drbubb

My point is this: I wont get too disturbed by moves in Gold here that are not also confirmed by Oil moves

Maybe. By hitting gold this hard, they try to cover the damage from the very bad inflation number But remember one key thing: The high in Gold was all outside NY trading hours. And maybe this low will be the same. Anyone know what is happening to oil??

That's not the way I do it. I cannot "decide what will happen". I can only assume that any scenario has a probability associated with it. And if it doesnt work out, I will have to manage "the surprise". I dont want my stop run, Hence i buy GLD calls. The posting is finished now... and: after all that work: We get a break of the support outside NY trading hours ! Anyone know what is happening to Oil ???

So after all that work: We get a break of the support outside NY trading hours !

TECHNICALLY, A near perfect set-up - Why is no one here commenting on it?? ======================== I had to go to bed last night before the latest drop in Gold, and so was a little surprised about what happened. I bought some more Calls thru an open order, and would have bought more if I had seen the late action. Why has no one here commented on how perfect this set-up is? Have you guys not been reading my posts? Maybe I will have to lay this out step-by-step. (Before doing so, there is nothing guaranteed about this analysis. Often enough, a market will look perfect technically, and get torn to shreds anyway. But it is nice to see what his happening, and watch how it plays out.) There was too much complacency when Gold hit $850. Too many, myself included, bought there (me: calls), thinking that support would hold. But on a micro-basis the charts weren't right. This time, with Gold testing $800, it looks like they might be. The first thing people need to realise is that Gold moves are being driven by Oil moves. Now fundamentally that makes some sense. But I am basing this comment on charts, not fundamentals. Gold has been following oil for some weeks and Oil has been following Oil service stocks. So in thinking about Gold, I have turned my attention to Oil and OIH. Here's a comment that many here seem to have missed: "QUOTE (bigtbigt @ Aug 14 2008, 12:54 PM) my bones are telling me we might today be due a smackdown in oil, and therefore gold also ...hope I'm wrong" UNQUOTE So what happened? Look closely, Gold (GLD) made a new low, but both Oil (USO) and OIH held above their prior lows. That is what I had expected and hoped for. If Oil is going to lead Gold higher, you want to see Gold making its last low, while Oil low stays above prior lows. That is what happened yesterday. Now lets look at the detail of that Gold low, using GLD as a proxy. What we have here is a new low in GLD on pathetically low volume. Doesnt this chart look alot like the one I posted fot OIH, saying: "This is what a low should look like." The OIH low held (so far), and I think there is a very good chance that this GLD one will too. Thursday's GLD: Day High 81.0996 / Day Low 79.28 Let's look at two other reasons why GLD-79.28 might be a good level to form a low: + Historical gap, as described and posted before (Gold left this gap at Christmas time) + Support on longer term, charts, here is the monthly, showing $800 support: The key MA here is 18 months, that's 377 trading days + And Gold is at channel support on the Weekly chart + Gold shares, have started outperform Gold again, in the last day or two Other factors: + Gold now is deeply oversold, with longs frightened- many have covered + Mid-August is usually a great seasonal Buy in gold + Full moon due today (?) & that often provides good turning points + Fundamentals (inflation, money growth, war, etc.) still favor gold Why do I call it "near-perfect", rather than perfect? I do not like the looks of this weekly chart- especially the last week or two. The latest break could be nasty indeed. Some key support has gone on this chart. Such breaks can sometimes kick-off disasters. Hence I am playing this thru Calls. I want to see it scurry back inside that lower Bolly, very soon. If Oil has finished its A-wave down, and makes a good rally here, the Weekly break above could be turned into a bullish "false break".

