Home Precious Metals

***MARCH 2013 Gold and Silver Stocks/Options/Futures trading thread***

ProofCollectionProofCollection Posts: 6,155 ✭✭✭✭✭
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.

Not a lot to discuss lately. I think the charts make the movement hard to predict - mostly because the overall pattern is sideways.
image

Comments

  • WingsruleWingsrule Posts: 3,011 ✭✭✭✭
    Looks like we're due for a six month, $200 run to the top of the channel image
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭


    << <i>Looks like we're due for a six month, $200 run to the top of the channel image >>



    Would be nice. Gold's weekly RSI and the monthly RSI and MACD are both hugely divergent....suggesting all sorts of bad things.
    Monthly RSI and MACD are at the same approx levels as they were in October 2008 with gold at less than half the price. Gold is also very close to
    touching the lower monthly Bollinger band. That's something it has not done this entire bull market. All those things point to <$1500 and possibly <$1400.
    But pointing is not the same as doing. If a move to the bottom of the channel ($1525) is to occur by end of this month, you can be sure more shorts will be
    applied to get a technical break of that lower channel line to sweep away a ton of stops in the $1500-$1530 range.
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    We do have a 1300 bet roadrunner. image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭


    << <i>We do have a 1300 bet roadrunner. image >>



    As you wish. I don't think we can penetrate the previous support levels of $1400/$20 = GSR of 70. And I'm not sure right now how we would get below $1450/$22 or GSR of 65.
    In looking at ratios of gold's 200 dma to it's price it did dip to 76.5% in Oct 2008 which would take it under $1300 this time around. Right now it sits at around 95%. It took 11 more
    weeks in 2008 to take it from 95% (Aug 11th) to 76% (Oct 24th). During that time there were bounces of +10% and +23% (ie Lehman event). Do we need a Lehman event this time
    around to force that final action? How will all that fractal energy get dissipated?


    2008 chart
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    image



    I see no reason why the GSR cant go to 65 or 70, or even higher. I also see no reason why there would have to be a "Lehman event" to drive the metals lower. I do currently see a lot of currencies getting their a$$ handed to them, namely the YEN and Pound. The Cando and Aussido are also on the verge of a good old fashioned butt whoopin'.

    I dont follow fractal energy and wont comment on it. I do have my own set of momentum indicators that have been very weak over the past 6 months to 1 year. Gold only needs more sellers than buyers to knock it down. And since I feel gold is over-owned, a break of the $1500 level will cause most of the buyers of the last 2 years to run. Lots of sellers and few buyers usually translates into price decline. I have also stated that I would look for a simple 38% retracement of the 12 year bull move. Roughly $300 to $1900 is a $1600 advance. Give back 38%, or about $600 and we get to my price objective of roughly $1300. A GSR of 65 equates to $20 silver, while a GSR of 70 gets us $18.50 silver, which I see as completely plausible.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    short term GSR

    In the shorter term I think GSR is going to roll over as this 8 week cycle is about timed out. In looking at GSR on a much longer term I feel it recently backtested the breakdown
    of the 30 year uptrend (formed by the 1980 and 1998 lows). Once the backtesting is complete it will be time to continue back down and complete the 5th wave of this 5 yr C leg.
    It's the tail end of the ABC pattern that began in 1991. To get to $1300 gold, the first step is to break the heavy resistance over head at GSR of 60. If that occurs, then the potential
    will increase sharply.

    30 yr GSR chart
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    I think the GSR breakout is about 2-3 weeks away. So there is still time to raise fiat currency. image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Miner turnaround today was epic. Once the 2008 low in HUI/gold was hit, along with the 12 yr trend line, they turned right around. Some juniors had 15-20% swings today.
    The GDX/SPY and GDXJ/SPY volume ratios were massive and all time highs. Nothing before today is even close. GSR starting to dig in deeper. Miners wiped up the floor today
    with gold and silver. Better that than the inverse.
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold


  • << <i>Miners wiped up the floor today
    with gold and silver. Better that than the inverse. >>



    The previously moribund precious metals mining boards were lighting up today like a xmas tree, if that's any indication.

