***FEBRUARY 2013 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 6,154 ✭✭✭✭✭
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.
I will add commentary shortly.
I will add commentary shortly.
0
Comments
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
<< <i>I'm watching those same charts.. watching them go sideways. Do you believe any will break significantly higher or lower in the next quarter or two? >>
I think it's going to be sideways until May or so, although I'll allow for a "black swan" event somewhere in between due to world events.
An interesting excerpt from a newletter about comments from Fred Hickey:
Here are the comments from Fred Hickey: I am recommending gold, as I have done for many years. I will continue to do so until the gold price hits the blow-off stage, which is nowhere in sight. I am excited about gold because sentiment is so negative. Gold could have a sharp rally at any time. The Hulbert Gold Newsletter Sentiment Index went deeply negative last week, indicating that gold-newsletter writers are recommending net short positions. When that happens, gold almost always rallies. The daily sentiment index for gold is at a 12-year low. Short positions by large speculators have doubled in the past few months. Sales of American Eagle coins hit a five-year low in 2012. Yet, the environment for gold couldn't be better. We talked today about massive money-printing by all the major central banks. Real interest rates are negative. These are the best possible conditions for a gold rally.
the only safe money is money that cannot be printed. Which one do you want in your savings account?
"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>Seriously, who creates the blue lines? Is their placement individually creative by the chart maker or following a standard? >>
Buy this book
Knowledge is the enemy of fear
<< <i>I'm watching those same charts.. watching them go sideways. Do you believe any will break significantly higher or lower in the next quarter or two? >>
The gold:10yr chart looks to be headed lower. AMZN is going lower. The Gold:Indu chart is sideways to down. Oil is rangebound for another year.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
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>Markets are being manipulated? This is news to me. >>
Me too.
From Barclay’s investigation:
“Instant messages and e-mails sent by Barclays’ traders, along with data, show the company conducted a “manipulative scheme” from 2006 to 2008, costing other market participants at least $139.3 million, according to the FERC’s enforcement office. The regulator says the traders deliberately took losses in physical markets, where electricity is bought and sold, to benefit swap positions in financial markets.”
With illegal rigging in energy, Libor, and other markets, I'm sure traders are not rigging gold and silver (ie taking designed hits via large short positions to benefit on other financial
instruments such as Forex and stocks). Nope, nothing to see here....move along.
I knew it would happen.
<< <i>The manipulation and conspiracy rhetoric is about to take a big leap higher. >>
It probably won't be rhetoric. Currencies (worldwide) ARE being manipulated such that I think the dollar index may start to climb, resulting in lower gold prices.
Nichols is looking for some action to start approximately next Tuesday.
<< <i>
<< <i>The manipulation and conspiracy rhetoric is about to take a big leap higher. >>
It probably won't be rhetoric. Currencies (worldwide) ARE being manipulated such that I think the dollar index may start to climb, resulting in lower gold prices.
Nichols is looking for some action to start approximately next Tuesday. >>
Impossible. This is a race to the bottom. Gold MUST go higher!!! ;0
You guys all know that I believe the dollar is being supressed (manipulated). Gold is not being manipulated lower or higher. It just reacts to paper supply/demand. The only central bank conspiracy is to keep the dollar from soaring higher.
Knowledge is the enemy of fear
<< <i>You guys all know that I believe the dollar is being supressed (manipulated). Gold is not being manipulated lower or higher. It just reacts to paper supply/demand. The only central bank conspiracy is to keep the dollar from soaring higher. >>
What if that gold supply/demand is being manipulated via release of reserves or increasing short positions? Would that result in gold being manipulated lower or higher? Fact is, control the paper price and you control the gold price.
"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>What if that gold supply/demand is being manipulated via release of reserves or increasing short positions? Would that result in gold being manipulated lower or higher? Fact is, control the paper price and you control the gold price. >>
That is until physical delivery problems arise...
