a spike in volatility is overdue and will signal the next downtrend.
"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
"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>Your chart proved my contention. Now prove yours. >>
It would help if the gold price were overlaid on the gold volatility chart. But it's pretty clear in the center of PC's chart that gold rose sharply with spiking volatility. Using 30 or higher for volatility spikes, the time frames listed below resulted in gold rally price peaks. Gold peaked approximately every 18-22 months from 2001 to 2011 (21 is the most often seen). It then broke that "topping only" pattern and bottomed on the last 21 month cycle in June 2013. We're just about 14 months through the next 21 month cycle....enough time either way to forge either a top or bottom....due in March 2015.
The late Nov/early 2009 gold rally peak at $1226 doesn't show up on the GVZ chart as a major spike but it still made it to 30. So PC's 18 month GVZ spiking is pretty much married to the 21 month average gold peaks/troughs of the past 13 years. There's a 7 wave expanding wedge pattern in GVZ from Nov 2009 to Sept 2011. And since that time the wedge looks to be headed towards its lower projection point (10) in an ending/tapering diagonal of sorts. If anything the spikes are subsiding in size. The Sept 2011 spike looks to be the B wave bounce off the Oct 2008 A wave spike. Now we're into a grinding C wave.
Gold to silver ratio can also be used as PM's "volatility" meter to bounce against GVZ. And it's clear that rising GSR doesn't always mean a falling gold price, even if that is the norm (see 2001-2003). GSR is usually on a 8-10 week cycle that's part of a larger 9 month cycle (range of 7-12 months) and part of a larger 4-5 year cycle. This also ties in pretty well with PC's 18 month GVZ cycle (or 3 gold intermediate cycles). Using the 36 yr GSR chart it has typically put in a spike high rally peak every 4 yrs (3-5 yr range). This current rally is 5-3/4 yrs from the last spike high in 2008. There's not a lot of chart time for a spike high here. On the flip side, the GSR chart pattern shows a 5 year IH&S with the potential to rapidly hit >100. On the tail end of that IH&S is a very nicely formed 1 year cup with handle which projects to around 80. GSR besides being overdue for a 4-5 yr top (if not already in) is also 3-1/2 years out from the last 4-5 year bottoming. Based on 36 yrs of history, GSR is going to need at least 6 months and typically 1-2 years to make the next dip.
Roadrunner, I think you may want to look at PC's chart again.
There is a spike in volatility in Sept/Oct 2008---gold dropped from 900 to 700.
There is a spike in volatility in July/Sept 2011---gold dropped from 1900 to 1600.
There is a spike in volatility in April/May 2013---gold dropped from 1600 to 1350.
PC, I didnt say gold MUST go down, rather pointing out that every increase in volatility has resulted in lower prices. Why cant you answer my questions?
I didn't answer because it didn't deserve an answer. Volatility is a measure derived by swings in price movement. A sharp move in one direction followed by a sharp move the other will result in high volatility. So when gold spikes to a new all time high and then quickly corrects and comes back down, it results in a high volatility. A "V" bottom would also do the same, but there have been few if any V bottoms for gold, while there have been a few "blowoff" peaks in the past few years which is why you drew your conclusion that high volatility would for gold would results in a price drop. A linear decline or increase from these levels will not result in increased volatility. The VIX is also extremely low right now, as the monthly SPX chart I posted shows essentially a sustained straight line movement. The volatility for the SPX is not low because the price is going up, it is low because the range of movement has been small and unidirectional (up). The VIX for the SPX would look the same if the SPX had been falling instead of rising.
