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Perishabull

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Posts posted by Perishabull

  1. Hi PD,

     

    how did you generate the lines?

     

    Are you advocating the middle line as the next target resistance area.

     

    If the bottom line is broken would this indicate the current uptrend is broken?

     

    Regards

     

    ML

     

    I use a trading system called Multicharts, there's a tool called Andrews Pitchfork that allows you to examine markets using 'median line analysis'. I'm relatively new to it but its quite powerful since it allows you to look at price structure from a different and sometimes original perspective.

     

    The midline may offer resistance since it provided compelling support on a number of occasions. If gold dismisses it by rising through with little or no resistance that could be interpreted as being very bullish for gold.

     

    If the lower line is broken and it is not immediately recaptured then the trend may be broken but it depends on seeing more detail and doing more analysis if that scenario develops.

  2. A different opinion - Tom Winnifrith;

     

    Excerpt

     

    http://tomwinnifrith...ices-must-crash

     

     

    "Why UK house prices must crash

     

     

     

    This went out on onefreesharetip.com a few weeks ago but perhaps meriots a wider audience I stand by my view expressed here:

     

    It is part of the British DNA that we believe that house prices must always go up. That is not the case. Be warned. Falls of 30% or more are inevitable within the next few years.

     

    Of course inflation (the erosion of the purchasing power of the pound) has made house prices a one way bet since the early 1970s. I will not bother serving up a chart just imagine climbing a ski slope. But this is an inflation given gain. It simply reflects, to misquote Harold Wilson that the pound in your pocket is worth far less than it was. You might note that in 1971 you could buy an ounce of gold for £14. Today that will cost you more than £1000. The destruction in the purchasing power of Sterling during the past 42 years has meant that all physical assets look, in headline terms, like smart bets, housing included. You cannot live in a bar of gold but it has actually been a better bet than UK house prices. So as it happens has been am 1870 Wisden cricket annual, but again you cannot live in it.

     

    House prices have not, as anyone who bought in 1987 will remember, moved in a straight line. There are periods when they fall sharply. That happens because a) they get overheated and because there is one of two external shocks: either a sharp rise in unemployment or a sharp rise in interest rates and either of those two triggers mean that large numbers of people with mortgages cannot pay, default and become forced sellers.

     

    For the feature of housing as an investment as opposed to, say shares or gold, is that the market is very illiquid. If Kylie Minogue moves into your street and there is a sudden demand from dirty old men to buy housing there too, prices will rise very sharply as there will be far more demand than supply and each transaction will set a new benchmark price for the whole street. But Kylie can live in only one place at a time.

     

    If you suddenly face a few forced sellers in your street and there is no rush of buyers each will compete to shift their property as quickly as possible and each time one sale goes through that sets a new benchmark – a lower one. And that is what will happen at some stage soon. At this point I bring to your attention a chart which shows average UK house price to average income ratios over time.

     

     

     

    You will see that the long run average is c4. Of course the ratio is very rarely exactly 4 it tends to get ahead of itself and then correct below mean and then bounce above mean. Right now we are at a level ( above mean) seen only twice before in living memory. The first time was in 1987 when Chancellor Lawson engineered a housing bubble with the announcement that in 1988 he would abolish double MIRAS. Folks rushed to buy in 1987 and the ratio headed just above 5. Look what happened next? Er..oh – the value of your house just halved.

     

    The second time was in 2007 when Gordon Brown pumped money into the UK system with his vast ( unsustainable deficits) and when credit was easy and base rates low. Then came the 2008 global crisis and the ratio crashed again. But not back to 4. And over the past couple of years that ratio has pushed higher and we are once again at 5+ and the amber warning lights are flashing.

