Chart looks promising
WestySteve
Posts: 567 ✭✭✭
I like to chart stocks and exchange traded funds (ETFs). I like ETFs because they are leveraged. One neat gold-backed ETF has the ticker symbol "DGP". Click the link and notice a few things:
golden link
See the graph on the top, labeled, "Slow Stoch"? Notice that it recently went through a very low, low. Now look what happened every time it got that low in the past (3 times). Each time, the fund bounced up until it hit the top band of the trading range (a "bollinger band"). Could it do it again?
Also, notice that the price of the ETF has formed three cycles. The first cycle was a rapid and large peak. the next cycle was a longer cycle with a smaller peak. The third cycle was an even longer cycle with a even smaller peak. The question is whether the pattern will continue...will we see a very long cycle with a smallish peak? Hey, if so, a peak is a peak, right? It does kind of seem like it's time for one to form.
I've seen that time and time again where a wave will seem to evolve over time. Sometimes it can even happen on the stochastic charts. Eventually, the evolving wave pattern will break, but before it does, it is a pretty good tool. The trick is to recognize there is an "evolving wave" early enough to use it before it stops working. Crossing my fingers here, today I bought a Silver-backed ETF, "AGQ". I bought that because of the ratio of the price of gold to the price of silver right now is high and silver would have to move more, percentage-wise, to hit it's own top bollinger band (trading range).
Some people think chart reading is complete hogwash. I used to think that too, but I've seen things that are compelling. None of the chart reading tricks work all the time, and some barely even work most of the time, but there are times when things really line up and go in your favor. Exercising patience helps...it doesn't seem to help much in fast trading. I consider it a supplement to other, better analysis, but it is compelling right now.
Steve
golden link
See the graph on the top, labeled, "Slow Stoch"? Notice that it recently went through a very low, low. Now look what happened every time it got that low in the past (3 times). Each time, the fund bounced up until it hit the top band of the trading range (a "bollinger band"). Could it do it again?
Also, notice that the price of the ETF has formed three cycles. The first cycle was a rapid and large peak. the next cycle was a longer cycle with a smaller peak. The third cycle was an even longer cycle with a even smaller peak. The question is whether the pattern will continue...will we see a very long cycle with a smallish peak? Hey, if so, a peak is a peak, right? It does kind of seem like it's time for one to form.
I've seen that time and time again where a wave will seem to evolve over time. Sometimes it can even happen on the stochastic charts. Eventually, the evolving wave pattern will break, but before it does, it is a pretty good tool. The trick is to recognize there is an "evolving wave" early enough to use it before it stops working. Crossing my fingers here, today I bought a Silver-backed ETF, "AGQ". I bought that because of the ratio of the price of gold to the price of silver right now is high and silver would have to move more, percentage-wise, to hit it's own top bollinger band (trading range).
Some people think chart reading is complete hogwash. I used to think that too, but I've seen things that are compelling. None of the chart reading tricks work all the time, and some barely even work most of the time, but there are times when things really line up and go in your favor. Exercising patience helps...it doesn't seem to help much in fast trading. I consider it a supplement to other, better analysis, but it is compelling right now.
Steve
0
Comments
I do prefer ETFs to take advantage of juiced markets. My weapon of choice is AGQ as well as the triple levereged USLV. The nice thing about some leveraged ETFs is that there are also inverse flavors to play the downtrend when the time is right. There are also some nice unleveraged ones to play just about anything out there.
ETF database
PS - like the website.
"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>no offense, but i gave up on historical charts when the markets became over juiced. Juiced behavior is unpredictable. The only charts I rely on these days are those that show what the FED is doing to our currency.
I do prefer ETFs to take advantage of juiced markets. My weapon of choice is AGQ as well as the triple levereged USLV. The nice thing about some leveraged ETFs is that there are also inverse flavors to play the downtrend when the time is right. There are also some nice unleveraged ones to play just about anything out there.
