ecoface

CGNAOs call of £900/toz for this leg up is looking a lot more likely suddenly.

There will be a correction soon whcih will test £750 to 775, as its getting beyond itself; this wouldn't be a bad thing but a good time to buy IMO.

My guess is that a correction will co-incide with a GBP short term rally as this is what the herd is least expecting.

The herd has gone short too much on sterling too quickly, and long GBP/ POG too quickly.

Anyone else looking at the contrarian view here?

Gold's resilience will surely be tested today.

Paper printers have gone to town, with EMs washing in the ink.

Had to happen I guess; the surely wouldn't let the free market operate would they.

Yep, nice call. I took a mini-roasting on Sterling last night and have to hold my hand up. An incredible election really. I knew the polls were wrong. They were, but not quite in the way I thought!

 

Fortunately I went long the dollar last year when it was meant to be toast I still think this is an important day for gold and I'm continuing to sell into it right at the top.

I just sold half my phys holding, which I only invested recently (the other core holding being "hands-off"; contrary to most, I am expecting a short term GBP/ USD rally from today's lows. I anticipate this also taking the shine off gold in GBP terms. I hope to buy back again in 2-4 weeks as I anticipate the new Govt.'s plan to resolve the deficit to be inadequate.

Maybe....!

In GBP terms its making new highs.

However, we need to see gold in $ to breakthrough 1200 with volume IMHO, or else we could get a double (some say triple) top and flight to USD.

Currently spot is at 1197. Tomorrow's close will be important.

After scouring the technical schools in search of some pattern recognition for the above phenomena, I finally decided to classify it myself. I called it the "Cheshire's Grin".

 

The way I look at it, a consolidation is always healthy... plus it would enable me to continue buying longer with my meagre income.

A double top being the sides of the mouth that's grinning perhaps?

As the next 6-9 months will see soverign debt issues, there may well be a repeat flight to safety in USD; gold may fall as per 2008, then repeat the pattern.

I can't see it this time round but hey ho, let's see.

£759.60 as I write this, which is a new all time high in GBP.

Yep - I just bought another load!!! Probably buying at the top again.

Gold has just broken through £755 - great news indeed.

If you still believed that seasonality occurred in gold then it should have dropped by now. The price is being kept in the ascending triangle by the weakness being shown in the EUR and people selling because they always at this time of the year. I put a chart on the gold thread a few months ago showing the march of the year peak to the end of the previous year, away from the seasonal influence.

Can you pl re-post the chart, sorry.

Whether or not you buy here surely has to do with the percentage [of your worth] that's already in gold. A small percentage... you should be buying. A large percentage... perhaps can wait a little. Thoughts?...'cos even though there may be strong resistance to the up-side, there also seems to be strong support to the down-side.

I reckon by the end of the week the pattern will be even stronger and we may even break through 754.

I have around 10% of total wealth in physical. I have just transferred another 10% to GM, in case confirmation occurs this week.

There is strong resistance to gold breaking through £750-754. (3x in 3-4 months)

This is stopping me from investing more in gold.

We need a good correction, or for it to punch through, but this range is making me feel awkward.

Is anyone else feeling this way too?

I'm not that into TA but it looks like we have an ascending triangle which bodes well though.

they have been very very quiet tonight..... :lol:

Goad, why?

Polo Resources on AIM is interesting. Good discount to NAV. Holds stakes in some good companies. I have had my eye on but have not moved.

 

Anyone else following Polo?

 

http://www.poloresources.com/Company_Strategy.htm

 

iii board following same is a little over confident, possibly

http://www.iii.co.uk/investment/detail?cod...ssion&it=le

 

brokers review courtesy minesite - dated Nov 2009

http://www.minesite.com/fileadmin/content/...20-%2024.11.pdf

I invested in Polo for alot of 09, on the back of their investment in south rossing fields and EME (emerging metals etc.) and the management etc., but it never took off as it was hyped to do so. I got in at 3.8 and out at out 4.6 but it never rocketed up to 10-15 like it should have and with leverage / capital still being tight, then it will take the underlying raw material price that is being mined to have to increase disproportionately. My feeling is that miners that didn't get leverage last year (09) may find it more difficult this year. I think you should investigate how much of the SP is interlinked with uranium as opposed to other raw mats FWIW.

..

Does anyone here have any BDEV shares, I am ashamed to admit that I took a punt at around 60p and have had a good return, down 40% today though!

 

Anyone else own BDEV and thinking about taking up the offer?

Absolutely not. None of the big volume plcs have gone under or been acquired in this housing downcycle. In the 70s and 80s/90s cycle there were several major casulties in each cycle. You could say the Crest Nicholson deal last summer was effectively the main casulty, but we are only 2 years into this fall. Given we have at least another 2 years of price falls to encounter, it is far too premature to think these companies have written down their values to where they should be. Housebuilding is arguably the most leverage hungry industry on earth.