<< <i>Roadrunner, I think you may want to look at PC's chart again. >>
No need to. All I had to do was find a single exception to your claim. I listed half a dozen examples sbove. In fact GVZ rose for 2 months into August/early September 2011 and spiking multiple times in unison with the gold spikes. The July GVZ peaks and August 10th and 22th both coincide with gold peaks....Sept 6th pretty much as well. GVZ posts a perfect 5 wave pattern from July - Sept 2011 with the 5th wave higher being a 5 wave ending diagonal. GVZ also rose and peaked into the late Nov/early Dec 2009 high of $1226.. Both time frames are legitimate examples that disprove that EVERY volatility spike higher, drives prices down. If we looked back to 2001 and even 1970-1980 we'd probably find dozens of examples showing the same thing. How about the bounce
<< <i> GSR is going to need at least 6 months and typically 1-2 years to make the next dip
So its going to be a while before silver rallies hard again? >>
Maybe. It also could be ready for a hard rally within the next couple of weeks, especially with indicators already at washed out levels. If GSR's July peak of 68.0 was the top of this cycle, then silver's rally is not far away. My point was that silver is already in the timing band to start heading down into the next 4-5 year bottom. Whether that happens now or a year from now remains to be seen. On the monthly chart, macd and rsi reached lows in 2014 last seen in 2001 and 2008. The monthly RSI and MACD both show positive divergences. The monthly MACD shows a slight upward cross, last seen during the end of August 2009.....5 years ago. There's that 5 year number popping up again.
Roadrunner, I think you are looking for micro counter trends, but I'll accept. Larger trends down in price are always accompanied with rises in volatility simply because prices fall faster than they rally.
If silver were to rally 20% or more in a very shirt time, a week or two, then the volatility would show a corresponding increase, but abscent a very sharp rally, increasing volatility is always associated with lower prices.
<< <i>PC, eventually you will be right. Hang in there. >>
They say an investor is never wrong, just early.
<< <i>Roadrunner, I think you are looking for micro counter trends, but I'll accept. Larger trends down in price are always accompanied with rises in volatility simply because prices fall faster than they rally.
If silver were to rally 20% or more in a very shirt time, a week or two, then the volatility would show a corresponding increase, but abscent a very sharp rally, increasing volatility is always associated with lower prices. >>
Not exactly. Volatility is a measure of the magnitude of the price changes. As posted in my monthly gold chart, all of the candles in the pennant are relatively small which leads to the low volatility reading we are seeing. By claiming that we are due for a spike, I am merely saying that we will be seeing some larger candles. It can still go either way.
Yes, a sharp rally versus a gradual rally would produce a higher volatility and I agree that as a general rule prices fall faster than they rise, but not always. A $100-200 rally in gold over the month of Sept would yield a decent spike in monthly gold vol., perhaps from current level of 14 to mid 20's or higher, and wouldn't be an unreasonable expectation.
I also see that a decline is possible as I believe the rule is that when the pennant breaks it will continue the direction of the previous trend which is down, so we'll just have to see which way it breaks. Either way, some price movement is coming.
A $100-200 rally in gold over the month of Sept would yield a decent spike in monthly gold vol., perhaps from current level of 14 to mid 20's or higher, and wouldn't be an unreasonable expectation.
The $200 rally in gold in Jan resulted in its volatility rising from 14 to 19. And the $100 rally in June pushed the vix from 12 to 15. These are hardly spikes in volatility. If you are looking for the VIX to be in the mid 20s, then expect gold to be at 1150 or lower.
There really are no technical indicators showing gold should rally in the next month. Bollinger bands are tightening which means volatility should return, but momo and moving averages are weak.
<< <i> A $100-200 rally in gold over the month of Sept would yield a decent spike in monthly gold vol., perhaps from current level of 14 to mid 20's or higher, and wouldn't be an unreasonable expectation.
The $200 rally in gold in Jan resulted in its volatility rising from 14 to 19. And the $100 rally in June pushed the vix from 12 to 15. These are hardly spikes in volatility. If you are looking for the VIX to be in the mid 20s, then expect gold to be at 1150 or lower.
There really are no technical indicators showing gold should rally in the next month. Bollinger bands are tightening which means volatility should return, but momo and moving averages are weak. >>
GVX going from 14 to 21 would be a 50% increase, which I consider a spike. I can see why you disagree, but 50% is a decent move by most definitions.
