“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Monday, March 31, 2014

Gold Nearing an Important Inflection Point

Gold was once again knocked for a loop in today's session as Ukranian issues continue to fade from traders' minds. There is not much to add to my weekend post noting the various time frames on the gold charts but suffice it to say for now, that gold is nearing an important inflection point centered around the $1280 level.



The market is working lower in the range noted within the rectangle with the -DMI back above the +DMI indicating the bears are back in control of the market. The daily chart is not, as of yet, reflecting a trend lower, just a move back down within a broad range.

The stochastics indicator is down in the oversold region so if this market is going to bounce, it had better do so now. If the bears can take it down through $1280 and hold its head down under the level, they run an increasing chance of dropping it back down to another test of $1200. They will first have to crack the $1260 level however as support is layered in approximately $20 levels from $1280 on down.

For the bulls to have a chance at salvaging this mess, they need to recapture $1320 at a bare minimum, especially with the mining shares signaling no help whatsoever at this point.

The grains got a shot in the arm today from the USDA numbers which got corn bulls all revved up on ideas of less acreage going to corn this planting season and more going to soybeans. That and they found some more critter mouths to feed. That did not bother the beans one bit however, ( old crop ) as it was off to the races with them to the upside. USDA found some more export business and plugged it in drawing down that carryover even more.

There is already talk of cooler, wetter weather putting a crimp on the field work and resulting in some delays in certain areas of the Corn Belt. That should tend to push more acreage to beans, especially with soybean prices refusing to break down. Corn (old crop ) topped $5.00 once again to the dismay and frustration of cattlemen and hog and poultry producers who cannot seem to get a break when it comes to lowering their feed costs. Blame it on that damned ethanol, which I am coming more and more to despise. When 4 out of every 10 rows of corn ends up getting burned in our gasoline tanks, no wonder livestock and poultry producers are angry. No worries however, we all end up paying for it at the meat counter. Yep - whatever makes the environmental whackos happy in their quest to counter their boogieman of global warming.

Yellen made some comments today which were in line with her dovish views but traders are convinced, whether rightly or wrongly, that the economic data is going to improve with the warmer weather and that the Fed will remain on track with its tapering plans, her comments notwithstanding.

Hogs did what I expected them to do and that was to believe the Hogs and Pigs report. They did come off the limit down move however so there might be a contingent who are skeptical of that Friday report. I am one of those. We will be back to watching slaughter data and other fundamental inputs to gauge whether or not the pencil pushers over at USDA got it right or not. I am convinced that they will have to issue a revision to the numbers at the end of June when the next quarterly report comes out to bring it into line with the weekly slaughter data.

67 comments:

  1. Thanks Dan, appreciate it.
    Asian markets are open and gold/silver got knocked back a wee bit.
    With all of the supposed Asian buying going on it surprises me a bit how flat the markets always seem to trade over there.

    I'd be suprised if sub-$1280 isn't tested in the coming hours.

    Regarding Ethanol....I agree, growing food to convert into fuel is foolish in a world where food shortages, malnutrition and starvation are still a problem.
    It's a perversion of farming on some level. Grown food should be for people or animals...not a fuel tank and then out through a exhaust pipe.

    Maybe they'll figure out a way to put wheels on a cow and a small methane combustion engine and all the enviro's can drive cows around instead of burning ethanol. };^)

    ReplyDelete
    Replies
    1. An addition to you note. There are people in Mexico starving for that corn the cars are burning.

      Delete
    2. NAFTA buried the small Mexican corn growers; sparks

      Delete
    3. Ironic considering the fear expressed by USA growers.

      Delete
    4. Yeah, but Mexico is burying the US autoworker. Assembly lines pay under $26 USD a day w/ benefits on a rail line less than a day from the border. Esp. w/ a 13:1 exchange rate.

      On the plus side I can get a sack of assorted organic green vegetables 15lbs or so for under 10 bucks.

      Delete
  2. Inflection point for all the gloom and doomer gold bugs has already come and gone.

    Stocks could crash 50% and gold could double from here, but even if that happens the losses the last 2 years have been so great that none of them will profit from such a move.

    After suffering 70% wipeouts in mining stocks, and losing on the short side on the Russell 2000 eight times in a row, those guys really don't have much left to play with in their trading accounts.

