Options
***DECEMBER 2011 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 5,578 ✭✭✭✭✭
This is a continuation of the monthly thread for discussing relatively short or near term movements in precious metals and related securities.
0
Comments
http://blogs.stockcharts.com/chart*watchers/2011/12/silver-poised-to-outperform-again.html
You will have to remove the * from the above link to view the blog. Stupid filters.
Knowledge is the enemy of fear
Are coins pedigreed to the Atwater collection similarly offensive?
Anyway, nice chart, we'll all be twaching the price of Gold!
Liberty: Parent of Science & Industry
Not sure I'm ready to say that silver is ready to take off, but I do think it's a great long term buy at these levels and that there is minimal downside risk.
I was watching the 1755 level for gold closely and closed my position there before the $45 plummet this morning on new about the ECB interest rate drop. Of course that weakened the euro and stengthened the dollar index so stocks and PMs caved.
A lot of people are looking for a gold rally here pretty soon but I am skeptical, and I think there is a good chance for a drop to the $1600's or lower. Part of that reason is that the market likes to disappoint the "herd" but also the McLellan newsletter has some scary charts comparing the 1 month LIBOR to 1 month gold lease rates.
When the spread between LIBOR and GOFO goes to a high positive value, meaning that gold lease rates are well below regular interest rates, then that has been a reliable sign that a meaningful up move is coming for gold prices. The last time we saw such a big positive spike was in 1998, when this GOFO spread correctly marked the bottom in gold prices. But now we are seeing the largest negative spread in the 22-year history of this data. The 1-month GOFO is 0.843%, while the 1-month LIBOR is still down at 0.28%.
The first time there was a negative spread ever was in early 2008, when gold made a top with other financial assets. Since then, big negative readings have been associated with meaningful tops for gold prices. In September 2011, this spread went to what was then a new record negative reading of -0.48 just ahead of the big plunge in gold prices.
Now we are seeing that record low get exceeded, just as gold prices are bonking against a declining tops line.
The historical record on this indicator is pretty good so it's wise to be skeptical here. I'm excited about the buying opportunity this present. Of course, nailing the timing will be tough, but I think the important thing is to have a lot of cash and be ready to jump on the opportunity if it comes.
On the physical front, a local dealer is claiming that it is hard to get a hold of $20 gold in large quantities and that Europe is buying a lot of gold right now. Can't blame them...
Edited to add:
Right on schedule, the McLellan timing models had a short-term gold top predicted for today...
The observation about LIBOR and GOFO falls into line with the chart I posted a few months ago of the 10yr US treasury yield vs gold. The chart had gone parabolic and poised to collapse. It peaked at 105 and is about 85 right now. I postulated that it could drop all the way to 35. I think the reason this chart went parabolic was due to the very easy terms in financing the gold trade, ie. easy money. If this easy money is taken away, so goes the trade. This actually applies to most of the commodities trade.
Gold didnt go up because the world was ending, but because people thought the world was ending and funding for this relatively illiquid trade was readily available and gold was cheap. People may still think the world is ending, but gold is no longer cheap and the funding may be drying up. Its hard to make a cake if all you have is flour and no eggs or butter.
If Europe can get its act together, then all I wrote above will be cancelled. Anyone want to bet on Europe?
Knowledge is the enemy of fear
<< <i>If Europe can get its act together, then all I wrote above will be cancelled. Anyone want to bet on Europe? >>
Of course, I'd have to stop laughing first, but I can't imagine anyone betting on Europe. I read one analysis which made a pretty good case for the Euro surviving and actually basically maintaining its current value (at least within the range that it's traded in the past few years). Of course, in order to do this it will require the EU to shed some members to survive.
I do still keep in mind the conspiracy theory that the world-powers-that-be will "cause" the end of the Euro, and as a domino effect, the end of the USD by the end of 2012. I think that timeline is still valid as a possibility.