I don't see why an increase in VIX volatility has to correspond to a drop in the gold price. I expect that if the SP500 was to flip and head down, we might see some of that money flowing into commodities. The relationship of stocks to gold is generally reliable to be inverse but not always.
I guess im not looking for minor "1 day wonder" spikes like we've seen numerous times. Those just are not tradable. Rather I am looking for an event that has a high degree of probability and offers a generous risk/reward ratio.
The last 2 spikes I see went from 15 to 43 and from 12 to 35. In each of these spikes gold trended lower. The time to buy gold has been after these spikes higher.
I would agree that the gold vix could pop to 21 and gold goes $40 higher, but so what? That really is not a tradable event for 99% of us. Thats the same as a stock going from $12.80 to $13.20. Hard to get excited about that.
<< <i>Roadrunner, I think you are looking for micro counter trends, but I'll accept. Larger trends down in price are always accompanied with rises in volatility simply because prices fall faster than they rally.
If silver were to rally 20% or more in a very shirt time, a week or two, then the volatility would show a corresponding increase, but abscent a very sharp rally, increasing volatility is always associated with lower prices. >>
I guess you could call a GVZ moving from 20 to 30 a micro-move. But in 2009 that move in GVZ produced a 34% move in gold which if applied to current price would suggest $1700+. And that move was really not a micro-move from a cycle standpoint since it fell right on the 21 month gold cycle, as did the summer 2011 peak. The first 2011 summer move in gold to $1912 was +29% gain on a doubling of GVZ from 15 to 33. Pretty sizable moves. GSR, GVZ, gold 18-22 month cycles, and the USDX should all work together to set up the next GVZ spike. In the last 4 - 21 month cycles since spring 2006 the key swing point usually took place in month 15-16. That would suggest September at the earliest (month 15) or October (month 16).
In looking back at the 1980-1985 gold correction it's A wave down took 35 months. That was a followed by a 39% B wave retrace of 7-8 months to key horizontal resistance of $500-$525 followed by the final 2 year C wave down. 5 years 1 month in all. The current correction is at the 35 month point now. It's only corrected 34% of the drop from $1921 to $1180 (ie $1434). Gold is usually pretty precise about reaching Fibbo targets. So there's a 38%-62% Fib retrace still out there. But does it come before or after another deep low? $1461 would be a min 38% Fib retrace while 50% is $1550. The $1550 level is interesting in that by March, when the next 21 month cycle is due to end, gold's downtrend line falls to the $1500-$1530 level. Gold has not come close to back testing that line nor close to the original horiz resistance breakdown at $1525-$1560. March would be a convenient window to do all of those things along with the typical GVZ and GSR spikes. If 35 months down was enough, then 7-8 months upwards as in 1982-1983 would equate to March/April 2015.
these ***trading threads*** used to be monthly (with multiple posts per day), then quarterly, now there's one for the whole year of 2014 and weeks go by between posts
I keep an online trading journal (signature link). Those interested can follow my blog. Those not interested, won't care either which way. My gold trades tend to be small, and this year have been a tiny part of my trading activity.
Last gold trade was a net long position in the form of a call calendar spread on GLD on Monday 9/22 when GLD was around 117.3 Buy GLD Dec 123 calls Sell GLD Oct 123 calls
I do weekly and monthly updates, so this latest gold trade will get posted this Friday or Saturday.
<< <i>I haven't seen any PM trade setups that I felt confident enough about to trade. And neither has anyone else, apparently. >>
I'm constantly profiting with USLV and DSLV. Volatility can be your friend (or enemy) if you let it.
"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 haven't seen any PM trade setups that I felt confident enough about to trade. And neither has anyone else, apparently. >>
I'm constantly profiting with USLV and DSLV. Volatility can be your friend (or enemy) if you let it. >>
When you see a setup post it! >>
Anytime price goes up are down there is a setup. Each player has to correctly guess which way for himself. My only investment advice is to keep on stackin'.
