Closed 1/2 position in basic metal and Euro short just in case the FED can find a rabbit (that is still alive) to pull out of the hat. Silver rallied back to the 50dma and has thus far been turned back. VIX remains stubbornly high so the likelihood of whiplash is still great. An increased cash position is best for my trading strategy at this time. Maybe change tomorrow though.
Increased silver short dramatically on the FED announcement. Also lightened up on long equities over last 2 days. Still short Euro and basic metals. So far, so good.
The gold consolidation is nearing an end, and today is a predicted bottom for gold, although there is another one predicted for Sep 30. These consolidation triangles usually resolve in the direction of the previous trend, which in this case would be up. Although we do have to be careful that we're not looking at a double top. I'm still looking to buy on a dip to 1750-1760, but I will abandon if it sinks too far below 1750.
Increased silver short dramatically on the FED announcement. Also lightened up on long equities over last 2 days. Still short Euro and basic metals. So far, so good.
<< <i>Increased silver short dramatically on the FED announcement. Also lightened up on long equities over last 2 days. Still short Euro and basic metals. So far, so good.
Beautiful call. >>
Great trading Dave. 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>I am disappointed, MJ. I fully expected a "This". >>
This. I was baiting you. 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......
Closed most of my shorts this afternoon. Still short Euro and a little basic materials. Probably more downside but my trading style is more like a sniper--a quick hit, then run into the shadows to await another opportunity. I try to hit for average, rather than homeruns.
Gold closed just under the 50dma, but on mid-Aug price support. Gold is still $225 above the 200dma, so if I had to guess down is more likely than up.
Silver hit the 200dma--first time in 13 months, but still above the May/July price supports. The 13 month uptrend was broken, so probably a retest of the May lows--32/33, before a rally back toward the 36/37 area, where it will then again test 32/33 support. Will reevaluate at that time.
Its been a brutal month for copper--down 19%.
Palladium looks to have broken support at 700.
Platinum still stuck in a wide range, but distribution is very heavy (lots of selling).
<< <i>I hope the breakouts in $HUI and GDX were not bull traps. The $XAU which I believe has more credibility did not push to new highs. >>
Yup, sure looks like it was a bull trap. These suck. Even had me falling for it for awhile. $xau all the way down to June lows and has broken the uptrendchannel.
In hindsight I had suggested the possibility this past month that the HUI could be putting in a broadening top pattern. What really didn't fit was that the volume on the 3rd peak was stronger than the previous two. Usually volume weakens by the 2nd, or certainly be the 3rd peak. It didn't in this case. The XAU and GDX were off be a few cents on the middle and/or third peaks or they too would have met the requirements. Unfortunately, I didn't pay enough mind to the formation. I figured it would pull back but not the extent it has because of that rousing 3rd peak volume clouding my view.
this one appears to be the most dramatic. Its a comparison chart of the price of gold vs the US 10-yr interest rate. Now obviously gold has gone up and interest rates down, but now the chart appears to have reached a critical point. Parabolic would be an understatement so I see a reversal of some sort occuring. Either 10yr rates go up or gold goes down. What would cause such an "unwind" to occur and what would be its economic implications? How would you play it?
Gold doesn't have to attain any particular price, so I would consider it a dumb number, a constant if you will. If you consider the underlying data the chart is unsustainable because interest rates must eventually reflect some market risk - one way or the other. The yield curve simply can't stay flat or have a negative slope forever, because of people's expectations about the future. Eventually a risk premium will develop at the long end of the yield curve, and that will show up in the 10-yr rate as well. That's under "normal" conditions.
What we have here, is a sovereign default environment. Think Russia, 1989. Lots of things can happen from here on. I don't think that all of them can be predicted, nor would I ever expect that the progression of events would be orderly. Lots of people don't even know what fiat currency is, but they put all of their faith in it. I don't.