Nothing at all wrong with your comments. I think you are pointing out what the Gold manipulators WANT the market to see. I am trying to look at some deeper structures. No guarantee that my interpretation will work, but if it does, I want to lay it out now, while we are in the middle of it, rather than later- This way people cannot say: "Well, you made that interpretation after the fact." But no one (myself included) has a flawless cyrstal ball

Wrongmove, thanks for your comment, but you are not listening to what I am saying. Look There was no real attempt to form a low at $850. It just touched it, and then moved straight thru it. I should have stayed up all night to watch that action, before putting in my orders. In hindsight, we got a few buyers there, but no bottom formation, and no help from oil. Plus a host of other differences that I am laying out now. Having said all this, we COULD slam thru this $800 level tomorrow. I have identified low possible support. I am buying Calls, not straight longs, so I have a degree of protection from the possibility that GLD-79.3, or even those lower support levels do not hold. Finally, I never said "screaming buy", I called it a near-perfect set-up for a low. Much better than the one we saw at $850.

As you said, you are no chartist. Read carefully what I write above, when I finish adding to it... I have laid out all the pieces in my prior posts. What do I see here, debates on Money Supply. That isnt what matters now. The technicals have set up a key level. (Having said this, dont bet the ranch, it may get swept away- but at least try to understand.)

TECHNICALLY, A near perfect set-up - Why is no one here commenting on it?? ======================== I had to go to bed last night before the latest drop in Gold, and so was a little surprised about what happened. I bought some more Calls thru an open order, and would have bought more if I had seen the late action. Why has no one here commented on how perfect this set-up is? Have you guys not been reading my posts? Maybe I will have to lay this out step-by-step. (Before doing so, there is nothing guaranteed about this analysis. Often enough, a market will look perfect technically, and get torn to shreds anyway. But it is nice to see what his happening, and watch how it plays out.) There was too much complacency when Gold hit $850. Too many, myself included, bought there (me: calls), thinking that support would hold. But on a micro-basis the charts weren't right. This time, with Gold testing $800, it looks like they might be. The first thing people need to realise is that Gold moves are being driven by Oil moves. Now fundamentally that makes some sense. But I am basing this comment on charts, not fundamentals. Gold has been following oil for some weeks and Oil has been following Oil service stocks. So in thinking about Gold, I have turned my attention to Oil and OIH. Here's a comment that many here seem to have missed: "QUOTE (bigtbigt @ Aug 14 2008, 12:54 PM) my bones are telling me we might today be due a smackdown in oil, and therefore gold also ...hope I'm wrong" UNQUOTE So what happened? Look closely, Gold (GLD) made a new low, but both Oil (USO) and OIH held above their prior lows. That is what I had expected and hoped for. If Oil is going to lead Gold higher, you want to see Gold making its last low, while Oil low stays above prior lows. That is what happened yesterday. Now lets look at the detail of that Gold low, using GLD as a proxy. What we have here is a new low in GLD on pathetically low volume. Doesnt this chart look alot like the one I posted fot OIH, saying: "This is what a low should look like." The OIH low held (so far), and I think there is a very good chance that this GLD one will too. Thursday's GLD: Day High 81.0996 / Day Low 79.28 Let's look at two other reasons why GLD-79.28 might be a good level to form a low: + Historical gap, as described and posted before (Gold left this gap at Christmas time) + Support on longer term, charts, here is the monthly, showing $800 support: The key MA here is 18 months, that's 377 trading days + And Gold is at channel support on the Weekly chart Other factors: + Gold now is deeply oversold, with longs frightened- many have covered + Mid-August is usually a great seasonal Buy in gold + Full moon due today (?) & that often provides good turning points + Fundamentals (inflation, money growth, war, etc.) still favor gold Why do I call it "near-perfect", rather than perfect? I do not like the looks of this weekly chart- especially the last week or two. The latest break could be nasty indeed. Some key support has gone on this chart. Such breaks can sometimes kick-off disasters. Hence I am playing this thru Calls. I want to see it scurry back inside that lower Bolly, very soon. If Oil has finished its A-wave down, and makes a good rally here, the Weekly break above could be turned into a bullish "false break". === written in pieces ===

I wouldnt put it all in one basket. But a solid chunk might go into Gold here, maybe over half of the portion earmarker for gold, and the rest after a new uptrend has been better confirmed I never expect to get timing perfectly, and certainly havent with a big foray when Gold was $850, one trading day before a huge drop. I am also far over-weighted in Juniors now, and that has proven very expensive (for the time being.)

