ecoface

Some sell a percentage of their position (usually a lot less than 50%), hoping to buy back cheaper.

 

G0ldfinger chastises them saying "you've got to be in to win".

 

May was a new all-time monthly closing high. We are close to the important USD 1000 figure and seem to be completeing this much talked about inverted head and shoulders formation. Oil has been increasing steadily over the last weeks. The printing presses are close to overheating. GM is bankrupt and California is 14 days from being broke.

 

We're supposed, by some, to be at the start of a summer doldrums but it feels very edgy.

 

So, I agree that it's beginning to look overbought but there are all these other worries.

I am only going short for the short term correction as my original post states - I don't disagree with the longer term trend. I just simply think that this is not "it" yet.

Of course I put my money where my mouth is. Indeed I already have done a Gold Short today. In the end I didn't look for confirmation from gold bugs like your goodself as invariably I would get the sort of response like you provided. I just wanted to share some views. So I apologise for doing that.

 

The fact remains that you can not answer why RSI and CMF is so high. I had read the posts - please show me which one answers this - or can't you be bothered "bla, bla bla".

Sorry, I should have also added that I went short Oil yesterday too.

blah blah blah, sorry bored of answering these sort of questions. Read this forum to find out the answer.

 

Are you putting your money where your mouth is?

Of course I put my money where my mouth is. Indeed I already have done a Gold Short today. In the end I didn't look for confirmation from gold bugs like your goodself as invariably I would get the sort of response like you provided. I just wanted to share some views. So I apologise for doing that.

The fact remains that you can not answer why RSI and CMF is so high. I had read the posts - please show me which one answers this - or can't you be bothered "bla, bla bla".

How do gold bugs respond to the TA revealing an overbought position?

Look at RSI, Chaikin money flow, and also volume?

FWIW, I reckon we are in shortly in a for quite a large short term correction in gold as indicators are all showing overbought without underlying support.

I also reckon the dollar will bottom this next week and rally for the short term, and $ dominated commodities such as oil will correct and fall from around $70 which is a top.

...at least this is the general theme of how I will be investing for the next few months.

More bullish comment on the inverse head & shoulders in gold;

 

http://www.howestreet.com/articles/index.php?article_id=9577

More bullish comment on the inverse head & shoulders in gold;

 

http://www.howestreet.com/articles/index.php?article_id=9577

OOhh I love patterns.

It looks remarkably like a triple top to me. Look at the symmetry. If it goes near to 1000 again it will be be the stongest signal for a crash down to lows of 750. Be careful what you wish for.

According to my trading software, someone/ thing bought $29m of PHAU (Gold ETF) at 4 pm today.

 

That is hefty vote of confidence if correct but I'm not sure it is.

 

Can others see this trade too or is something wrong with my data?

 

I can't believe it.

Considering how many gold bugs there are on this site I am surprised no one has replied to this.

It is by far the largest trade this year in this ETF. The average largest trade is about 0.5m so this is ABNORMAL.

Why?

According to my trading software, someone/ thing bought $29m of PHAU (Gold ETF) at 4 pm today.

That is hefty vote of confidence if correct but I'm not sure it is.

Can others see this trade too or is something wrong with my data?

I can't believe it.

May be they are about to get some government help? Time for a short?

They were aggressive with development lending particularly from 2006 onwards. Indeed I would suggest competing for clients with RBS, HBOS and the Irish banks - that in itself may tell us something.

I want to get the word out, so people will be more inclined to resist the temptation to buy.

The irony is that buyers entering now, and a brief rise, will only serve to prolong the price falls, thus any recovery. Everyone is so short termist it amazes me. A shorter sharper steeper decline and crash is considerably better than a state led, bailed out, subsidised, hpc, and recession.

(This is from the clone thread on HPC. I may add it to the header post also)

 

So in the case of UK residential property, the homebuilders have give a series of good early clues over many years. My basic signal would be when the Builder Bellwether Index (of 5 housing stocks) breaks thru the 252day (One year) moving average

Bubb,

You have written before that you see a bottom being "When the average of the 4 top Builder stocks breaks above the 12 month moving average. After you see that, you should have about 6-12 months to the low."

So if the stocks shoot through the 252 MA we could be 6-12 months off a bottom.

My guess is that in a few weeks or by May the rally in builders' stocks (and most EMs) will have petered out, so this is merely a false dawn, and the MA may be pierced but not any movement will not be sustainable.

You have also written that before we see a low we need to satisfy the following criteria:

"+ 3 to 5 years from the top (ie. 2010-12)

+ Yields above interest rates (= Buying cheaper than Renting)

+ Most foreclosures washed through the system

+ A serious rally in Builders has already happened. (trading above the 252d.MA)

probably:

+ US property prices at least 6-12 months before an upswing."

I agree with all of these and frankly and idea that we have a bottom is not worth the air-time, other than to help people not get their fingers burnt!

Should have also said that if we really are in a deflationary period and end up going Japanese then perhaps gold will just steadily keep increasing year after year with no serious correction like we had in the inflationary mid-70's. I definitely can't see the stockmarket bouncing back to it's previous highs in the way it did back then - it's looking really ugly for this year and next so I'm finding it hard to believe any SM rally is going to pull much money out of bonds, gold and cash sitting on the sidelines.

I've seen you explain this train of thought in several posts. A gradual increase in POG seems unlikely to me. I accept that the 1970s was not deflationary.

However, I also think that whilst the headliners will explain that it is deflationary now, inflation will creep in next year and then set well in thereafter.

At that time POG will start on the mania phase IMO and we could see the parabolic pattern which you think will not occur.

Therefore we can conclude that you believe we will not encounter inflation and that it is not on the menu for the next 5-6 years (I think you cite 2014-2015 before the peak in POG.)