    Ironically, the only guys that will profit are the TBTF banks and the momentum traders who have stayed with the trends and will reverse positions only when the market gives the proper signal.

    ReplyDelete
    Replies
    1. If it were to happen, unless they make one order every 5 years, they would profit from such a move if they bought gold now and sold stocks now.
      I agree that most investors are not day traders, but changing one's portfolio even once every quarter is enough :)

      Delete
  3. Interesting....are the USDA report purposely skewed.
    I don't believe a single thing that comes from government or wall street.

    Mark...when the market gives the proper signal...be sure to let us all know .

    ReplyDelete
  4. I'm long at 1278, which is the Fibonacci of the previous 1180-1430.
    It seems that the retracements of this move are still active, as the last move up 1180-1393 nearly made all the way, so the main configuration of the market is this range 1180-1430. Then 1277 is a retracement, which was active before.
    Anyway, it confirms the 1280 area.
    Plus tomorrow, upwards pitchfork mlh inf going up will meet 1280 as well.
    As Dan says, it probably has to be today or before the end of the week if bulls want to organize counter attack from 1280 area...

    ReplyDelete
  5. Had Yellen made those uber dovish comments that she made yesterday , only a couple of weeks back , on the 19th , the day she sounded so hawkish , during the FOMC meeting , if you look at the chart , the USD would have most probably broken down below the 79.20 level ….just some food for thought

    ReplyDelete
  6. Hi all,

    End of month, end of quarter, and a little time today, so I'll post my own attempt of T.A on gold, even though Dan posted his own comprehensive one during the weekend, simply because I'm used to do my own homework everytime anyway so that I can't blame anything but me regarding my trading decisions :)

    Long-term : quarterly and monthly time units.

    http://s28.postimg.org/4k59z9j59/gld_lt.jpg

    Quarterly : we see that the ma20 (grey) and ema15 (red dotted) crossed at 1390...precisely where gold stopped. Watching prices, CDUR and MACD together, my view is the trend on gold is still bearish on this time unit, as long as 1412 doesn't give way, but with an important support in the 1200 area and a potential to reverse bullish soon once MACD purged its excesses and CDUR starts reversing up. But "rapidly" in the quarterly time unit may mean one or two more candles...i.e easily 6 more months.

    Monthly : I'm using this time unit to get some targetted supports / resistances a bit withing the quite wide range Dan described in his T.A for the weekly time unit (1200-1400). The mlh inf of the green fork and the ema15 are going to cross at 1360 during april, so that's the main resistance I choose to monitor for this month. Support is given by the long term black line going up, in the 1220 $ zone. The MACD didn't cross yet, and if it doesn't but reverses back instead, it can be a powerful bearish signal. The CDUR here is quite up, near its top of cycle. Which means, in this time unit, prices may easily reverse down during the next few candles, testing once more 1220 $.

    CONCLUSION LONG-TERM : long-term time units are still bearish imho, and they have a more important weigh than the faster time units. The bullish impulsions always come from the faster time units, but they must still "contaminate" long-term time units for gold. The party is not over for the bears! Bulls still must convince this "rally" is something else than a mere correction in a bear trend. For that, they must go through 1412-1420 and remain there.

    ReplyDelete
  7. T.A part 2 : Short-term (weekly / daily).

    http://s15.postimg.org/jmyk6idu3/gld_ct.jpg

    Weekly : since we didn't break through 1420 but got so close (1393), we see more and more a wide range appear on this time unit, and that range is 1180-1420 imho. That's why I still closely monitor the fibonacci retracements WITHIN that range, and not of the last daily uptrend which stopped short of 1400. If I take those retracements into account, then the next Fibo is just here, at 1277 $!!
    Well, what a coincidence! Because 1275 $ area is this week also the area of the weekly MA20 and the mlh inf of the upwards pitchfork (one of the only and last upwards technical figures left for the bulls...).
    So I come to the conclusion that 1275-1278 $ is a pivotal area, in line with the 1280 $ explained by Dan. If this area doesn't hold, then the MACD may cross down and prices will probably reach next target = red fork near 1235 $.
    So how do we know if prices will bounce up or keep going down?

    a) I buy a cristal ball and watch inside it
    b) I subscribe to a gold bug's newsletter and read it, though the cristal ball would have been cheaper.
    c) I watch a signal on the daily time unit.