GSR momentum the past few weeks seems to be on the wane from the earlier runs into the mid-50's. Normally from the peak CCI should pull back to at least -100. While GSR is very hard to decipher, between bottom/top cycles and oscillators it would appear to have a better chance of turning from here after hitting the upper 20 day BB. In the 7-8 month parallel channel it hasn't touched the lower channel line since August. If alternation applies, it should trace back to the lower channel/BB to around 51. The action of the 60 day BB's looks to be capping the upside and offering a quickly rising downside target. Essentially no GSR gaps sitting higher but a number of them sitting lower. Not a horse I'd bet money on, but just some thoughts. That gold $1702 pivot point low from back in August continues to be the key support point.
$BPGDM
GSR
roadrunner
Knowledge is the enemy of fear
GSR in various time frames
If we go back to the 1991 peak at approx 100, GSR has been in a downward correction mode since then. It appears to be in the final waves of a 25 yr ABC in 3-3-5 EW format.
At least that's a very commonly seen wave set. The C leg is often a final 5 waver. And so far it looks like we're on the 4th wave of the final 5. The alternation works well since
wave 2 was a flat while this wave 4 is a sharp. A good time for the 5th leg down to start is while up against Cohodk's downtrend line. Interesting that the rebounds from 1980-1991
and 1998-2009 both lasted 11 yrs each. The 1991-1998 down trend only took 7 yrs. If the spacing follows that previous model of 7 yrs that points to 2016 which fits nicely to
Martin Armstrong's thoughts...and a 15-17 yr commodities bull run. But so far this last wave set looks like it may only take 5 yrs (2014). I've liked the look of this 23-25 yr ABC for
some time now.
roadrunner
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Trading has been tough so i haven't. I did entered long Euro/USD on Friday on spec. MJ >>
Not a bad spec. Lots of bears on the Euro. I have no fx trades having closed Yen and Euro shorts last month. The dollar still looks bullish, but im not about to fight the global central banks right now, at least not until I have more vigilanties in my corner. I do see their torches in the distance.
Not sure I follow you RR. Are you saying there is possibly 1 more leg lower for the GSR? Then thats it, game over as the cycle would be complete?
Knowledge is the enemy of fear
The current wave set that's already 3-4 yrs in progress would still have one more 1 yr (approx) impulsive down leg remaining after this current bounce up is complete. Of course we
don't know if this peaks at 55-60 or something higher. To maintain the current EW structure the 58-60 level sort of has to hold since the bottom of leg 1 hit around 58. Otherwise time
to re-analyze the waves. A 5th leg down doesn't necessarily means the run is done. EW theory allows for extensions from that 5th wave that appear to morph into 7th and even 9th
waves down. If you look at gold this past summer that final flurry of zig zags from around $1660-$1900 was pretty much all done on a series of 5th wave extensions. For now, that
58-60 point is key. If GSR blows through it and heads into the 60's then that will extend the whole process out 1-2 more years. Even if that downtrend line gets broken I suspect GSR
would still pull back into the lower 50's to retest it, chewing up more time in the process. Eventually, a inal leg down would follow and take GSR into the 20's or teens.
In looking at the gofo / libor / lease rate issue these larger negative values (Libor - Gofo) are peculiar to 2nd half 2011. During the 2008 crisis the Libor-Gofo was peaking at large positive
numbers. So I'm not sure that -.8 like we're seeing now is comparable to +.7 to +2.6 seen during the Sept-Nov 2008 time period. Gold forward rates started off in 2008 >4.0 and
bottomed at <0. So is today's Gofo of 0.8 really all that high where the interest rate curve is skewed by "imaginery/unsupportable" otc interest rate contracts? If one was looking for
larger negative (Libor - Gofo) rates from Jan 2009 - Aug 2011 to tell them when a correction was coming...they would have never anticipated one. That's not much of a correlator imo.
Even looking at 2006 and 2007 rate diff's I find that it would gave as many bad calls as good ones. These rate diffs "rhyme" much of the time with the pog, but to try to predict with
them based on peaks and trends will often get you into hot water as the August-November 2011 rates will show. The rate diff peaked at +2.69 back on October 7th 2008 a few weeks
before gold actually bottomed. And for only one day in 2008 was the Libor-Gofo actually negative. The current high "negative" Libor-Gofo diff probably is more a sign of banking system
stresses than the price of gold trend. I find it difficult to make Libor-Gofo comparisons to 2008 or any other year for that matter.