     

    You might ask why has the ratio climbed once again? It is not that average incomes are falling but the reason – as ever – is political. The Coalition reckons that rising house prices wins votes. It is probably correct. And so taxpayers cash is being blown in a myriad of ways to push prices up – we are being bribed with our own dosh. Banks have been given cheap money to lend which is passed on via cheap mortgages. There are numerous schemes to help first time buyers onto the property ladder. That they need assistance at all is down to a benefits system which underwrites sometimes exorbitant rent bills for those who have never worked ( see today's latest installment of the increasingly vomit inducing tale of Heather Frost here). Landlords know that housing benefit picks up the tab and can thus afford to charge more so pushing up both rental and purchase prices for those who do actually work.

     

    The whole system is not sustainable and is pretty ludicrous to boot and at some stage the realities of the UK Government deficit will force an overhaul which will inevitably lead to a total de-rating of house prices. That is probably a good way off (at least until well after the next Election). But interest rate rises are not so far off. The UK lost its AAA credit rating last week. That should mean that the Government has to pay more to issue bonds to fund its gaping deficit which will push up interest rates generally. Moreover there are clear inflationary pressures in the system. At some stage base rates will have to increase and – assuming that the banks do not take a margin hit, a safe enough bet – that means sharply higher mortgage costs."

  3. Daily Express excerpt;

     

     

    "House prices to rise £10,000: Biggest increase for 3 years

    CONFIDENCE in the housing market has soared to its highest level in three years with prices forecast to rise by £10,000 this summer.

    By: O'GradySarah

    Published: Fri, April 26, 2013

     

     

    Property values are expected to rise by an average of £10,152

     

    Almost three-quarters of homeowners expect values in their area to increase by an average of 4.5 per cent, according to a survey.

     

    That would put an extra £10,152 on the average home worth £225,601, property experts say.

     

    The good news comes as official figures showed higher than expected growth in the economy for the first three months of the year.

     

    Mark Dyason, director at mortgage broker Edinburgh Mortgage Advice, said: “The results of this survey are yet more proof of the deep-seated appeal of bricks and mortar. There’s no doubt the property market is coming back to life. There’s a lot more confidence and urgency and news that the economy actually grew in the first three months of the year will put a further spring in people’s step.

     

    “Instrumental to the recovery of the property market is the first-time buyer who has been buoyed by very competitive rates at ever higher loan-to-values.

     

    “Properties that might have languished on the market for months and months last year are now being fought over.”

     

    Both the numbers of people forecasting a house price increase by the end of the summer and the size of the anticipated rise are the highest since a quarterly survey of 4,000 owners began in 2009.

     

    Lawrence Hall, of property search website Zoopla.co.uk which commissioned the research, said: “The housing market has seen a number of positive events in recent weeks including the Budget and growing confidence from homeowners is a significant step towards a recovery.

     

    “With first-time buyer lending gradually increasing and mortgages becoming more readily available, there is real belief that the property market is starting to turn a corner and finally drag itself out of the hole since the financial crisis.” He said measures such as the Government’s £80billion Funding for Lending Scheme has helped fuel a surge in price."

     

    The property market is fizzing with positivity, says Richard Sexton

     

    There’s no doubt the property market is coming back to life

     

    Mark Dyason, director at mortgage broker Edinburgh Mortgage Advice

     

    The scheme has offered mortgage lenders access to cheap money to pass on to homebuyers. And from 2014 the Help to Buy Scheme will give Government guarantees to support up to £130billion of higher loan-to-value mortgages."

     

     

    http://www.express.co.uk/news/property/394866/House-prices-to-rise-10-000-Biggest-increase-for-3-years

  4. Different perspectives on gold;

     

    Volume profile and Linear Regression

     

    3 year continuous futures with volume profile;

    Goldvolumeprofile_zps391c996d.png

     

    The light blue shown on this chart is volume profile. That is showing the volume of trade at each price level (as opposed to volume of trade per day shown at the bottom). The horizontal line emerging from the light blue and running the whole way accross the chart shows the price level over the last 3 years where most volume transacted - $1661.60.

     

    The volume profile shows the amount of trade at each price level over the last 3 years. So at $1450 you can see the volume of trade was very low indeed (just below the blue line beneath 'LESS TRADE', and as you look at higher prices, the volume has steadily increased at each price level.