"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>these ***trading threads*** used to be monthly (with multiple posts per day), then quarterly, now there's one for the whole year of 2014 and weeks go by between posts
interesting. >>
Some trading setups have been posted in other threads, although perhaps a duplicate post in this thread would be in order.
<< <i>these ***trading threads*** used to be monthly (with multiple posts per day), then quarterly, now there's one for the whole year of 2014 and weeks go by between posts
interesting. >>
Some trading setups have been posted in other threads, although perhaps a duplicate post in this thread would be in order. >>
Or maybe all trading discussion should all happen in the trading thread. What a concept.
RSI on Platinum as of Friday close was 9.24 and the price dropped another $25 overnight which probably pushed RSI close to 8 if not lower. According to my records thats the lowest i can find going back to 1980. Its probably a buy here (1200) for a $30 bounce.
Nice. All PMs seem to have had a bounce. I'm still looking for some sign of solid strength in gold. The USD is overdue for a pullback and gold is due for a retracement. The weekly chart for USD index looks amazing. I'm not good enough to say when this will happen as it would seem both charts are ready to reverse but lately these markets have a way of going and then going further.
<< <i>Equities are going to be under pressure. I think we finally get that 10% correction in the dow/spx. >>
I agree that we're overdue. Once scenario I see is increased volatility with fakeouts in both directions until a meaningful correction sometime in December. The trend that's coming to an end is on the monthly timeframe so it can take a while to finally wind down.
RSI on Platinum as of Friday close was 9.24 and the price dropped another $25 overnight which probably pushed RSI close to 8 if not lower. According to my records thats the lowest i can find going back to 1980. Its probably a buy here (1200) for a $60* bounce.
*Fixed
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>RSI on Platinum as of Friday close was 9.24 and the price dropped another $25 overnight which probably pushed RSI close to 8 if not lower. According to my records thats the lowest i can find going back to 1980. Its probably a buy here (1200) for a $60* bounce.
*Fixed >>
Target price was actually 1276, but I like to arrive and leave parties early.
FED talking down the dollar today, a good PM thang.
"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
FED talking down the dollar today, a good PM thang. >>
Also a good boost for stocks. I don't think we'll see new records, but it could very well be a sucker rally. I saw the stock rally coming but I didn't feel confident enough to post it. Sp500 futures should hit 1975 easily (currently at 1950 after bottoming at 1918 today).
Interesting action in the Russel 2000. Everyone talking about the weakness in this group, and for good reason as price is same as a year ago. Todays action may have been a cleaning out of the stops under 1080. If so, then the last 12 months action is just a consolidation and small caps will be hitting new highs by Spring. Overall market correct will be put on hold for awhile. I sold my position in TZA at 17.76. Bought at 16.30, which I had been holding since April. Yeah, I had been been "hoping" for a larger correction also.
Got long gold with a small position last night at 1228 which was a tad high. Up $10 at the moment, I'm not sure how much longer I'll stay with it. I'm not sure we're ready to take off from here just yet, but maybe by the middle of next week.
By the way, thought it would be worth mentioning the futures contract requirements is really low right now. They've been lowering it over the last year or two because of the low volatility but no one is scream conspiracy. As volatility picks up though, I predict a return of blaming the CBOE for manipulating gold by means of raising contract requirements.
Comments
<< <i>
<< <i>So the low gold volatility means prices will drop? >>
No, it just looks like a time for a spike in volatility. >>
Well, the last 2 spikes coincided with selloffs in gold price. I would no reason why "this time is different".
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>So the low gold volatility means prices will drop? >>
No, it just looks like a time for a spike in volatility. >>
Well, the last 2 spikes coincided with selloffs in gold price. I would no reason why "this time is different". >>
No reason why this time has to be the same.
