***MAY-June-July-August 2013 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
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Better late than never...
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.
So last month I started the thread with: "The only thing to discuss at the moment is how low will it go. Key supports were broken Tuesday and it looks headed lower from here. Some targets are $1460 with a worst-case at $1230." The low was pretty much in the middle.
The Gold Sentiment indicator is at record lows. Can it go lower? Sure. But it must turn around, and when it does the move should be impressive as we're talking about a move on a larger time frame. Now is the time to buy!
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.
So last month I started the thread with: "The only thing to discuss at the moment is how low will it go. Key supports were broken Tuesday and it looks headed lower from here. Some targets are $1460 with a worst-case at $1230." The low was pretty much in the middle.
The Gold Sentiment indicator is at record lows. Can it go lower? Sure. But it must turn around, and when it does the move should be impressive as we're talking about a move on a larger time frame. Now is the time to buy!
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Comments
Knowledge is the enemy of fear
<< <i>How do you know sentiment is at record lows if the chart is only 5 years long--- during a bull market. >>
cause thats all Hulbert posted?... do i win?...lol
........Gut feeling...
I think gold and silver are about to take a big dump.soon.. .real soon...no facts, no charts, just a gut feeling....JMO
Just in case I'm right, I had to say something..........
I suspect we'll have a head fake down this week and then a recovery towards $1500 soon enough. The current weekly fractal is playing out in nearly identical sequence so far as Sept-Oct 2011. That sequence was 4 weeks down, 2 weeks up, 1 week down, and then 3 weeks up. Last week "should" have ended the 1 week down phase. 3 weeks up from here might be stretching it. But, I can see about 2 weeks up from here into end of month OpEx week. Gap at $1439 on Friday afternoon was filled. But a gap was left behind at $1444 tonight which is a plus. Nice potential IH&S forming on silver which didn’t quite take the bait like gold on this mini-drop. That pattern projects to $24.60…..which would take gold up to the low $1460's.
Update for 9 am.
Gold forward rates dropped sharply this morning which is the same setup that occurred prior to Friday's hit. This raises the chances of retesting $1419 today or even taking a stab at $1400. Indian govt came out today with restrictions on bank gold imports. That's hundreds of tonnes of gold demand being altered.
into the more bearish part of the week, it's starting to look more likely gold could test the $1375-$1405 area. Miners are not looking that good. The shorts will probably pick
a window between now and Thursday and conduct a hit. Seems like there is decent buying on each dip though. Gold forward rates dropped significantly again today. Another red flag.
An update on the Phoenix housing market. The number of foreclosure filings has now reached the level of 2003, which was considered a "normal" market. Average housing prices are set to increase pretty big in the next month or two as there is simply no low-priced inventory and higher priced inventory is making up a bigger portion of all sales. Buying under $200k is impossible - ultracompetitive.
Just returned from Honolulu where my family there reports that the housing market is on fire with multiple bids on every home.
Off to France again in a few hours for some work there.
Would welcome your opinions of conditions in France. Not just the direct reports from merchants and general populace, but on your "gut" as im sure you will hear lots of complaining, but it is more whining than anything else.
Knowledge is the enemy of fear
Soros Reports Over $239mm In Gold Positions, Buys $25mm In Call Options On Juniors
In a 13-F release issued by the SEC after market close yesterday, it was reported that Soros Fund Management LLC, founded and chaired by billionaire financier George Soros, significantly increased its gold related holdings, most notably, through the purchase of over $25 million dollars worth of call options on the GDXJ Junior Gold Miners index.
Gas is about $1.55/L or about $5.85/gal.
Adding: A little note about the Phoenix housing market. Foreclosure notices are now down to the 2003 level, which is the time before the bubble even got started.
What's interesting is that the higher 1973 and 2007 stock peaks are both 7 years from the initial market peaks (1966 vs. 2000). 1966 is basically where the gold price first started to see life even though it was still semi-fixed in price internationally. It still rose 25% from 1966-1968. 2000 was also where the gold price first started to show signs of life. Can't forget though that silver was unmanipulated and started its bull market along with copper no later than 1962. Silver more than doubled in price from 1962-1967. The London Gold Pool's activities (1962-1968) kept the gold price capped for the most part.