London Gofo and Libor rates
roadrunner
<< <i>
<< <i>Trading has been tough so i haven't. I did entered long Euro/USD on Friday on spec. MJ >>
Not a bad spec. Lots of bears on the Euro. I have no fx trades having closed Yen and Euro shorts last month. The dollar still looks bullish, but im not about to fight the global central banks right now, at least not until I have more vigilanties in my corner. I do see their torches in the distance. >>
The torches seem to be getting closer. Ouch. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I warned you via PM last week.
Not taking long for those lines in the above charts to be tested or broken. GLD is right on the 150dma and uptrend line from Jan. These patterns have a way of resolving themselves very quickly.
Knowledge is the enemy of fear
The last time gold failed to hold the 150 dma was during the 2008 crash. It certainly has a test before it this week with miners, commods and equities in general probably going lower.
GLD is also sitting on top of its 20 day lower BB. The GLD gap at 158.4 ($1626) may be calling. Let's hope that the gaps at 149 and 145 aren't also calling.
Odd that even with this crunch that money flows in GLD and GDX have continued to rise or maintain. That "bullish looking setup" in BPGDM was a perfect headfake.
BPGDM is once again below the 8 dma which is bearish. Pretty rare for BPGDM to make a run "out of the hole" only to fall right back into it without getting very far.
GLD and GDX Aroon 10 have also just crossed which means they still have a ways to go to peak out the indicators. Probably 3 more days just like it took in mid-November
from this point to flip the Aroon 100/0. That will make it a 10 day decline. GLD volume is considerably smaller than seen at the same point in that Nov decline and less than
I would have expected for a $50 down day. Gold could be ready for crash. It also could be a final head fake to shake all the weak hands out as well. GSR just moved sideways
today which was odd. Typically on the OE hit silver drops a lot more than gold. Several things not quite adding up here from Gofo and Libor, volumes, money flows, etc. Just sayin'.
The dollar too is giving conflicting signals as it has traced out a bullish looking cup with handle the past 2 months. And that sits within an 11 month bowl with dual handles. Even more
bullish. Yet the last 3 moves into the upper 79's has been on successively weaker UUP volume. And the dollar COT commercial short to long ratio is still a pretty fat 4.7 to 1.
roadrunner
In God We Trust.... all others pay in Gold and Silver!
$1420 will be a GREAT buying opportunity that I will be preparing for. My only question is if I am brave enough to play the downside here and I think I might with a small position.
BSTs with: Coll3ctor, gsa1fan, mkman123, ajbauman, tydye, piecesofme, pursuitofliberty
Travelog - 20in20travels.com
<< <i>Proof, would you generally see a contraction the the GSR on a pullback of this sort if gold were to hit $1420? >>
I don't like to make predictions about the relativity of markets. Gold will drag down (or up) silver and vice versa. Silver is still consolidating it's move up to $50 and subsequent crash, so it's harder to predict, but it's movements seem to be muted in size, relative to gold.
<< <i>The near-term picture for gold became clearer today, it doesn't look good. $1420 is a compelling target for this downside because it is a 38.2% retracement of the move up from 2008 and there would be good symmetry for an a-b-c-d patter starting with the all-time-high. Nichols claims this low could happen as soon as Dec 22. USD futures have also broken out above the 80.0 mark, and with the talk out of Europe I can see it heading higher. Stocks and PMs will suffer with the strong dollar. Of course, then the fed will have to step in and do something to weaken the dollar, among other things I'm sure. The wild-card factor will be how much European money fleeing the Euro will support PM prices.