    Let's see if it has staying power.
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    It was a nice potential bullish engulfing candle today. Good volume on GDX. Miners might finally be probing for a bottom after a nearly 40% drop over the last 6 months. I wouldnt look for a rally right back to new highs, but sideways for the next 6-9 months would be better than down. I smell trading opportunities soon developing.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    I liked the -15% swing today in DUST. GDX closed within 1c of the highs for the day on a heavy 34 MILL shares. The DUST daily candle engulfed the 3 previous days (ie wiped out
    the gains of those days). Triply bearish engulfing. I guess that why it's a 3X ETF. image

    Tried to pick up some GPL on the cheap today and missed the bottom by 2c with a too stingy bid. It rebounded 15% from there. I doubt I'll get another chance like that this year.
    I did get some fills near the bottom on several other juniors though. Missed the RBY swing as well figuring it would go back under $1.90...it didn't. No big deal. My NUGT train is
    pretty heavily loaded as it is. derryb is probably fully loaded in USLV again.
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Dollar has been showing declining momentum on the 4 hr, 8hr and daily charts during this latest price rise. It looks more like a final blow out than a new leg. Cycle wise it's getting close to timing out....now at the 8 week point where the last 2 tops occurred. Could have already peaked this week or maybe prolong a bit into next week. UUP had huge volume on the Feb 25th and 29th peaks. Probably plenty of sellers handing off the baggage. Over 3 MILL shares traded on each of those 2 days. Today the volume during a gapped up fresh high was only 855K. Cando looks like it could have peaked along with the USD/Yen. Commercials doubled up on their net CDN shorts this past week from 28K to 59K net short. Just 3 weeks ago they were net short. At the same time the EUR looks to be trying to make a bottom. The USD/Yen shift since mid-2011 has been the biggest headwind for gold. That trend shifted into overdrive the past 6 months. When it finally rests, gold could finally make a move. One by one the USDX currencies are taking deep dives. There must be a schedule posted at the FED. First it was the Yen. Now the Pound. I figure the dollar is next in line. Even the record in the Dow doesn't look all that stable. But they'll probably find a way to push that up higher for a bit longer. The crappy miners set all types of records on Wednesday. HUI officially retraced 50% of all the gains from 2000-2011 and 62% of the gains from 2008-2011. On top of that the HUI/Gold ratio fell below the October 2008 low of .220....though for only a few only minutes.

    On the COT report the commercials once again added to their dollar shorts by +4K bringing their net shorts to 31,000. A pretty sizeable position against a dollar rally that "potentially" still has legs left. Commercials doubled up on their Canadian dollar longs this week to a +60K net long. Huge change. Last week was the first time in months that they were even net Long. Recall that they were hugely net short only 2 months ago. Bullish for miners. 2nd highest ever volume week for GDX at >120 MILL shares. The GDX low in May 2012 was the only time volume was higher. Just in time to roll into next week's miners OE and Treasury Auctions. The GDX/SPY volume ratio set an all time record on Wed by quite a bit. GDXJ did as well. Those huge volume spikes almost always coincide with intermediate/long term peaks or tops.

    M0 data is recently out again. Wow, +$300 BILL increase over the past 3 months or +11%. Huge breakout after an 18 month sideways consolidation that basically land-locked the PMs. For the 3 yrs prior to Nov 2012 gold and silver prices tracked M0 very well. Silver's trading range today enveloped the last 4 days. Nice action. Typical jobs report day to sweep out the stops. Nugt down 5%, then back up 10%, then back down 5%.

    The gold commercials pared down their gold and silver short positions from last week to give short to long ratios of 1.55 silver and 1.88 gold. That's the 2nd low week for silver. What's more interesting is that the managed money side (MM) leveraged up again to the short side. Those guys added +5K shorts in silver and +10K in gold. Their gross silver shorts are right back to the >5 yr highs they set a couple of weeks ago. Clearly, these guys are expecting much lower gold prices. The commercials are taking the opposite bet on gold and silver, and reinforcing that with the dollar too. MM gold position is normally one of a high concentration of longs in the 5X to 20X range. Today they are at 1.61 long to short ratio. On silver they dropped to 1.44. The "other reportables" (smaller traders who don't have to report) have stopped shadowing the MM's to the short side. "OR's" lowered their silver shorts and were flat on gold for the past week. Their long to short positions are in the 4-1 to 5-1 range. It's still managed money (hedge funds and large traders) vs. the commercials (bankers and producers).
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • ProofCollectionProofCollection Posts: 6,155 ✭✭✭✭✭
    I'm not sure on timing. I'm tempted to get in on gold stocks here as they have taken an pounding and it does kind of look like this could be a bottom. And it might be a short term bottom. I'm still looking for GDXJ in the $13's and I think we'll get there. But even if we don't, I still think it's going to be until summer before we'll see any real upward movement in gold. The sentiment indicators are off-the-charts negative for gold, as well as the Gold ETFs finally saw some decent selling volume which make it hard for me to think the bottom isn't in, but at the same time I'm not convinced gold is ready to move yet. So to summarize - now might be a decent time to buy, but there is no rush. Lower prices may be ahead, or you may pay a little more in a month or two, but not that much more.
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Here's how the miners came off the last 2 major bottoms that were oversold to the same degree as the current one. A bit of a concern though that GDX stopped its
    descent last week after picking off a gap at $36.00. But just 30c lower was another at $35.30 that it left alone. Another gap sits even lower at $32.50 which is a much more
    significant chart level. I figured HUI was going to bottom in the 275-375 congestion zone. So far it reached fairly close to the 325 midpoint at 337.