Q: Are You Printing Money? Bernanke: Not Literally
Looks like we need a wave 4 up and a wave 5 down to complete Wave C of this ABC correction. Still looking for $1550 in gold and around $27 in Silver. I'm 3 weeks away from being able to do much about it. I don't think the markets will recover much in that time. Will really need to do some work at these levels to gain a base to build on. Maybe a couple of months? 2012 looks to be a very special year for PM's in my book. If this were a Texas Holdem game........I'm going all in.
What an incredible routing in gold and silver. The thing is, the move is not yet done. What will be tricky is that eventually there will be at least a 38.2% retracement of the move down and that is going to be well over $100. So at this point it's too tough to predict the near term for PMs - further downside, some destabilization, or a retracement. McLellan had a low predicted for Thursday, and these predictions can be off by a day or two, so perhaps we saw the low today.... but there is another low coming up Sep 30, and if that's thte case, hopefully that would be a level like $1550 or $1600 - some of the downside targets I have seen - as these would make an awesome back-up-truck buying opportunity as I think most of us believe that the overall downside is limited at these levels. I certainly would feel VERY confident buying silver at the $27 level.
Off to France I go... I'll let you guys know what the French are saying about the whole situation.
<< <i>Gold doesn't have to attain any particular price, so I would consider it a dumb number, a constant if you will. If you consider the underlying data the chart is unsustainable because interest rates must eventually reflect some market risk - one way or the other. The yield curve simply can't stay flat or have a negative slope forever, because of people's expectations about the future. Eventually a risk premium will develop at the long end of the yield curve, and that will show up in the 10-yr rate as well. That's under "normal" conditions.
What we have here, is a sovereign default environment. Think Russia, 1989. Lots of things can happen from here on. I don't think that all of them can be predicted, nor would I ever expect that the progression of events would be orderly. Lots of people don't even know what fiat currency is, but they put all of their faith in it. I don't. >>
Part (or all) of the problem is that the $900 TRILL in interest rate derivative contracts world-wide has skewed the yield curve away from reality. There are no "retail" end-users for these products other than largest banks. So nothing in the financial system can mirror reality when the whole thing has a foundation of sand. There is really no way to determine market risk or how to allocate capital properly with such a distortion. Gold is one of those few things that is trying to mirror the risks and reality of the current situation.
Silver hit 33.50 this morn, which was the previous support "floor" in May/June. These floors usually turn into "ceilings" after they are broken. Silver is probably turned back at this level.
<< <i>Silver hit 33.50 this morn, which was the previous support "floor" in May/June. These floors usually turn into "ceilings" after they are broken. Silver is probably turned back at this level. >>
Probably for now this will offer strong resistance. But considering that the silver chart from the May high formed a 5 month parallel channel with bottom hits at $32 and $26, I think silver has some bouncing to do after completing this channel. That's a 52% pull back with good anchor points. $7 would seem like a paltry retrace out of $24 lost (29%). The mid-channel line of that larger channel hits some key peaks and valleys. Resistance from that mid-line would equate to around $35 and a 38% retrace of the 5 month dip. Also note that silver's recent C leg dip from $44 to $26 is almost identical to the length and slope as the $50 to $32 May crash (see chart link below). Silver could/should pull back from today's bounce. But eventually another bounce into $35 is reasonable to complete a zig-zag pattern. So far it's been basically just up. Options expiration ends today and a bad week for the metals. PMs getting a few days or a week of bounce as the equity markets recover seems to fit. Even the DAX gapped above it's down channel and seems to have put in at least a short term double bottom. TBonds coming back to reality as well. Some nice charts here by Xiphos highlighting the various markets. The dollar has filled one gap today around 77.7 and seems to have its eye on the next lower one at 76.6.
Gold also completed a double tag of a larger channel formed from the August and Sept lows. It's now working on a resistance line anchored around the August 6th low and going back to the August $1910 high. GSR peaked yesterday a tad short of 59. Now already back to 51.
