***MARCH 2013 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 6,100 ✭✭✭✭✭
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.
Not a lot to discuss lately. I think the charts make the movement hard to predict - mostly because the overall pattern is sideways.
0
Comments
<< <i>Looks like we're due for a six month, $200 run to the top of the channel
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.
Knowledge is the enemy of fear
<< <i>We do have a 1300 bet roadrunner.
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
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.
Knowledge is the enemy of fear
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
Knowledge is the enemy of fear
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.
<< <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.
Knowledge is the enemy of fear
the gains of those days). Triply bearish engulfing. I guess that why it's a 3X ETF.
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.
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).
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
Been watching this guy for several years. Does very well with his calls.
Seems others are watching the miners also.
Knowledge is the enemy of fear
<< <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
Knowledge is the enemy of fear
Anyway, watch the red metal for a break in the next few days, maybe week. My thought is lower---much lower.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
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
Knowledge is the enemy of fear
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!
I think there isnt much left in this run. Im out.
Knowledge is the enemy of fear
<< <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
<< <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.
Knowledge is the enemy of fear
<< <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
The great thing about investing is success can only be measured via time. And thankfully religion is based on patience.
Knowledge is the enemy of fear
<< <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.
<< <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.
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
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?
Knowledge is the enemy of fear
<< <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.
<< <i>This wedge is going to be broken also--probably within 3-4 weeks if not sooner. Momos are pointing higher.
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.
Knowledge is the enemy of fear