The S&P500 tanked from 1973-1975 due to a recession, roughly equivalent to our 2007-2009 crash. Both lows came about 9 yrs after the intial peaks (1966/2000). The S&P bounce out of the 1974 bottom never reached the old highs. They didn't have QE or the other opaque tools available to CB's today. The mid-1970's B wave correction only lasted 2 years. Ours is now 4+ years into the bounce. The peaking of stocks in mid to late 1976 allowed gold to finally end its correction. Note that gold began moving up from August 1976 while the stock market would still linger near its peak for 4 months.
The gold chart of 2011-2013 is tracing a similar path to the 1974-1976 correction. That correction lasted 20 months while the current one is 21 months old. During the past 11 years no single leg in the gold correction has lasted more than 9 months. The 2008 correction was 8 months down, 4 months up, 7 months sideways. The current correction was 9 months down, 4 months up, and so far 8 months down. While the 2008 correction was a flat with the C wave ending higher than the A wave, this correction is a sharp with the C well below the A. Basically this is two A legs from 2008 tied together. This suggests an alternation between the two major corrections of the past 12 years (waves 2 and 4?). With that bit of information it's still quite possible that we're correcting the rise from $681 to $1923 and not the entire bull market from $252 to $1923. Makes a big difference on the depth required of this current leg. Throughout the past 12 years, 9 months shows up quite often in arriving at a turning point or taking out previous highs. Could just be coincidence. Dave Nichols put out that 12 year gold bull chart showing 21 months (7 quarters) between peaks. The peaks were 18-22 months apart with 21 showing up the most often. Based on that, last year he was forecasting a new all time high in June 2013. He was right on the cycle, but wrong on the direction. End of May 2013 to June 2013 will be 21 months again, but it could very likely mark the low of this consolidation.
it didn't occur to me until today that the action in top quality rare coin prices is similar to what I personally experienced from March 1975 - March 1977. Nice coins that I had been tracking and looking to buy basically rose 3X in that time frame. They would increase another 5X from April 1977 to April 1980 (15X total). That first triple came while gold was getting beat down. That's quite similar to the current 2011-2013 period where top quality rare coins (top 10%, stickered, pop tops, etc.) have flourished again after a disappointing and recessionary 2009-2010. I compare that to gold flourishing just like it did from 1973-1974 while coins and stocks stagnated (US recession from Nov 73 - Mar 75). For now, great coins, art and stocks are booming again while PM's languish. It's just like the mid-1970's B wave bounce. Until stocks slow their ascent and start to stagnate, gold will languish. But at least I can fit the price of rare coins into this equation to make some sense.
1974-1976 gold vs. 2011-2013
1970's stock market chart
1973-1979 gold chart
Looks like silver is taking a hit tonite......
here
It took 5 mill contracts on Sunday night April 14th to get a $2 drop in silver over a 4 hr span. Tonight they skipped the 4 hours and did it in 2-3 minutes with about 15,000 contracts.
This 4 hour block will probably end with under 500,000 contracts traded. At least that's what Netdania is reporting.
<< <i>So a little report from a French McDonald's. I don't recall the prices from my previous trip about 18 months ago but prices seem higher. A meal consisting of a Big Mac, Med Fries, Med Coke, and 6 piece McNugget will run you almost 13 Euros, or over $16US, and this is at a non-premium location (not an airport or high-end city location). I believe this would be less than $10 in Phoenix. There doesn't appear to be any kind of "dollar" menu equivalent, but they are advertising a cheaper burger at 2 Euros.
Gas is about $1.55/L or about $5.85/gal.
Adding: A little note about the Phoenix housing market. Foreclosure notices are now down to the 2003 level, which is the time before the bubble even got started. >>
Thanks PC. What were the demographics in MCD? Tourists? Common folk? Silightly more upscale family dining? Busy?
Knowledge is the enemy of fear
Me smells a very good opportunity to double or triple or quadruple ones money in the options.
Knowledge is the enemy of fear
bump for a +1 on a great (and profitable) tip.
<< <i>Thanks PC. What were the demographics in MCD? Tourists? Common folk? Silightly more upscale family dining? Busy? >>
I wasn't in a touristy area. It was families, common people. A good number of young adults. The place was always busy when I was there, but that also may be a factor of French culture where the real restaurants have limited operating hours, McD has a unique offering in that it's almost always available and quick.
Unfortunately I am back and don't really have anything else to report. I always run out of time. But I'd have to say that my meal at McD had to have been 2-3eu higher than it was about 18 months ago.
<< <i>you still in the JNJ put cohodk?
bump for a +1 on a great (and profitable) tip. >>
No. im out. Weekly RSI is back to 77--high but not grossly high.
Time to find another.