Knowledge is the enemy of fear
<< <i>Please cite an example of higher prices coinciding with a spike in volatility. >>
Please show a definition of volatility that says it means prices go down.
Knowledge is the enemy of fear
<< <i>Your chart proved my contention. Now prove yours. >>
My only contention is that a spike in volatility is due.
You content that this means gold must go down.
I say show me the definition of volatility that correlates an increase in volatility to a specific direction of 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
"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
Selling now!
<< <i>Your chart proved my contention. Now prove yours. >>
It would help if the gold price were overlaid on the gold volatility chart. But it's pretty clear in the center of PC's chart that gold rose sharply with spiking volatility. Using 30 or higher for volatility spikes, the time frames listed below resulted in gold rally price peaks. Gold peaked approximately every 18-22 months from 2001 to 2011 (21 is the most often seen). It then broke that "topping only" pattern and bottomed on the last 21 month cycle in June 2013. We're just about 14 months through the next 21 month cycle....enough time either way to forge either a top or bottom....due in March 2015.
The late Nov/early 2009 gold rally peak at $1226 doesn't show up on the GVZ chart as a major spike but it still made it to 30. So PC's 18 month GVZ spiking is pretty much married to the 21 month average gold peaks/troughs of the past 13 years. There's a 7 wave expanding wedge pattern in GVZ from Nov 2009 to Sept 2011. And since that time the wedge looks to be headed towards its lower projection point (10) in an ending/tapering diagonal of sorts. If anything the spikes are subsiding in size. The Sept 2011 spike looks to be the B wave bounce off the Oct 2008 A wave spike. Now we're into a grinding C wave.
Gold to silver ratio can also be used as PM's "volatility" meter to bounce against GVZ. And it's clear that rising GSR doesn't always mean a falling gold price, even if that is the norm (see 2001-2003). GSR is usually on a 8-10 week cycle that's part of a larger 9 month cycle (range of 7-12 months) and part of a larger 4-5 year cycle. This also ties in pretty well with PC's 18 month GVZ cycle (or 3 gold intermediate cycles). Using the 36 yr GSR chart it has typically put in a spike high rally peak every 4 yrs (3-5 yr range). This current rally is 5-3/4 yrs from the last spike high in 2008. There's not a lot of chart time for a spike high here. On the flip side, the GSR chart pattern shows a 5 year IH&S with the potential to rapidly hit >100. On the tail end of that IH&S is a very nicely formed 1 year cup with handle which projects to around 80. GSR besides being overdue for a 4-5 yr top (if not already in) is also 3-1/2 years out from the last 4-5 year bottoming. Based on 36 yrs of history, GSR is going to need at least 6 months and typically 1-2 years to make the next dip.
GSR 36 yr chart
7/5/11 - 8/26/11....anyone remember this gold rally? It only lasted 2 months on rising volatility ($1478 to $1912).
10/7/2010
5/6/2010
12/4/09 - 12/07/09 ($1226 gold peak on 30 volatility)
9/3/09
I probably missed a few too. I don't have GVZ prior to 2009 but I suspect there were plenty of gold rallies with volatility spikes from 2001-2008.
There is a spike in volatility in Sept/Oct 2008---gold dropped from 900 to 700.
There is a spike in volatility in July/Sept 2011---gold dropped from 1900 to 1600.
There is a spike in volatility in April/May 2013---gold dropped from 1600 to 1350.
PC, I didnt say gold MUST go down, rather pointing out that every increase in volatility has resulted in lower prices. Why cant you answer my questions?
Knowledge is the enemy of fear
It simply means that gold is outperforming silver, whether that means rising faster or falling slower.
GSR is going to need at least 6 months and typically 1-2 years to make the next dip
So its going to be a while before silver rallies hard again?