    Those who chose c) can read the end of my post.

    Daily time unit : except the fibonacci level at 1277 which I mentioned above, I don't see much of a signal yet. Sure, we are flirting with the inf Bollinger. But it can keep going that way. It would be anticipating a reversal to buy based on the Bol. Of course, both CDUR are quite down within their cycle, but once again, not yet a real signal of reversing up. Same story again with the MACD.

    Conclusion : We are in contact with a quite important pivotal area in the 1275-1280 area, which is an opportunity for gold prices to reverse and attempt at least an upside correction. But based only on the daily time unit, it is quite risky to go long. Wait for a signal on the daily time unit imho, or if you can watch the 4 hours candles for an even more advanced bullish signal.

    The End.

    I hope you found this analysis useful and not a total repetition of Dan's excellent T.A this weekend. Trying to share my observations here, but takes a bit of time to write and prepare.
    Have a nice week,





    ReplyDelete
    Replies
    1. P.S : the 4 hour chart now.
      Prices are capped by the ma20 (grey) and the ema15.
      As long as it is the case, no big reason to go long despite continuous bullish divergences on the MACD. On the 2 hour chart, I can even find 4 bounces upwards of the MACD, i.e 3 bullish divergences with effect on the prices yet...a divergence is not enough to be considered a signal.
      But on the 2 hour candle, yes, MACD is bouncing on an upwards support. I'll be :
      - watching the support line of MACD on the 2 hour chart.
      - watching the ma20 (1290 price) on the 4 hour chart.

      http://s29.postimg.org/7s5mia4sn/gld_4_H.jpg

      Delete
  8. Tipping / Inflection point:

    http://www.weissresearchissues.com/flash-alert-tipping-point-arriving-for-gold-and-silver-2-129358?t=RWR126463

    There is now forming a consensus amongst the self proclaimed pundits that 1278 to 1287 range is the TIPPING, INFLECTION, LINE-IN-THE-SAND level for Gold. Some use charts, other base it on the great Leonardo Fibonacci. others on pure gut feel. So cunning Mr. Market will not comply and there may be a spike under this level to drive trend followers out of the market. Key question, if this happens, is: will this be a buying or selling opportunity. ( Will depend on sentiment numbers at that level ).


    ReplyDelete
    Replies
    1. The only key question is : whatever the tipping, inflection point, which happen every day in tens of different markets, will you be able to enter the market correctly and at the right time, and get out of the market in order to make some profit in the long run.
      Everything else is pure rhetoric.
      I like the hate in the "self proclaimed pundits" though I'm always amazed about where it comes from.
      If Mr Market doesn't comply now, it's not important as we didn't take position yet.
      If we have a signal to enter the market in the shorter time units, and Mr Market will not compl, it's not important as we will have a stop loss close by.
      If we lose a bit on one trade such as this one, it is not important as we enter the market many times, on many occasions, on many different markets, and are able to make money on the long run with good TA and good money management.
      A trader trades many markets, many times.
      It is not about THE tipping point for THE market for gold, where THE crazy trader is going to go all in.

      Delete
  9. Poor Richard Russell once again sits on the sidelines in cash, T-bills and a little gold.

    While he looks at his monitor aghast as the market moves relentlessly higher.

    Well, at least he can afford it. Making $250k a year for 60 years in a row, now his house in LaJolla is paid for and he has tons in the bank, guy like him doesn't have to reach out for risk at all. In fact, he can actually afford to do a little gambling, like buying silver.

    Meanwhile, the rest of us continue to try and grind out 15% a year to build for retirement while paying mortgages, car leases, college tuition, etc.

    Must be a great gig to sit there all day and write about WWII stories and being fearful about the market, while the checks continue to roll in.

    ReplyDelete
    Replies
    1. Mark -

      Please do not criticize people because they are conservative with their money. For all you know, the stock market and economy are an accident waiting to happen.