$1420 will be a GREAT buying opportunity that I will be preparing for. My only question is if I am brave enough to play the downside here and I think I might with a small position. >>
Dollar futures have yet to get past 79.7 on this recent rally and 80 has not been seen since January. A rally above 80 is not yet a given though it certainly is a reasonable bet. Nichols
has been wildly wrong on enough occasions that I wouldn't hang my hat on his $1420. How many times has he called for rallies based on high fractal energy only to have them go nowhere? My own feel is that the recent run to $1900+ wasn't a final blow off of a 3 yr rally but just the 2nd intermediate step up (ie wave 3). That 2nd step to around $1650 was followed by a series of extensions....not a separate 3rd impulse. I believe the 5th wave of that set is still out there in the short to intermediate term. Once this 4th wave correction ends the 3rd impulse wave would be seen. I could see gold moving back to retest the May-August consolidation area which could mean anything from $1475-$1575. This 2nd impulse wave was from $1044 to $1920 and 44% has been retraced already. That number is consistent with the 41% & 50% retracements seen by the 2 larger pull backs since $681. A 50% retrace would take gold to $1488, a point that works on several levels. But let's take it one GLD gap at a time. Next up is $1626 or near the 200 dma. It's beginning to feel like the last time gold was under stress as $1600 was being penetrated to the downside. There were calls over the map for $1000-$1450...didn't happen. More than likely, the outcome will be similar this time....it won't happen as too many are already expecting it so they can load up on the cheap.
$32 BILL in 3yr notes sold yesterday at 3.62 bid to cover. 10 yrs are up today.
roadrunner
<< <i>Dollar futures have yet to get past 79.7 on this recent rally and 80 has not been seen since January. >>
My charts show March dollar futures (DX) peaked at 80.36 late last night and is at 80.08 as I write this.
<< <i>
<< <i>Dollar futures have yet to get past 79.7 on this recent rally and 80 has not been seen since January. >>
My charts show March dollar futures (DX) peaked at 80.36 late last night and is at 80.08 as I write this. >>
I've been watching netdania 24 hr dollar USDollar index. I guess I erred in thinking they were dollar futures. But it's not broken 80 since January. Close...but no cigar.
Finviz.com also calls the USDX "futures" and reports the same level as netdania. So what would determine the USDX price if it wasn't futures trading?
So which of DX or USDX takes precedent or counts as an "official" break above 80?
roadrunner
-USDX is the dollar index
-DX is a tradeable futures contract for the USDX
So I still don't have an answer, but I'm not ready to call it a break above 80 just yet, it's not yet decisive IMO.
In God We Trust.... all others pay in Gold and Silver!
Gold looks like is still needs one more burst down in this short term sequence. With gold's 8 hour oscillators pretty much buried and flattened out as in mid-November
it's not a place I'd be comfortable shorting. But with 2 more days of OE and TBond auction "help" there are still some nice tail winds with your short. But I suspect they
will disappear by Wed afternoon/Thursday morning.
roadrunner
Silver has a good chance of underperforming the stock market this year.
Knowledge is the enemy of fear
(Not trying to sound like a hole, but)
When I look at today’s gold chart, the $30 drop off didn’t begin until the Fed announcement at ~2:15 pm. How can one summarize that the drop was a result of a chart pattern as opposed to the Fed decision?
Chart patterns show resistance and support levels that are useful because so many people feel that are useful (50dma for example). It is a play on the psychology of the market. If you hit a support level (be it due to good news, bad news, or no news) and you do not break through, the general psychology of the market is positive. If bad news comes out and you do break a support, the general feel of the traders negative enough to break through a psychological support level. Kind of a self fulfilling prophecy if you will because so many people follow this...
Although this may not be a technically correct description, it is the way that makes logical sense... I am sure the real traders will chime in and offer a better description
BSTs with: Coll3ctor, gsa1fan, mkman123, ajbauman, tydye, piecesofme, pursuitofliberty
Travelog - 20in20travels.com
<< <i>Everything proving very efficient so far. Charts playing out exactly as they projected.
(Not trying to sound like a hole, but)
When I look at today’s gold chart, the $30 drop off didn’t begin until the Fed announcement at ~2:15 pm. How can one summarize that the drop was a result of a chart pattern as opposed to the Fed decision? >>
Good question.
