***OCTOBER 2011 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 6,114 ✭✭✭✭✭
This is a continuation of the monthly thread for discussing relatively short or near term movements in precious metals and related securities.
September was a wild month. What will October have in store?
September was a wild month. What will October have in store?
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"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In God We Trust.... all others pay in Gold and Silver!
<< <i>You should wait until the market retest the new low. A double bottom is always better, before going long. >>
Sure hope we get it spooly. Patiently waiting
edited to disclose.....Sold basic material names as market bounced back to its 200 period average on 5 min charts. Got $1.39 on FCX and 40c on AKS.
Knowledge is the enemy of fear
Roadrunner, you think GSR is headed to 65-70?
Knowledge is the enemy of fear
The USA After A Euro Collapse
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Shoulda held FCX and AKS.
Roadrunner, you think GSR is headed to 65-70? >>
Well for starters, I never figured it would get past 50. But here it is at 55ish. Right now it's sitting on the 30 yr uptrend line the best I can draw it
taking the 1980 low as the anchor point. And then the 60 horiz resistance line has been a critical area since 1982 and most recently in 2010. That
60-63 point may have the been the bottom on wave 1 of this set. So I don't think that would be violated. Therefore probably won't see 65-70. But that
assumes a massive deleveraging event doesn't continue to play out like 2008. The stock market fractal pattern from July-Sept 2008 is very similar to the
one being traced out the past couple of months. It comes down to QE3 or bust. Pick 'em.
On a shorter term scale the upchannel from May points to about 58. And if we toss in a few points for overshoot that could get it to 60. But it's already
close enough to say it has completed 2 touches per side on this channel. But it does look like there is at least one more push higher to come in GSR.
For comparison purposes the VIX has formed a pretty formidable cup w/handle over the past 18 months. Maybe one more retest of the 50 dma and up she
goes. GSR will follow or lead. The VIX chart looks a whole lot more bullish that GSR. VXO has two touches at 50 and looks primed to start a 5th leg up.
If I try to use where gold and silver are pointing to right now I see $1520/$26 if this C leg sort of follows the % drop of the A leg. That gives a GSR of 58.5.
The dip of last week took GSR to 58.8 already so revisiting that is logical. If I assume worst case dip to next support level it's $1462-$1475/$24-$25 = 61-62.
I mapped out a number of key long term chart lines this weekend and couldn't see silver going lower than $24-$25 from here.
1-35 yr historical GSR charts
roadrunner
Agreed on the VIX.
Knowledge is the enemy of fear
That makes a big difference where that line crosses our current path. As it turns out my charts were using closing prices and that crosses right around the 60-62 area.
The wave pattern in GSR looks to be in a 4th wave right now (of the C leg down). This is a 20 yr pattern so far with the B leg ending up at 88 in the fall of 2008. I think the
4th wave will respect the current down channel. These C legs per EW theory are supposed to be 5 waves. Since waves 1 and 3 were about dropped 30-40 pts respectively,
I'd make an estimate of 35 for wave 5. 60-35 = 25. It the 5th leg exceeds wave 3 in length then 15-20 as a price objective. It wouldn't take much to tweak your downtrend
line to come up with 60. Since wave 1 of this expected 5 wave set ended between 61.86 - 64 (depending on how you count waves 1-2) that can't be violated w/o blowing my count
out of the water. One thing I've noticed in hindsight over the past 3 yrs is that GSR counts out Elliot waves very consistently.
roadrunner
Wanted to short the Euro this morn, but shorted the Yen instead. Bands are very tight. FXY could run to 132 or 124. Under 128 and it breaks the 50dma and rising wedge pattern. Just playing the risk/reward ratio as my outs are clearly defined. The YEN is the only currency to holds its own against the dollar, but after a 60+% rally against the greenback over the last 4 years, I believe gravity will be re-established.
Knowledge is the enemy of fear
Schmidt says hold gold, sell silver, buy yuan
Clive Maund's take on silver - nice chart
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
But he appears to be on the right side for now.