     

    Gold has recently sold off very sharply from around $1550 to $1476.10 where it sits now. So as the price moved lower and lower from $1550 to $1476.10, the price moved deeper into price levels where trade volume was less and less. That may partly explain why the move lower was so sharp, certainly if there was some manipluation it's clear from this chart that the price would be particularly vulnerable at the $1550 level.

     

    So I would certainly expect to see gold move down and through $1450 (trade volume historically low at that level)

     

    You can see below the 'SOLID TRADE BELOW HERE' line there is a sizeable and consistent block of volume. in other words there was a lot of gold traded between $1430 and $1350.

     

    So based on this I would be looking for gold to move down to $1430 and then be met with solid support.

     

     

    This next chart is 5 year and shows the 'air pocket' in terms of lack of volume more clearly.Gold5year_zps071f6219.png

     

     

    At the left axis of the chart just above the blue line there is very little volume. This very low volume region is $1450 to $1500.

     

     

    This 5 year chart shows gold (in log) with Linear Regression lines

    GoldLR_zps787dde0a.png

     

     

    These help to provide longer term context (see explanation below). The lowest trendline represents 3 standard deviations from the mean and is currently at $1432, so if gold were at that level today it would be 3 standard deviations from the average price over the last 5 years. Over any period price can only exceed 3 standard deviations for 0.3% of the period covered. You can see that when gold topped in 2011 it spent very little time above the upper 3 standard deviation line.

     

    Interestingly looking at it from this perspective confirms the analysis of the volume profile aspect (that price could go to $1430 but then be met with very strong buying).

     

    Of course by its very nature Linear Regression is constantly moving, albeit it's slower over longer periods like this, but what this does show is that we are nearing an extreme.

     

    I'm looking for gold to clear and confidently close well above $1430.

  5. Looking at the long term log charts, the magnitude of the crash/ consolidation in both gold and silver are now similiar. This recent one of the past two years taking a lot longer.

     

    Don't know if you saw this Roman;

     

     

    From Gold's peak at $1923 to it's low so far of $1321 is a 31.3% move lower, it took 1 year 7 months from high to low.

     

    From Silver's peak in April 2011 at $49.82 to it's immediate low 12 days later at $33.03 was a 33.7% move.

  6. It rather looks as if GLD is experiencing a parabolic blow off top..........

    PT1_zps6eb812df.png

     

     

    ............when measured in GDX

     

    This chart is GLD / GDX. The point at which the price trajectory is heading 0° is 27th April and since price trajectory cannot go <0° this suggests to me gold miners will bottom within the next 5 trading days (if they haven't already)

  7. From Streettalk live;

     

    Gold-deviation-34wk-price-041513.PNG

     

     

    From Gold's peak at $1923 to it's low so far of $1321 is a 31.3% move lower, it took 1 year 7 months from high to low.

     

    From Silver's peak in April 2011 at $49.82 to it's immediate low 12 days later at $33.03 was a 33.7% move.

  8. Very interesting interview with Andrew Maguire on Kingworldnews.com where he's suggesting the London Bullion Market Association were on the cusp of a default;

     

     

     

    Maguire: “Gold and silver only have this type of selling when there are extreme shortages of the physical metal. I am totally aware that before this takedown occurred there was an imminent LBMA default.

     

    We had already seen COMEX inventories plunging. In 90 days COMEX inventories saw an incredible decline. So immediately available physical gold was disappearing. People around the world don’t understand what has been happening since Cyprus...."

     

     

    “Entities went to the LBMA and said, ‘We don’t trust anybody anymore. We want our physical metal.’ They were told they would be cash settled instead by a bullion bank. The Western governments have been trying to plug holes, and the reason for it has to do with the default that was taking place at the LBMA.

     

    This is why this smash has been orchestrated because of the run that has been taking place on physical metal. So Western governments had to do this because of an imminent run on the unallocated LBMA system. The LBMA bullion banks had become so mismatched at one point on their trading positions vs real world demand that they had to orchestrate this smash.

