or a hangman. who knows I want to see what kind of action gold has the rest of the week. It wouldn't surprise me is we see one more dip or we could start to take off from here. I believe by the end of the first week in August. The next 8 trading days, gold could be much higher than people think.jmo
Doc, you are obviously voting with your feet, so to speak. 18 looks imminent to me, primarily because I do not see help coming from the currency front. You are watching the COT action, 'maybe' a bounce back to 20 can happen out of the blue. You are buying when you can, not when you must and quite possibly you are onto something. What I am trying to figure out is the multi-year high in COT dollar shorts and spec dollar longs.....We've been expecting a reaction for a couple of months now, thinking this sort of extreme cannot last. I always read "it's dollar-bearish and gold-positive". Nobody I've come across has gone beyond pointing at the probable outcome. What I would like to know is what kind of commercials need to be short the dollar? what are they hedging? is it possible this can go on and on for as far as the eye can see? I do not see the bulk of these commercials as table-pounding fundamentalists, hedging against the demise of the dollar.
Maybe my questions imply utter ignorance - but being a pm investor, this situation has befuddled me more than once and can continue to cost money due to timing. TA is fine but only to a degree. The unexpected is all around us. Thoughts?
I'm less inclined to follow the US$ or other currency cots than I am the Silver and Gold Cots.
The currency markets are HUMONGOUS compare to the Gold or more so the silver market.
Also the US$ is extremely important in this day and age as the excesses of the last 10 to 20 years have produced numerous imbalances waiting for a catalyst to set off a dramatic cascade of unintended consequences. So the dollar and bond markets are (in my opinion) currently being supported in order for the banksters (who have any sense)to get to cover. Unfortunately it looks like the cover they will be using is the sweat of the American worker and the sweat and pain of future generations of workers, that is, our children. In other words todays banksters are being bailed out of their greed and folly by the future labors/taxes of our children.
What a nice legacy we are providing for our children and our childrens children. Remember that bumper sticker "I'm spending my childrens inheritence."
There should be a new one "We're spending our childrens future earnings."
I am certainly no currency expert like the other good posters but I can guess some answers for you.
The open interest might be at record levels because there has been an explosion in currency trading becuase more money has been produced than good stocks can soak up.
The commercials who are short the $ are that way because they may be vulnerable to a rising E or Y or commodities like oil in their operations businesses so they hedge with a short $.
I think this can all get too confusing and we do not have to weigh this much data. I trust the charts to indicate these things before they know why or what they are discounting so I'm going with technicals to sort of consolidate all this info.
Jims is great with his work eh. I just do not want to put the time in like that though when others can do the work and post the results. I have lightened my work load because of your currency work, thanks.
no offense trav, but you have been looking for lower prices since the 2 day rally in May that left the xau at 82.50. :) (touche) but in regards to your cot dollar question, it is one where cot is not a determining factor in the market. It is a 1.9 trillion a day currency market and cots short position is small in comparison to what is traded by frims and central banks. In the gold pit the trading is thin, funds buy and sell and central banks only sell. They become the only market maker and that is why they control gold. At some point in time, well over 500, the trading will be much greater and cot will be less of a player as they are in the dollar.
Let me give you a brief background of myself..Your background may be more extensive than mine, but nonetheless let me give you an idea where I'm coming from.
I started trading commodities (silver was my very first trade) in the late 1980's...From there I began to trade stocks and found I liked stocks better (probably because of the absence of the "time decay" inherent in futures contracts)...I got a real good education in chart reading trading commodities however, and was able to transition what I've learned over to stocks...They actually trade very similarly.
Of all the technical indicators I've studied for years, and used, by trial and error I have ended up with only less than a handful I actually belive are reliable enough to lean on in making technical decisions...Moving Average studies and how they relate to trading is probably my most often, most studied, and I believe perhaps the most reliable tool I have ever found...(BTW, my other indicators I believe to be of utmost importance are Price, Volume, Bollinger Bands, and individual Candlesticks and Time....I refer to others, but those stated are my bread and butter, tried and true after many years...The Moving Average(s) as a phenomena is to me the most fascinating however, on all time frames.
Enough about my background, and on to what I see on the chart (Daily, but the Weekly confirms it as well)...We may have seen a small hammer today, but not large enough to overcome the UNDERDEVELOPED 20-dma schematic...The 20-dma (and of minor importance, the 10-dma) are just beginning to roll over...Very, very seldom do you see a rally when the 20-dma and 10-dma are IN THE EARLY STAGES of rolling over--w/price confirmation (price under the 20-dma)....I know you want to see a rally real soon, but I just don't see it happening on the chart anytime very soo (BTW, RGLD has some of the most classic technical movements I've seen in a long time--textbook)....Basically you need to give time a chance at separating the moving averages, beyond just a few days.
Time and price, and the 20/10-dma's, all point to mid-lower $18's, perhaps high $17's.
Time? At least another week to week and 1/2--at least.
JMHO...Hope this is of some help to somebody.
(P.S. No, I am not short..I am waiting for a Strong Buy set-up for a short-term Long trade.)
Thank you hon05. Great, thoughtful analysis. With your background in commodities, maybe you can shed some light on my COT questions in the previous post. To what degree do you watch COT/Spec positions, or do you believe that currency moves are already implied& factored in the pm stock price ?
good call you are right on. Set your standards and play by them. I bought last week under 19 and it went to high 19's. This morning I was waiting for the drop and tomorrow morning too, I will be looking to buy on the drop again. I will continue to buy under 19 since I believe the pog will move higher within the next 1-1 1/2 weeks. Btw, I believe the rally will come and I am not going to be on the sidelines in doubt when it happens. I don't need it to happen tomorrow, it would be great but I believe we will see the old highs in the high20's within the next 6 months.jmo
Yes it's a hammer but it's location renders it of low importance. if it were a new high/low, or a channel high/low or a horizontal support level it would be significant.
It is neither so it should be seen as a continuation stick. It's looking for support still. Fib supports are 18.73 18.20 and 17.67
The low held an u/t line but not the tail. If this level holds it would change the stick to a hammer bottom but volume today's did not lend credibility to that theory.