I like Clive Maund's silver chart as well. Silver's B wave apparently completed at $44. That means a 5 legged C wave should follow. The current
wave count seems to be in a 4th wave flat, which alternates with wave 2 being a sharp correction. A 5th leg down as some point is probably coming
to give NY buyers a shot at that $26.05 silver. Those long tailed candles have a habit of being revisisted. This would align with a final and 5th leg in
GSR ending up in the low 60's or higher ($1450-1475 gold, $24-$25 silver). It might not occur until equities and the S&P rally up to 1250 or so.
Friday's jobs report was bolstered by 45,000 Telcom workers returning from strike. The short to long commercial ratio in gold and silver are at (low) extremes
not seen since Sept-Nov 2008 (<2). Same comment for the dollar being at a high extreme of short to long comm. ratio (>5). The downside is that these extremes
can last for 3-9 weeks at a time as they did during the Aug 2008 - March 2009 period. A couple of big EU banks are in the news this weekend as they seek to nationalize
and/or recapitilize them. Their BSC/Merrill Lynch/Lehman moment continues.
roadrunner
This pretty much sums up the major options open to gold right now. While there's no way to know which direction it will take, it helps to know the major TA influences.
I like some of Connor's longer term gold chart counts. He uses the ABCD wave method to track gold's movements (C is the strong up leg, D the strong down leg, A the
corrective bounce leg, and B the final consolidation before resuming the next intermediate up leg).
Dollar now seems headed to fill that gap at 76.6. TIPs and Gold usually seem to follow the same trend. Today they have widely diverged in opposite directions. Though TIP
volume is quite minimal so far today indicating a weak sell off. Dow has completely faked out the bears (for now) by a false breakout below support (10,600) then roaring back
to above the midpoint of the last multi-month consolidation zone. Now a higher high in effect. Dow 50 dma blown through as well today. Maybe now we get that retest of the broken
H&S neckline at 12,000....just like in April-May 2008. Interesting that GDX is not yet buying into this equity move today even with gold >$1670...it's highs are still lower than Friday's
rally peak. Maybe just playing coy right now.
Other than slightly declining volume the last 4 days, all the daily oscillators in gold look primed for an upward move. Now at the $1676-$1678 point for the 3rd time. The GDX
bullish percentage just crossed the 5 dma. That's often a final confirmation sign that miners are running away. Gold closed above the 10 ema today and also had a 3/10 ema cross.
Linking gold/silver to sentiment - USD - COT reports
An interesting summary linking several keys together. Interesting how the author uses the 1993 silver bottom of $3.50 to determine his FIB ratios today. The 20 yr silver COT charts
clearly indicate that there's not necessarily a safe haven yet just because they levels are low. They've been low and even lower before....as silver went lower.
roadrunner
SLV needs to clear 33 and GLD over 165 to even consider a trend change. Now of course this could happen in a single day, but to say PMs are going higher is more "gut" analysis rather than "technical" analysis.
Im actually tempted to buy ZSL, but given the emotional nature of silver, im gonna sit.
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
But silver on the other hand is in a steep dive, now at 56.
SLV weekly
roadrunner
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>When I do a weekly full stoch on gold with Cohodk's favorite 45-25-25 model it's still well above 80 and hardly affected at all by the recent drops.
But silver on the other hand is in a steep dive, now at 56.
SLV weekly
roadrunner >>
Gold does look stronger than silver, probably as it should be. That long term stoch has been high on gold for a long time, which is a testament to gold's strength, but possibly also a sign of being long in the tooth.
Im back in the Euro short, but perhaps a day or 2 early. Still holding YEN short, which looks to have a 3% move in it starting almost immediately.
Knowledge is the enemy of fear
UUP getting interesting.
Silver banged its head against 33 again. Will it get a concussion and pass out?
Gold finally reached the 20dma. Will it push thru now?
Shorted more EURO.
Knowledge is the enemy of fear
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>Im still rather unimpressed with the action in gold, or silver. Neither has even reach the downward sloping 20dma. Both have RSI's in the low to mid 40s. My longer term-(2 month) momo indicators are still in the middle of a sharp trend lower.
SLV needs to clear 33 and GLD over 165 to even consider a trend change. Now of course this could happen in a single day, but to say PMs are going higher is more "gut" analysis rather than "technical" analysis. >>
I'm just looking at gold and I'm not referring to a bigger weekly timeframe - I'm looking more at a daily timeframe, and probably a ~$60 move. At the moment I'm up about $20, was up $30 earlier, although I'm looking for a more definitive break above 1684 to confirm the move. There's a little bit of 'gut' in my call, but I would call it experience of having watched the movement in the charts for years. But also the indicators I do look at were showing a short term move was ripe and underway. Mining stocks were very oversold and the past few days has been pretty good for them.
