Home Precious Metals
Options

***DECEMBER 2011 Gold and Silver Stocks/Options/Futures trading thread***

2»

Comments

  • Options
    RR...please forgive the uneducated question: The "Amount Tendered" vs. "Amount Accepted" in several cases in your Treasury link is several multiples higher...does that indicate strong demand?
    ASE Addict...but oh so poor!
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    Not to speak for roadrunner, but yes, there is TREMENDOUS demand for US debt.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    Everybody and their dentist expecting $1520-1550 to hold. Just sayin'.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭


    << <i>Everybody and their dentist expecting $1520-1550 to hold. Just sayin'. >>



    Actually, I think it's quite the reverse. Everyone and their proctologist is expecting a much further decline right away. Bearish sentiment is off the charts...not that it can't
    go lower. Another set of bond auctions doing down today through Wednesday. With gold futures options expiration only about a week away, there are still bearish influences
    in the air for another week or more.

    Sentiment at Dec 2008 levels

    $36.1 BILL sold in today's 2 yr Note auction with a strong 3.37 bid-to-cover. But not quite as high a demand last week's auctions.

    roadrunner



    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    We had 3 attempts on the $1610 level and now it looks like we might have broken through but it the breakout needs to be confirmed. Still, I don't think this rally will go far. $1640-1650 remains a 38.2% retracement level of the move down. This is mostly because of the hit DX took this morning, but I feel that it's just temporary.
  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭


    << <i>We had 3 attempts on the $1610 level and now it looks like we might have broken through but it the breakout needs to be confirmed. Still, I don't think this rally will go far. $1640-1650 remains a 38.2% retracement level of the move down. This is mostly because of the hit DX took this morning, but I feel that it's just temporary. >>



    The dollar was looking toppy at end of last week on declining volume and momentum. It was sort of looking like it was ready to head back and fill the most recent gap at 78.6.
    If the momentum picks up it could even target the huge 8 hr gap sitting down at 75-76. But that seems a bit unlikely still. The 77's would project to a retest of the 4 month uptrend
    line which is not out of the question as the dollar has already put in 3 up moves since the May bottom. A nice bounce in PMs and equities though on what looks to be lighter than
    normal holiday volume. But after this last week of washing out PMs, one wouldn't expect rousing volume on the turn with so much negativity out there. From what I've been reading
    $1300-$1450 is all "but assured."

    UST 10 yr to 2 yr ratio

    This ratio has rhymed fairly well with gold's longer term movements the past 3 yrs. Note that it has a very nicely shaped cup and handle before the August breakout occurred.
    The pullbacks have typically lasted 4-5 months. That's close to where we currently are. And the current sym. triangle is looking for resolution soon. Considering that this ratio
    has continually plowed upwards after a brief rest, that would be the most logical path until this 10/2 UST "bull" is broken. The spikes and waves have been getting larger and larger
    which will probably continue.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    A nice exercise would be to review the chart patterns of stock markets around the globe.


    Roadrunner, I dont know who they are talking to to get those "sentiment" values, but everyone I talk to, and especially those involved on these boards, is bullish and looking for support near current levels.

    But in the meantime, here is a chart of gold.

    image


    I added a new indicator to my charts. I often use this, but recently I've seen it used on CNBC and since it may be getting market attention, I thought it useful to include.

    A tutorial on Volume by Price



    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    Here is a chart of 30 yr US Treasury yields since 1943. Still in an established downtrend and probably gonna stay low for quite awhile.



    image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    jmski52jmski52 Posts: 22,532 ✭✭✭✭✭
    cohodk, what does it mean when the higher lows off the mid-2009 inflection point seem to be accelerating until just recently? Does it mean that the lower regression line is too steep, or does it mean that support (for gold) is breaking down?

    With the systemic changes that have occured in FASB accounting standards since 2008, does anything prior to then really matter?

    Also, I agree with you that yields may be low for a very long time, if only because there is no alternative. But doesn't this also mean that inflation is the key variable that will determine gold's direction and since real interest rates are probably negative already, gold should take off like a rocket in the not-too-distant future?
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Roadrunner, I dont know who they are talking to to get those "sentiment" values, but everyone I talk to, and especially those involved on these boards, is bullish and looking for support near current levels.

    One sentiment index is the Hulbert which surveys gold analysts. And those guys to a tee are almost entirely bearish, if not short as that must be close to 0% right now.
    Another one was market watch which I posted yesterday which is at Dec 2008 levels. Another one is Bullish % GDM (HUI) which is at 13% and the 2nd time this low since
    2008 crash. Frankly, I don't see anyone bullish beyond gold bouncing $1664. Even Stuart Thomson mentioned this in his article today that $1,000 gold was in the bag if
    you listen to din. In reading the gold blogs (Kitco, TF, etc.) it seems like the vast majority are looking for a deeper dip. I don't see any gold sentiment index that's not near
    cyclical lows.