$7 would seem like a paltry retrace out of $24 lost (29%
Actually I think thats a pretty good dead cat bounce. Usually these dont even go 20%. Momos are LOUSY for both gold and silver. Gold should test the 200dma. That print yesterday at 1533 will most likely be realized eventually.
If gold doesnt have a red Dec 31 close this year, then it will next year. The rose has bloomed.
If silver's lower channel touch of $26 was just leg #3 in this current 3 week sequence, and today is wave #4, then a 5th wave down to retest that line at $26 could be in the cards. And this wave 4 has already bounced >38% from the $43ish high.
How does one factor in momentum after a $388 drop in gold in under 3 weeks? It had so many oversold parameters on that final dip. And that was a pretty well-coordinated attack to take it down so quick from $1840 to $1532. They had Shanghai cooperation as well as they raised margin requirements >20% over the weekend.
Cohodk, how many years now have you been calling for a lower December 31? You know, if you keep this up eventually you will be right. $1420 was last yr's close.
That just reminded me, I had a small wager with a forum member on $2000 gold coming before $1500 made back around mid-way on the run. It was looking pretty good there for a while. Got within $32 of losing yesterday.
<< <i>If silver's lower channel touch of $26 was just leg #3 in this current 3 week sequence, and today is wave #4, then a 5th wave down to retest that line at $26 could be in the cards. And this wave 4 has already bounced >38% from the $43ish high.
How does one factor in momentum after a $388 drop in gold in under 3 weeks? It had so many oversold parameters on that final dip. And that was a pretty well-coordinated attack to take it down so quick from $1840 to $1532. They had Shanghai cooperation as well as they raised margin requirements >20% over the weekend.
Cohodk, how many years now have you been calling for a lower December 31? You know, if you keep this up eventually you will be right. $1420 was last yr's close.
That just reminded me, I had a small wager with a forum member on $2000 gold coming before $1500 made back around mid-way on the run. It was looking pretty good there for a while. Got within $32 of losing yesterday.
roadrunner >>
Gold isnt close to being oversold by my indicators. If you are looking at momos over a week long period, then sure you'll find some that called for a bounce today. But we like to look at the bigger picture here right, and my momos, the very ones that PC said would not work about 3 weeks ago, are only about 25-30% through the cycle. AT BEST, gold holds in this 1600-1700 range.
I've only been calling for a lower close since late 2009. When it comes, people will be very surprised, and given the extreme bullishness I am sensing from this board, at my local B&M, and bloggers, this year runs a VERY GOOD chance of closing red. At this point, 1450 and even 1300 are just as likely--perhaps moreso--than 1800 and 2000.
<< <i>Gold isnt close to being oversold by my indicators. If you are looking at momos over a week long period, then sure you'll find some that called for a bounce today. But we like to look at the bigger picture here right, and my momos, the very ones that PC said would not work about 3 weeks ago, are only about 25-30% through the cycle. AT BEST, gold holds in this 1600-1700 range. >>
That's not what I said. I said they *might* not work in the final stages of a parabolic move. As it turns out, we were not in the final stages of a parabolic move, although you may think otherwise. But to be honest, you were predicting crashes long before this crash happened. We all could see that gold was overbought, but it remained so and continued higher regardless for a LONG time.
While you seem to think that gold is done, I'm not seeing that way. Parabolic moves do not end like this. If it is the end, we'll see a second attempt over the next few months to re-touch the all time high but it will fail just short of the high, perhaps the high $1800's.
For what I think is happening we have to look at the bigger charts, and even the weekly and monthly charts will need to have their 38.2% retractions. This last move retraced the move up from ~$888 which is probably about the extent of the retracement needed since there was a nice baseline and consolidation at this level. But you never know and we may need to retrace from levels of $590 or lower, but I just don't see that as being necessary.
Daily indicators show oversold, but weekly and monthly are still overbought but a move of this extreme will turn them oversold fairly quickly.