If you look back a few days ago I posted charts showing trendlines that I thought would be broken soon. Did I know that gold was going to drop at 2:15 today? No. But I could read into the chart (which is the market) and saw that market participants were getting weary of this European bs. Volume trends on GLD, contrary to what roadrunner saw, were and are terrible. An educated bet would have been to short gold.
Now of course the charts show history, but patterns often repeat. If you can correctly decipher a pattern, then you can trade markets with better than average success. Kind of like predicting the future. Once a pattern develops, it can be difficult to reverse and thats why I wrote that the present pattern could develop quickly.
So to answer your question. The chart pattern did not dictate the move in gold or the Feds decision. It did predict that investors would most likely be disappointed, and I think they were.
Knowledge is the enemy of fear
roadrunner was expecting another leg down following the move to $1650 and said so above and on another thread. The daily GLD volumes are still pathetic to what occurred during the Aug and Sept drops. Today's FOMC meeting was the time the banksters decided to commence that 5th leg of this set that started from $1753 (Dec 8th). They probably had this planned before today. The GLD volume in the last 2 hours of trading today was monumental and nothing else in the PM sector compares to it. It dwarfs anything seen in the past few weeks. In looking back 2 months you won't find hourly volumes at 2:00 and 3:00 like you saw today....even the gold futures final hourly volumes were stout, but nothing like GLD. You would have thought the world ended at 2:00 today based on the "horrible" minutes the FED posted. They said nothing new and was probably exactly what everyone expected. Pretty much all rigged. But that gets that wave set out of the way though still two l-o-n-g days left in OE week. GLD's volume today though increasing was rather lackluster in size, just like uup/dollar's move into the 80's. Note that silver, oil, and a host of grains/softs didn't play along with gold today. In the past, this type of carnage was almost always lead by a silver rout. Not today. In any case, so far this move down cleans out weak hands and gives those shares and ounces to the strong ones. First 2 bond auctions were quite successful with bid to covers>3.5.
Since gold fell from $1800 it has filled out a 4 point parallel channel. A pair of very symmetric ABC (3-3-5) waves fill it out. Both dropped about $140 each. Daily RSI has nearly reached the same level seen during the massive drop on 9/26 (31 vs. 33). Gold's definitely broken a number of key trend lines now. But nothing says it has to continue beyond the 200 dma ($1614). Another GLD gap was filled today (158.4 = $1626). If it's in the cards, deeper ones are still below at $1530 and $1488 from the July breakout. Those are months earlier than the most recent gaps being dealt with. But if gold is headed down a lot deeper, it will deal with those July breakout gaps as well.
Congrats on your short today PC. Hopefully now closed.
roadrunner
In God We Trust.... all others pay in Gold and Silver!
<< <i>(Not trying to sound like a hole, but)
When I look at today’s gold chart, the $30 drop off didn’t begin until the Fed announcement at ~2:15 pm. How can one summarize that the drop was a result of a chart pattern as opposed to the Fed decision? >>
There are different beliefs, but I believe that the markets are going to do what the markets are going to do and that new such as the fed announcement is nothing more than a trigger. It didn't matter what the news was, that drop was going to happen. The media will always put an explanation on it... sometimes good news is good (i.e., lower unemployment good for economy thus good for stocks), sometimes good news is bad (news was already priced in, or it was good but not good enough...). But in the end the financial media doesn't know why the markets moved - it's their best guess given the days' events and headlines.
<< <i>Congrats ProofCollection on calling the short position. It feels good to hit the wave.
Thanks. Now the only question is when to get off.
I had previously mentioned $1420 as a target. I have a pretty low confidence in that number, but I have seen targets of $1456 and $1500 that are probably more reasonable. Hitting $1420 would be incredibly opportunistic because that is a 38.2% retracement of a very large pattern, which would "free" the pattern for much more upside.
Tonight/Tomorrow I expect a 38.2% retracement of this fall to take the pattern back up to $1648 before resuming downside...
