine how PM's go. Miners looking terrible. 3 perfect red soldiers in the CDNX.
It's done that twice in the past 18 weeks...but only for 3 days and then would turn upwards. Unfortunately it looks like momentum has been waning since
November. And the CDNX is still a long ways above the 200 dma (can also use the new GLDX etf for an approximation of the action in CDNX).
Interesting that the bullish % GDM (arca miner index) is at 63% and steadily rising. By itself it gives a very bullish picture. Hmmm.........
roadrunner
Todays' McLellan newsletter didn't have a lot of updates for predicted highs and lows - evidently with everything moving in relatively straight lines the signals don't get generated as much. Regardless, lows in stocks and metals are predicted for Mar 23ish, whatever that means.
We're still - still - at a volatile position where metals really could go either way, and I expect a resolution any day now. So far it has been a "high and tight" consolidation for gold, but Nichols warns that these situations can and have resulted in sudden and abrupt corrections... but the target for such a correction is only around 1392 (38.2%), so not really that significant.
Mining stocks took a hit today and recently which also doesn't bode well for metals near-term, but anything can happen.
Overall, it seems the markets are very much event-driven right now and at the moment it's holding markets in-place until the middle east situation resolves one way or the other. I'm fixing to take a stab at a crude oil position tonight as I have a hunch about Thurs/Fri that I'm going to play. I think the upside gain is MUCH higher than the downside risk at the moment...
But plat, pall, and the miners I'd say have more downside risk right now. It would only take a slight puff of wind to push the miners down 5-10% from here.
They are more closely linked to the SPY and sentiment/events so they have much risk right now. They aren't money. They also have much geo-political risk, not
to mention rising costs associated with oil and other inflation based materials and supplies. Rangold got pummeled yesterday on news of nationalization some
mining operation in the Ivory Coast. I think it was copper and coal. That's not great news for an Ivory Coast gold miner. Australia, Peru and Argentina have
talked of raising royalty taxes. One of CDE's flagship mines (35% of profits) is in the "stable" nation of Bolivia. Poor Goldenstar (GSS) had some of its mines underwater
for part of 2010 and lost $7 MILL with gold > $1300. That seems impossible but there you have it. Large US silver miner Hecla recently filed a great quarterly report and
seemed to have confirmed a resolution on a decades long-standing CERCLA cleanup issue. It seemed like good news. That is until a few days later when one of Warren Buffet's
railroad stocks decided to bring up a lawsuit/claim at one of their isolated railway yards involving Hecla. Down went the stock yet again. These are all risks that bullion in your hand doesn't have to worry about.
If one looks at all the miners and commodity stocks, they are all following downtrends right now: silver, gold, plat, pall, ags, copper, steel, oil, gas, uraniums, rare earths
strategic metals. They've all sucked wind, some for 2 months now. And gold has been trending with them for the most part. It's why it can't break away from here. At least not yet. The uraniums are still in a fairly long protracted downtrend. I'd like to see those end before giving gold the go-ahead. Gold and silver could effectively tread water from another 2-3 weeks, while miners drift lower and lower. It's happened so often in the past it's becoming old hat. This time though silver doesn't fall back like in the old days. It's the leader of the pack for now. I'd look at CDNX to give me the most important trending action at what's coming at the PM's. That's one index that the banksters don't manipulate directly. I am surprised that the bullish percentage GDM is now up to 63% (% of miners above their 50 dma). I don't get that feeling looking at the charts.