IMO, Silver's still dominated by the bigger term energies and is consolidating the massive move up. I'd buy it on any dips to the high $20's, but I'm avoiding it for now.
Edited to add: Bonds are poised to crash and crash hard, I'm just not sure of the timing but I'm guessing this month.
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......
portion of this 5 week up move.
roadrunner
MJ, my charts show the 200dma on the dollar at 75.99 with the 50dma just crossing to the upside at 76.01. I see no failure here. All major competing currencies have only rallied back to near the breakdown levels. I'm trying to temper my enthusiasm on the dollar, but she sure looks good.
I think you are looking at the 200 week MA, not 200DMA.
Roadrunner should note that my long term stoch on the dollar is just beginning to turn higher on the weekly charts. Also, RSI and MACD are both showing positive divergences.
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......
Which may not be a good thing for gold as it has had a pretty good corrolation to bond prices, especially over the past year.
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>Edited to add: Bonds are poised to crash and crash hard, I'm just not sure of the timing but I'm guessing this month. >>
Not any time soon. I believe the FED has demonstrated they will not allow it to happen. QE3?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Cohodk has taught us well to never count out the dollar or the TBond. Sometimes you just have to accept it rather than fight them.
The 50/200 dma dollar cross is a positive sign even if barely noticeable. The downward momentum is still there on the 8 hr, daily, and weekly charts so I think a gap fill is still
going to happen this week. It got within about 0.25 pts today. Too close to not go back and fill it. S&P basically ran up to the top of the summer channel line again. Today's
gapped up gravestone doji on higher volume could be ominous for the short term. Seems like GSR and VXX hit 20/50 dma lines today and halted. The VIX touched the 30 pt for the
4th time in 1-2 months. Can't help but notice some gaps about 10-20% lower on GSR and VXX. Maybe the equity's rally gets a little breather. Would still like to see the dollar do a
quick dip to fill that gap though. Then it can do what it wants.
roadrunner
Everybody knows that the math behind Treasuries is unsustainable. The fact that the Gov't has been able to float the whole proposition until now does perpetuate the myth that they can continue to float it indefinitely.
The biggest problem is that nobody knows when, or how it will implode. Why be there when it does?
Are the profits from trading bonds THAT good?
I knew it would happen.
Agreed. A dollar rally is still in the very early stages and vulnerable to failure. There are some very interesting developments that need to be followed though.
PC has mentioned that foreign holders of US debt are sellers. I havent seen any evidence of this, but lets just say he is right and bonds do fall. This would raise interest rates which would cause more money to flow into the dollar as investors seek yield. I almost think the dollar has the world by its ball$.
Knowledge is the enemy of fear
I got my wife a job as a bond trader in 1999. By 2001 she was making so much money she filed for divorce.
Knowledge is the enemy of fear
<< <i>PC has mentioned that foreign holders of US debt are sellers. I havent seen any evidence of this, but lets just say he is right and bonds do fall. This would raise interest rates which would cause more money to flow into the dollar as investors seek yield. I almost think the dollar has the world by its ball$. >>
I'm just going off of the link in the last post on the first page of this thread. Cyclicly, bonds are not looking good for the 4th quarter but that doesn't mean that we'll see the big inevitable crash just yet.
<< <i>
<< <i>PC has mentioned that foreign holders of US debt are sellers. I havent seen any evidence of this, but lets just say he is right and bonds do fall. This would raise interest rates which would cause more money to flow into the dollar as investors seek yield. I almost think the dollar has the world by its ball$. >>
I'm just going off of the link in the last post on the first page of this thread. Cyclicly, bonds are not looking good for the 4th quarter but that doesn't mean that we'll see the big inevitable crash just yet. >>
Agreed that the bond rally--going on 30 years now--may be long in the tooth and that inevitably bonds should go down. But to follow that line of thought, I would say that consumer prices have been on an 80 year rally and should inevitably crash. And I am kind of leaning toward consumer prices falling before bonds.
