***FEBRUARY 2012 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
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ProofCollection
Posts: 6,109 ✭✭✭✭✭
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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
Short GDX (long puts)
no position GLD
/edit to add: those that don't trade can disclose that or can use:
no trading positions
Rinse, repeat.
Edit to add: REE leaps in my 'play' account.
ZSL - very small postion
VXX - watching closely
AGQ - looking for the next dip
2/15 update
cash -long
USLV - long
UGL -long
"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
Nibbled on AGQ puts at 12.10pm EST. Out at 12:58. Had a 10% trade, but missed it and settled for only 3%. Better than a sharp stick in the eye.
Knowledge is the enemy of fear
Sold sizeable NUGT position end of last week.
Nibbled on DUST twice this week, stopped out this morning when I couldn't watch the market close enough.
Waiting for next entry points on either NUGT and GDXJ.
roadrunner
No current position.
Knowledge is the enemy of fear
Sold AGQ puts as of time of edit.
Long AEM calls.
Knowledge is the enemy of fear
What little gains the DAX, FTSE, CAC, and S&P had this morning seem to be gone. Volatility moving up a bit with TIPS and 10yr/2yr yield ratio both down. Gold tends to somewhat follow those last 2. Gofo rate dropped yesterday which coincided with gold's drop. It's unchanged today. Silver forwards still creeping up which is bullish. On the daily chart the dollar still looks to be trying to turn but it's a darn slow one. Same positive divergences in the 8 hr and now some slight ones in rsi and w%r on the daily. It can drop further before completing this turn. When I checked the dollar COT commercial short to long ratio last it had jumped to a nosebleed ratio of >13-1. And I though the 9-1 ratio maintained from mid Dec-January was high! Silver's rising consolidation rectangle of the past 8 days has been putting in a series of higher lows. But that's no guarantee which way it finally breaks. Both gold and silver have been coiling over the past 2 weeks. I still think a strong move is coming, but maybe not quite yet, especially for the miners which are within one week of Options Expiration effects. Today's gold action broke below the 3 day uptrend line as the 3-4 day cosolidation triangle breakout and backtest failed. But the 1-2 month uptrend line is still intact. A back test of the 4 month downtrend line in the area of the $1660-$1690 August breakout area is potentially still on the table. Note that GSR looks to be in the 5th wave of the C leg in the ABC consolidation since the December high....or it could be already done. A retrace of part of that move into the 52-55 gap area above would be logical. It's also logical to get another wave down into the lower gap area of 46-50. Which one wins? Volume today for GLD and GDX was substantial with accum/distrib downtrending. The candles for GLD and GDX could be called bearish engulfing. More warnings....even in light of the reduction in CME margins on PMs today.
Brochert
Adam Brochert sees some of the same stuff I'm been noticing. A "C" leg into later next week would complete a typical gold miner correction. His theory of yet another gdx major breakout/breakdown is interesting. I wouldn't be surprised if GDX moves higher from here, but it's it not what I would expect. Anglogold Ashanti falling back to fill its gap in the 44's by next week would work as a bell-weather for me.
Update: GDX and GDXJ filled those morning gap ups and then making lower weekly lows this afternoon. Silvercorp filled it's rather obvious daily gap. GDXJ crossed the -50 line on the daily W%R (14). Usually once that occurs it will head to -80. GDX is higher at -38. I'd like to buy this dip but prices at the close are near lows of the day. Plus I think we're close enough to OE week to sit back and just watch unless we get a really fat dip before next Wed/Thursday. It's bullish that the miner volumes are still declining through this dip. The one obvious exception in NUGT which has had fairly large steady volume in both the initial up and now down direction (fuel cell?). GDX W%R (10) hit -100 today on the daily chart. Usually it spends a couple days down there once it gets tagged.