     

    This orchestrated smash in gold and silver was nothing short of a bailout for the bullion banks. So there is a run on physical gold that is taking place and the Ponzi scheme the West is running is being threatened because of it.”

     

    Maguire also added: “We are nearing the end of this decline. Physical demand is already beginning to catch up with leveraged paper. If gold were to trade into the low $1,300s it would be unsustainable for very long.”

     

     

     

     

    This guy's very experienced in the precious metals sector and he's suggesting low $1,300s is the low.

  9. This is from Bespoke Investment Group;

     

    I think Bubb alluded to this on his diary.

     

     

    http://www.bespokein...-on-record.html

     

    "The price of gold is currently trading more than 4.5 standard deviations below its 50-day moving average, which clocks in at the most oversold reading since at least 1975. The chart below shows the daily overbought/oversold reading for gold based on the number of standard deviations it traded above or below its 50-day moving average. As shown, there have not been very many occurrences where the commodity traded more than 3.5 standard deviations below its 50-day moving average. In fact, there have only been ten."

     

    Oversoldchartgold.png?__SQUARESPACE_CACHEVERSION=1366040693798

  10. Well for me these prices represent great value so earlier this morning I've bought gold at $1365. Gold was as low as $1321 overnight and at that point was $240 down since 12th April. That's an unprecedented move and it came with unprecedented volume.

     

    This from Bubb's diary;

     

     

    NOTE - from my broker...

     

    Gold Trades at Most Oversold Lev... has been added

     

    Title: Gold Trades at Most Oversold Levels on Record - Bespoke

    Body:

     

    The price of gold is currently trading more than 4.5 standard deviations below its 50-day moving average, which clocks in at the most oversold reading since at least 1975. The chart below shows the daily overbought/oversold reading for gold based on the number of standard deviations it traded above or below its 50-day moving average. As shown, there have not been very many occurrences where the commodity traded more than 3.5 standard deviations below its 50-day moving average. In fact, there have only been ten.

     

    When silver was at it's peak I believe it was trading at over 4 standard deviations from the mean over a 7 year duration, see chart below from the 50ish peak in Silver thread;

     

    from KingWorldNews.com;

     

    Ben Davies

     

    1__$%21%40%21__driver.gif

     

     

     

    Also a big trade of late has been long gold and short silver, this has been a big winner for many.

     

    This next chart shows the ratio of Gold to Silver, so as gold has outperformed silver the ratio has climbed steadily higher but look now, it may have peaked and formed a lower high.

     

    Gold Silver ratio from 1st February to present

    GOldsilver_zps8aac6699.png

    The volume at the bottom of the chart is Gold futures (June contract)

     

     

    This next chart shows the ratio from 20th March to present and shows it more clearly;

    clsoer_zpsa034a1a4.png

     

     

     

    All these aspects together suggest to me this is an appropriate point to be buying.

  11. Heavy discount from spot on bullionvault, which is sort of a closed garden. I think the ferocity of this move on no real news has spooked a lot of joe public.

     

    gb

     

    http://ingots.eu

     

    People selling less than spot! They must be desperate.

     

    Peter Cambell of M3 Financial Sense thinks the Japanese have been selling gold....

     

     

     

     

    "Everyone wants to know what started the GOLD crash...

     

     

    A new high in Gold prices in YEN combined with an implied default in JGB’s (on April 5th) in an environment of high distrust of BOJ and other central banks and a great need for cash to settle debts in an insolvent Japan would sound like the perfect trigger to me. Wait till you see how the markets behave when JGBs follow the same path - and they will…the GOLD implosion will likely look small in comparison.

     

    The funny thing is the types of liquidations we are seeing are not just liquidations, they are destruction of capital, which may in the end cause a muted US and German bond rally followed by margin call selling even overwhelming the best government bond markets. If there is no place to hide…then we get a freefall.

    2013-04-15_1317_GoldInYen.png

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