Knowledge is the enemy of fear
Volatility is a measure derived by swings in price movement. A sharp move in one direction followed by a sharp move the other will result in high volatility. So when gold spikes to a new all time high and then quickly corrects and comes back down, it results in a high volatility. A "V" bottom would also do the same, but there have been few if any V bottoms for gold, while there have been a few "blowoff" peaks in the past few years which is why you drew your conclusion that high volatility would for gold would results in a price drop. A linear decline or increase from these levels will not result in increased volatility. The VIX is also extremely low right now, as the monthly SPX chart I posted shows essentially a sustained straight line movement. The volatility for the SPX is not low because the price is going up, it is low because the range of movement has been small and unidirectional (up). The VIX for the SPX would look the same if the SPX had been falling instead of rising.
<< <i>Roadrunner, I think you may want to look at PC's chart again. >>
No need to. All I had to do was find a single exception to your claim. I listed half a dozen examples sbove. In fact GVZ rose for 2 months into August/early September 2011 and spiking multiple times in unison with the gold spikes. The July GVZ peaks and August 10th and 22th both coincide with gold peaks....Sept 6th pretty much as well. GVZ posts a perfect 5 wave pattern from July - Sept 2011 with the 5th wave higher being a 5 wave ending diagonal. GVZ also rose and peaked into the late Nov/early Dec 2009 high of $1226.. Both time frames are legitimate examples that disprove that EVERY volatility spike higher, drives prices down. If we looked back to 2001 and even 1970-1980 we'd probably find dozens of examples showing the same thing. How about the bounce
GVZ summer 2011 rally
Gold summer 2011 rally
I'd also bet that the October 24th 2008 bottom in gold produced a pretty sharp volatility spike. Silver's volatility spike was even greater.
2008 bottom chart
<< <i> GSR is going to need at least 6 months and typically 1-2 years to make the next dip
So its going to be a while before silver rallies hard again? >>
Maybe. It also could be ready for a hard rally within the next couple of weeks, especially with indicators already at washed out levels. If GSR's July peak of 68.0 was the top of this cycle, then silver's rally is not far away. My point was that silver is already in the timing band to start heading down into the next 4-5 year bottom. Whether that happens now or a year from now remains to be seen. On the monthly chart, macd and rsi reached lows in 2014 last seen in 2001 and 2008. The monthly RSI and MACD both show positive divergences. The monthly MACD shows a slight upward cross, last seen during the end of August 2009.....5 years ago. There's that 5 year number popping up again.
Knowledge is the enemy of fear
If silver were to rally 20% or more in a very shirt time, a week or two, then the volatility would show a corresponding increase, but abscent a very sharp rally, increasing volatility is always associated with lower prices.
Knowledge is the enemy of fear
<< <i>PC, eventually you will be right. Hang in there. >>
They say an investor is never wrong, just early.
<< <i>Roadrunner, I think you are looking for micro counter trends, but I'll accept. Larger trends down in price are always accompanied with rises in volatility simply because prices fall faster than they rally.
If silver were to rally 20% or more in a very shirt time, a week or two, then the volatility would show a corresponding increase, but abscent a very sharp rally, increasing volatility is always associated with lower prices. >>
Not exactly. Volatility is a measure of the magnitude of the price changes. As posted in my monthly gold chart, all of the candles in the pennant are relatively small which leads to the low volatility reading we are seeing. By claiming that we are due for a spike, I am merely saying that we will be seeing some larger candles. It can still go either way.
Yes, a sharp rally versus a gradual rally would produce a higher volatility and I agree that as a general rule prices fall faster than they rise, but not always. A $100-200 rally in gold over the month of Sept would yield a decent spike in monthly gold vol., perhaps from current level of 14 to mid 20's or higher, and wouldn't be an unreasonable expectation.
I also see that a decline is possible as I believe the rule is that when the pennant breaks it will continue the direction of the previous trend which is down, so we'll just have to see which way it breaks. Either way, some price movement is coming.