Alot of people are worried about such a possibility. When it doesn't happen, and the prices just sheds a bit, and stays above the recent lows, that will be a good sign that Oil and Gold now want to go higher (that's my expectation anyway) I do think that we have only seen the A-wave of an A-B-C correction in Oil. And I believe that we may have seen the end of the C-wave in Gold. so in then next little while. they can both up together. Sure. Prices move when something unanticipated, or undiscounted happens. Or, in thin markets, when a manipulator has taken charge. Markets are thin in the summer, and its easy to push them around. The big traders like that because they can stay out of the market (on holiday) and then react after they have been moved to an extreme. I think you will find people love seeing gold go to a low level, and stocks too high, because they are setting up some good trading opportunities for later, after the summer moves peter out. You need to study charts and psychology alongside economics. if you want to understand this

We wont know until Gold fills that overhead gap, and we see if it has the muscle to get thru it, and push back up above $850 and higher

that's too bad. It was "flagged" here: (from 2 days ago): "This is what a bottom should look like: The above is the Oil Holders etf (OIH) - includes shares of Oil Service companies. It often leads Oil (USO), which has sometimes led Gold (GLD) also. It made a low yesterday on light volume, and then rose on heavier volume. That's a very positive sign, and now it looks set to break above that downtrend line. If OIH opens higher on big volume, a bottom may be in place, and I think it is then likely that a Gold bottom will come within a few days also." UNQUOTE

Welcome, YuChen. ANy relation to the family of painters? If so, say hello to ChenYu I want to see Gold back above $850 soon. There's a gap to fill near there. Let's hope once it fills the gap, it keeps powering higher. It looks like the Chinese were in on the Dollar manipulation. So my "olympic opening turn" thesis was wrong/ But I think people everywhere can see value in Gold at these levels, and there's a good chance the bottom is being put in. OIH bears watching, and it si moving up strongly today (so far), and oil/USO is rising too

Oil Service stocks (OIH) are usual a leader for Oil, and Oil has been leading gold Over the past 2-3 days OIH appears to have put in a bottom and is beginning a move up. This bides well for Gold and Gold shares IMHO

For those who want to find these charts easily... I am copying this post to the end of the Links page, and you can go there by clicking on "GEI-Links" under the Banner, which is at the top of this & every page on GEI

The Canadian venture index: an index of small companies traded on Canada's Venture exchange I use it as a proxy for Junior miners

I have a secret source. These are realtime, and meant to be private. But I will share a link with you, which is similar, and has a 15 minute delay. GLD: 10d-Intraday : 3yrs-Daily // Gold : 1yr-Daily : 5yr- Weekly yesterday's chart: BTW, that's a big buy: 2.7 million GLD shares = 270,000 ounces at $800/oz, that's : $21.6 million Buying like that can turn the market around. Let's see if there are more BUY orders like that.

THERE's a BUYER ABOUT Some of that Gap GLD:$79/80 has been filled Last [Tick] 80.5200[ + ] Change -0.6100 % Change -0.75% Bid 79.9800 Bid Size 1 Ask 80.2500 Ask Size 1 Open 80.7400 Volume 20,114,059 Day High 81.0100 Day Low 79.5500