Looks like a lousy 30 yr TBond auction today with only $18 BILL sold at a sub-par 2.3 bid to cover, the worst of the 3 auctions this week. The 3 and 10 yr auctions were only fair with bid to covers of 3.05 and 2.80 but they sold $37 and $26 BILL. Each day the auctions got worse, same as the last 2,5,7 yr set 2 weeks ago. Maybe the appetite for debt paper is just not there. The FED will have to buy more of these auctions on their own via the back-door. I took a medium postion yesterday in NUGT but after this morning's 4% bounce, and the negative signs above, I dumped it on it's 2nd bounce this morning. Didn't get that last 25c but avoided the much larger downside I was sort of anticipating this afternoon...primarily because of the gap up with no follow through past $1750, and the aroon (10) cross. Will sit back and probably re-enter next Wed-Friday when the usual GDX mid-month whacking occurs. AEM seems like a pretty good play. It's head and shoulders still projects down to around 32-33. I'd sort of expect it to retest down near the current lows yet again next week...assuming gold doesn't take a flyer above $1767 before then. They're still struggling with the loss of 15% production after the closure of their most cost effective mine. And that was after they had a fire at another mine last year. I've gotten tired being on the wrong end of bad mining reports/news that I'm starting to spend a lot more time with NUGT, GDXJ, and DUST.
roadrunner
Knowledge is the enemy of fear
This current week and next week set up much the same way the OE weeks did in December...that is, back to back with a TBond auction week included.
And those 2 weeks in mid-December were quite a bear. So as soon as mining stocks are out of the weakness of this week, we potentially morph into the
weakness of bullion OE come next Wed/Thursday/Friday. There's not much time for a rally inbetween. And if the Dow/S&P is starting to consolidate, that
could add some liquidity headwinds as well, esp to miners. The GDX chart from mid-December OE has some similarities to the current OE period.
Silver failing attempt to break 200dma and downtrend? Maybe give it another 2 weeks. If it doesnt break by then, then the downward sloping 200dma will probably act as resistance for a few quarters.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
where they lost $601 MILL last year. I knew about them shutting down one mine due to excessive water leakage but taking a longterm value hit on Meadowbrook was fresh news
I think. So no surprise it got hammered almost down to mid $31's at the open. But the bounce into the $37's was an 18% turnaround, on no good news. Whatever shorts had been
applied to this for so long probably all bailed out this morning. If I had been holding AEM overnight I would have given anything to be out of it even this morning. Who saw $37 coming?
I had taken up another position in NUGT as of yesterday but I guess I wasn't ready to deal with the pain of being in a 6% losing position in <24 hrs. But I sort of knew there'd be
at least one more possible hit today before OE ended. Think I was looking into next week when PMs should get hit again on Wed/Thursday. Didn't properly factor in the potential
for a killer bounce after 7-8 straight down days and an 11-12 day correction. All I was focusing on was the -6% that eventually became only a -3%. Should have bought half as much
yesterday and been ready to buy a dip today which was the game plan last week. The game plan played to a tee, but not my execution. Silver and HUI falling below some key trend
lines yesterday didn't help the mindset. Also, gold falling sharply under the 20 dma this morning looked positively gruesome. Bailed on my NUGT position at around 10:30 am after
a bounce to 21 on declining volume. It just didn't seem like it was going to run. Even gold looked like it had no energy left in the $1715-$1720 area as volume fell off. But about a half
hour later as the dollar tanked harder, it sprang up like a cat. Not quite the turnaround that AEM saw, but 14.5% swing is pretty impressive too. In hindsight gold double bottomed
for the week around $1705 and then bounced hard like it has done a dozen or more times in the past 6 weeks....trading range of $1702-$1750 still intact. The HUI/GLD level hit 2 yr
lows for the 3rd time in the past 2 months. I guess that was enough. The PPT must have showed up with a lot of money in the last 24 hrs to rescue AAPL and the S&P. An extended
smackdown into next week seemed certain after yesterday's close, but evaporated shortly after today's open. Was there some great newsworthy event that I missed?
Danielson...."risk off"...."risk on." You see?
Not really newsworthy, but it looks like money might be coming out of the bond market. If so, the market continue higher. Im not happy as I am pretty long SPY puts as the options specialist is way underwater right now. Maybe he got a bit back yesterday, but is still in a hole. Was in a big hole last month also. Last time I saw the specialists take a bath like this was Aug when GLD ripped up in his face. But then GLD collapsed. Same scenerio for equities next week? Right now I have no idea.