IL,OIL,UNG,$BPGDM|B|D20">CDNX and friends
<< <i>Good points RR. I picked up some NEM today, probably a bit over-eager on that one but just a small position. Looking to add more on a further dip. >>
Probably not a bad move to start layering in on Newmont. They really hammered that stock on slightly lowered 2011 production numbers. I had picked up some over the past couple of weeks on dips but got scared during yesterday's dipping process and bailed on Newmont and other weak sister seniors. After looking at the totality of the mining sector and commods as I discussed above, I want to give things some more time to settle. Let's see if some of those miners come back a ways like CDNX suggests. I had a pretty sizeable postion in Brigus (BRD) that I did well with after selling off yesterday, though would have done a lot better had I sold at the peak last week. I'll be layering that one back in as it could potentially drop another 5-8% following today's dip. Will also watch BRD, CGR, TLR, RBY, NXG, NSU, ANO, PLG, MGN, and similar juniors for a decent entry point. How low will they go? Guess I'll continue to use CDNX and GLDX for clues. Was waiting on the ANO dip when it was around 1.20 and sure enough it blew down to 1.10 yesterday...but totally missed it. But it will be back, and probably lower. Most of those long tails do end up being reached again. That 15.0 tail on Kinross will probably get hit again. When I saw that Northern Dynasty (NAK), a blockbuster junior that tripled in the previous 8 months finally turned tail today in a 3rd leg down that blew through the 50 dma. It's still 55% above the 200 dma but it was 125% above it at the peak. It could easilly drop another 15%. Another one to watch for clues to the juniors. This stock probably has the 3rd largest gold reserves of all gold miners. While less than 1/30th of the market cap of Goldcorp, it still has to get permitted and then build a mine. A process that will take 5 yrs or so.
Would like to get some positions in the silvers, but none have really pulled back anything significant. So I just watch. Picking safe jurisdictions is getting very important as it seems
miners are in bifurcation mode. The leaders (gold stickers) keep going up, while the green beans and no beaners sit there or go lower.
If I had to pick a direction for gold and/or the miners right now I'd say further downward consolidation only because copper still looks headed lower and the dollar is rebounding at the moment. We're in the middle of a TBond week as well. Next week is miners options expiration. But a lot of time before getting there. And in the back of my mind I hear Bob Hoye whispering that the end to this frothy 2-1/2 yr speculative period is coming to an end.
roadrunner
This could be part of the correction to wipe out all the froth that began in July. Miners actually peaked back in October/November/December though a number of them kept going higher in concert with rising gold and silver bullion prices. I could easily see another 10-15% in the average miners. AEM for instance now seems pointed at 60 to hit the bottom of the channel. That would be another 10% down. But I can also say that GDX and GDXJ are now adding deeper right shoulders to their bulish IH&S patterns. Doesn't change my mind about $40 silver this year. But now maybe it won't happen by June, never mind March.
roadrunner
So putting together what I'm seeing in multiple places, if I had to guess, I'd say we're looking at a decline over the next week and then potentially the start of the next big leg up to start mid-next-week.
Tomorrow is not POMO covered so the market is on its own. Also a minor FOMC meeting to add to the confusion.
Normally next week would be a 2-5-7 yr bond auction week but they moved it back to the last week of the month. Makes next week a freebie for the POMO.
roadrunner
RR, you watch those stocks closer than I do - if you think of it - let me know if/when you think uranium has bottomed.
Been looking to add some DNN, URZ, URG or CCJ on a dip and this was what the doctor ordered. The drop may not be over but those gaps won't remain open for
more than weeks, ok maybe months. I didn't get what I thought I should have even though I had buys on DNN for example every 10c from $2.45 down. Only the $2.45 got
filled and not the $2.35. I missed the $2.25 by a cent but figured that the flash traders got all the easy money and left nothing for me. Same story on URG.
Those long candle tails may get revisited this week and that could be as good as it gets. Stick to producers or near producers/top explorers that have significant reserves in the ground. Real question is how long uranium will be bottom feeding for. It was due for a final hard knock but this really did it. It reminds me of copper miner Taseko that had its permit denied on an upcoming flagship mine back in fall of 2010. It got whacked for 33% in one day. It took a few weeks to meander about another 10% below the first long "tail" low.
Nice late night smackdown in progress in PM's. Plat now looks headed back to retest the large summer cup neckline at around $1700-$1725. I mentioned back in December that wheat was soon headed back to $650 to do some gap-filling. I just didn't expect it to go to almost $900 first before turning around. Now it's got that gap target in mind at only $50 away. If the equity markets and commodities needed something to complete the tipping process, Japan was certainly a good reason. But tonight's after market action looks more like bankster
stop-sweeping than anything else.
roadrunner
The pullback in gold and silver came as expected. I think the key level here is 1390-1392 again... if we can continue to close above this level this is probably the bottom for the near-term, otherwise a steeper pullback may be necessary. Judging only by the severety of today's pullback, I'd kind of be surprised if it doesn't continue lower from here, still not sure how to trade this.
further after yesterday's nibbling. If any further bad news rolls out on the nuke plants, these stocks can go a lot lower still following their dramatic runups over the past several months. DNN is still double July's levels. Trying to call a bottom in this environment is nuts. Best play is to buy a deep dip and immediately sell off on the day's rebound. That would have worked well yesterday and today.