The $200 rally in gold in Jan resulted in its volatility rising from 14 to 19. And the $100 rally in June pushed the vix from 12 to 15. These are hardly spikes in volatility. If you are looking for the VIX to be in the mid 20s, then expect gold to be at 1150 or lower.
There really are no technical indicators showing gold should rally in the next month. Bollinger bands are tightening which means volatility should return, but momo and moving averages are weak.
Knowledge is the enemy of fear
<< <i> A $100-200 rally in gold over the month of Sept would yield a decent spike in monthly gold vol., perhaps from current level of 14 to mid 20's or higher, and wouldn't be an unreasonable expectation.
The $200 rally in gold in Jan resulted in its volatility rising from 14 to 19. And the $100 rally in June pushed the vix from 12 to 15. These are hardly spikes in volatility. If you are looking for the VIX to be in the mid 20s, then expect gold to be at 1150 or lower.
There really are no technical indicators showing gold should rally in the next month. Bollinger bands are tightening which means volatility should return, but momo and moving averages are weak. >>
GVX going from 14 to 21 would be a 50% increase, which I consider a spike. I can see why you disagree, but 50% is a decent move by most definitions.
I don't see why an increase in VIX volatility has to correspond to a drop in the gold price. I expect that if the SP500 was to flip and head down, we might see some of that money flowing into commodities. The relationship of stocks to gold is generally reliable to be inverse but not always.
The last 2 spikes I see went from 15 to 43 and from 12 to 35. In each of these spikes gold trended lower. The time to buy gold has been after these spikes higher.
I would agree that the gold vix could pop to 21 and gold goes $40 higher, but so what? That really is not a tradable event for 99% of us. Thats the same as a stock going from $12.80 to $13.20. Hard to get excited about that.
But at least this thread is a bit more lively.
Knowledge is the enemy of fear
<< <i>Roadrunner, I think you are looking for micro counter trends, but I'll accept. Larger trends down in price are always accompanied with rises in volatility simply because prices fall faster than they rally.
If silver were to rally 20% or more in a very shirt time, a week or two, then the volatility would show a corresponding increase, but abscent a very sharp rally, increasing volatility is always associated with lower prices. >>
I guess you could call a GVZ moving from 20 to 30 a micro-move. But in 2009 that move in GVZ produced a 34% move in gold which if applied to current price would suggest $1700+. And that move was really not a micro-move from a cycle standpoint since it fell right on the 21 month gold cycle, as did the summer 2011 peak. The first 2011 summer move in gold to $1912 was +29% gain on a doubling of GVZ from 15 to 33. Pretty sizable moves. GSR, GVZ, gold 18-22 month cycles, and the USDX should all work together to set up the next GVZ spike. In the last 4 - 21 month cycles since spring 2006 the key swing point usually took place in month 15-16. That would suggest September at the earliest (month 15) or October (month 16).
In looking back at the 1980-1985 gold correction it's A wave down took 35 months. That was a followed by a 39% B wave retrace of 7-8 months to key horizontal resistance of $500-$525 followed by the final 2 year C wave down. 5 years 1 month in all. The current correction is at the 35 month point now. It's only corrected 34% of the drop from $1921 to $1180 (ie $1434). Gold is usually pretty precise about reaching Fibbo targets. So there's a 38%-62% Fib retrace still out there. But does it come before or after another deep low? $1461 would be a min 38% Fib retrace while 50% is $1550. The $1550 level is interesting in that by March, when the next 21 month cycle is due to end, gold's downtrend line falls to the $1500-$1530 level. Gold has not come close to back testing that line nor close to the original horiz resistance breakdown at $1525-$1560. March would be a convenient window to do all of those things along with the typical GVZ and GSR spikes. If 35 months down was enough, then 7-8 months upwards as in 1982-1983 would equate to March/April 2015.
Knowledge is the enemy of fear
interesting.
Liberty: Parent of Science & Industry
Last gold trade was a net long position in the form of a call calendar spread on GLD on Monday 9/22 when GLD was around 117.3
Buy GLD Dec 123 calls
Sell GLD Oct 123 calls
I do weekly and monthly updates, so this latest gold trade will get posted this Friday or Saturday.
