***NOVEMBER 2012 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 6,103 ✭✭✭✭✭
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.
Been pretty busy the last couple week. Cohodk, I'll post an updated chart later today hopefully.
With the election results coming in 5 days things could get interesting in the market. Indicators at this point show that the short term correction is over and that gold should probably start to recover some of the losses over the couple of weeks. I don't have any feeling right now for how much recovery just yet. Election results could really have an effect. Also, I will speculate that the economic indicator data (in general) may have some significant negative revisions to be revealed this month after the election is over.
Been pretty busy the last couple week. Cohodk, I'll post an updated chart later today hopefully.
With the election results coming in 5 days things could get interesting in the market. Indicators at this point show that the short term correction is over and that gold should probably start to recover some of the losses over the couple of weeks. I don't have any feeling right now for how much recovery just yet. Election results could really have an effect. Also, I will speculate that the economic indicator data (in general) may have some significant negative revisions to be revealed this month after the election is over.
0
Comments
Zoomed out and added some lines:
Barrick missed on earnings, raised cash costs approx 5%, significant drop in margins from 3Q 2011 as expected, and reported a delay in a key mine construction project. Stock gapped down 3.6% to a H&S neckline area in pre-market ($38.80). After market opened it gapped down another 3-4% cleaning breaking a H&S neckline. This could point down to the $34.50 gap area and give the chart a very symmetric IH&S (another -7%). You have to wonder how the senior sector will hold up with the flag ship company missing targets and dropping by 8% today. That's long fall in one day for a senior, especially the biggest one. Newmont reports earnings after market close today but is already down 2.4% as if someone knows something. It just slipped a bit below the 50 dma. Goldcorp reported earlier this week and gapped up on an decent report. Newmont could make it or break it here for GDX.
Looked at gold's weekly macd crosses for the past 5 years and for the most part they occur very routinely every 2-4 months during uptrends and downtrends with 3 months being the most often seen. The exceptions are the longer downtrends that last up to 5 months. During the 2007 summer/fall breakout weekly macd never crossed in 7 months, but did make one near touch at the mid-rally point. Current weekly macd is at the 3 month point since the late July up-cross. While crosses are far more numerous than touches, can't say that we won't see just a touch/near miss here as in fall 2007.
Gold was already headed down after the bounce away from $1727 with Barrick leading the way. The jobs report just added the nuclear hammer to complete it.
38% fib out of the way. Depending on how you count this 4 month uptrend you could get a $50% fib of $1662, $1665, or $1675. Funny that the same old key area
of $1660-$1665 just keeps on showing up. Gold's H&S projection of $1660-$1670 will likely play out. Important to keep that August 2011 breakout area of $1660-$1665
supported. Below that looking at $1625 to fill the remaining GLD gap at 157.5. That tiny GLD gap at 164.3 that failed to get filled last week was the target after all.
November is normally a good month for gold. It may not be this time around. Next week are the 3-10-30 yr TBond auctions so gold won't get much traction until Wed/Thursday.
That fits well with keeping everything in line until the election rolls by. Even the "strong" dollar policy is back on the table (80.5).
Lots more depression to come for the perma-bulls.
Knowledge is the enemy of fear
I am looking to sell off most of my stock holdings in the next week or so. I think there is a nasty turn coming in the markets in general. I think McClellan was looking at a turn here in the next week or two and a bigger drop in the Jan/Feb timeframe. I think it's time to move to cash and wait for buying opportunities.
<< <i>Gold hasnt even made a 38% retrace of the 2009 rally. >>
True, but that doesn't mean it's coming any time soon... The 2009 move might not be done yet...
<< <i>
<< <i>Gold hasnt even made a 38% retrace of the 2009 rally. >>
True, but that doesn't mean it's coming any time soon... The 2009 move might not be done yet... >>
Seems Mc Clellan thinks something is going to happen soon.
From a psychological viewpoint I see gold as being overowned and disillusionment and impatience settling in with those owners. True there are perma-bulls, but the new, fast money, that gold attracted is getting cold feet. This should keep a ceiling on the price.
Knowledge is the enemy of fear
<< <i>From a psychological viewpoint I see gold as being overowned and disillusionment and impatience settling in with those owners. True there are perma-bulls, but the new, fast money, that gold attracted is getting cold feet. This should keep a ceiling on the price. >>
I don't see the same thing. With governments amping up their printing gold owners know it's just a matter of time. Powerful rallies often begin with a good deal of negative sentiment after convincing the weak hands to sell.