On the news over here in Europe there is a lot of discussion about the EU debt crisis, with talk of writing down 50% of Greece's debt, and a lot of discussion about how it is pretty much all on Germany's shoulders to bailout Greece and if they'll be willing to do it, why they should, etc. I don't see how the people of Germany will ever go for it, but they seem to be claiming to be willing to do what's necessary and as such the markets are doing well on that news.
Also, finally got to see "Too Big To Fail" on the plane ride over. GREAT movie, it gave a lot of insight into what happened. Highly recommended.
The level to watch is 1660, which actually marks a 38.2% retracement of the move down, so this is a natural bounce target. A decisive move over this level would indicate the weakness is over for now. With McLellan looking for another low on Oct 2 though, I tend to think we are not quite ready for a lasting recovery.
The word "might" is in not to be found in your response. You may want to double-check yourself.
Regardless, parabolic moves certainly do end this way. You may want to look at a chart of oil in 2008, or GE in 2000. They all start out with a sharp downside reversal and very seldom do they retest previous highs.
The uptrend line off the 2008 lows targets 1500 as support. Gold had BETTER hold this level, or it wont test 2000 again until people start throwing in the towel, and gold bugs tend to be a patient lot, so I wouldnt hold my breath. So lets just hope 1500 holds.
A drop to 1500, would validate my indicators in looking for a 20-30% decline. In fact, if the 1535 print is correct, then gold did drop 20%, so I would say my indicators DID work.
Yes, I'll admit that I usually underestimate the power of a mania (greed), but you may want to look at my posts in March 2006, July 2008, and last month so some fairly prescient money saving (if gold is money) calls.
Comments
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Beautiful call.
<< <i>Increased silver short dramatically on the FED announcement. Also lightened up on long equities over last 2 days. Still short Euro and basic metals. So far, so good.
Beautiful call.
Great trading Dave. 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......
Knowledge is the enemy of fear
<< <i>I am disappointed, MJ. I fully expected a "This".
This. I was baiting you. 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......
Gold closed just under the 50dma, but on mid-Aug price support. Gold is still $225 above the 200dma, so if I had to guess down is more likely than up.
Silver hit the 200dma--first time in 13 months, but still above the May/July price supports. The 13 month uptrend was broken, so probably a retest of the May lows--32/33, before a rally back toward the 36/37 area, where it will then again test 32/33 support. Will reevaluate at that time.
Its been a brutal month for copper--down 19%.
Palladium looks to have broken support at 700.
Platinum still stuck in a wide range, but distribution is very heavy (lots of selling).
Soybeans at CRITICAL support.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>I hope the breakouts in $HUI and GDX were not bull traps. The $XAU which I believe has more credibility did not push to new highs. >>
Yup, sure looks like it was a bull trap. These suck. Even had me falling for it for awhile. $xau all the way down to June lows and has broken the uptrendchannel.
Knowledge is the enemy of fear
was stronger than the previous two. Usually volume weakens by the 2nd, or certainly be the 3rd peak. It didn't in this case. The XAU and GDX were off be a few cents on
the middle and/or third peaks or they too would have met the requirements. Unfortunately, I didn't pay enough mind to the formation. I figured it would pull back but not the extent it
has because of that rousing 3rd peak volume clouding my view.
roadrunner
Gold doesn't have to attain any particular price, so I would consider it a dumb number, a constant if you will. If you consider the underlying data the chart is unsustainable because interest rates must eventually reflect some market risk - one way or the other. The yield curve simply can't stay flat or have a negative slope forever, because of people's expectations about the future. Eventually a risk premium will develop at the long end of the yield curve, and that will show up in the 10-yr rate as well. That's under "normal" conditions.
What we have here, is a sovereign default environment. Think Russia, 1989. Lots of things can happen from here on. I don't think that all of them can be predicted, nor would I ever expect that the progression of events would be orderly. Lots of people don't even know what fiat currency is, but they put all of their faith in it. I don't.