<< <i>
<< <i>(Not trying to sound like a hole, but)
When I look at today’s gold chart, the $30 drop off didn’t begin until the Fed announcement at ~2:15 pm. How can one summarize that the drop was a result of a chart pattern as opposed to the Fed decision? >>
There are different beliefs, but I believe that the markets are going to do what the markets are going to do and that new such as the fed announcement is nothing more than a trigger. It didn't matter what the news was, that drop was going to happen. The media will always put an explanation on it... sometimes good news is good (i.e., lower unemployment good for economy thus good for stocks), sometimes good news is bad (news was already priced in, or it was good but not good enough...). But in the end the financial media doesn't know why the markets moved - it's their best guess given the days' events and headlines. >>
I tend to agree. But over time I think the outside "assistance" to help the sheeple sell their shares or positions when they really don't want to gets things done faster and possibly deeper than otherwise could have happened....and vice versa in the other direction. I feel that paper gold, derivatives, and well placed rumors and "information" can steer the markets to places they may not have gone otherwise. Were there a ton of people today looking to sell their gold positions if the word out of the FOMC was exactly the same as it had been? I don't think so. Selling begets more selling. We know exactly why gold moved down viciously today at 2:00 pm as it was timed exactly with the FOMC minutes. No debate there. The question is would the same drop well under the 150 dma have occurred today w/o an intentional push by the commercial interests? Who knows? The gold cartel is well trained in getting the results they need when they need it and to send misleading signals to gold bulls. How many shorts placed by the banking cartel the past few days won't ever get properly filled with an actual long purchase? No doubt a pile of 'em. A lot of trading is just self-fullfilling prophecies. And there are plenty of prophets in suits more than willing to help us along, whether we want their help or not.
roadrunner
I agree with Gartman's assessment today.
Knowledge is the enemy of fear
that. But I understand why day traders would want to be out on the break of the 150 dma and no BB help. However I feel QE3 is already happening, just behind the scenes. Or even
out in the open with continued bond auctions, 8-10% M2 annual increase, currency swaps, and lots of other slush well hidden from J6P. I still respect the formidable potential downside.
Interesting MP3 audio interview today with Sinclair on the MFBGlobal fallout. In his opinion Lehman Brothers broke the derivatives clearance model when they crashed. And now MFGlobal has busted the market clearing mechanism by giving derivative holders priority over customers. In essence the system is fully broken even if most don't yet realize it. He feels there is no way out of the mess at this point. It's every J6P for himself. If you don't hold it or have specific registration saying you own it....then you don't own it and are at risk of losing
it if you participate via a clearing house....which nearly all investors and traders do.
JS link
roadrunner
<< <i>Tonight/Tomorrow I expect a 38.2% retracement of this fall to take the pattern back up to $1648 before resuming downside... >>
Looks like I called that one pretty close too, although it really only got up to just under $1646. Support at $1612.7 and 1591.
DX well up over 81. More downside on gold expected just due to the dollar breakout.
Knowledge is the enemy of fear
Market is telling us that Europe is a major problem...... everyone is going to hide in dollar/bonds.
Thank Europe for saving the dollar...... at least temporarily.
In God We Trust.... all others pay in Gold and Silver!
<< <i>PC, check out a chart of the price of the 30yr Treasury. $USB on stockcharts.com. Getting ready to breakout? >>
Kind of looks that way. Hard to imagine it going higher, but it looks like it will. I was also wrong about my prediction for November being bad... Eventually it will be, just not yet. Timing is everything.
Interestingly I think this will drive mortgage rates even lower, and they are already ridiculous. GMAC is showing 3.875 today for a 30 yr on it's main page. Not sure how low that could go... 3.5%?
Gold's out of downside energy in the short term and should probably bounce (38.2%) Thurs and/or Fri. Will probably close my short position tonight or tomorrow morning and wait for the bounce.
A 30yr mortgage in Japan is about 2%.
Also, the potential price appreciation of the US treasury going from 3% to 2% would be HUGE. Its an enticing trade considering poor growth prospects, a FED determined to maintain a zero interest rate policy and disinflation.
