Chart looks promising

WestySteve

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

derryb

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.

WestySteve

<< <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.

cohodk

Moving averages and trend channel pointing down. Will continue to do so until it doesnt. Possibility of death is high.

NumbersUsacom

The MACD Histogram looks positive for DGP on the Weekly Chart, the slow stochastic is also encouraging. keep in mind that you are looking at recent history of a bull market and that in a bear market the technicals act completley different, in other words, over sold indicators are not really oversold while in a bear market. As far as the Gold and Silver Markets, if you accept the traditional drop of 20% equates to bear market territory then we entered a bear market in metals some time ago. But then we look at the huge drop in 2008 and the recovery and get another sense of perspective.

WestySteve

CohodK:

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.

cohodk

Charts on juiced etfs are notorious for giving false and misleading signals. There are lots of reasons for this that I will not go into, but if trading a juiced etf, one should follow the chart of the underlying rather than the chart of the etf.

jmski52

In this world, oil seems to be a reasonable bet.

derryb

all markets are juiced. one must learn to read the juice.

cohodk

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.

Easy come, easy go.

roadrunner

A daily stochastic of 10,3 is pretty short term. So bounces from one extreme to the other are pretty regular.

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.

WestySteve

Yep, back to zero gains. It's like playing blackjack. Not negative yet. I won't be stupid about holding for a loss, too long but I need to be a little patient...the cycles are weeks long. We did go through a prolonged slide down the lower bollinger and we are off the bollinger, so I'm not making a wild guess. Edit...also, if you go back to the very first link I provided in this thread, you'll see that the price of gold is sitting on the bottom bollinger now, having dropped at a steep angle. That's ripe for a bounce. Too early to throw in the towel for sure.

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

bluelobster

You are stacking the deck against you when you buy and hold a leveraged ETF...they are not designed for that, unless you like frustration of being right and while still having a decent chance to lose money.....if you're wrong, forget about it.
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.

cohodk

, if you go back to the very first link I provided in this thread, you'll see that the price of gold is sitting on the bottom bollinger now, having dropped at a steep angle

Which way is that Bollinger band pointing? There is a reason why these price actions are called "downtrends".

WestySteve

Yep, starting to take a bath. I'll remain a little patient, but it's really getting the c-rap kicked out of it today.

piecesofme

I'm waiting for someone to say "told you so", but that's above anyone in this crowd to do so

derryb

<< <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.

WestySteve

<< <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.

Coyn

Charts are great for showing "what just happened", haven't seen one yet that can tell me "what's going to happen"

derryb

<< <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.

meluaufeet

Some pretty interesting stuff...

The Financial Tap: A Cycle Has Clocked – Public Version May 21st

WestySteve

That is interesting. Ya'll can say I'm full of c-rap, but his discussion on PMs is what I was seeing in my chart. PMs slid for a long time to an oversold position, and when they bounced back up some, it seemed "energetic". That made it too dangerous for an intelligent short to stay short, IMHO. Maybe going long is risky, but going short right now seems even riskier based on how far it's fallen and the fact that the pattern appears to be broken. I'm about even now and still holding.

derryb

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.

WestySteve

Cool...futures are up this morning. If it holds, I can get out with a decent profit. But should I? More and more the downward pattern looks broken.

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.

cohodk

tneig

<< <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?)

NumbersUsacom

XAU or PHLX hit the 50% retracement of the 60 low from the 230 high and has begun to rebound,

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.

cohodk

<< <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?