Knowledge is the enemy of fear
I hate it when there are no opinions posted for a couple days here.....makes me nervous........
<< <i>I hate it when there are no opinions posted for a couple days here.....makes me nervous........
I post my opinions every day in great detail in 2 other PM blogs. Just really don't see the need to clutter up this forum with all that minutia that is unimportant to most others.
<< <i>
<< <i>I hate it when there are no opinions posted for a couple days here.....makes me nervous........
I post my opinions every day in great detail in 2 other PM blogs. Just really don't see the need to clutter up this forum with all that minutia that is unimportant to most others. >>
which?
Also, interesting interview. Start from 12:30. Informative
Video!
BST Transactions (as the seller): Collectall, GRANDAM, epcjimi1, wondercoin, jmski52, wheathoarder, jay1187, jdsueu, grote15, airplanenut, bigole
In 2 days we took out the small trading boundary gaps in spot gold that have been hanging for 1-4 weeks ($1422.90 and $1380.53). GSr close to being out of mojo for today. It did 3 week’s worth in one day today. The 4 hr and 8 hr rsi's are quite elevated and only seen this high about once every 3-4 weeks. Don’t like the daily GSr breakout but I don’t think it can go much further without retracing a hunk of this 1-2 day 62.0-64.0 move. Daily macd has crossed positive. Last time it did this (early Feb) it rallied for an additional 2-3 weeks. Stoch-rsi built a 2nd peaked head today. CCI peaked to the 220+ level which is usually the end of a run, not the beginning. GSr jumped well above its daily BB. Usually that means it will pull back the following day to at least hug the band, if not get back under it.
Maybe the GDX gap at $28.50 holds for later next week or into OpEx. We got over half of it filled though. There's a smaller hourly gap underneath that one at $27.22. GDXJ has the same 2 gaps. Recall that GDX started filling the Dec 2008 gap range of $25.80-$26.40 a couple of weeks ago before deciding to head back up with gold from $1338. GDX could still revisit that gap as well as the $23-$24 gap right under that from Nov 2008. Silver in no-man's land under $21.80. Could fall all the way to $20.04 again to match that May 20th 6 pm spike low if GSr gets a second wind next week.
No real changes in % positions in the COT from last week. I'd call it mostly flattish action. But the biggest thing was the OI in gold dropping by a larger 37K. That's 2 weeks in a row as both sides peel off contracts (from 411K to 374K). The commercial golds dropped over 20,000 each of shorts and longs. The gold comm. short to long ratio moved up for the first time in a while from 1.34 to 1.41. Silver remained at 1.12 and now one week shy of tying the 2012 record of 17 consecutive weeks. In the past, anything for silver under 2.0 was semi-bearish while <1.70 was crazy bearish. We've been "crazy bearish" now for 16 weeks straight.
Per this month's bank participation report, the big banks are very heavy long/short the following items:
Long: copper, coffee, sugar, cotton, heating oil, corn, wheat, hogs/cattle.....also yen, euro, aussie, cando, and pound
Short: oil, plat, pall, cocoa, silver (3-1 short to long).
I’m sort of suprised the reporting world banks are slightly long gold for the first time in eons (81K vs. 76K) yet they are heavily short silver (17K long vs. 48K short). It’s only very recently that the big banks have moved from heavy short to net long. At no time in 2012 were they anything but heavily short gold. The current report shows the US banks 2X long to short while non-US banks are 2X short to long. It’s the US banks that are trying to go large long. This exceeds anything seen during 2008 by quite a margin. US banks are net long 29.6K contracts where is 2008 they were even for 3 months at gold's bottoming. I'd say the banks are playing for a rising GSR (long gold, short silver). That's been working. One plus is that on the 1 hr through 8 hr charts the RSI is extremely overbought. CCI took a huge spike that usually doesn't last more than a day (chart linked below). Still, one has to wonder if this is another "April 12th/15th" weekend setup in the making...at least for silver? We saw that long fingered "trial" dip at 6 pm in overseas trading back on May 20th with zero volume. Maybe it's time to shift from trial stage to the big stage? I don't think silver gets any solid traction until sugar, coffee, wheat and corn do.
The silver BPR looks somewhat bleak compared to gold. But there may be a reason those banks have to maintain a legacy short position. As long as that position moves to the small net short side, then it’s technically moving to bullish. The Nov and Dec 2012 reports showed nearly zero longs on the US bank side and about 40K shorts….net 40K short. Overall world bank positions were net 58K short silver. But in 2013 that has been whittled down to 31K net short for all banks and only 19K net short for US banks. So some progress in cutting those net short positions by almost half. That fits with what we've seen in the COT commercial short to long ratio being driven to 1.12 with a net commercial short position of only 8400 contracts.