I'm out for now. Going to wait and see what develops. I'm half-tempted to get short a little bit but there's a decent chance this drop is over. Better to wait and see.
Knowledge is the enemy of fear
Sort of expected GDX to pick off the gap at $48.00 before moving back up. But it respected the May-June 1st wave high as well as the 200 dma.
Maybe later on. Terrible miner quarterly reports this past week or so....Barrick, Newmont, CDE, Hecla, Endeavor, etc. CDE did a monumental -23% decline today
essentially carving most of a right shoulder. I guess 1 day is faster than a couple of weeks. The miners will need to lick these wounds for a while before trying to
double up on gold. Today GDX did about 20% better than gold. In looking at the GDX holdings I'd say 55% of the $ value is the dog house.
I guess the game plan was to knock the risk trade for a loop leading into the elections using the smoke screen that it was essentially a tie race. Looks like everyone woke up
from that dream today and went risk on again. Even with a Romney win, the Bernank remains on the job until 2014....plenty of time to QE his way to infinity.
The renko chart shows the BPGDM at a deep enough pt in the wave trough that it would likely take time to flatten out further before coming out. Still, it could come back up from here, but it's not the norm. A pull back to today's BPGDM of 58 doesn't seem like much after the big run it had. A drop to at least 40-50% is more in line with past rallies. Stock market broke key resistance line at 13,000 and made a lower low in this cycle. The good thing is that heavy buying on weakness showed up in the SPY, a sign of weak hands starting to sell to strong ones. The hammer candles in the miners were impressive today. Almost seems too easy though after buying off the $1672 hit. The dollar just doesn't seem like it's done yet and wants to probe up to 81.5. The SM and dollar still have some bearing on miners and PMs.
Tomorrow is the 3rd and last TBond auction of the week. The first 2 were sort of weakish. We also have FOMC meeting minutes published next Wednesday to have something to look forward to. With next week being OE week for miners that would be a better time to officially washout everything than this past week, though either way works. Flatlining for an additional week will give the BPGDM bottoming indicators the needed week of overlap. I still have some concerns with numerous gaps in the mining charts, especially GDX at $48.00 and GDXJ at $22.00. Gold could once again revisit something above $1672 and still whack the miners down to those remaining gaps. Price is certainly close to what will probably be the 5-6 month cyclical low. Just not 100% convinced that the final hit is over. S&P500 VIX has broken out above the 200 dma after a back test of the 50 dma. It doesn't seem that a high of <20 is going to be good enough for a volatility rally. A move to 25-30 will take stocks, and possibly miners down a bit more. Hopefully, the S&P daily cycle low is not far away.
CDNX
BPGDM chart
BPGDM renko wave chart
By mid-Thursday of Friday gold will be ready to move again, so it will be a pretty good indicator for which direction it goes from here.
I still think we're going to see more weakness so it will be interesting to see how this affects PM stocks, but I don't think they will do well. I'm kind of banking on that, I'd like to get back in cheap after a drop. Although I'm not looking to get back in anytime soon, I'm going to wait and see how things look but I can very much see January being very bloody for stocks.
<< <i>Gold is looking promising to head higher. IF it does the bullish case is still intact and we can expect to see $1800 again soon. Stocks are in a precarious situation and need to turn around soon. If not, we're looking at a serious decline from here. I'm not too optimistic... >>
If stocks go down then so will gold.
Knowledge is the enemy of fear
<< <i>If stocks go down then so will gold. >>
Maybe. Sometimes they trade together, sometimes they trade inverse. I think it depends more on what the USD index does. We've seen the USD index drops, stocks drop, and gold go up before. We'll know in the next day or two where it's all headed.
<< <i>We'll know in the next day or two where it's all headed. >>
My wild guess would be......sideways .....
<< <i>
If stocks go down then so will gold. >>
If you were to compare the SP 500 index to the price of gold over say the past 10 years, you'll see
that what you've suggested is probably note the case.
<< <i>If stocks go down then so will gold. >>
2008-09 is perfect proof of this. A dash to cash in most all asset classes is the norm when we have a major negative economic event. A major decline in equities will initiate panic selling pretty much across the board (a move to the "safety" of the US$) until the uncertainty subsides. Gold normally sees the least decline and the earliest revival.
Gold, for at least the last five years has had a close, direct relationship with equity movement and an equally inverse relationship with the dollar index. It tends to do what equities do, most likely because of premature dashes to cash that are short lived. Nobody wants to be late moving to safehaven and this tends to make them move too early at the first sign of any weakness. Lately there have been brief moments of a disengagement and even reversal in both of these relationships. The next major negative event (especially if it is a dollar event) could be the catalyst for a dash to gold. Safehaven choice is nothing more than what one perceives as safety until their view/perspective changes.