One-third of Amercans in "negative Equity" reported Bloomberg today /see: http://www.bloomberg.com/apps/news?pid=new...id=a3rsglZgqmTs That's an exaggeration of the real figure announced by Zillow: "Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said. Negative equity and declining prices are making it difficult for homeowners to sell property for a profit. Almost one-quarter of U.S. homes sold in the past year were for a loss, Zillow said. That contributes to the foreclosure rate because some homeowners can't absorb the loss and end up surrendering their homes to the bank that holds the mortgage, said Stan Humphries, Zillow's vice president of data and analytics." . . . "The highest percentages of homeowners with negative equity were located in California. In four of the state's metropolitan areas -- Stockton, Modesto, Merced and Vallejo-Fairfield -- the number of homeowners whose mortgage debts exceeded the values of their properties topped 90 percent, Zillow said. In five more California areas -- the Inland Empire (Riverside-San Bernardino), Bakersfield, Yuba City, El Centro and Madera -- the percentages were more than 80 percent. " From Zillow: Q2 Real Estate Market Reports: Home values nationwide declined nearly 10 percent over the past year, leaving almost one-third of homeowners who bought in the last five years in negative equity. Zillow’s Q2 Real Estate Market Reports monitor 165 metropolitan statistical areas (MSAs), and monitor home value change, homeowner equity and rates of negative equity and “distress signals” – including homes selling at a loss and foreclosures. /see: http://zillow.mediaroom.com/

Zillow Home Value Index Compared to OFHEO and Case-Shiller Indexes By: Stan Humphries VP, Data & Analytics | March 18, 2008 There was an interesting article in the Wall Street Journal a few weeks ago by David Wessel discussing differences between the housing index produced by the Office of Federal Housing Enterprise Oversight (OFHEO) and Standard & Poor’s Case-Shiller index. Since Zillow recently released our Q4 2007 Home Value Reports, I thought I’d extend Mr. Wessel’s analysis with a comparison of the Zillow Home Value Index (Zindex) to both the OFHEO and Case-Shiller numbers. . . . So, how does the Zindex compare to the two most common flavors of weighed repeat sales indexes? The table above compares year-over-year changes in market values for OFHEO, Case-Shiller and Zillow for selected markets between the third quarter of 2006 and the third quarter of 2007 (the same markets and periods compared by Wessel in his article). Also added to this table are the Pearson correlation coefficients between the three measures (an indicator of how similar the various measures are to one another). Zillow and Case-Shiller are fairly similar to each other with a correlation of 95% and median absolute error of 1.5%. OFHEO, on the other hand, is about equally dissimilar to both Zillow and Case-Shiller with a correlation of 50% with both other measures (median absolute error of 5.3% when compared with Zillow). /more: http://www.zillowblog.com/zillow-home-valu...ndexes/2008/03/

This is constructive. OIH is higher this morning in NY, and has broken its downtrend. Meantime, GLD looks set to test its low on lighter volume, which would be a potential bottoming formation. But more work is required, and maybe a visit to GLD-$79 to fill that gap from last Christmas

This is constructive. OIH is higher this morning in NY, and has broken its downtrend. Meantime, GLD looks set to test its low on lighter volume, which would be a potential bottoming formation. But more work is required, and maybe a visit to GLD-$79 to fill that gap from last Christmas

SOME TECHNICAL INDICATORS ============ = 1/ TAKE A LOOK at the Long Term chart: The Bull market in Gold is still intact. Something like $800 is key support on the Monthly chart, then $650 maybe I dont believe the dollar can go much higher. This ws driven by a concerted effort of CB's in a summer market, and they may have spent their force by now, and will need to be careful from here. A big bounceback in Gold would mark a very important low for Gold, and give the Dollar bears a great chance to regroup. In hindsight, the $850 had too many stops, and was too tempting a target for Gold Bears to miss, so they ran the stops there, and triggered a $30 selloff. Today's sentiment feels more like a low than the complacency many had on Friday (self included.) Another few days, could establish a nice low, filling that gap at GLD-$79/80 = 2/ This is what a bottom should look like: The above is the Oil Holders etf (OIH) - includes shares of Oil Service companies. It often leads Oil (USO), which has sometimes led Gold (GLD) also. It made a low yesterday on light volume, and then rose on heavier volume. That's a very positive sign, and now it looks set to break above that downtrend line. If OIH opens higher on big volume, a bottom may be in place, and I think it is then likely that a Gold bottom will come within a few days also. Other charts: OIH vs. USO & GLD: st-10 days : lt-6 months