June 4th bank participation report
GSR chart - looking somewhat like a repeat of early/mid Feb brewing...or just another head fake?
Note that with GSR monthly we're now in the 3rd month of the breakout of the final 4 yr downtrend/fan line. Same thing occurred in August-Oct 2008. But 2013 May's monthly GSR candle was very small compared to Sept 2008 (ie no Lehman bank failure). I'd say now we're in the same effective month as October 2008. Can June 2013 put in that flourish that October 2008 did or will it also be another weak monthly gain in the GSR? These quick pulses in GSR like we saw today only seem to show up every 3-4 weeks, sometimes every few months. Of course if the TPTB are planning another April12/15th bust for Monday, then we could indeed see another GSR spike not unlike today's. Next week are 3-10-30 yr TBond auctions. That never seems to help PMs. Then the following 2 weeks are chock full of anti-PM stuff (a pair of OpEx weeks, 2-7 yr Treasury auctions, and FOMC meeting). It's made to order for a 2-3 week PMs hit. Another $70 BILL was added to the money supply the last 2 weeks. Base money supply now up $600 BILL since October.
Yikes! I wonder if come Monday I wish I had seen this witiin trading hours today(if only it had been posted earlier).
We shall see. I know, the leveraged shorts will post late Monday with glee.
Any day traders want to take a stand now as to what goes down on Monday? For the record!
The opportunity was there so it was taken advantage of. A bounce was expected off the S&P 20 dma/intermediate uptrend line after a 10 day decline. Since stocks and PMs have been
like oil and water the past 8 months, no surprise PMs got whacked on this bounce back today. But the NFP report was the "cover" to be extra aggressive. The dollar cratered from
84.37 to 81.06 in only 7 days. A huge drop similar to the one back in October 2011. The question is how far will the dollar bounce next week? It left a lot of gaps in its wake. With this
latest break of trend the dollar looks like its set to begin its decline into the early summer 2014 low. It will resist along the way. Might even bounce back up to 83 again. But it sure
looks like it has peaked for this 3 year cycle.
Would sort of expect a bouce in PMs Monday am back to $1395/$22.20 as the overseas traders get to buy cheap metals Sunday night. That's how I think it will play. Not so sure
about Tuesday through Wednesday since that's bearish time with the Treasury auctions in progress. Gold responded fairly well off of the $1380 level. It also went down to retest an
important swing line formed the by peaks/dips formed on these 6 days (May 7, 22, 28, June 3, 4, 7). I find that those diagonal support lines that have numerous swings touching them
often act as brakes on downturns. This is most easily seen on gold's 4 hour spot chart. I don't think we'll see another April 15th come Monday since gold only got hit for $40 and not
$150. But certainly that fear is now out there and some longs will pack it in on Sunday night or Monday morning after they've seen today's results. The only safe play is to do like the
big banks (long gold,short silver)...assuming that what they report to the CFTC is even factual.....
COT and BPR analysis
Gold shorts front-run Friday's jobs report by 62 milliseconds - drop gold $10
DCOT report
I feel the markets are nearing a capitulation. Stocks are going to top out in the next month or so, and gold is going to put in a bottom.
<< <i>So the reports continue to come out... The gold ETFs continue to drop their holdings. >>
Could it be because the real thing has become the real thing?
"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
things will drop in that time. If there's more bearishness coming in July it will probably more of a final retest rather than a new low. In looking back over the past 12 Junes
6 lows came in June, 5 in July, and 1 in May. And of those 5 Julys, 2 came early in the month. That sort of suggests 9/12 summer lows ending by the first week in July. Of those
3 lows in mid to late July, they typically came about because June was a rally month that had to be worked off. So far, this June has been anything but a rally month. We'll have to
see if there's a bounce coming between now and mid-month.
This looks "broken".
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
If only that chart went out to 2030. Where's Biff and his magic book?
Too many positive BST transactions with too many members to list.
Anyone else notice the eerie similarity between recent price movement and the 2008-2009 price movement?
"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
Yes, all corrections look similar.
So the question really is, "Are the events responsible for the declines similar?" I cant make many arguments, and you know I like to argue
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Based on momo, you could say that the chances of silver hitting $4.00 are not much different than silver's chances of hitting $15.00 or so. This assumes that things like the debt, spending, investor demographics and the economy are just like they were in 1994. (Hint - they aren't.)