    The move off the 2008 bottom was pretty quick with a 50% gain in 2 weeks. By the time it was evident that the tide had turned for good (2-3 months) GDX was at $26 or up 60%.
    With the radical moves (ie debasement) occurring throughout the currencies the past few months. When they all flip around against the dollar at essentially the same time it could
    add a ton of fuel to the equation. That would probably send the stock market into its final euphoric rise and possibly keep PMs and miners on the shunned list a bit longer.

    GDX off the 2008 bottom

    HUI off the 2000 bottom
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Some interesting EW analysis on gold - silver - commodities - AUD and YEN

    Been watching this guy for several years. Does very well with his calls.
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭


    << <i>http://blogs.stockcharts.com/canada/2013/03/bullish-percent-indexes-understanding-the-clues.html

    Seems others are watching the miners also. >>



    The BPGDM on the way down the past 5 months was quite tricky. It didn't produce the normally seen, very distinct 5 waves. It was just one straight decline with the smallest
    of inflections. Even the renko chart of BPGDM macd didn't do the normally flattening seen until the very bitter end of this consolidation.

    another view of BPGDM

    If one looks at a close up of BPGDM in 2008 it performed incredible whipsaws the last half of the year. In fact when GDX bottomed in Oct it had just risen from 16% to 28%.
    It wasn't until 6 weeks after the GDX low that BPGDM hit its bottom of 0%. By that time prices were up significantly. Trying to figure out what miners were going to do
    via BP% in 2008 was a nightmare. This time around they just ramped from 41% right down to 3%. At 3% it means that one single miner out of the 29 in the ARCA GDM index
    remains with a bullish P&F chart. In looking at all the NY exchange listed miners I can only find 3 with bullish P&F's (Hecla, First Majestic Silver, and one other). Could not locate a
    single gold miner with a bullish P&F chart.

    BPGDM 2008
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    Agreed Roadrunner and could mean that there will be no huge bounce, but rather a sideways consolidation basing pattern that could develop over a year or more. Overbought is a sign of strength and should not always be shorted, just as oversold is a sign of weakness and should not always be bought.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    Amazing how a period of lackluster returns destroys enthusiasm.

    Anyway, watch the red metal for a break in the next few days, maybe week. My thought is lower---much lower.

    image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    This wedge is going to be broken also--probably within 3-4 weeks if not sooner. Momos are pointing higher.

    image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Good call on copper cohodk. It broke under that trend line today. Next Tuesday-Thursday would be a good time to whack the PMs again (end of quarter OE for metals and
    a set of Treasury auctions). That could start the GSR run in earnest. Sinclair has all but promised gold above $1600 for good after March 27th. He will have some serious egg on
    his face if gold tanks. But right now gold, GSR, and GDXJ all have a bullish setup in the positioning of the daily 3 ema - 10 ema - 20 dma (ie each one higher than the next). The rest
    of the PM sector is still struggling with trying to re-establish bullish ma's. FOMC announcement at 2 pm Wed could be a wildcard for either direction.

    A very bullish view on the dollar over the next couple of years
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    Nice chartwork posted roadrunner. If the 2004 downtrend line is broken, I will have to shift from mildly bullish US dollar to ridiculously bullish US dollar. Target would be 100 or wherever the 1985 to 2001 downtrend line extends. At that point I will be much more eager to buy PMs.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • ProofCollectionProofCollection Posts: 6,155 ✭✭✭✭✭
    I think we're looking at a short-lived rally to complete a 38.2% retrace of the last move down. That will bring us back to $1650 or so. I think it might take a couple of weeks.

    I think it's time to be extra bullish on the dollar. I think the US will let the other currencies out-pace the dollar in the race to the bottom for a few more months before the fed will have to fight back with more QE.