<< <i> Impossible. This is a race to the bottom. Gold MUST go higher!!! ;0
You guys all know that I believe the dollar is being supressed (manipulated). Gold is not being manipulated lower or higher. It just reacts to paper supply/demand. The only central bank conspiracy is to keep the dollar from soaring higher. >>
While currencies are being manipulated, it is far easier to manipulate the tiny gold and silver markets. Just selling 10,000 gold contracts in a computerized, nano-second flurry sends
price dropping 2-3%. And you don't even need any real gold to do this. Just a few sell/short orders that are immediately closed out with paper gold after the hit. Moving the $TRILL
dollar currency markets is much harder than moving the $BILL gold market. The CB's don't want a higher dollar, they also don't want to see gold higher as long as they are carrying a
pile of shorts. The dollar can stay at 0.80 indefinitely...with purchasing power going to zero. Gold and other commods are the only alarm bells that will tell you that is happening. So
to keep all alarm bells silenced, these guys have to manipulate the commodity markets as well. Since the CFTC seems to condone their behavior, they keep on doing it.
Nichols last reported the monthly fractal at huge highs that needed a major rally to lower it. Well, that didn't quite happen, in fact just the opposite. Is his fractal model still loaded up
and waiting to unleash? He can't continue to call for a major rally "soon" and not deliver the goods. Most of the "analysts" out there have pretty much screwed the pooch these past
18 months. Eventually, they will call the turn right...after a dozen missed calls.
I think there is a good case for a big stock market crash or rally, and a $100-200 drop in gold (or larger rally), but it's all just waiting on some trigger mechanism. I think this year will be wild, the only question is when it will get wild. FYI, David has revisited his larger timing and is now looking at 2016 for a big apex for the gold bull run. That sounds reasonable. Nichols has also identified mid-year as an important time period, mid-June if I recall which I think coincides with some indicators from McLellan.
As for me, I'm out of almost everything at the moment. My decision to unload my mining stocks just before the election has really saved me. I'm also holding off on physical buying as I think there is a good opportunity coming. I'm hoping a big drop in gold comes because I will be ready to scoop up mining stocks and metal this time. I don't think it will be low for long. Of course maybe I will miss out on a huge rally.
There still is the potential for GDX into the mid $30's or even mid-$20's sometime this year as the HUI range of 275-375 is going to get revisited imo. It's just a matter of what
level they bottom out at. Each long rally in HUI pulled back to the previous long consolidation zone. Hence the 2008 low went all the way to the bottom of the 2006-2007 consolidation
zone. I expect 2013 to pull back to the last HUI consolidation zone of note from 2009-2010 (275-375). The 330 level represents the mid point as well as a nice shouldering area that
it eventually sprung off. HUI has come a long ways from 2001 to 2011 (34 to 625). The last good H&S from 2012 did target the $330 zone as well. The correction in May/July ended
at the 380 level. A 50% retrace of the 10 yr move is a decent fit. I still see significant gaps in many miners that need/should get filled. Most go back to July and August 2012. The list
includes just about every major silver miner, SIL, and about half the leading gold miners. The most obvious big gap is sported by AEM down around $39. That's still 10% away. But
with a good 4th qtr earnings report just out, it may not fill that any time soon. Kinross reported today as well. Tomorrow it's ABX and GG. If they all come out hitting estimates the
correction for them just might end....as long as gold doesn't violate $1623 this week. In 2 weeks gold has to get through another OE week + Treasury auctions. This week set up the
same way along with G20 finance ministers meeting Friday/Saturday. A lot of headwinds to fight this week. And next week doesn't give much time to rebound before end of month effects
roll back in.
Below is GLD, my proxy for gold. A pennant has appeared and GLD has fallen out of the pennant to 159.50. Thus, we are in what I believe is the ‘clean out’ correction for gold. This is the correction that will scare out all the in-and-out traders and the newcomers. It is here that those who hold gold in physical form will do best, since they won’t be tempted to sell.
My advice is to hold all gold positions and wait patiently for the correction to end. Just before the huge 1979-80 surge, we saw a big ‘clean out’ correction in gold. I believe history is about repeat.”
I don't think you could come up with a better duo for advice.
I knew it would happen.
hold all gold positions and wait patiently for the correction to end.