<< <i>Gold hasnt even made a 38% retrace of the 2009 rally. >>
but gold is up over 200% since that rally began and has yet to come even close to dropping back to that rally point. A rose by any other name is still a rose.
<< <i>From a psychological viewpoint I see gold as being overowned and disillusionment and impatience settling in with those owners. True there are perma-bulls, but the new, fast money, that gold attracted is getting cold feet. This should keep a ceiling on the price. >>
that's the difference between investors and speculators - the "holding time vs. profit expectation" factor. The ceiling gets steadily raised when speculators sell to investors and not to other speculators who are temporarily a bit more optimistic than the seller. If speculators were the driving force in today's gold market it would have by now become a bubble that would have already popped. Investors are really not perma bulls, they are current bulls whose focal point, based on fundamentals and not fast profit, is longer than that of the average speculator. I don't see how gold can be overowned, it will always be owned by someone. Overbought is something that does occur periodically when gold speculators let their greed outrun their rationality.
"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
Think about that.
Knowledge is the enemy of fear
<< <i>AAPL is over-owned.
Think about that. >>
Took me four minutes. AAPL is overbought.
"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>AAPL is over-owned.
Think about that. >>
Took me four minutes. AAPL is overbought. >>
Nope. There is a huge differencw between overbought and over-owned. All investors should understand this very importantconcrpt
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
<< <i>GOOG, MSFT, T, AMZN are overweight, AAPL is over bought. >>
Maybe this will help. MSFT is over-owned. AAPL is overowned. AMZN is overbought. AMGN is over bought.
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
<< <i>Things are about to get VERY bloody in stocks, get out of ALL of them... >>
Are you getting that from Faber?
Quote form Derryb...
" I don't see how gold can be overowned, it will always be owned by someone. Overbought is something that does occur periodically when gold speculators let their greed outrun their rationality."
VERY WELL PUT AND RIGHT ON!
I'll add... Goverments own gold but not the driver to gold being overbought... to be on th right side of over bought.. follow the big hands... simple.
<< <i>AAPL is over-owned.
Think about that. >>
We own too many AAPL products. I blame the wife.
<< <i>Quote form Derryb...
" I don't see how gold can be overowned, it will always be owned by someone. Overbought is something that does occur periodically when gold speculators let their greed outrun their rationality."
VERY WELL PUT AND RIGHT ON!
I'll add... Goverments own gold but not the driver to gold being overbought... to be on th right side of over bought.. follow the big hands... simple.
I might add that I believe cohodk was alluding to the fact that central banks hold so much. This is a good thing because it puts gold in very strong hands that will not likely release it into the marketplace at the first sign of weakness. That particular gold may never see the marketplace.
"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>Things are about to get VERY bloody in stocks, get out of ALL of them... >>
Are you getting that from Faber? >>
No, I don't even know who that is. I predicted November would be bad and the last week saw a pretty good drop. That might be the extent of it for now. The serious damage is likely to come in January. Regardless I see little upside in the next few months. Mining stocks might do OK if gold takes off, but I think it is too much risk and gold stocks tend to act more like stocks than gold - I'm not sure they are worth the risk.
<< <i>
<< <i>Quote form Derryb...
" I don't see how gold can be overowned, it will always be owned by someone. Overbought is something that does occur periodically when gold speculators let their greed outrun their rationality."
VERY WELL PUT AND RIGHT ON!
I'll add... Goverments own gold but not the driver to gold being overbought... to be on th right side of over bought.. follow the big hands... simple.
I might add that I believe cohodk was alluding to the fact that central banks hold so much. This is a good thing because it puts gold in very strong hands that will not likely release it into the marketplace at the first sign of weakness. That particular gold may never see the marketplace. >>
Over-owned in my opinion is when people who have no business owning something, own it. When all available money allocated toward purchase of something has already purchased it. The average Joe or Indian or Chinese is not going to buy gold at $1700/oz. They have already allocated that money at the same or higher prices over the last 2 years. The only buyers remaining are the 3rd world central banks. And they can only absorb the new gold that is being printed (mined) everyday.
To add....Just because something is in strong hands, does not mean its value cannot drop. Buying is what maintains prices, not holding. Without buying pressure that exceeds selling, the price cannot go up. However, even an equal amount of buying and selling can result it lower prices as the sellers look to "front run" each other. They get distraught or disappointed in performance and just sell at any price. This causes prices to drop, even if there is equal demand.