      I do agree stocks continue to rise double digits this year and next while commodities slide, but to criticize someone for being conservative and sitting out a liquidity induced stock market is not a stupid person

      Delete
  10. I see a tide turning on gold. Let me remind all there is a very good chance that gold and the Dow eventually go to a 1 to 1 ratio. Is holding some gold really stupid? Or is holding a lot of stocks stupid?

    ReplyDelete
  11. jmsvett; if 1-1 is seen, I do not want to be around; sparks

    ReplyDelete
    Replies
    1. It is not going to be pretty. My guess is Dow 3500, gold $3500 in 2024

      Delete
    2. Good news - should be a great opportunity in stocks!!

      Delete
    3. jmsvett,
      How in the world did you get to this prediction?

      Delete
    4. Abraxas, he got there > smoking a fattie; sparks

      Delete
  12. This is fun!
    http://www.thestreet.com/story/12567709/1/mannkind-afrezza-fda-panel-live-blog.html?puc=yahoo&cm_ven=YAHOO
    History in the making...

    ReplyDelete
    Replies
    1. yup .. not if you are in though … the rocky muppet horror show !

      Delete
    2. http://widget00.mibbit.com/?settings=e8ed2c13c030aefd52a98054b9d977e0&server=irc.Mibbit.Net&channel=%23MNKD

      Here too but better!

      Delete
    3. CONGRATS TO ALL MNKD Longs today! Great AdCom! Stock will fly high tomorrow!!!!!

      Delete
  13. Horrific collapse in GLD continues, down 13 days, wow....

    ReplyDelete
  14. I suspect it may take 6 to 18 months before well see the final low. Its a slow motion chrash wearing all the longs out and grinding all the bugs down untill the most religeous gold bug throws in the towel.

    ReplyDelete
  15. Jasper,

    Yes, the decline will stop once David Duvall throws out the last of the burning fax machines set ablaze by floods of angry CIGA's screaming "But Jim, you promised!!!"

    And when Duvall finally throws up his hands, and closes jsmineset to incoming phone calls, e-mails, and faxes and barricades the place, lol....

    ReplyDelete
    Replies
    1. Well its a good thing the insiders sold most their RSU's and got a 200% to 500% payraise after the 2011 30 million dollar private placement while exploration was halted at the same time.

      We sure wouldnt want the management to suffer from market cricumstances, after all its the investors that are to blame for not buying enough gold and gold shares.

      Steven deserves every single 550.000 dollar for preparing the annual reports. The corporate secretary deserves every single 220.000 dollar for transferring phonecalls from concerned investors to the investor relations answering machine. Joe shouldnt get paid anything less then 360.000 dollar annually for not securing a mining license. Lastly, the directors that spend 10% of their time on corporate matters according to the annual report definetely deseerve to get paid 80.000 dollar up from 3.000 dollar since a decade ago.

      LOL.

      Delete
  16. GDXJ owners have no been burned by a 27% "bail in" in less than 15 trading days.

    Meawhile, SPY and DIA owners are still luxuriating with their portfolios less than 1% from world record highs, thanks to retail, tech, and financials.

    With most banks passing the stress tests, a depositor bail-in is pretty much a pipe dream at this point.

    I mean really, the bondholders have spoken. Portuguese and Greek bond yields now at 200-year lows.

    Sovereign Paper rules......forget those risky hard assets.

    ReplyDelete
    Replies
    1. Mark, all on the mere rumblings from that draghi..blows my mind. ..when the paper orgy is finished ..Fed balance sheet now over 4 trillion..US debt 17.6. Teaching. Doing my best cheer..great we are right now looking at 155k debt per taxpayer..yeha...ain't it grand?????
      You love don't you Mark?

      Delete
    2. Do as I say Govts..are great..yeha...more debt chapter interest..who cares.. just print and lend to the hedgies.
      Moar...Moar debt..Moar debt..come Scotty. More juice.

      Delete
  17. New world record closing highs on NY Composite Index and S & P 500.

    Emerging Market index meltup, now going on 9 consecutive days.

    Anyone who bought GLD or GDX, and shorted EEM on anticipation of Ukraine blowup just got their accounts slaughtered.

    All hail to the new queen: Janet Yellen.

    BRAVO!!!!

    ReplyDelete
  18. Mark,
    Not for nothing but I think we all get it... Plus, we are here to learn from Dan so that we do not repeat previous mistakes. Appreciate the input but pretty sure we all got it.