I knew it would happen.
<< <i>I haven't seen any PM trade setups that I felt confident enough about to trade. And neither has anyone else, apparently. >>
I'm constantly profiting with USLV and DSLV. Volatility can be your friend (or enemy) if you let it.
"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>I haven't seen any PM trade setups that I felt confident enough about to trade. And neither has anyone else, apparently. >>
I'm constantly profiting with USLV and DSLV. Volatility can be your friend (or enemy) if you let it. >>
When you see a setup post it!
<< <i>
<< <i>
<< <i>I haven't seen any PM trade setups that I felt confident enough about to trade. And neither has anyone else, apparently. >>
I'm constantly profiting with USLV and DSLV. Volatility can be your friend (or enemy) if you let it. >>
When you see a setup post it! >>
Anytime price goes up are down there is a setup. Each player has to correctly guess which way for himself. My only investment advice is to keep on stackin'.
"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>Well, the gold VIX spiked from 12.5 to 16.5 and gold went from 1290 to 1250. Whoodathunk? >>
Gold vix at 18.83 and gold at 1209. Almost like taking candy from a baby.
Knowledge is the enemy of fear
<< <i>these ***trading threads*** used to be monthly (with multiple posts per day), then quarterly, now there's one for the whole year of 2014 and weeks go by between posts
interesting. >>
Some trading setups have been posted in other threads, although perhaps a duplicate post in this thread would be in order.
Knowledge is the enemy of fear
<< <i>
<< <i>these ***trading threads*** used to be monthly (with multiple posts per day), then quarterly, now there's one for the whole year of 2014 and weeks go by between posts
interesting. >>
Some trading setups have been posted in other threads, although perhaps a duplicate post in this thread would be in order. >>
Or maybe all trading discussion should all happen in the trading thread. What a concept.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>Equities are going to be under pressure. I think we finally get that 10% correction in the dow/spx. >>
I agree that we're overdue. Once scenario I see is increased volatility with fakeouts in both directions until a meaningful correction sometime in December. The trend that's coming to an end is on the monthly timeframe so it can take a while to finally wind down.
*Fixed
I knew it would happen.
Knowledge is the enemy of fear
<< <i>RSI on Platinum as of Friday close was 9.24 and the price dropped another $25 overnight which probably pushed RSI close to 8 if not lower. According to my records thats the lowest i can find going back to 1980. Its probably a buy here (1200) for a $60* bounce.
*Fixed >>
Target price was actually 1276, but I like to arrive and leave parties early.
Knowledge is the enemy of fear
FED talking down the dollar today, a good PM thang.
"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>bought USLV @ $27.23
FED talking down the dollar today, a good PM thang. >>
Also a good boost for stocks. I don't think we'll see new records, but it could very well be a sucker rally. I saw the stock rally coming but I didn't feel confident enough to post it. Sp500 futures should hit 1975 easily (currently at 1950 after bottoming at 1918 today).
Interesting action in the Russel 2000. Everyone talking about the weakness in this group, and for good reason as price is same as a year ago. Todays action may have been a cleaning out of the stops under 1080. If so, then the last 12 months action is just a consolidation and small caps will be hitting new highs by Spring. Overall market correct will be put on hold for awhile. I sold my position in TZA at 17.76. Bought at 16.30, which I had been holding since April. Yeah, I had been been "hoping" for a larger correction also.
Largest position remain cash however.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Knowledge is the enemy of fear
By the way, thought it would be worth mentioning the futures contract requirements is really low right now. They've been lowering it over the last year or two because of the low volatility but no one is scream conspiracy. As volatility picks up though, I predict a return of blaming the CBOE for manipulating gold by means of raising contract requirements.
Thats a prediction of which I believe you will be 100% correct.
Knowledge is the enemy of fear