Sold 1/4 position of ZSL pre-open this morn. Still holding Euro and Yen shorts.
Knowledge is the enemy of fear
Don't Treasuries and the dollar hinge on essentially the same set of presumptions, i.e. the dominance of the US? I'm of the opinion that if one goes down, they both go down. Until then, they both provide a different function within the same mechanism - which was Nixon's "Bretton Woods II".
That arrangement post-dates the Great Depression, so I'm not sure that Bernanke's dependence on the Fed's playbook, based on the Keynesian approach to Depression era economics - is entirely workable.
40 years ago, I'm not sure that they considered what the blowback from our schizoid US foreign policy would be by 2011. It's a different world now too, and that's not a good thing.
I knew it would happen.
Closed another 1/4 of ZSL position.
Knowledge is the enemy of fear
"As all of us were taught, but most of us have long since forgotten, economic change occurs at the margin, where the action takes place... individuals who can think on the margin always have an advantage over those who cannot." - Arthur Zeikel
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
roadrunner
<< <i>Usually these 2X and 3X ETF's just continue to lose value over the long term whether bull or bear. Can one infer that a halving of AGQ is a "bullish" sign from the sponsor that they want to give AGQ more room to the upside again?
roadrunner >>
Or maybe they figure a drop from 60 to 40 wont look as bad as a drop from 120 to 80?
From Briefing.com
10:36 FOREX USDJPY rallying on possible intervention headlines (+50 pips at 77.35)
Pair is nearing 77.50 resitance
10:36 FOREX Yen spikes lower following headlines suggesting Japanese govt will intervene in coming weeks against strong currency -Update-
FXY (yen ETF) drops to lows.
The Aussie dollar has risen 1000 bps ~94 to 104, but now up against the 200dma. It also looks vulnerable to correction. I nibbled on some FXA puts.
Knowledge is the enemy of fear
<< <i>
<< <i>Usually these 2X and 3X ETF's just continue to lose value over the long term whether bull or bear. Can one infer that a halving of AGQ is a "bullish" sign from the sponsor that they want to give AGQ more room to the upside again?
roadrunner >>
Or maybe they figure a drop from 60 to 40 wont look as bad as a drop from 120 to 80?
From Briefing.com
10:36 FOREX USDJPY rallying on possible intervention headlines (+50 pips at 77.35)
Pair is nearing 77.50 resitance
10:36 FOREX Yen spikes lower following headlines suggesting Japanese govt will intervene in coming weeks against strong currency -Update-
FXY (yen ETF) drops to lows.
The Aussie dollar has risen 1000 bps ~94 to 104, but now up against the 200dma. It also looks vulnerable to correction. I nibbled on some FXA puts. >>
So much for the Aussie dollar never achieving par again
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......
Divergences showing up in the 4-8 hr charts. Note that the dollar left a gap open on the recent drop (78.6). Another target.
Don't like the weak volume on PMs and oil on this last push upwards. A bunch of little gaps sitting lower in Spy, QQQ, Sil, etc that might be targets for a short term fill.
JPM reported 10% higher earnings than forecasted. Received as great news ($1.02 vs. $0.93). But 40% of their earnings were by claiming unrealized cash from their
debt becoming worth less money. So if a company continues to spiral down causing its debt to be constantly devalued then all that goes towards additional income?
So as a company approaches insolvency their debt becoming worthless fuels an income spurt? Maybe the accountants can chime in on this. If this works, then Greece must
be hauling in some great income as their debt value heads to zero.
JPM beats earnings with FASB approved debt income
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......
Looks to be 50-50 right now to me. The equities have put in a nice short covering rally on nothing but fumes and the PPT. If they can get some more momentum maybe it turns
into a real rally drawing PMs even further along.
Hmmm, not very significance for my 20,000th but I'm out of ideas and energy at the moment. Probably 1/3 to 1/2 my posts were in the main thread, most of them on the longer side.
Anyways, I like to keep my birthdays quiet and low key...lol. And while there's no prize to be given away here, I like to think that I have "donated" throughout the years.
roadrunner
Anyways, I like to keep my birthdays quiet and low key...lol>
Congrat's RR!!! I also can't wait to read your next 20,000 posts. That's a lot of words
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......