Knowledge is the enemy of fear
The uptrend line drawn from $681 gold has not been broken, not yet at least. And as best I can draw it seems to be at around $1520 today. I could also draw it showing anything from $1488-$1550 as today's intersection point depending on how one takes the candle wicks into consideration. The drop on Sept 26th fell considerably short of the uptrend line. But it came within approx $10 today.
The gold consolidation of 2008 even though it seemed very volatile, followed a fairly well defined parallel channel. We haven't quite defined a bottom channel line yet but the top one looks to be in place. And using that and the 9/26 bottom projects out to $1100-$1350 worst case. Best I can come up with for a current bottom channel would be using the 2 swing lows from Aug 19th and Oct 24. That line points to the $1488 area but can also be drawn to hit $1520. Those swing lows of $1702 and $1603 have played important roles in the charts while so far the $1533 has yet to come into play other than for an earlier retest.
The $1488 GLD gap level fits the price objective of the recent $1803 H&S. But a higher GLD gap $1530 is still active. The miners have already corrected their July breakout gaps. The $1488 gap is gold's July B/O. However, we can find decent-sized GLD gaps all the way back into the $700's as well. Right now gold is tentatively above the key support area of $1460-$1575 that was hammered out in early summer. The apex of that triangle is about $1520 today. When gold was hammered overseas to $1533 on 9/26 it hit the top of that triangle perfectly. Another test of the $1520 apex area of that breakout triangle (during NY hours) would make perfect sense.
The next lower consolidation area from winter 2011 is $1325-$1430. And of course there's a decent GLD gap there as well at $1406. But first we need to possibly deal with the $1520 level before worrying about $1400. But none of that is relevant until this C leg gets further along and the 3 yr uptrend line gets broken. And at some point soon gold should bounce and retest the 200 dma line breakdown. The couple of times it has occurred since 2002 there was a retest fairly soon after the break.
BSTs with: Coll3ctor, gsa1fan, mkman123, ajbauman, tydye, piecesofme, pursuitofliberty
Travelog - 20in20travels.com
The cut by one notch Bank of America Corp, BNP Paribas, Citigroup, Deutsche Bank and Goldman Sachs.
Film at 11. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>RR, here's the chart I've posted before with that channel drawn. If you zoom out the channels look better, but that's not important. $1520 is where the bottom line puts us, $1560 is where the second bottom line is. So I see 4 support levels: $1420, $1460, $1520, and $1560. I personally think more downside is in store. I think the dollar has broken out and will continue to breakout and will cause gold to decline further. We could see a short term bounce to $1610 or so, but my money is going to be on adding to my short position if it hits $1590 tonight. >>
In one respect I've been feeling like there's another leg down missing from this downturn since $1763. And that $1520 area has a lot of indicators pointed at it. But at the same time
gold is about due for a bounce to retest the 200 dma and $1600+. It already played with that area before the open today which shows a willingness to go there. Gold likes to confuse.
And heading back once again towards the key August breakout level of $1660-$1665 would do precisely that (50% retrace). That would retest the 200 dma as well as approaching one
of the most significant support/resistance lines of the past 6 months. About this point in the 2008 downturn (mid-August) gold put in a +11% bounce. Then came a decline of -23%,
a bounce of 25%, and a final decline of -27%. The pre and post Lehman failure weeks no doubt contributed to those impressive 25-27% short term swings. If there are another 11 wks
of downside left in PMs, that would coincide with the usual annual bottom (or top) occurring in February. With 3 more TBond auctions set for Mon-Wed, and end of month gold futures OE
influences starting to hit just as traders leave early for Christmas (22nd-23rd), next week could be the one to take gold to $1520. New moon a week from Saturday as well. It
doesn't look like next week will be a "calm" week either regardless of direction.
roadrunner
Knowledge is the enemy of fear
Over $200 BILL in TBonds, Bills, and Notes auctioned off this week. Phew!
The maturities >1 yr totalled about $80 BILL.
Strike while the iron is hot.
roadrunner