    ReplyDelete
  19. This trading pattern in gold seems strange. Doesn't seem there is even any short covering rally spurts. If no one is stepping up going long and no short covering this could collapse like corn.

    ReplyDelete
    Replies
    1. r u blind? corn is in a bull mkt pal; sparks

      Delete
    2. I meant in July 2013, see the weekly chart:

      http://stockcharts.com/h-sc/ui

      Delete
    3. But ya corn is looking good now, perfect cup formation and breaking out handle.

      Delete
  20. A "disaster signal" in the gold market with stocks like EGO on the cusp of breaking to fresh new lows, among other ominous signs totally missed by the acclaimed experts.

    ReplyDelete
  21. Dan, please forgive me...


    HOW BOUT MNKD?????????????????????

    ReplyDelete
  22. Nate:

    MNKD chart looks exactly like a gold mining stock.

    Insane short covering rallies, followed by horrific collapses.

    Lower lows and lower highs.

    Stay away from that stock, probably pumped and dumped by many promoters and pushers, absolutely horrific chart pattern.

    ReplyDelete
  23. Mark,

    I have followed it for 6 years, always having a position. The drug is very promising. I know more about the fundamentals of this company than ANYTHING I have ever invested in.

    ADCOM just voted overwhelmingly for the drug to be approved in Type1 and Type 2 diabetics...

    In fact, if I hadn't listened to the damned perma bulls in gold, I'd be a millionaire with MNKD. I should have stuck to what I knew, but I branched out into the PM realm and got burned... making it back now.

    Technicals mean NOTHING with this one.

    ReplyDelete
  24. I'm sure Dan will agree. Technicals are everything.

    If the company was so promising, investors would be front-running it and driving the stock up, not down, and it would be soaring along with many of the other speculative biotech and pharma plays.

    Price action now tells us that something is very wrong.

    ReplyDelete
    Replies
    1. Mark id buy the dip in miners and gold if I was you. I think this is a correction...

      Delete
  25. So I'm long gold since 1280 once more some few hours ago.
    On one hand, I could have waited the signal on the 4 hours candle, i.e crossing the ema15 then the ma20...but that would mean waiting to be near 1290.
    With prices confirming for the second time that 1277 is the support area and bouncing once again on the short term time units, I'm able to put a stop loss ridiculously lower to my prices, at 1276.
    Of course, there are some chances that I get wiped out by the "noise" of the market, especially with a small squeezed range without much action as we see now (1280-1284), but my potential loss is only 4 points.
    If I waited even 1288, my loss would be 12 points.
    Does waiting for a buy stop order above 1288 multiply my chances by 3?
    I don't think so.
    So...I'm choosing the risky option of being long quite early in the market.
    Note that we do have positive bullish divergences on the MACD on 4h or 1 h time units, and the 1 h MACD went through its propagation axis, but still, these divergences didn't push prices up, and so my position is very risky.
    The point is, even if I have 50% chances to be out within a few hours, if I have 50% to still be long, and market goes up again, the risk/reward ratio has a chance to become huge.
    So that's the idea, getting into the market and being stopped many times, but at a minimal cost, which eventually gets compensated by a big risk/reward ratio trade which went right, just like a recent long trade on silver (long 19.10 / stop loss just under 19, out 50% above 20, out 50% at 21.80...excellent ratio).

    ReplyDelete
    Replies
    1. HdH - HUI / Miners were not affirming gold's movement yesterday. I got out of 3/4 of my dust position yesterday afternoon & the rest pre-market (amateur hour) today. Easy enough to move in/out.

      Also-KWN is paying homage to the French--the stock photo they use for "World Destruction" posts is from Operation Licorne 1970 French Polynesia. "only" a 914 kiloton blast, but a beautiful mushroom cloud. Leave it to the French.

      Delete
  26. Dear Dan,

    If Money Velocity is falling it would mean economic recovery is not on sound footing, as QE has only helped asset values to remain high (Equity/Realestate).

    If QE is withdrawn then does Fed have any tools to induce borrowing & spending? If QE is not helping much then they may want banks to pay interest on money lying at the fed so that they are forced to lend the excess reserves.