The CDNX was giving the best clues among the gold indicies. When it closed yesterday at Friday's low, that was a bearish signal as investors were tossing out the least liquid of miners. Also the S&P's action on Friday and Monday exceeding the low of Feb 24th and then not getting back to the 50 dma yesterday was a glaring warning. Flash crash or extended correction? Bob Hoye's "all one market" blowout that he predicted back on Dec. 31st (occuring in Feb-March) possibly seems to have come about. It just took a series of catastrophes to ignite the event. If it wasn't these unfortunate events, it would have been something else such as the middle east or northern Africa. If Hoye is correct this is only the beginning on an extended cleansing period. He's only had 5 similar warnings over the past 37 yrs: 11/73, 11/79, 5/87, 2/98, 4/04, 5/06, 12/10. Interesting that the peaks of 2000 and 2007 weren't frothy enough and don't show up in his analysis. Note that during the 11/73 washout that even though gold got hit initially, it rebounded to a new all time high by the end of the year.
Hoye on frothiness using MPF
Wheat gap from late November now filled from today's low of 662. Platinum hit the projected $1700 mark. But it doesn't necessarily mean things are done.
Today's move down in the metals felt like the middle and typically most impulsive leg. The first leg took it down about $40, this last one about $50. Usually there's a 3rd wave in there
to finish things off. Should be another $40 ending around $1360. The action of the dollar and TBonds today apparently showed they aren't the safe haven they once were.
roadrunner
One wildcard I can is perhaps some good news coming out about the situation in Japan, and I can see a case for gold going either way.
By the way, here is a compelling prediction for a US-area earthquake on Mar 19... Of course, size and location are unknown, but interesting none-the-less. This guy has been accurate in his previous predictions...
<< <i>By the way, here is a compelling prediction for a US-area earthquake on Mar 19... Of course, size and location are unknown, but interesting none-the-less. This guy has been accurate in his previous predictions... >>
How about this...about a month after a the last MAJOR Japanese earthquake in 1707 Mt. Fuji blew up!!!
And....a large magnitude 6.2 quake was centered about 4.5 miles from the caldera of Mt. Fuji and was only 6 miles deep on Tuesday. M6.2 quake under Mt. Fuji
Quake was centered almost exactly where this picture was taken.
Knowledge is the enemy of fear
RR, you seem to pay more attention to physical prices. I noticed via the PCGS price guide that prices on MS63, MS64, MS65 Morgan and Peace dollars have started to move, as well as Pre-1933 gold premiums. I see this as VERY bullish as to me, it indicates a potential physical supply shortage as I theorize that investors will move to premium material as bullion material becomes hard to come by. What are you seeing RR?
Good article: Secret Iran Gold Holdings Leaked: Tehran Holds Same Amount Of Gold As United Kingdom, And Is Buying More
I've been seeing daily missives from Nichols and over the past few weeks he seems to be all over map hedging his bets. Last week's low for gold and silver did seem like a short term low showing an uptrend. But there's still just as much opportunity to revisit the $1365 level again as well. Miners got hit so hard mid-last week that I can't see them going any lower than that unless the S&P craters another 5-10%. In looking at the GDX hourly chart it looks to be rounding over and losing momentum. I can see it dropping 4% to fill the gap from Friday's bounce at 55.7. Similarly, gold has a gap remaining at $1403. Note that gold had no problem moving down quickly this morning to close that gap at $1419 from Sunday night's open. Silver has hourly gaps down at $35.10 and $34.40. Has broken out above it's 2 week flag but could easily pull back to test the flag one last time. That could fill those gaps. And if there's ever a "best" time to do it, it would be during options expiration week.
We're running out of time for more bullish action this week with options expiration looming on Monday. That means settling action beginning on Thursday or Friday at the latest. The heavy POMO days may still give the S&P a lift during this period, though today's POMO action was of no help to push the markets higher. Then 2-5-7 bond auctions Monday-Wednesday. Since gold is still consolidating I don't see it getting too far by Monday. But, it just might hold it's own if determined to rise. Gold and the HUI at least for now seem to be mapping out some decent looking IH&S formations.