    It certainly gets lonely out there when the voices of gold all turn negative.
    –Jim Sinclair 12/20/2011


    Those bearing rising wedges are not always bearish as the April 2008-April 2011 chart shows. Gold broke out of that bearish rising wedge which surprised many. Coincidentally,
    gold's recent low corresponded with a retest of that 3 yr wedge b/o. O'Connor basically called PM's and stocks dead only weeks ago. It's very odd that he's changed his tune based
    on the current downdraft. One would have expected just the opposite from him. There aren't too many analysts taking this view right now. Yet grains, oil, and even the SM are
    all tracing out patterns that could easily flip to the upside. The CRB/CCI has been declared dead a number of times in the past 3 yrs. I read an interesting article by Goldrunner
    yesterday that in tracing out the 1970's gold bull had already factored in one "2008 type event." There were no spots left in the late 1970's chart for a 2nd such event.

    Gold morphing back to bull?

    Individual rates can continue to fall as that LT 30 yr TBond chart will attest. But the ratio of long term to short term rates (ie 10/2, 10/5, etc) has been in a rising pattern for a while
    now. And so far gold seems to like that trend. The lower the individual rates, the more likely real rates stay negative. Gold likes that too. Today's 5 yr Note auction with $35 BILL
    sold was not as strong as the previous 4 auctions these past 2 weeks. Bid to cover around 2.85 but in line with previous 5 yr auctions.

    Based on the large S&P and Nasdaq moves today gold and silver lagged. Really only GDXJ put in a bullish day at +7.7%.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    Cohodk (and anyone else),
    I'm thinking about refinancing my home mortgage. Naturally, mortgage rates are somewhat correlated to bond rates. It makes sense for me to refi at current rates, but in your opinion, do you think lower rates are coming in the next few months that I should hold off for? As a benchmark, the homepage of http://gmacmortgage.com is currently showing 30 year rate at 3.875. What would you do?
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    I think the gold bearishness (at least for me) is based on dollar bullishness. The breakout over 80 is very bullish, and hard to ignore. Although the big caveat is that gold and the USD can and do sometimes move together.

    Today's breakout over 1610 isn't very impressive, so far...
  • Options
    guitarwesguitarwes Posts: 9,242 ✭✭✭


    << <i>Cohodk (and anyone else),
    I'm thinking about refinancing my home mortgage. Naturally, mortgage rates are somewhat correlated to bond rates. It makes sense for me to refi at current rates, but in your opinion, do you think lower rates are coming in the next few months that I should hold off for? As a benchmark, the homepage of http://gmacmortgage.com is currently showing 30 year rate at 3.875. What would you do? >>



    Depends on what your current rate is and what the fees are associated with a refi. Waiting for any better than 3.875 for 30 is just a gamble. Especially if you're at >5.5% or so on your current.

    @ Elite CNC Routing & Woodworks on Facebook. Check out my work.
    Too many positive BST transactions with too many members to list.
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭


    << <i>Depends on what your current rate is and what the fees are associated with a refi. Waiting for any better than 3.875 for 30 is just a gamble. Especially if you're at >5.5% or so on your current. >>


    Of course it's a gamble. I'm trying to make an educated bet. I believe it will be my last refi on this mortgage, so I have to make it count. Like I said, it makes sense for me to do it at today's rate, but if rates are going to drop further it's worth waiting. I will weigh the risk/reward. I'm just looking for other opinions.
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    What would be the difference in payment for your mortgage at 3.875% or 2.875%. If the dollar amount is negligible, then I would refi. Unfortunately I see the potential for 5% rates as likely as 2% in 3-5 years. So I would just play the hand that is dealt me now.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭


    << <i>What would be the difference in payment for your mortgage at 3.875% or 2.875%. If the dollar amount is negligible, then I would refi. Unfortunately I see the potential for 5% rates as likely as 2% in 3-5 years. So I would just play the hand that is dealt me now. >>


    I guess I wasn't clear. I know mortgage-math and calculations inside-out and I have all of the figures.

    In my case every 1/8th point is doubly significant because every dollar I save vs. my current payment will be applied as extra payment to pay down the loan earlier. It fluctuates +/- 1/8th daily so a small move is not my concern.

    But once I refi - say to 3.875 - it will be unlikely that I would ever see a scenario where another refi would ever make sense (for rate/term reasons).

    The question is really whether to lock-in a rate now or wait a few months and see what happens. I don't care what happens in 3-5 years. Do you see bonds going higher in the next month or two? I have my theories, I want to see what others are thinking.
  • Options
    jmski52jmski52 Posts: 22,532 ✭✭✭✭✭
    Today's breakout over 1610 isn't very impressive, so far...