I would be very careful indeed of having any shares in this sector.

bit of a turn in Barratts today I see....:-)

 

down 40%

Yes, I just saw this.

Its the post Rights issue price. Pre RI £2.56

TERP = (£2.56 + £1.30)/2.3 = £1.68

In theory the price should level off around £1.68 (depending on confidence, take up etc etc)

It should pick up now, so just an admin blip?

I am making a call for the end of the Dead Cat Bounce in UK resi property.

I have been watching BDEV for a month and it topped in Sept. IMO.

I work in property development and activity is definitely tailing off.

Darker sentiment is returning.

I have been on several seminars recently where talk is definitely of a W shape and we are embarking on a return to harder times.

I could provide more evidence but have lack of time.

I will be intrigued to see Spline's updated Oct bellweather Index (last updated in Sept). Bubb do you have this?

I have been waiting for 2-3 months to post this and have finally made a call based on my own experiences and what is happening in the resi land market too.

(I don't think confidence will return until after the election, if at all. The only possible argument the property bulls can have is that supply will dry up in the usual fashion as owners delay marketing their property until after the results.)

Watch the rights issues for these two builders. With the markets turning they could be in alot of trouble. Speculation was that the money was more for seeing out existing commitments rather than to create new money (through new site acquisitions), hence dead money. What on earth would anyone want to invest in housebuilders for?

 

Since mid Sept when they offered the rights issues BDEV and RDW (Redrow) have fallen very sharply.

 

I will be watching Persimmon (PSN). That sp has been whacked too since Barratt and Redrow went begging to the market for more capital.

 

The rights issue for BDEV ends in 4 weeks (Nov 3rd) with a strike price for the supporting syndicate of 100p. Given how much the sp has fallen already and we are potentially in for a large correction in EMs over the next month, then...

If the underwriting syndicate panics then there will be greater downward pressure on the share price.

In other words they may well then short Barratts to drive the price lower to 100p (about 63% off 270p) It would be one magnificent fall if they did but, remember that only 6 months ago Barratt was trading at below 100p.

 

It is intresting to note that the following have shorted Barratt recently:

 

Marshall Wace LLP - 02 October 2009

GLG Partners LP - 01.10.09

JGD Management Corp. 25 September 2009

Cazenove Cap Mgnt.Ld - 28 September 2009

BlackRock Group - 24th Sept

Blackrock adds to it short position

Watch the rights issues for these two builders. With the markets turning they could be in alot of trouble. Speculation was that the money was more for seeing out existing commitments rather than to create new money (through new site acquisitions), hence dead money. What on earth would anyone want to invest in housebuilders for?

 

Since mid Sept when they offered the rights issues BDEV and RDW (Redrow) have fallen very sharply.

Nice head and shoulders pattern is forming on BDEV.

If the markets do turn over the next week or so then Barratts et al could well be in a lot of trouble.

The rights issues that occurred earlier in the year were considerably better timed. Research from several estate agents indicate that activity has fallen off in the last week.

I reckon that come October we could be seeing the turn in property too, and winter may come early.

But then again the duration of the dead cat bounce has surprised me. Cash rich buyers are the supporters of this market right now, and as EMs fall and fear sets in again, then property will be punished. I don't often link property sentiment to equity market's performance, but this time I can quite easily see how closely related they are.

Watch the rights issues for these two builders. With the markets turning they could be in alot of trouble. Speculation was that the money was more for seeing out existing commitments rather than to create new money (through new site acquisitions), hence dead money. What on earth would anyone want to invest in housebuilders for?

Since mid Sept when they offered the rights issues BDEV and RDW (Redrow) have fallen very sharply.

I will be watching Persimmon (PSN). That sp has been whacked too since Barratt and Redrow went begging to the market for more capital.

The rights issue for BDEV ends in 4 weeks (Nov 3rd) with a strike price for the supporting syndicate of 100p. Given how much the sp has fallen already and we are potentially in for a large correction in EMs over the next month, then...

If the underwriting syndicate panics then there will be greater downward pressure on the share price.

In other words they may well then short Barratts to drive the price lower to 100p (about 63% off 270p) It would be one magnificent fall if they did but, remember that only 6 months ago Barratt was trading at below 100p.

It is intresting to note that the following have shorted Barratt recently:

Marshall Wace LLP - 02 October 2009

GLG Partners LP - 01.10.09

JGD Management Corp. 25 September 2009

Cazenove Cap Mgnt.Ld - 28 September 2009

BlackRock Group - 24th Sept

I'm surprised to be first to post this. It was on Radio Five news just now - is the summer party over for the UK housebuiders?