I find it interesting that FXE:FXY liquidity ratio is showing a broadening top over the past 2 months. This would go hand in hand with more short term volatility to come. The rapid bounce back from last week's lows has set this up. The volume on the bounce has been very unimpressive. Would not be surprised to see this ratio crash right back the other way and take stocks with it. There are plenty of large recent gaps that could be filled. But on the long term chart FXE:FXY seems to have turned upwards once again after a 2 yr correction. S&P has bounced back to touch the 50 dma but on lowering volume. But....in looking at the VIX and GSR volatility ratios, they almost seem like they've turned and don't want to continue upwards.
In looking at the 10yr/2yr TBond rate ratio it has generally shown trend changes in gold on the order of several weeks at a time. It has also generally risen over the past several years along with gold. So far the ratio has cycled 6 times since the Nov gold peak while forming a pretty consistent downtrend channel. Last week it reached the top of that channel after meandering upwards for 4-1/2 wks. It now appears headed back down after failing to stay above the 50 and 200 dmas. The crossover of the PPO tends to support that as well. In a nutshell it probably means more rangebound action for gold.
While gold has moved up slightly against the USDollar, it's action vs. the Euro or Bonds is weak. The action in copper and base metals still looks to be weak and would only serve to pull gold down. Oil has gaps at 83 and 94. At the first sign of the MENA situation easing, 94 should be an obvious target and would probably drag gold down with it. I get the feeling that this strong rebound from last week's catastrophic lows is a sort of fakeout serving to give the idea that things are headed up into another bull wave continuation. It could just be a retouch of 20/50 dma's and S/R lines. In looking at a lot of different things nothing stands out other than a few things mentioned above. Tough market to figure out while it's consolidating.
10yr to 2 yr TBond ratio
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'm not a big MACdaddy indicator kind of guy. However, the MACD is turning up on GDX/GDXJ and about to cross so I'm at least paying attention.
Q-------what do like better-----------GDX or GDXJ?
Me-------I like GDX a little more. I'm curious on your take. TIA.
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......
My NEM purchases looking really good right now... of course, all minig issues seem to be doing well.
I gave up trying to anticipate silver. It's been so strong since August that it does what it wants, when it wants. Gold is at least a bit more predictable. If gold breaks through
$1450 would expect $1500-$1520 on this leg.
MJ, I think I would prefer GDXJ at the moment. For one it has a slightly greater silver component. 50% of GDX comes from its top 6: ABX, NEM, GG, SLW, KGC, AU. 34% is from the
top 3 with Barrick at close to 15%. And even though NEM and KGC are currently moving pretty well after being hammered recently, they have a number of structural issues. KGC is still wallowing from the Red Back takeover where the estimated cost of building a new flagship mine has increased dramatically...and probably still increasing. It's Kupol mine is Russia is not exactly in the safest of jurisdictions. But I do like trading this stock at times. NEM has issues with losing reserves, flat production in 2011, reduced ore grades, and increasing costs. ABX is an institutional favorite so that is helpful right now. But I'm still not convinced they didn't paper over more of their hedges. GG is firing on all cylinders. And I've never been a huge fan of South African miners such as AU. I think the negatives outweigh the positives and I'd go with GDXJ which is more nimble such that no one miner is weighted more than 5%. The majors are mostly institutional owned (60-85%) while the juniors have a smaller institutional ownership. Some of the online sites haven't updated the holdings on these 2 in quite some time so go to the Van Eck website to check them. For example GDXJ is radically different than what Yahoo Finance shows. GDXJ seems to be more active in cleaning house and readjusting percentages than GDX does. But GDX is mimicking the HUI/GDM so that's expected. GDX does carry about a dozen small junior golds but the percentages are small enough as to be unimportant. For instance Sinclair's TRE is in the GDX.
This chart shows since inception GDXJ has done better during the strong upmoves in gold. When things are consolidating as they have been since about November then they are
about equal or slightly in favor of GDX. Seems like once this pause ends I'd put my money on GDXJ. It also carries a slighlty higher silver component than GDX. I would not be surprised to see GDX = GDXJ within the year.
GDXJ vs GDX chart
roadrunner
would show incredible strength. That would be similar to the late August bust outs of the past 2 yrs when despite options expiration and Bond auctions, the metals couldn't be
held back.