    I'd agree, especially in light of oil being up over $3.00 and the Dow being up over 300 pts. Maybe it simply means that the transient money is mostly gone from gold now, and that may be a good thing.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    The quick repulsion off of the $1640 retracement level is a bearish indicator. We'll need to see if gold can get back up and over this level before getting long. As time goes on I'm more convinced that serious further downside may be unlikely - perhaps more sideways action is in store. Basically, we just need to wait and see where stuff is heading, the action this week is just too quiet.
  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Actions across the other parts of the commodity sector today and the last few days were bullish. Generally, most everything across the commodities went up from oil, copper & uranium
    to grains. Gold and silver seemed capped. The dollar has now retreated to the bottom of the 2 month up channel. Last 2 days closed < 10 day ema. Exxon has broken out above it's
    multi-month bullish pattern. Now 3 days strongly up. Similar pattern in WTIC and S&P though yet to reach necklines.

    7 yr Note auction today was the weakest of the past 2 weeks with a below average bid to cover over the past 4 auctions. With nearly $300 BILL in bonds and notes auctioned these
    past 2 wks maybe everyone has had their fill?

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭


    << <i> With nearly $300 BILL in bonds and notes auctioned these past 2 wks maybe everyone has had their fill? >>


    The federal reserve has infinitely deep pockets...
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    PC, I dont know where rates will be in a month. Could be 50bps higher or lower. In either case, mortgage rates likely would be slow to move. As much as I love to time the market, and I think I do it with fair success, my aim is not always on the bullseye, but rather hitting the target. Borrowing money at 3.875% is historically very cheap. Personally I would take advantage


    Not much more to say about gold as I think the chart speaks for itself.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    Thought this chart from the latest McLellan newletter was interesting - a comparison of the POG in USD vs. Euro. McLellan notes that when the two diverge, it is usually the Euro chart that is the best predictor.
    image
  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Considerable movements in today's COT commercial numbers. In gold, a fat 14,000 short contracts were closed out while 7400 longs were added.
    In the past 2 weeks over 17,000 longs were added while 19,600 shorts were closed out. On the dollar side, the commercials have shifted to record
    levels on the short side by adding 2914 shorts and removing 4335 longs. Their net short to long ratio is now an eye-popping 9.8! As far as I can tell
    that's the largest it's ever been in the past 3-4 years. Since they peaked on longs back on Nov 4th at 17,846 (2.5 short to long ratio) commercials have
    been shedding them each and every week....now down to only 5,676 longs and nearly 55,000 shorts. The longs have been basically replaced with shorts
    as OI has remained fairly steady. The smart bankster money apparently sees the dollar falling off.

    Hoye on gold

    Hoye has been fairly good at calling exhaustion points (tops and bottoms). While he sometimes is a bit early, he's rarely wrong. He got the 2008 crash in
    commods and PM's pretty close. He's calling for at least a 2 week dollar pullback with PMs moving higher until at least the first week in January. He's not
    discounting a revisit to $1900-$2000 gold either and could see a move last months instead of just weeks.

    TLT dropped below it's 4-1/2 month ascending triangle today (on very low volume) to touch the 50 dma. The 200 dma is quite a ways below if this continues.
    If TLT regains the triangle it projects to 163 (currently at 118). P&F chart suggests 142. GSR of course is a very similar looking chart and still well within it's
    ascending triangle with similar lofty projections.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    He's calling for at least a 2 week dollar pullback

    What happens after 2 weeks?
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭


    << <i>He's calling for at least a 2 week dollar pullback

    What happens after 2 weeks? >>



    I'll worry more about that in 2 weeks....................

    Assuming 2 weeks is the most the dollar will reverse, then it's more upside for the dollar and more downside for PMs. More risk off - less risk on.
    Then again, that's the worst case scenario presented. If might just as easily last 3-6 months. Personally, I don't think that 2 weeks will be enough
    to kick some tar out of the dollar bulls and Euro shorts. But late Jan-early Feb has tended to be a bottom/peak month for PMs. From where we are now
    it could just as easily be an intermediate high or a new and much deeper low. The fact that the PM cycle has shifted by 1-2 months could easily push back
    the usual late Jan "peak" by 1-2 months as well. The current commods pull back is about as long as any seen over the past 10 yrs. Long in the tooth?

    The chart speaks for itself.