I knew it would happen.
Off to France I go... I'll let you guys know what the French are saying about the whole situation.
<< <i>Gold doesn't have to attain any particular price, so I would consider it a dumb number, a constant if you will. If you consider the underlying data the chart is unsustainable because interest rates must eventually reflect some market risk - one way or the other. The yield curve simply can't stay flat or have a negative slope forever, because of people's expectations about the future. Eventually a risk premium will develop at the long end of the yield curve, and that will show up in the 10-yr rate as well. That's under "normal" conditions.
What we have here, is a sovereign default environment. Think Russia, 1989. Lots of things can happen from here on. I don't think that all of them can be predicted, nor would I ever expect that the progression of events would be orderly. Lots of people don't even know what fiat currency is, but they put all of their faith in it. I don't. >>
Part (or all) of the problem is that the $900 TRILL in interest rate derivative contracts world-wide has skewed the yield curve away from reality. There are no "retail" end-users for these products other than largest banks. So nothing in the financial system can mirror reality when the whole thing has a foundation of sand. There is really no way to determine market risk or how to allocate capital properly with such a distortion. Gold is one of those few things that is trying to mirror the risks and reality of the current situation.
roadrunner
<< <i>Sold a bunch of Ag and some US Mint Au over the weekend. No regrets. >>
Beautiful call.
In God We Trust.... all others pay in Gold and Silver!
Knowledge is the enemy of fear
<< <i>Silver hit 33.50 this morn, which was the previous support "floor" in May/June. These floors usually turn into "ceilings" after they are broken. Silver is probably turned back at this level. >>
Probably for now this will offer strong resistance. But considering that the silver chart from the May high formed a 5 month parallel channel with bottom hits at $32 and $26, I think silver has some bouncing to do after completing this channel. That's a 52% pull back with good anchor points. $7 would seem like a paltry retrace out of $24 lost (29%). The mid-channel line of that larger channel hits some key peaks and valleys. Resistance from that mid-line would equate to around $35 and a 38% retrace of the 5 month dip. Also note that silver's recent C leg dip from $44 to $26 is almost identical to the length and slope as the $50 to $32 May crash (see chart link below). Silver could/should pull back from today's bounce. But eventually another bounce into $35 is reasonable to complete a zig-zag pattern. So far it's been basically just up. Options expiration ends today and a bad week for the metals. PMs getting a few days or a week of bounce as the equity markets recover seems to fit. Even the DAX gapped above it's down channel and seems to have put in at least a short term double bottom. TBonds coming back to reality as well. Some nice charts here by Xiphos highlighting the various markets. The dollar has filled one gap today around 77.7 and seems to have its eye on the next lower one at 76.6.
Xiphos Trading
Gold also completed a double tag of a larger channel formed from the August and Sept lows. It's now working on a resistance line anchored around the August 6th low and going back
to the August $1910 high. GSR peaked yesterday a tad short of 59. Now already back to 51.
roadrunner
Actually I think thats a pretty good dead cat bounce. Usually these dont even go 20%. Momos are LOUSY for both gold and silver. Gold should test the 200dma. That print yesterday at 1533 will most likely be realized eventually.
If gold doesnt have a red Dec 31 close this year, then it will next year. The rose has bloomed.
Knowledge is the enemy of fear
And this wave 4 has already bounced >38% from the $43ish high.
How does one factor in momentum after a $388 drop in gold in under 3 weeks? It had so many oversold parameters on that final dip. And that was a pretty well-coordinated attack
to take it down so quick from $1840 to $1532. They had Shanghai cooperation as well as they raised margin requirements >20% over the weekend.
Cohodk, how many years now have you been calling for a lower December 31? You know, if you keep this up eventually you will be right.
$1420 was last yr's close.