GDX edged out GDXJ today, +3.63% to +3.41% as GDXJ flattened out for the last couple of hours while GDX kept rising into the close. But it's like picking your favorite flavor of ice cream. The "dogs" of GDX are really catching up after their March beat down. They quadrupled gold's move for today. The half-way pattern in gold starting in January projects to $1520. That fits well with the next angel beyond $1444......$1521.
GSR was initiated into the "38 club" today.
No movement in generic gold prices that I could see with today's move. But I caught a look at the NGC/PCGS high wholesale sell prices for Morgans and was amazed at how far they have moved in the past few months. 63's at $69, 64's at $91 and 65's at $175. I don't think 64's have been that high since the very early 1990's. That's almost a double in MS64
prices over the past year, essentially the same that silver bullion has done. Where getting 63's and 64's slabbed a year ago almost wasn't worth the effort, it now definitely is
from what I can see. If original BU rolls are still bringing $550-$600, and they usually will have a decent amount of 63 and 64 coins, then they are way underpriced.
Jim Willie thinks the Japan effects have effectively ushered in QE3 - all out in the open and legal-like...bullish for PMs
Japan was also a net export source for gold and silver finished products. That's dropped off. Japansese citizens have been looking to buy gold since last week's events. A surge is underway that is reducing readily available supply.
roadrunner
The McLellan newsletter showed that so far, GLD and IAU ETF holdings are not confirming the breakout, and Nichols is still expecting a rapid breakdown any minute now. And perhaps it's still coming, so I'm still prepared to cut positions early, but I'm not going to sit on the sidelines and miss out on what looks to me to be a really nice move. The only personal drawback I see is higher prices for the upcoming mint product releases (AGEs, Buffs). One other observation though is that gold looks good in USD terms but not so much in Euro terms. The USD is back up to 76, but I still think we need to touch 74 before any meaningful reversal - even then I'm not sure it will affect PM prices.
So I think we're in for a few more days of upside, and if we see any sudden and decisive negativity I think that's going to be a big cue to get out. There shouldn't be any of that for a while if this move is what I think it is. But I just don't see anything like that happening with world events and economies such as they are, and perhaps a new quagmire developing in Libya.
Near term silver target is $38.60. I don't have a precise target for gold, but 1459 and 1480 are reasonable targets.
RR, the Morgan pricing is what I was referring to a few days ago. I think it has to do with a tightening physical silver market, but also probably because an ASE is now over $40. I wouldn't say MS64's have quite doubled, but my reference is Ebay as I have been buying and selling 64's here and there and they seem to have gone from mid 50's to the 80's recenly. Still a nice move. In fact, I just sold a tone-free 1921 in PCGS MS64 for $72 shipped and it had been listed for over a week.
I agree with QE3. In fact, I think a few months ago I stated to look for the next round to gain steam in April. The conversation right now is NOTHING about recovery and cutting stimulus, it is only about excuses why we might need more. In fact, there is still NO TALK in congress about cutting the things that really need to be cut - defense and entitlements. The fed is out of bullets, and the fed is buying 80% of the treasury offerings. There's no way they can stop! And world events have supressed any news about trouble in European economies, but it's still there...
term top. And not surprisingly after a 6-7 day bounce and gains of 10-25% in many miners and with options expiration only 2 days away. Of course miners took a 10-25% dip just in the past few weeks to allow that to happen.
These volume spikes for a down day where the largest seen since January when the ratios last bottomed....but quite a bit smaller than the October, Nov, and Dec monthly spikes.
I'm pretty sure that today's spike would be marking at least a weekly topping, if not a multi-week/monthly. I'll look at it more closely tonight. The action in some of the grains and
softs has not been very impressive the past month. Plat and Pall have still not bounced back to their Feb lows, never mind new long term highs. Gold, silver, and oil seem to be out
there on their own leading the commodities pack. Gold has reached the point where it might be adding a right shoulder/handle to its recent H&S/cup formation. Today it went back and retested the neckline breakout. Silver just blew away from it's neckline. So a pullback to the 36's to retest that would be in order. There have been several silver cups since October and each time it pulled back within 4 days to test the neckline. This one was at the 5th day of the ascent and was due.