    That's always true....at least until people get involved and start offering interpretations of what they see. image

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    You know what they say about interpretations, everybody has one.image


    Merry Christmas and Happy Holidays everyone!!!
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    What I read and see aligns somewhat with RR. I see that stocks will do well for the next 2 weeks, and that usually comes with a falling dollar. Also, with gold hanging in there better than I thought it would, I think the risk of a significant decline are diminished - at least for the next couple of weeks, as I think gold and stocks will head the same direction.
  • Options
    jmski52jmski52 Posts: 22,532 ✭✭✭✭✭
    Check it out, from Jim Sinclair's site:

    "Silver London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Long & Short As A % of Open Interest"


    image
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    Grasping for straws.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    The chart that jmski52 posted has worked quite well. However currently it shows the stochastics bottoming 1-1/2 to 3 months away.
    That's a whole lot of time to continue to chip away at the PMs. I don't see why stoch couldn't bounce from here. Gold and silver's quick move
    down yesterday seemed well choreographed. Now back to the same area seen during the lows of 2 weeks ago ($1560-$1570). All the banksters
    wanted for Christmas was an annual gold close under $1600. I'm sure they really wanted $1488 too but you can't get everything on your list.

    Yesterday gold bounced sharply off the apex of the May-July consolidation triangle while finally taking out that Sept 26th long shadowed daily candle.
    That qualified as a technical retest of that area though it doesn't mean the consolidation is complete. Gold also bounced off that same triangle back on Sept 26th.
    Interesting that silver did not take out it's long shadowed Sept 26th candle yesterday as it fell short by about 8 cents. Guess you have keep the sheeple guessing.
    For those looking for sub-$26.05 silver they'll have to wait longer. Very nice $2 snap-back by silver. I still like the 3-4 year consolidation patterns in most of the grains,
    softs, energy, and metals. Quite a few cups, bowls, and head and shoulders hiding out there where long term necklines have been retested. Seems like the herd
    is calling for a commodity's bath in 2012 while the charts seem to imply otherwise. Must be in the interpretation.

    In this PMs bull market this will the 3rd year that silver had ended lower (2002, 2008, 2011). Neither of those first 2 killed the bull market. Silver's longest downward
    correction in this bull market was 8 months 1 week. That's precisely where silver stands currently - 8 months 1 week since late April/early May. The din of pessimism
    was so strong yesterday morning that one would have assumed that silver should correct downwards for all of 2012 as well. Another headwind for PMs has been the declining
    10/2 yr treasury yield ratio. Over the past 3 yrs these pullbacks have typically lasted around 5 months. The current correction is just about at that point and below the
    200 dma. Once this reverses the current trend it's a plus for PMs. But it certainly doesn't track PMs directly as there can be significant lag in either direction.

    UST 10 yr to 2 yr ratio yield

    For gold it looks like 11 yrs in a row is in the bank. Next year is already setting up well for number 12. With this low volume week it's hard to get a read on any direction. But
    one has to wonder how many Comex traders have left for good because of the MF Global mess. The banksters and gold mining companies might end up being the only players
    left for "paper gold price discovery." Some other market may have to determine the price of physical gold.

    roadrunner



    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭


    << <i>Grasping for straws. >>


    Wow, that's unusual, usually you have a pretty solid outlook or opinion on what's going on.

    I renewed my short gold positions on last night's bounce which looks to me little more than a retracement of yesterdays' decline. I've got $1420-1460 in my sights at which time I think I will take a long term buy and hold position. Stocks continue to do well and probably will for the first week of January, although I expect January to be pretty bloody overall. 1Q I expect there to be a lot of commodity related bargain stocks - the best buying opportunity in a few years. Gold will end the year strong, over 2000.

    Although it hasn't really gone anywhere since breaking above 80, I expect the dollar index to climb to the upper 80's. This fits in with the discussion on Alex Jones yesterday. Without going into details, it's a little conspiratorial but it makes sense. Next year we could be looking at an overt dollar devaluation (via bank holiday) to fight deflation (a la Roosevelt) as per Bernanke's 2002 speech. The only conflict with that is the election year so that might not be politically possible until next November, so nothing anytime soon, unless the strong dollar becomes problematic.

    I'll probably copy this post for the January thread which I'll go ahead and start tonight or tomorrow after markets close.
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    I didnt mean "me" grasping for straws, but rather the author of jmski's chart.

    Silver has pretty much done what I expected--tested the Sept low. Seems to be decent support. A market meltdown and it breaks toward $20, but we'll just have to see it that materializes.

    Same comments for gold, but sideways pattern looks most likely. Dead money in 2012.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭


    << <i>I didnt mean "me" grasping for straws, but rather the author of jmski's chart. >>


    See what happens when you're frugal with the keystrokes?
  • Options
    ProofCollectionProofCollection Posts: 5,581 ✭✭✭✭✭
    New thread started.
  • Options
    cohodkcohodk Posts: 18,766 ✭✭✭✭✭
    More good stuff with which to build an education.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

Sign In or Register to comment.