    At the same time if Interest rates are also increased (as yellen has said last week) then it would hamper borrowing & consumption further.

    What exactly is the Fed trying to do here? I am unable to undestand

    ReplyDelete
    Replies
    1. Shark, do not assume that the Fed knows what they are trying to do; sparks

      Delete
    2. Well, perhaps they are more interested in pain and havoc in other countries, than fixing domestic problems. Is that their mandate? Not overtly, but...
      When Volcker increased the interest rates in the 80-ies it made many countries to fold to IMF.

      Delete
    3. Abraxas,

      i agree with you. The only reason i see Yellen tightening is to bring back legitimacy to the $.

      By raising rates she will bring Asia, Emerging Markets, South America, Africa, Middle East to their knees as the $ Carry trade unwinds. All these continents will need bailouts.

      At home in usa, yellen is likely to allow some good amount of correction in the dow jones as long as their dollar gets back its legitimacy!

      While such a global deflaitonary bust will break commodities and asset values, it may be good for Gold.

      For example, if India suffers a crash, then most indians will run to buy Gold as safe haven in fear of a banking collapse.

      Delete
    4. Shark, that's exactly what I'm thinking. As for gold, during this tightening period it will probably be hit hard together with the commodity sector, but it should start to shine again once (not if but when) the FED goes for another round of money production. Of course the situation is so complex that I'm sure there are many surprises on the way.

      Delete
    5. Dear Dan, Abraxas,

      I feel central banks of the world work in Unison and are controlled by some elites higher up.

      To compensate for Fed Taper, Last week :

      Chinese PBOC stimulates
      http://www.nytimes.com/2014/04/04/business/international/china-leans-toward-more-stimulus-measures.html?partner=rss&emc=rss&smid=tw-nytimes&_r=0

      Japan is ready to unleash more QE anytime this month as Sales Tax has proven to be more damaging than expected.

      ECB & IMF have started discussing QE. Predictive Programming. They will start it soon.

      I guess QE to Infinity is the Mantra.

      Delete
  27. Palladium making another attack at the highs.

    Car sales are booming, huge global demand for catalytic converters.

    Check out the huge breakout on Ford, which has been consolidating for months and is now marching higher.

    The consumer is stronger than ever, especially now that inflation has been vanquished.

    ReplyDelete
  28. Powershares DBC collapsing, dragged down by energy weakness today.

    No inflation whatsoever, except for occasional rogue spikes in meat prices once in a blue moon events.

    So far, Joe Six is unfazed, happy as ever, record consumer spending being forecasted by superior strength in XRT and XLY.

    ReplyDelete
    Replies
    1. Mark, what do you do for a living?

      Delete
    2. Mark, the June Palladium high is $802 and it is currently $788; sparks

      Delete
    3. @Jon D , he doesnt work now … before , he was a she , had boobs and all that , worked at cnbc , and her name was Maria … he just can't help it , to many years parroting news hahah .. Mark sorry mate , only joking

      Delete
    4. Jon D,
      I believe Mark's job is to do just what he does here? He is paid to post on sites like this.

      Delete
  29. I see the unfortunate Fort Hood shooting has some elements of the blogosphere starting to chatter about other angles other then a probable soldier on soldier incident.

    It's another example of a ‘monological belief system’ where an individual can build and maintain a view of the world that is ruled by conspiracies, they are seen everywhere and anywhere, and explain many of the surprising, uncontrollable, or deadly events that happen. As this system develops, people become closed-off and reluctant to believe in alternative explanations, spotting conspiracies in increasing amounts of events and situations.

    This system has been demonstrated by research that suggests that belief in one particular conspiracy theory strongly predicts belief in others, even unrelated or contradictory ones. These views are not driven necessarily by theories supporting each other, but instead a general overarching belief that supports conspiracy in general.

    With this belief, it is not necessarily the specifics of a conspiracy that are important (often in sensitive cases such as mass shootings conspiracists “just ask questions”), but the fact that the perpetrators are lying, covering up, or misleading the public. This motivation to uncover deception at any or all levels while eliminating or doubting reasonable or logical explanations is typical of a monocular outlook that incorporates some elements of magical thinking.

    It never ceases to amaze me how some seemingly simple straight forward events can almost immediately have some alternative explantion then the media dares offer an explanation of.