Holding an asset in a downtrend is always good advice.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
essentially flat, just like it currently is. No sign yet that the 200 dma is going lower. From 2001-2013 I don't see any death crosses with an obviously declining 200 dma. By
the time the 200 dma started an obvious decline in 2008, the gold price had already hit bottom. I use death crosses these days to mark bottoms in the HUI because everyone is
too focused on the "negative" implications of the D.C. GSR looks to have another 2 weeks minimum (6 wks max) to fully top out. That should market an intermediate bottom in gold
during either the FEB or MARCH end of month OE weeks.
The Sinclair site has a link to www.usfunds.com (May 2012) showing an 88 page article on world gold market trends.
Of interest was the miner's per ounce cost for gold. Source was from CIBC World Markets:
Cash operating costs - $700
Sustaining Capex - $275
Construction Capex - $150
Discovery costs - $125
Overhead - $50
Taxes - $200
Total - $1500/oz.
Most interesting was that taxes have risen about $50/yr for the last several years. They are now a very significant factor to mine profitability.
Cash costs in isolation are very misleading especially if the company is a consistent overspender in other areas.
The trend is changing as larger miners start reporting "all-in" production costs. Barrick did this today in their 4th quarter earning's statement. All the others will follow.
This will help shareholders better gauge profitability. Barrick took a $4.4 BILL write down on their copper unit in 2012. It made the 4th quarter $3-$4 BILL negative, and the entire
year a loss of around $650 MILL. Yowser.
Don't a fair number of miners sell some of their output in forward contracts as well? It seems that this would render them vulnerable to a downdraft in gold prices, unless they had a cash reserve set aside for that contingency. Those would be additional costs, financing costs and opportunity costs if you will.
I knew it would happen.
up there with a 50% debt to equity ratio. Newmont, Barrick, and AngloGold all up around 50%. The intermediates in the 0-30% range. Goldcorp is one of the big 3 and only has a
3% debt to equity ratio. Most of the juniors have small numbers as well. But most issue shares to fund their operations. So instead of more debt, they dilute shares. Check out the
finviz chart below.
Barrick rallying over 4% this morning after reporting a "non-cash" loss/writedown of over $3 BILL the last quarter. Guess the buyers liked the fact that they could still make
money going forward despite this one time huge glitch. Let's see if the earning's reports from ABX, AEM, and KGC result in a morning pump and dump recon.
Miner financials
Knowledge is the enemy of fear
Or maybe get greedy and see what tomorrow holds?
"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 knew it would happen.
<< <i>I bought some silver today.
Well, at least you were warned.
Knowledge is the enemy of fear
<< <i>I think silver has a good chance to see a $1 daily drop in the next few days. >>
Close. Got about an 80c drop today.
Knowledge is the enemy of fear
I'm just "buying early".
I knew it would happen.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>The general rule in technical analysis is that it takes two points to draw a trend line and the third point confirms the validity.
The lows used to form an uptrend line and the highs used to form a downtrend line should not be too far apart, or too close together. The most suitable distance apart will depend on the time frame, the degree of price movement, and personal preferences. If the lows (highs) are too close together, the validity of the reaction low (high) may be in question. If the lows are too far apart, the relationship between the two points could be suspect. An ideal trend line is made up of relatively evenly spaced lows (or highs).
As the steepness of a trend line increases, the validity of the support or resistance level decreases. A steep trend line results from a sharp advance (or decline) over a brief period of time. The angle of a trend line created from such sharp moves is unlikely to offer a meaningful support or resistance level. Even if the trend line is formed with three seemingly valid points, attempting to play a trend line break or to use the support and resistance level established it will often prove difficult. >>
Given this, it's difficult to form an accurate trend line from the 2008 low. Probably the best overall trend for the period is indicated below.
Knowledge is the enemy of fear
sebrowns chart shows "strong support", which is now strong resistance. Expect at least 2 attempts to get back about $26 before a real breakout can occur. This may require quite some time. Perhaps, and probably, exceeding a year or more.
Any other "opinions".
Knowledge is the enemy of fear
<< <i>Ok, I'll start the discussion.
sebrowns chart shows "strong support", which is now strong resistance. Expect at least 2 attempts to get back about $26 before a real breakout can occur. This may require quite some time. Perhaps, and probably, exceeding a year or more.
Any other "opinions". >>
More downside before any major breakout
"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
be sold....even tonight's move in gold to $1478.