 

Housebuilders and property group in cash call

http://www.ft.com/cms/s/0/e15870be-a809-11...144feabdc0.html

 

Article starts:

If the markets do turn over the next week or so then Barratts et al could well be in a lot of trouble.

The rights issues that occurred earlier in the year were considerably better timed. Research from several estate agents indicate that activity has fallen off in the last week.

I reckon that come October we could be seeing the turn in property too, and winter may come early.

But then again the duration of the dead cat bounce has surprised me. Cash rich buyers are the supporters of this market right now, and as EMs fall and fear sets in again, then property will be punished. I don't often link property sentiment to equity market's performance, but this time I can quite easily see how closely related they are.

Is there anyone out there who has a different opinion? I am open for alternative views or even views that support me!

I posted this last week on the Trading Diary thread:

I'm not putting this on the Gold thread because the last time I aired my views on going short at $970, I got shot down.

Gold seems to be taking a breather around 920-930.

I have been short gold since 970 so done okay. But now we are in the doldrums. I have found it difficult to decide if to get out my short position or hold for further falls.

We may have to wait for the Fed's meeting next wednesday for major movements in all markets including gold. If if the Fed holds rates then this could pummel gold.

But I need further guidance. So I have looked at the last 2-3 months of movements in gold and compared patterns with the last 2 years'.

The closest comparison to the 3 month pattern is that which peaked in August last year.

MACD, momentum, RSI, correlation to 50 MA, all very similar indeed. That correction ended down near $750. If gold breaks $915-920 by next Thursday then expect the worse IMHO (it could bottom at $850 though).

So I will continue to hold my SBUL (short gold) for another week (I had planned to exit tomorrow but I feel there is more to come).

(FWIW if the Fed raises rates next Wed then this strategy changes.)

How is this call doing ?

"Gold may be done here - Be careful"

 

 

still think the "buying window" in gold will be late July or August

I got my head bitten off a few days ago on this thread for mentioning gold was overbought.

Sorry in delay in answering - been busy!

 

So, the RSI > 70 which means it is overbought according to TA - Time to sell?

 

Firstly, lets run down history road a little and the RSI indicator. It was created by Wiley in 70's and was initially used in stock trading. It was created due to the gaps that occur in the trading of illiquid stocks and shares.

 

Here is some analysis and wise words: http://www.danielstrading.com/education/te...ength-index.php and I quote:

 

Selling when the RSI is above 70 or buying when the RSI is below 30 can be an expensive trading system. A move to those levels is a signal that market conditions are ripe for a market top or bottom. It does not indicate a top or a bottom. A failure swing or divergence accompanies your best trading signals.

 

Next, which time period are you using for RSI? The figures I have for gold are:

Daily = 62.3%, Weekly = 59.2% and Monthly = 61.6%

 

Now none of these indicators are above 70%. So have you been looking at intra-day timeframe? Oh dear. Remember that Wiley stated that the longer time periods trump the earlier ones.

 

Also, would like to clearly state that even if you had an RSI > 70% for whatever timeframe, then Overbought does not mean imediately SELL. According to TA text books that I have read, you need to ensure that RSI comes back below 70% then start to sell.

Thanks for the detailed reply which is most useful. FWIW I only use RSI as a minor TA along with CMF, Volume, and usual patterns and so on, certainly not in isolation which is what your email implies. I couldn't be bothered to write a long speil about all the reasons...

If it was as easy as just using RSI to show a sell date when it got above 70 then how rich we would all be!

(As a point of detail RSI on my 6 monthly chart for PHAU shows RSI above 80).

In terms of short term trading, the $ listed short precious metal short etfs have some advantage when sterling is being used as the basis currency since £ weakness is accompanied by pm weakness (more or less, but esp. now as a result of the £s rises of late). Therefore, given your other comments ecoface, I can see merit in your actions.

 

My caveat would be having an 'untouchable' physical insurance policy in place exempt from trading, oh and also an acceptance that you might get burnt.

I always accept that I will get burnt if I get it wrong. Like last year for example when I lost a lot from PM investing.

Interesting what price did you get on your short?

Wouldn't it be better to go short something like retail, builders, treasuries or a bank?

 

Also if you look back at the other TA reasons like, the inverse head and shoulders formation.

I got $43.1 on SBUL.

Hold on , I am only going short gold for a a few weeks or month(s), maybe picking up the short term correction. I'll see how it goes for the next week or so.

In the long run I agree with you completely. I see a triple top potentially in gold though before the spike or massive movement to 1300++ (which will come next year IMO.)

I am short banks already (XS7S), and short FTSE and to a lesser extent S&P. I am recently short oil too, as I believe we have reached an interim top. This like gold could be a short-term play for me.

I am long Natural Gas from these lows.

I am long Soyabeans too.

I am covered to a degree with inflationary hits by Index linked bonds (INXG).