    Having said all that and in an attempt to get on topic...the S&P continues onwards toward 1900 while gold remains$600 below that lofty level and struggles to hold $1300 despite all kinds of currency market and geopolitical turbulence all around.

    Blame it on manipulation but make sure you blame it on something.



    ReplyDelete
  30. "There is now forming a consensus amongst the self proclaimed pundits that 1278... is the TIPPING, INFLECTION, LINE-IN-THE-SAND level for Gold... So cunning Mr. Market will not comply and there may be a spike under this level to drive trend followers out of the market."

    NOT.
    Dan's inflexion point was 1280.
    Mine was the Fibo of 1180-1235 = 1277, i.e same.
    One can use many different tools for T.A, but amazingly enough, most T.A charts come to the same conclusions indeed.
    So what Mr Market did?
    It recognized the support.
    It bounced there.
    It complied.
    Now it doesn't mean that it will bounce upwards very much.
    It only means T.A was once more very useful in order to :
    1) monitor the area where a bounce could be expected.
    2) monitor the short-term reaction of the prices within this precise area in order to VALIDATE what the market is doing. Traders don't guess. Traders don't foresee. They watch the shorter time units in order to get a quick validation that their hunch may be right. They put a stop loss close under their feet, so that they get a decent risk reward ratio, and make money on the long run.
    The point of T.A AND money management is to try to survive and make money within a market driven by competition between the good traders and the fish.
    Deny T.A, money management, and as a trader, you'll most probably end up being a fish.

    This time for my trade, I waited for a confirmation that 1278 was a short-term support at least (double bottom) and that bullish divergences kept appearing on the 1h / 4h candles before I bought at 1280.
    When I don't wait, most of the time, I'm being stopped out, just as in my compulsive trade on silver last week which I commented as such from the beginning on the blog, saying I was "high" and probably thought I was a kind of Jedi. Boom. Small loss. But unnecessary. Trading is based on discipline. Waiting the exact right time. Pondering between risk of being stopped out and risk/reward ratio. It is an extremely difficult balance and art.
    Just like poker players take years to master marginal hands and become long term winners.
    I don't think you can quickly learn your way to being a very successful trader. You have to learn, be patient, practice a lot with small amounts of money, and be very humble.

    Now for the last long trade :

    http://i62.tinypic.com/2wgxl7a.jpg

    How useless T.A is indeed! Prices bounced totally by coincidence exactly on the MA 20 weekly crossing with the mlh inf of the upwards pitchfork (purple), as "magically' foreseen by Merlin the magnificent, allowing us to take a long position on gold ONCE it was CONFIRMED a little bit on the shorter term time units. Even so, chances to get stopped out are very high. Before getting into the market, I watched if my first target out on profit made a sensible risk/reward ratio compared to the 4 dollars I was risking if I got stopped (1280-1276). Now I'm monitoring closely short term time units again, so that I can raise my stop loss at 1280 if I feel things may go wrong.
    The point is to get quickly in a situation where I can only win or not lose.

    The only upwards support I see for bulls for now is this upwards pitchfork. Many technical elements are showing the global trend is down. MA 20 daily is heading down. Etc... So I'm again in a counter trend, and would gladly sell 1/3 of my positions at 1320 is prices were nice enough to get back there.
    Maybe they won't.
    Maybe Mr Market will crush me today or tomorrow under 1280, but I hope that I'll have enough signals to get out of my trade without a loss if it does so, and at least, T.A gave me a chance to be a winner by correctly buying gold at 1280 yesterday.
    So why do some people get some angry about charts, trading, and technical analysis altogether, I don't understand.


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  31. Dow Jones now at record highs confirmed by transports.

    And gold stocks are in another full scale collapse.

    Stay in the system, don't waste your time and money on fear mongering Q & A sessions

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  32. USDX now comfortably above the 20-day EMA.

    The story is being told there.

    The U.S. is hands down the paragon of safety and security for global investors.

    No other central bank has been able to design the "Infinite Fiat" perpetual motion machine whereby the more you print, the higher prosperity and economic growth rises.

    Maybe one day Draghi catches up by printing even faster, but for now, the U.S. is the place to be.

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