That just reminded me, I had a small wager with a forum member on $2000 gold coming before $1500 made back around mid-way on the run. It was looking pretty good there for a
while. Got within $32 of losing yesterday.
roadrunner
<< <i>If silver's lower channel touch of $26 was just leg #3 in this current 3 week sequence, and today is wave #4, then a 5th wave down to retest that line at $26 could be in the cards.
And this wave 4 has already bounced >38% from the $43ish high.
How does one factor in momentum after a $388 drop in gold in under 3 weeks? It had so many oversold parameters on that final dip. And that was a pretty well-coordinated attack
to take it down so quick from $1840 to $1532. They had Shanghai cooperation as well as they raised margin requirements >20% over the weekend.
Cohodk, how many years now have you been calling for a lower December 31? You know, if you keep this up eventually you will be right.
$1420 was last yr's close.
That just reminded me, I had a small wager with a forum member on $2000 gold coming before $1500 made back around mid-way on the run. It was looking pretty good there for a
while. Got within $32 of losing yesterday.
roadrunner >>
Gold isnt close to being oversold by my indicators. If you are looking at momos over a week long period, then sure you'll find some that called for a bounce today. But we like to look at the bigger picture here right
I've only been calling for a lower close since late 2009. When it comes, people will be very surprised, and given the extreme bullishness I am sensing from this board, at my local B&M, and bloggers, this year runs a VERY GOOD chance of closing red. At this point, 1450 and even 1300 are just as likely--perhaps moreso--than 1800 and 2000.
Knowledge is the enemy of fear
<< <i>Gold isnt close to being oversold by my indicators. If you are looking at momos over a week long period, then sure you'll find some that called for a bounce today. But we like to look at the bigger picture here right
That's not what I said. I said they *might* not work in the final stages of a parabolic move. As it turns out, we were not in the final stages of a parabolic move, although you may think otherwise. But to be honest, you were predicting crashes long before this crash happened. We all could see that gold was overbought, but it remained so and continued higher regardless for a LONG time.
While you seem to think that gold is done, I'm not seeing that way. Parabolic moves do not end like this. If it is the end, we'll see a second attempt over the next few months to re-touch the all time high but it will fail just short of the high, perhaps the high $1800's.
For what I think is happening we have to look at the bigger charts, and even the weekly and monthly charts will need to have their 38.2% retractions. This last move retraced the move up from ~$888 which is probably about the extent of the retracement needed since there was a nice baseline and consolidation at this level. But you never know and we may need to retrace from levels of $590 or lower, but I just don't see that as being necessary.
Daily indicators show oversold, but weekly and monthly are still overbought but a move of this extreme will turn them oversold fairly quickly.
On the news over here in Europe there is a lot of discussion about the EU debt crisis, with talk of writing down 50% of Greece's debt, and a lot of discussion about how it is pretty much all on Germany's shoulders to bailout Greece and if they'll be willing to do it, why they should, etc. I don't see how the people of Germany will ever go for it, but they seem to be claiming to be willing to do what's necessary and as such the markets are doing well on that news.
Also, finally got to see "Too Big To Fail" on the plane ride over. GREAT movie, it gave a lot of insight into what happened. Highly recommended.
Regardless, parabolic moves certainly do end this way. You may want to look at a chart of oil in 2008, or GE in 2000. They all start out with a sharp downside reversal and very seldom do they retest previous highs.
The uptrend line off the 2008 lows targets 1500 as support. Gold had BETTER hold this level, or it wont test 2000 again until people start throwing in the towel, and gold bugs tend to be a patient lot, so I wouldnt hold my breath. So lets just hope 1500 holds.
A drop to 1500, would validate my indicators in looking for a 20-30% decline. In fact, if the 1535 print is correct, then gold did drop 20%, so I would say my indicators DID work.
Yes, I'll admit that I usually underestimate the power of a mania (greed), but you may want to look at my posts in March 2006, July 2008, and last month so some fairly prescient money saving (if gold is money)
Knowledge is the enemy of fear