Knowledge is the enemy of fear
In God We Trust.... all others pay in Gold and Silver!
Gold, silver, and the HUI all rebounded to resistance levels today. Next step will be to see if they can push through. They just might do that over the next
3 days but then end of month OE pm's effect will take hold. Treasury auction week as well (2-5-7 yr notes). Last evening's gap up in the dollar on the open
(79.7) sort of indicated the dollar would pull back this morning. So it was likely a morning bounce in stocks and pms would occur, just didn't think the dollar
would drop as fast and as far as it did. Still a higher low in place even if the 3 day uptrend fell apart.
Monday's US trading holiday brings next week's OE that much closer.
This process is the debt deflation cycle I have talked about at length for years
Yeah, me too.
Knowledge is the enemy of fear
Gold is in a great position for an upside surge on Friday from a number of fractal energy and timing cycle standpoints, but it remains to be seen what will actually unfold. Something tells me this weekend could be key for a big economic announcement of some sort.
Buy May 185 calls
Sell Apr 185 calls
A modestly bullish strategy, for a net debit. I am looking for a modest run up to the old highs of GLD 185. Max profit is if GLD is at 185 at April option expiration. Max loss if GLD moves lower or stays were it is, or shoots way up immediately to over 200.
I am still holding my now near worthless Mar GDX 45 puts (commission is about the same as exit price).
Edit: 2.2% if called away.
"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
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Knowledge is the enemy of fear
A large pile of March silver contracts still stand for delivery by early next week. Silver might be currently under pressure to get these guys out of them. Could still see more attempts to dip silver early next week so the Comex doesn't have to deliver physical. Silver has also run into the downtrend line from the May 2011 top.
I have to wonder if IAG's lousy -9% performance today on a slightly negative quarterly report was a harbinger for the seniors in general. IAG gapped down hard and closed near the lows. It just happened to be the miner with news today while gold pulled back. And it suffered it for it. Heavyweights Newmont, Goldcorp, and Barrick all had weak days losing 1.5-2%. Have to consider that it's more than just a backtest of the downtrend line breakout. Usually when one major miner runs ahead of the pack, the pack often catches up. Something to watch next week.
In today's COT report hard not to notice that the commercials added a whopping 19,000 shorts as of Tuesday, while selling only 800 longs. Looks like they are positioning for the next hit. Next weeks report will probably show that they sold a ton of longs the past 3 days as gold surged from $1730 to $1787. Fwiw yesterday's 7 yr treasury note auction was a huge success by previous standards.
roadrunner
<< <i>Interesting Hoisington lead economist interview from Mish on debt vs the economy
Gold, silver, and the HUI all rebounded to resistance levels today. Next step will be to see if they can push through. They just might do that over the next
3 days but then end of month OE pm's effect will take hold. Treasury auction week as well (2-5-7 yr notes). Last evening's gap up in the dollar on the open
(79.7) sort of indicated the dollar would pull back this morning. So it was likely a morning bounce in stocks and pms would occur, just didn't think the dollar
would drop as fast and as far as it did. Still a higher low in place even if the 3 day uptrend fell apart.
Monday's US trading holiday brings next week's OE that much closer. >>
Thanks RR,
I have learned to respect Lacy Hunt and his work through the years. I'm really glad for the link, I would have missed this as it is not listed on their sight.
<< <i>Looks like GDX and $XAU breaking downtrends. >>
Still not breaking downtrends yet. Gonna have to get moving soon.
Knowledge is the enemy of fear
<< <i>Looks like GDX and $XAU breaking downtrends. >>
Deep morning dip to backtest that downtrend line as well as the 20 dma touch for GDX, GDXJ, NUGT, and SIL. Let's see if that was enough.