IL,OIL,UNG,$BPGDM|B|D20">GDX/SPY ratio charts - click on for extended chart
An interesting mix to get an ATH so close to options expiration. I don't know if that's occured recently. I see one back on Sept 28th but that was the day after expiration and gold rebounded much higher by the close. Today's move is 2 days before expiration and showing a longer shadowed red candle, not unlike those seen during the peaks from Oct-Dec.
roadrunner
So PMs are vulnerable here, further decline is worrisome, but I'm going to stick with my initial call that a new up-trend is here. For Friday I would expect perhaps a mild up-day, recovering some of the give-back from today but no new highs, barring some big world event.
Tough market to figure out while it's consolidating.
Consolidating is exactly what I think the 10yr:2yr is doing. The 200dma is still rising and the ratio is will at the holding above the tops of the 2009 consolidation area.
I have no idea where the markets are going right now. I own GLD long term calls and am long ZSL. Somethings gotta give. GSR approaching 28 year low in the 34-36 range
This chart probably reinforces MJ's "line in the sand" as the EURO is 57% of the dollar basket.
Knowledge is the enemy of fear
Sneaky Aussie's..................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>Good on ya
Sneaky Aussie's..................MJ >>
Its gotta be difficult to manage business in Australia with the incredible volatility of that currency.
Knowledge is the enemy of fear
<< <i>
<< <i>Good on ya
Sneaky Aussie's..................MJ >>
Its gotta be difficult to manage business in Australia with the incredible volatility of that currency. >>
Hope I can still afford to shop there when I visit later this year.
<< <i>
<< <i>
<< <i>Good on ya
Sneaky Aussie's..................MJ >>
Its gotta be difficult to manage business in Australia with the incredible volatility of that currency. >>
Hope I can still afford to shop there when I visit later this year. >>
The beers are cheap and the chicks dig American accents...............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>My gut tells me that the S & P will correct 7-10% from here. Copper IMHO could correct 15-20% if that's the case. It's looking very sluggish on it's own.
MJ >>
I just can't seem to get this right. My gut still tells me lower but my trade says I'm wrong.................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......
From Briefing.com...
12:39 COMDX In the wake of hawkish comments made by Philadelphia Fed Head Phil Plosser, select commodities are seeing weakness, as the dollar rallies to its best levels of the day -Update-
This commentary marks the third Fed voting member to make hawkish comments today.
May crude dropped ~60 cents; currently own 53 cents to "05.07.
April gold shed ~9 points; currently down $9.40 to "425.50.
May silver sold off ~30 cents; now down 26.5 cents to $37.11.
Knowledge is the enemy of fear
<< <i>
<< <i>My gut tells me that the S & P will correct 7-10% from here. Copper IMHO could correct 15-20% if that's the case. It's looking very sluggish on it's own.
MJ >>
I just can't seem to get this right. My gut still tells me lower but my trade says I'm wrong.................MJ >>
It comes down to the old adage, 'don't fight the fed.' The fed is juicing the markets, so it's very hard for things to go down with so much money flowing in, and few worthy alternatives. Betting on the market to fall in this kind of environment is like pissing into the wind. Wait for QE to end, then go short!
<< <i>
<< <i>
<< <i>My gut tells me that the S & P will correct 7-10% from here. Copper IMHO could correct 15-20% if that's the case. It's looking very sluggish on it's own.
MJ >>
I just can't seem to get this right. My gut still tells me lower but my trade says I'm wrong.................MJ >>
It comes down to the old adage, 'don't fight the fed.' The fed is juicing the markets, so it's very hard for things to go down with so much money flowing in, and few worthy alternatives. Betting on the market to fall in this kind of environment is like pissing into the wind. Wait for QE to end, then go short! >>
i think if the Fed announces that QE will end PM's will take a big, big hit. But then so will the markets....then the Fed will announce plans for QE III and some kinda major change in the thinking of what is REALLY happening. How long a time span this will take will be interesting on both sides of the fence.
<< <i>Just in case you were wondering why metals just reversed.....
From Briefing.com...12:39 COMDX In the wake of hawkish comments made by Philadelphia Fed Head Phil Plosser, select commodities are seeing weakness, as the dollar rallies to its best levels of the day -Update- This commentary marks the third Fed voting member to make hawkish comments today.
May crude dropped ~60 cents; currently own 53 cents to "05.07.