ETF database
PS - like the website. >>
None taken. I want to check into USLV...I had looked for a triple levered PM ETF and hadn't found one. I would be a fool to argue about markets being easily predictable by charting, but I do find that since the PMs and oil are relatively slow moving, they are more predictable than many instruments over a longer term. My mistake early on was trying to predict daily fluctuations and it was hard to sort "signal" from "noise". But over the longer term, it's not impossilbe. I see the PMs and Oil moving like slow moving ships over the longer term...takes lots of tugboats to turn them.
Knowledge is the enemy of fear
Not this one:
AGQ
AGQ (silver) looks like it has broken out of its slide and the price action is pulling its short term moving average. Will it be sustained? Don't know...but I wouldn't want to be short right now...smart shorts should bail out.
Don't mistake my unwaivering faith in myself for actual knowledge. I don't know what I'm doing, but I'm up almost $1.50 a share right now going long. Doesn't mean I won't pull the plug if I have to.
Knowledge is the enemy of fear
I knew it would happen.
"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
Easy come, easy go.
Knowledge is the enemy of fear
Some other triple PM etf's: ugld, dgld, dslv, nugt, dust. One can try to catch a NUGT or get DUSTED. Most of these highly levered ETF's head to zero eventually.
I guess the only exception is if you happen to catch a long term bull market. Then, a trip to zero is delayed....but not avoided.
Hey, regarding the way these ETFs fade to nothing...I thought about shorting the "short fund" to go long, instead of just buying the long.
So like instead of buying AGQ to hold for the long term (a foolish thing to do), I've wondered if you can short ZSL. (its "short" counterpart). ZSL would have a component of it that would fade over time, so that could only contribute to my gains.
Just a thought.
Steve
For an investor, the odds would be better going to the Belagio and playing the pass or don't pass line at the craps table or baccarat....and I'm not joking.
I still say the best way to trade those "weapons of mass destruction"(leveraged ETFs) is to short the rips.
Which way is that Bollinger band pointing? There is a reason why these price actions are called "downtrends".
Knowledge is the enemy of fear
<< <i>I'm waiting for someone to say "told you so", but that's above anyone in this crowd to do so
We eat our own crow.
"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>I'm waiting for someone to say "told you so", but that's above anyone in this crowd to do so
Still waiting to see what will happen...price is still off the bottom bollinger, so it's worth waiting to see. If it hits it, then I'll get out.
If I can break even, I'll get out too.
<< <i>Charts are great for showing "what just happened", haven't seen one yet that can tell me "what's going to happen" >>
Gotta agree 100% with that.
I'm going back in on silver, close enought to bottom for me. Doing so on anticipation that EU will print away. Once they announce it the bottom will be gone. Long term silver looks beautiful, so catching the bottom now is not as important as missing it.
"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
The Financial Tap: A Cycle Has Clocked – Public Version May 21st
"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
edit: I got out. Made enough to take the family to dinner. I think today it will sit close to its short term moving average, and then any further guesses would be pure gambling.
Knowledge is the enemy of fear
<< <i>PMs will have to break from their inverse relationship with the dollar to gain strength. The dollar will continue to strengthen in the short term as the euro implodes. I'm guessing that break is near and that PMs will begin to benefit from the euro fiasco along with the dollar, especially once speculators see that PMs are oversold. >>
Has anything ever broken this inverse relationship before? (let alone snapped one pm [silver] off the trend of the others?)
The Dec Silver Monthly 3 year EMA held just like it has 2 x previously
The Stochastics of the weekly and monthly are in their usual bottoming areas
The Macd Histograms are reflecting a somewhat inverse in comparison with recent price declines
The medias bashing of the PM's has went rather neutral
Fundamentals hasn't changed that I'm aware of
The Possibility of reflating or bailing further is still a great possibility if not absolute
We have had many positions liquidate over the past few months and meanwhile new participants buying has enterd the market for the first time world wide.
It appears like a good time to test the waters until we know its not.
<< <i>Charts are great for showing "what just happened", haven't seen one yet that can tell me "what's going to happen" >>
Have you seen one yet?
Knowledge is the enemy of fear