What happened to all the "gotta buy gold now" ads that I used to see every 5 min on TV?
Knowledge is the enemy of fear
<< <i>Things are about to get VERY bloody in stocks, get out of ALL of them... >>
If the stock market crashes as you allude to, then PMs will suffer, likely underperforming equities.
Knowledge is the enemy of fear
"Over-owned in my opinion is when people who have no business owning something, own it. When all available money allocated toward purchase of something has already purchased it. The average Joe or Indian or Chinese is not going to buy gold at $1700/oz. They have already allocated that money at the same or higher prices over the last 2 years. The only buyers remaining are the 3rd world central banks. And they can only absorb the new gold that is being printed (mined) everyday.
To add....Just because something is in strong hands, does not mean its value cannot drop. Buying is what maintains prices, not holding. Without buying pressure that exceeds selling, the price cannot go up. However, even an equal amount of buying and selling can result it lower prices as the sellers look to "front run" each other. They get distraught or disappointed in performance and just sell at any price. This causes prices to drop, even if there is equal demand.
What happened to all the "gotta buy gold now" ads that I used to see every 5 min on TV? "
I think you are under estimating the amount of money still on the sidelines after the 2008 bust [ money markets and cash accounts]...... This money will not be going into stocks as I see it. Gold and PM'S will be the safest bet to curb the inflation that is going to hit.... not if but when. Gold at $1700 will be a bargin price in short order and have a solid base. Also week hands and smaller holders of paper or physical have more than likely gone to the sidelines.. The big holders today in paper or physical are in and will stay without a better play available. They made trade in and out but metals will be safer and more predictable in and out play than the stocks [which most/average Joes, Indians or Chinese arent savy enough to do]. JMHO for what its worth.
"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 2005 I thought both the stock market and the housing was overbought(owned), they probably were but that didnt stop 2 more years of huge gains.
While i agree that gold its not a bargain right now, I think that both fear and greed can push it To incredible levels even by our bullish precious metals board standards.
There is plenty of fear ...political chaos, future expectations of inflation, euro collapse and on and on...
and greed as well....the stock market has been brutal in recent memory, incredible low rates make savings a moot point and the gold's performace over the last 10 years could all attract a lot of latecomers.
I'm not sure which way it will go...but I dont think we will be range bound for much longer
Groucho Marx
They're still there, but maybe once every 10 or 15 min now. The average Joe has already sold all his scrap gold on the way up from $500/oz.
And the dealers and buyers of this stuff are finding it harder and harder to do the same volume they did just 2-3 yrs ago....hence less buying ads.
Available supply is way down with much of that old scrap being turned into coins, bars, or newer jewelry. The people have been fleeced of their older gold.
Gold buyers have to look elsewhere to keep playing the game.
<< <i>What happened to all the "gotta buy gold now" ads that I used to see every 5 min on TV >>
They're being replaced with "gotta buy silver now" ads.
"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>http://blogs.stockcharts.com/dont_ignore_this_chart/2012/11/silver-miners-etf-breaks-key-support-level.html >>
Looks like a buy at 22.50!
"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>http://blogs.stockcharts.com/dont_ignore_this_chart/2012/11/silver-miners-etf-breaks-key-support-level.html >>
Sort of suggesting that a drop to $20 or even $18 is going to happen by end this month or end of December. 10% to go.
Now the question is the SIL chart (and GDX for gold) forecasting the next big move for the metals?
The picture for PMs still looks great. After doing a lot more research tonight, Nichol's intial projections from last year are still on target. He projected a sideways movement until about now. He is expecting a 7 month rally into July to start soon. This next move is slated to begin in the next week or two, and will be MASSIVE. So we may see another drop to the 1700 area in the next week or two, and this should be the most opportune time to load up. A strong breakout over 1800 will be the definitive indicator that the move is underway.
next big smackdown. This brings their initial contract levels more in line with the hedgers.
<< <i>in english what are you guys saying >>
either it's a good buying opportunity or one is quickly approaching,
OR
look out below.
Opinions are mixed though.
_______________________
derryb posted this link on another thread. Important enough imo to post here too.
David Nichols latest on gold fractals
<< <i>derryb posted this link on another thread. Important enough imo to post here too.
David Nichols latest on gold fractals >>
I normally don't post to this thread because I as well only understand english, but here is a much a better link to the David Nichols post:
David Nichols
"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