April gold shed ~9 points; currently down $9.40 to "425.50.
May silver sold off ~30 cents; now down 26.5 cents to $37.11. >>
A timely announcement for options expiration. Maybe another hit on Monday as well? POMO "fat" on Monday and Wednesday next week. But it leaves the cupboard bare Thurs/Friday.
The FED heads can make all the announcements they like. Doesn't seem to change anything in the end. There will be continuous hints dropped between now and June about cessation
of QE. And each one will lead to the risk trade coming off. But with Japan out there needing $Trillion(s), there's going to be continuous QE whether via front door or back door. Bond auctions on Mon-Wed next week.
roadrunner
edited to add
PC- I agree, I'm trying to trade with the Fed on this one. At least the posturing part. The stock market will come unflued if they don't get Q3 i believe.
Also, gold and silver held up quite well after the Fed jibberish. Maybe the market sees a hollow transparent statement? I have skin in the game so I'm all ears.
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......
Gold seems to be following the same type of pattern it has for the past 2 yrs, cups and inverted head and shoulder rises. The current pattern of a 5 months IH&S is exactly in the same line. The neckline has been hit 3 times now along with 2 other close attempts. January was the 6 month cycle low and another one of that magnitude shouldn't be due until July. Many were calling a double top back in November. Now it's a quadruple top. If gold breaks out above it will head to the upper channel line at $1515-1575. Worst case is that this pattern is an expanding wedge that could retrace back to gold $1260-$1280. But in the face of silver's strength and QE3, that seems less likely. The sentiment from gold blogs I read is that many gold bugs are still waiting for yet another pullback to $1250-$1380, a perfect time for gold to take off. Gold can still easily pull back to $1405 on Monday and keep the current pattern fully alive along with a more bullish ascending triangle. Also recall that gold never went out in a blaze of euphoric glory at any of the peaks from this past Nov-March. It reached only 17% above it's 200 dma, far less than the 25-33% of the mania-induced 2006, 2008 and 2009 peaks. Gold is pretty much unloved at $1440.
The below BP%GDM chart is sort of a sentiment/momentum indicator of what % of miners on the Arca GDM are above their 50 dma. Since GDX mimicks the GDM/HUI they are very similar. Note that even with this current correction in gold into the $1420's that the % rose above the most recent high of 63. If you compare the current up move on the 3 yr chart it seems we're not halfway done in this move. The previous 2 BP% moves all have 3 steps upwards with RSI and W%R both peaking. It's far from those points yet. MACD has just crossed over indicating the 3rd leg is underway. Each cycle in the BP% forms a neat ABCD (spring rise, summer pullback, fall rise, winter pullback). We're on the A train right now. The trends of the last 2 yrs would have to be broken to interrupt the upward movements now that W%R is >-50, MACD cross, and RSI>50. At no time in the past 2 yrs has BP% pulled back before maxing out in the 80's once these crosses have occured from the annual bottom. Interesting too that BP% has formed an asending flat-top triangle over the past 2-1/2 yrs. If someone could post a 10 yr chart of it I'd like to see it.
Bullish percentage GDM (GDX)
The 10yr:2yr ratio continues to fall as I already mentioned. This highlights the generally consolidating moves in gold since November. 10/2 yr has already been dropping for 1-1/2 weeks and during those move all the previous drops have lasted 1-3 weeks. So at most another 1-1/2 wks left to bottom in the upper 3's or low 4's. Though ending next week makes the most sense. The recent short term down trend in the 10/2 yr coincides with gold consolidating in March after a monthly run up. At that point gold should be free to release and continue on into the more bullish part of this spring season.
10yr to 2yr ratio chart
weekly GSR chart
What's interesting about the weekly GSR is that is shows no sign of any end to the current down move. Stochastics are still buried <10 and flat, the money flow ratio is still headed down
as is the faired Trix moving average. But note that in the CMF indicator it has done an ABC movement these past 3 times with the C being 5 smaller waves down. The current down move is in the 5th. Or more simply, after forming the 2 large green double humps on that green mountain, it then takes 5 quicker steps to scale back down. But do note below that the daily chart does show some slight negative divergences in RSI and MACD starting back in November (slightly higher lows). But volume has yet to shift the other way.
Daily GSR chart
roadrunner
I believe you are correct on that. I'm also with Martin Armstrong about a sideways gold market "correction" until just around June. I'm still a net buyer.