Simply amazing that the dollar index drops 5% in a month and gold barely budges higher and silver is lower. PMs seem--at least now--to not believe the dollar weakness.
What's the dollar supposed to be weak against? It's one dying currency vs. other dying currencies, each country trying to boost their economic numbers at the expense of someone else, instead of focusing of real growth, real quality and real results. Same as it always was. I would be much more concerned about a competing trade settlement system that is designed not to accept depreciating dollars in trade.
I knew it would happen.
Gold is not behaving well against a rise in interest rates, a predicted by a small minority. The forces that are really responsible for the trading of gold are becoming apparent.
Knowledge is the enemy of fear
<< <i>Simply amazing that the dollar index drops 5% in a month and gold barely budges higher and silver is lower. PMs seem--at least now--to not believe the dollar weakness.
Gold is not behaving well against a rise in interest rates >>
The ETFs have not started buying again yet.
And gold typically does well in a rising interest rate environment.
The dollar is so strong that it takes about 1,400 of them to buy an ounce of gold. Ahem.
Gold is not behaving well against a rise in interest rates, a predicted by a small minority. The forces that are really responsible for the trading of gold are becoming apparent.
That's the official short term view.
I knew it would happen.
Yet it takes less than 500 of them to mine an ounce of gold, and less than $10 to mine an ounce of silver. (else, how did any miners stay in busines prior to about 2006?)
Liberty: Parent of Science & Industry
I knew it would happen.
<< <i>So the dollar is currently weak against other failing fiat currencies yet strong against the 4000 year old ultimate currency? >>
"Currently strong" is key word on this topic. Dollar was also currently strong against gold in 2008 when gold was overpriced at $730-$989. I was buying then, I'm buying now.
Dollar Vs. 4000 year old currency
"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>The dollar is so strong that it takes about 1,400 of them to buy an ounce of gold.
Yet it takes less than 500 of them to mine an ounce of gold, and less than $10 to mine an ounce of silver. (else, how did any miners stay in busines prior to about 2006?) >>
You're talking about "cash cost" prices. And more specifically cash cost pricing from around 2004-2008. Cash costs have nearly doubled since then. Jmski's chart shows the additional
cost factors that aren't included in cash costs. That adds another 40-50% to the total. The large miners have seen their net profits drop about 60-90% year over year. And with
Kinross being the latest miner to get screwed by a sovereign (ie Ecuador), don't count on any further increases in gold production for quite some time. It looks like production peaked
in the past 1-2 years. Silver net costs are on the order of $17-$22/oz on average. Some juniors are seeing costs of $30-$40/oz right now and won't be around much longer. This is all
very bullish for the price of physical metal....not so good for the miners that have to bring it up.
Liberty: Parent of Science & Industry
Yes, yes, yes, yes, and yes.
EXCEPT for the books of the miners? Those numbers we can believe?
Nobody said that, did they? By the same token, what makes your numbers real?
I knew it would happen.
Liberty: Parent of Science & Industry
<< <i>Hmmmmm.
There is a lot wrong with using this graph for anything other than propaganda. The most obvious question is this. Do mining costs follow the price of gold or does gold follow mining costs? To get perspective on a true meaning of such a graph, can you produce one going back to the mid 80s so it would capture several economic cycles?
Knowledge is the enemy of fear
<< <i>
<< <i>So the dollar is currently weak against other failing fiat currencies yet strong against the 4000 year old ultimate currency? >>
"Currently strong" is key word on this topic. Dollar was also currently strong against gold in 2008 when gold was overpriced at $730-$989. I was buying then, I'm buying now.
Dollar Vs. 4000 year old currency >>
Another faulty graph. Since gold is priced in dollars, you cannot compare its price to a dollar. It needs to be compared to something else that is valued in dollars to determine relative performance or against gold valued in something else to determine the actual effect of dollar valuation.
Knowledge is the enemy of fear
<< <i>There is a lot wrong with using this graph for anything other than propaganda. The most obvious question is this. Do mining costs follow the price of gold or does gold follow mining costs? To get perspective on a true meaning of such a graph, can you produce one going back to the mid 80s so it would capture several economic cycles? >>
I have to disagree. Mining costs are based on the price of fuel/energy, labor, & equipment, and taxes/permits, and then of course the cost of land/claims/royalties. That graph to me looks to reasonably follow the trends in those expense categories.
Knowledge is the enemy of fear