Plat, pall, Dow all have broken below their short term trend line from the 15th. Gold, silver, copper, euro, and oil still holding theirs. Dollar showing positive divergences on the 8hr and daily chart. Now dealing with resistance at the 78.5-78.8 area that propped it up last time around (previous gap area of 78.60). Silver retested $35.02. Does it need to also retest the b/o from $34.50-$34.60? Gold did a retest of the $1763-$1767 breakout area with a touch of $1761 this morning. Looks like a double zig-zag pattern almost forming a 4 point parallel channel. The push down accelerated just 5-15 min after London opened. Note that silver didn't have volume spikes at that time. Silver bounced at the 2nd touch ($35.02) of the 3 day downward sloping parallel channel. The 3 am volume on gold was 2X to 3X larger than seen on the subsequent bounce back to $1770. Well coordinated pre-NY raid to pick off those 24 hr stops. Do NY traders get a chance at those same prices later today? Interesting that Sifo's are the highest seen in 2012 today. Gold forwards are at 2 wk highs.
Edit: 3rd trading day in a row that gold got hit for $7 precisely at 2:20 PM during Globex hours. What are the odds of that?
roadrunner
By some stroke of pure luck, I sold my weekly AGQ calls this morning at 74, about 10 minutes before the splunge started. I was going to be tied up for a good portion of the day and wanted to book some profits. AGQ currently under 68.
"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
Knowledge is the enemy of fear
added: not gonna happen any time soon. Went with ZSL at 8.95
"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
Knowledge is the enemy of fear
There are gaps in GLD going back all the way to the $800's. Closest one I see is around 158 (approx $1620-$1625). Doesn't mean they get filled though.
SLV gap at 32.3. Still a bit to go to tag that. GDXJ nearly filled it's 2 week old gap in the upper 27's.
Just before gold fell out of the low $1770's this morning some serious divergences started showing up in the 2hr to 8 hr charts. That was the first big warning. And when the $1764 level
gave way, that was it. From midnight to 10 am silver put in a 5 way broadening top pattern. But on a bull run they often become breakout rising wedges. Not this time.
PC, it's tuff to pick out "good" miners these days. One day they're good (ie IAG), and the next day they are dog meat and can't get out their own way. While I think I could list a dozen
or two top flight miners I'm no longer playing that game unless they get dirt, dirt cheap. Best way to play miners imo is with NUGT and GDXJ. With NUGT you get 3x leverage to GDX so it should be used sparingly. But with that leverage it can compete with and usually outperform GDXJ. GDXJ tends to have 1.5X to 2X the leverage of GDX. While GDXJ and NUGT might not perform as well as high flying junior, they will fully participate in any up move....and down move as well. While I wouldn't sit on NUGT for months at a time due to the decay factor, it seems to do ok for days to a few weeks at a time, the length of shorter term cycles. Now if they just came up with a 2X Junior ETF...lol. Like derryb, I'm getting to like USLV. Got out yesterday at 63. Major resistance was looming in the 63-65 range. It did make it to 65 this morning matching the November peak. Lightened up on miners yesterday as well, but apparently not enough.
And especially following the 13,000 "bullish" Dow close yesterday. Certainly things did get a bit extended in the metals.
Buyers were no doubt scarce once gold hit $1790 and silver to $37. But there had to be a good shove to both of them around 10 am today
to get the Ben Bernank party started. 225 MILL ounces of paper silver dumped in less than an hour today. That's a lot of paper and keystrokes...but not much silver.
Found this on TF's website comments on reasons for today's takedown other than it was just time for the cycle to end:
Cartel needs to shake out weak hands standing for March delivery of silver
* Wednesday - first day for new COT report
* Bernanke speaks
* Ron Paul pisses off the cartel
* Cartel provides cover for LTRO 2
* Fed horrified of 1800 gold, gave the orders to beat it down
* EUR/USD weakens 150 pips
* Obama feeling the heat from inflation - only thing that can dereal re-election
"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
Knowledge is the enemy of fear
<< <i>Today was a massively ugly day for PM's. No roses can cover this one. It felt real. Very heavy volume, and not the capitulatory type. At best, sideways trend continues. >>
I was off the grid today. I did hear BB's comments in a headline on talk radio for a brief minute and I thought to myself gold will fall $40. I was somewhat surprised by the $90 drop when I checked in later. 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......