Secondly, I just can't see a gradual movement upwards because of the speculative nature of price movements. Gold over the next 5 years will only end up in another bubble, like any other asset class, or commodity, currency.

Well, amongst all this bullishness I see, I have to say, I've been busy selling into this strength today. Never my core physical holdings, but taking profits on some gold stocks, and lightening up on a little goldmoney silver. Its well possible we might have a little further to run, but I'll stick make money on my core positions if thats the case. Ditto if it really is 'different this time' and this is the beginning of a run on all fiat currencies.. Does anyone else feel we are just a little overextended at this point?

Yes we are definitely over extended. Can't be arsed to justify anymore as I have been for a week now and get shot down.

How do we know he is not ker or his buddy already

Paranoid?

You should team up with Ker. $200 just around the corner.

 

Yes, in the mother of all financial crises, let's sell all our gold because it could be cheaper in a couple of months. Sound advice.

I'm not advising anyone.

I don't think 200. I've been through what I think - all based on parallels to the 1970s in REAL terms.

You think this is THE move to over 1200 and beyond.

I don't. But we will get another correction first before the big move. So we think the same but I am more patient.

GTG

I will look forward to that in anticipation.

 

Gold coins at spot price I haven't seen for a few years.

So do I. I sold all my PMs recently anticipating a very large correction. I can't see this lasting much longer and may go above 1000-1030, but thereafter it will be carnage, and time to re-invest again.

If you're correct the spreads on coins should narrow. It is my humble observations that during the last correction the opposite happened, that infact folk used the correction as a chance to purchase more bullion/coins.

That's because the mid cycle correction that will occur in the next year will be much greater than that correction IMHO.

During the correction of gold from 1030 to 690 gold bullion/coins was very hard to obtain. When silver corrected from 20 to 9 it was even harder to find. The only freely available at any quantity gold and silver was via the ETFs. The numpties piling out of these abortions is what is will crash the paper price of gold.

 

People piling into ETFs will be the first to sell, that is what the government is banking on and why they are being herded into ETFs.

I agree.

I also think that alot of those who have bought physical will sell in the correction.

I think some people are missing the point.

 

This article makes me nervous. They are herding the masses into their pen. Remember what I said: "owning gold is not the same as having possesion".

 

 

http://www.reuters.com/article/reutersEdge...E51C3T020090213

Its interesting how people see different things.

The bit that scares me most in the article is:

"It's a little worrisome that so many people are piling in," Gartman said.

The herd is gathering. A big correction will come perhas after a re-test of 1000-1030, but it will demolish all that dumb money that has flooded in Dec / Jan.

Maybe, time will tell. Those sectors which were heavily fuelled by debt growth are toast though, there will be no innovation to save finance or real estate. Perhaps retail has a chance, but it's a slim one for the foreseeable future. The market became so distorted it's hard to tell where genuine productivity ended and credit fuelled fortune began. I have a funny feeling that the debt effect made up a huge percentage of growth compared to sustainable productive output.

 

And then there's the actions being taken by world governments, which will delay the price/profitability discovery process and hinder genuine innovators and producers for years to come. It's grim out there now, but I see absolutely no cause for optimism in the future. Long, slow and painful - words people are going to have to get used to.

Like you say, time will tell, but then what's 5-8 years of no growth or negative when you look at where we were and just how well off we have been for many years.

This disruption will bring sort the wheat from the chaff and IMO is evolutionary anyway. The good will come out of, but as yet, we can't see what it is.

IMO. The questions are.

 

Will they want a drop in gold price?

 

Do they now owe so much to the Governments that they do what they are told or do they now own the governments.

Many western Govts own more than 1000 tonnes so I am not sure that ETFs are as influential other than when Govts sell they gold it has to be within the parameters of the Central Bank Gold Aggreement and its terms (i.e. not to sell more than 400 tonnes per year and no more thann 2500 tonnes over 5 years). Of course though etfs are not bound by this.

All of the growth for the last decade was paid for by borrowed money, as Pluto says, tomorrow's earnings spent yesterday. That could mean almost a decade without growth before we take into account the effects of the recession.

Yes alot of growth was fuelled by credit.

However, alot of growth was created by ingenuity, creativity, inspiration, invention, hard work, tenacity, productivity, IT, globalisation, improved terms of trade and so on.

In other words the boom grew on the back of these basic factors which allowed more credit to come through and so on.

Let us not assume that with credit contraction all of the basic factors of growth will be eradicated. Value in terms money may be reduced significantly but the gains (health, science, efficiency, IT, invention, inter-dependence etc etc) will not be lost forever.

So lets not be too alarmist here. Growth will return but will be measured in different ways perhaps.

ETFs are another abortion born by wall street. They are tomorrows CDOs, MBSs and SIVs, and yesterdays MFs.

That own c 1000 tonnes of gold - not to be ignored perhaps

As my post above shows, this is totally irrelevant.

No point in having a debate then if it is irrelevant

The deleveraging that has been going on recently was all the hedge funds and institutions selling everything to meet redemptions. That hardly signals the top is in.

You quoted my post but didn't refer to the volumes questions. Do you know?

I think when the herd buys gold the price goes to the moon. Only a minority are buying gold and because that minority are getting slightly bigger, the bullion dealers and producers cant keep up. Dumb money is clearly fiat, sterling for example, not gold which is real money. But I take your point though.

Has anyone compared the Volumes in the mid 1970s to now?

Secondly...

I may not have the evidence so could you please provide it to suggest the volumes are low now compared to the last 10 years? At what point does a minority cease to be a minority? How do you quantify the judgement - volumes or something else? Put it this way I know a lot more retail investors that are in PMs than 6 months ago. Now if they are behind the institutions and funds then is there not already decent investment?