FWIW

RH got me intrigued to look into this further.

 

In the chart below, I think it will be obvious to many traders that gold is making a potential cup and handle candlechart.

 

I have also boxed out the two candlechart patterns that made a double bottom. Many people would have seen this and will be selling out now.

 

If the handle part goes down to $936, then I think everyone and his dog will be back in. I will be dipping my toe back in, but with caution as still could go down to $911.

 

What do you guys think? I am not trading any of this btw - i am only buying and holding my gold.

 

Got to 936.50 so i was 50 cents out!

Later on today (less likely) or with a gap up on Monday (more likely), we should get our 'you know what' pictures ready!

Of course DYOR...could still go to 840...or 911...

If you had used that $100,000 instead as a 20% deposit on a UK property worth $500,000, you could have sold the property for over $1,000,000 after 10 years, netting a profit of $500,000. In the meantime, you would have enjoyed historically low interest rates and a rental income which would have exceeded your BTL mortgage.

Buy to Fret!!!

Yes, I think you are right there RH.

 

The handle part needs to decline down to around $930, then lift off upto $1080???

 

Edit to say this is only with my TA hat on. My FA hat has other ideas!

RH got me intrigued to look into this further.

In the chart below, I think it will be obvious to many traders that gold is making a potential cup and handle candlechart.

I have also boxed out the two candlechart patterns that made a double bottom. Many people would have seen this and will be selling out now.

If the handle part goes down to $936, then I think everyone and his dog will be back in. I will be dipping my toe back in, but with caution as still could go down to $911.

What do you guys think? I am not trading any of this btw - i am only buying and holding my gold.

Cup and handle anyone?

 

Yes, I think you are right there RH.

The handle part needs to decline down to around $930, then lift off upto $1080???

Edit to say this is only with my TA hat on. My FA hat has other ideas!

http://www.moneyweek.com/investment-advice...Money%2BMorning

Quote I Like:

Another possibility is gold. If you had invested $100,000 in bullion coins ten years ago, selling off 5% at the end of each year to provide you with cash, by now you would have gold worth more than $200,000. In the meantime, you would have enjoyed an income – usually tax-free – totalling more than $71,000.

http://www.moneyweek.com/investments/preci...Money%2BMorning

appologies if posted already, but a good read.

Nothing wrong with buy low sell high...

I hope...

Got gold? I mean, do you really 'get' it?

Things seem to have changed subtly over the last month or two; when the smackdowns happen, gold still seems to finish in the upper 1/3 of the day's trading range. Whilst I don't see that happening today, it has made everyone a bit more relaxed.. maybe... or was that ...complacent..

I'll get excited when it gets to $740 per oz....

I bet someone in China is laughing right now!

Watching two photo-copiers churn out all out this fiat crap whilst manipulating the gold price down!

Now we can all sit back and watch the who can lie the best with a straight face competition between the yanks and the brits.

Got gold?

I put some money this time last year into the Ruffer Baker Steel Gold fund (my way of getting exposure to non-large cap gold mining shares). Like almost everything else, the fund suffered in Autumn 2008. However I see from my most recent statement that the losses have been made up such that I am back now at 'level par'. Just a thought, but I am wondering if I should sell out now and then drip the proceeds back into the fund over the next 12 months. I think this gives me a better chance of benefiting from any dips in price which I am expecting later this year.

 

Anyone got any thoughts on this?

I think what are talking about is dollar cost averaging down (DCAD). I think this is a good way to buy volatile stocks, but you need to have a firm plan before you start. For example, lets say you have approx $10,000 you want to invest. What you should do is this:

Month 1 - invest $100

Month 2 - invest $200

Month 3 - invest $400

Month 4 - invest $800

Month 5 - invest $1600

Month 6 - invest $3200

Now all that adds up to $6,300. You can of course use the 3,700 as a rainy day fund or just buy and hold. Of course if you can do this for the full 12 months then I personally think that you will be in the money!

This can be dangerous though, it can be like throwing good money after bad. However, as each month passes you buy more than your existing holding. This is why you need to have a plan and stick to it regardless of the price or any news.

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).

Ahh i see - I only look at physical gold prices, because I only buy physical or GoldMoney. Looks like you are looking at phau gold etf. Now I'm pretty sure all gold etf's are overbought regardless of RSI!

I only picked on RSI as I use that in combination with Fib retracements, macd and moving averages. I don't use much else. I try and keep it simple.

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.

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.

See also the hyperinflation thread where I posted it last night.

So many great threads and posters!

So little time!

Thanks!

Paul Tustain of BullionVault has just sent out an email to customers which I think provides a good brief summary of the monetary situation.

 

I hope BV does not mind if I post his email in its entirety here (bolded by me):

 

Anyone know the FT article that says gold bulls are nuts?

Great article - thanks for posting!

How about : Paper, Scissors or Gold...

Gold really needs to break $1000 and stay there now.

 

I am concerned that it is going to stall there again , which will mean an ugly 3 top in the chart.

Fear, uncertainity and doubt....

The method of control of the masses from at least 1971...

Weak hands will fold from here...

I think people that are focusing on just the head and shoulder or double/triple top patterns, are not paying attention to the RSI osciliator indicator.

The RSI is >70% which is classed as 'overbought'; however nobody in their right mind would sell now. According to text book definitions, traders should only sell once RSI comes back under 70%. From just looking at this one indicator, I can tell you that gold will break through the 1000 resistance line.

I am looking at 1032.28 as another technical resistance level. This is a major fib retracement for me.

For me, if gold does not do what I think it 'should' do, then I will be very happy as the gold sales will be on! This is win-win time for us gold bulls!

http://www.marketoracle.co.uk/Article10966.html

Haven't read this yet but might be useful.

http://www.elliottwave.com/club/protected/...SilverEbook.pdf

The more I study this chart the more I learn.

Gold is not something to be gambled with. It is my long term investment and safety in an uncertain world.

What if, QE was really started in 2001 with all fiat 'hard' currencies? What if, the term Hard Currency was meant originally only for Precious Metals. What if, the only way the Yanks can win this corrupt game, is if everybody else loses?

Good report here:

http://www.gold-speculator.com/mark-lundee...-week-84-a.html

Not that I wouldnt like to see the H&S work but it seems too obvious, there has been a lot of articles on it recently

I would forget about the reverse head and shoulders. I have more faith in double tops and double bottoms.

It just looks like we will be atempting our 3rd assault on $1000 from that chart. However, it is by no means certain that it will be broken this time. Might bounce off and go to 875ish before trying to break 1000 again.

This article is good and so deep, that I still can't believe I have just read it..or where to post it.

http://www.marketoracle.co.uk/Article10817.html

The Presidents Working Group might have some work to do this Friday, just look what the journalists are writing

(Is it me, or does every news outlet seem pro-gold at the moment, a worrying sign)

 

"Faith in Obama? Not according to gold prices"

http://www.todaysfinancialnews.com/gold-an...rices-9102.html

 

PS I am following the £:$ charts more than the gold $ price at the moment - what is going on there?

Have a look at the sterling is toast thread...

watch out

 

http://jsmineset.com/2009/05/20/it-is-now/

There's one eventuallity that we gold bugs must consider. What happens if whoever controls the gold price controls the reserve currency. By this I mean, could the Yanks (after some major persuassion) hand over the manipulation/management of the gold price to the Chinese? They would get their Yuan as part of the SDR and the yanks will become like the Brits e.g. free to print as much paper notes as they want and not worry about the POG.

May buy some time for all the fiat money masters; I will only put my trust in Gold!