    I think the gold-negativity trend can continue for a few more months dragging it to a real extreme before it snaps back wildly.

    Could be looking at a big crash in stocks any time in the next few months. The big crash might actually come this summer and trigger the grand reversal. Do not be lulled into buying stocks for any kind of a long-term hold. The buying opportunity is coming!
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    You killed this thread PC.


    I think there isnt much left in this run. Im out.


    image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>Could be looking at a big crash in stocks any time in the next few months. The big crash might actually come this summer and trigger the grand reversal. Do not be lulled into buying stocks for any kind of a long-term hold. The buying opportunity is coming! >>


    And, as occured in 2008, metals will temporarily sell off and roar right back.

    "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

  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭


    << <i>

    << <i>Could be looking at a big crash in stocks any time in the next few months. The big crash might actually come this summer and trigger the grand reversal. Do not be lulled into buying stocks for any kind of a long-term hold. The buying opportunity is coming! >>


    And, as occured in 2008, metals will temporarily sell off and roar right back. >>




    Silver fell 62% in 2008. Gold 35%. If history repeats as you say it would, I'll bet all those who were stacking PMs over the last 2 years would be wishing they had stacked dollar bills instead. And if they do "roar back", then to what level? Where they are today?

    What kind of store of value loses 62% in the environment in which it is supposed to thrive?


    Hold the Faith Brother. Hold the Faith.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>Silver fell 62% in 2008. Gold 35%. If history repeats as you say it would, I'll bet all those who were stacking PMs over the last 2 years would be wishing they had stacked dollar bills instead. And if they do "roar back", then to what level? Where they are today? >>


    Today gold is 213% above its 2008 low and silver is 313% above it 2008 low. Those that bought the two years prior to the 2008 lows and saw their holdings temporarily reduced and still hold today are glad they didn't stack dollar bills instead. Those that paniced and went back to cash after the drop regretted it. Post 2008 recovery in metals shows recent buyers (last two years) not to panic.



    << <i>What kind of store of value loses 62% in the environment in which it is supposed to thrive? >>


    No asset other than cash thrives in a 2008-like financial environment as everyone seeks safety, not store of value. As history has shown that was short lived, especially when it comes to PMs. Cash is a good place to be when the black swan lands. Converting that cash to a store of value in the aftermath is crucial, given current economic bailout and money creation policy.

    "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

  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    Why not argue that anyone who bought silver in the last 2 years--when the PM mania, fear mongering, doom and gloom newsletter writers and their followers were preaching the virtues of silver. The "poor old savers" whom you often speak about are the ones who have been hurt. Where is the promise QE to infinity?


    The great thing about investing is success can only be measured via time. And thankfully religion is based on patience.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • ProofCollectionProofCollection Posts: 6,155 ✭✭✭✭✭


    << <i>What kind of store of value loses 62% in the environment in which it is supposed to thrive? >>


    I'm not sure but clearly we're not in that environment. But we're getting there. The problem is that many people here believe we are in "that environment." "That environment" requires much more than simply QE.
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭


    << <i>

    << <i>What kind of store of value loses 62% in the environment in which it is supposed to thrive? >>


    I'm not sure but clearly we're not in that environment. But we're getting there. The problem is that many people here believe we are in "that environment." "That environment" requires much more than simply QE. >>



    Agreed.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭
    continued unsustainable debt and money creation are reason enough to continue holding/accumulating PMs. The fix to the last crisis is the current crisis.

    "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

  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    unsustainable

    Adjective
    Not able to be maintained at the current rate or level.


    So PMs went up because debt increased. But this increase is unsustainable. Therefore the increase in PMs is unsustainable?
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • VanHalenVanHalen Posts: 3,993 ✭✭✭✭✭


    << <i>unsustainable

    Adjective
    Not able to be maintained at the current rate or level.


    So PMs went up because debt increased. But this increase is unsustainable. Therefore the increase in PMs is unsustainable? >>



    We know that you know that that was not the only reason PMs increased. image
  • ProofCollectionProofCollection Posts: 6,155 ✭✭✭✭✭
    April Thread Started
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭


    << <i>This wedge is going to be broken also--probably within 3-4 weeks if not sooner. Momos are pointing higher.

    image >>




    Today is 4 weeks. Wedge broken. Do we hit 70?

    Darn technical analysis isnt worth squat. Its voodoo. No one can tell where prices are going to be in the future.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

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