I knew it would happen.
<< <i>Gold seems to be following the same type of pattern it has for the past 2 yrs, cups and inverted head and shoulder rises. The current pattern of a 5 months IH&S is exactly in the same line. The neckline has been hit 3 times now along with 2 other close attempts. January was the 6 month cycle low and another one of that magnitude shouldn't be due until July. Many were calling a double top back in November. Now it's a quadruple top. If gold breaks out above it will head to the upper channel line at $1515-1575. Worst case is that this pattern is an expanding wedge that could retrace back to gold $1260-$1280. But in the face of silver's strength and QE3, that seems less likely. The sentiment from gold blogs I read is that many gold bugs are still waiting for yet another pullback to $1250-$1380, a perfect time for gold to take off. Gold can still easily pull back to $1405 on Monday and keep the current pattern fully alive along with a more bullish ascending triangle. Also recall that gold never went out in a blaze of euphoric glory at any of the peaks from this past Nov-March. It reached only 17% above it's 200 dma, far less than the 25-33% of the mania-induced 2006, 2008 and 2009 peaks. Gold is pretty much unloved at $1440. >>
The one thing that I have a hard time reconciling is the SLV chart, where silver appears to be way overextended at the moment. This condition cannot last. The difficulty comes in to my mind of how closely linked GLD and SLV have always been. I just can't imagine SLV going an opposite direction as GLD, and it would seem that SLV needs to correct/pullback sometime fairly soon. The one caveat to that is if you believe the consipiratorial silver manipulation theories, silver might be having a once-in-a-lifetime "catchup moment," where silver is returning to where it's "supposed" to be after being artificially supressed for decades.
But the bigger question - does anyone really think the fed can put this genie back in the bottle again?
And some people will complain about THAT. (others will pocket profits from the move)
Liberty: Parent of Science & Industry
The current prompt jump in the adjusted money base (M0) was only a few hundred billion. Not quite as impressive as 4th quarter of 2008 when they effectively more than doubled it by
adding $850 BILLION to help jump start the banks again. Gold did rebound from $690 to $1000 by Feb 2009 but it was massively oversold as well. Gold was not massively oversold during this M0 increase. And most of that M0 are reserves that aren't being lent out. They are there to ensure the banks reserve ratios are decent enough to "pass a stress test." (lol).
Question is, how important is the money base in the scheme of things? It meant a lot more in the days before otc derivatives and numerous back door deals. We're only talking about a few hundred billion dollar increase. But QE2 is adding $600 BILLION by June. Then you have all the back door money infusions that probably are on the order of trillions. How about the $100 BILL every month in TBond auctions of which most of that is being monetized as the primary dealers sell the bonds back to the FED a few weeks later. Sovereign debt seems to be the primary driver for gold now. And it was that way in the 1970's as well. The monetary aggregates (M0, M1, M2, M3) can give additional indications that can help us figure things out. But since the banks and FED have invented new ways to bypass the monetary aggregates entirely, they don't matter quite so much in an environment of hidden QE.
I don't think there's ever been a substantiated case where the FED has actually drained liquidity out of the system, and certainly not on the order of trillions. A lot of the FED's booked assets are illiquid derivatives and other junk the banks didn't want. If the FED ever tries to sell them (assuming anyone would buy them) they'd lose their butts taking pennies on the dollar. Their best hope is to secretly transfer most of the crap into the Fannie and Freddie slush fund since there's no upper limit until 2012. They could dump a $Trillion in illiquid junk into the taxpayer's lap via F&F and call it prime AAA rated. It's one thing to raise rates which the FED has done. Another story to drain liquidity.
roadrunner
<< <i>When the financial markets begin to rise with irrational exhuberance again >>
I'm under the impression (albeit mine) that they already have. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
But what a remarkable channel... This channel would suggest that the bottom for any decline would be ~1340.
<< <i>
<< <i>When the financial markets begin to rise with irrational exhuberance again >>
I'm under the impression (albeit mine) that they already have. MJ >>
Worthless US$ inflates stock prices and the prices of most everything....so I'm not so sure the 'exuberance' theory exactly explains the high price of corporate stocks or hard assets. But that's not to say there's not some stampeding into stocks going on. But where else does one put their $s?