Catflap

It looks like a lagging indicator to me.

 

This is a one way trip to the poor house.

 

Say you went short in Jun 2008 (the middle of the chart) based on the bearish cloud:

 

Gold went up a lot and came down a bit - You’ve lost money

 

In Aug 2008, the cloud turns green, close the short open a long and… You’ve lost money again.

 

In Sept 2008, the cloud turns red, close the long open a short and guess what! You’ve lost money again!

There's far more to this than meets the eye and a lot more things to consider as to simply whether a cloud is bullish or bearish, it's not as easy as that - if only. It also depends if you are looking at a daily or weekly chart as the weeky trend is the one you want to trade, in which case the chart has a bullish cloud from June all the way to early March on the dollar $GOLD chart. As we know, gold should have gone up in August as a safe haven but the paper markets took it down in forced liquidation. I'm going to learn it as it's meant to be a very powerful trading tool.

http://stockcharts.com/h-sc/ui?s=$GOL...id=p50671748480

http://www.swing-trade-stocks.com/200805.html

While Ichimoku utilizes five separate lines or components, they are not to be used individually, in isolation, when making trading decisions, but rather used together to form an integrated "whole" picture of price action that can be gleaned "at a glance". Thus, a simple look at an Ichimoku chart should provide the Ichimoku practitioner with a nearly immediate understanding of sentiment, momentum and strength of trend.

Tenkan Sen/Kijun Sen Cross: This is similar to any moving average crossover system. When the blue line crosses above the red line from below, it is a buy signal. When the blue line crosses below the red line from above, it is a sell signal.

 

Kijun Sen Cross: When price crosses the blue line from below it, there is a buy signal. When price crosses the blue line from above it, there is a sell signal.

 

Kumo Breakout: The Kumo is the "cloud" or shaded red and green areas on the chart above. When price closes above the Kumo, it is a buy signal. When price closes below the Kumo, it is a sell (short) signal.

 

Senkou Span Cross: This one is pretty simple. On the chart above you can see how the Kumo changes from red (bearish) to green (bullish) and vice versa. A buy or sell signal is generated when this change occurs.

 

Chikou Span Cross: When the green line crosses through price from the bottom, it is a buy signal. When the green line crosses through price from the top, it is a sell signal.

I think you need to explore it more to appreciate how powerful it really is. Using $GOLD:XBP then the you would have had a long position confirmed right at the bottom when gold was £450'ish which would have been good for loading up on miners. What I am particularly interested in right now is that gold in sterling terms could keep rising into August (albeit at a slowed rate) even though it might fall again dollar terms. Thinking about it, if the dollar strengthens then gold will fall again but sterling is likely to also fall so this is perhaps the forecasting in the clouds you are seeing.

I find it fascinating and it might at least give anyone in the UK a better idea on the future direction of gold.

http://stockcharts.com/h-sc/ui?s=$GOL...id=p50671748480

The chart links don't work

Sorry they were not links but underscores

Try these;

 

http://stockcharts.com/h-sc/ui?s=$GOL...id=p97590000336

 

http://stockcharts.com/h-sc/ui?s=$GOL...id=p44068394149

 

Note for catflpap: Click "linkable version" when trying to copy links from stockcharts.

Thanks - didn't realise you could do that.

Guys - I think I've found something that is very bullish for anyone in the UK at least and would appreciate your thoughts. I use Stockcharts quite a bit now and have just started using something called 'Ichimoku Clouds' as an overlay as it seems to give better indications of a forthcoming bull/bear trend.

Using $GOLD:XBP

Right now the cloud is green which is bullish and the price is above the cloud with the green cloud extending into the end of March on the daily chart. On the weekly chart the green cloud extends all the way to August although it gets thinner. I'm still trying to understand all the indicators - I don't think you need MA's on the chart as this is meant to tell you everything you need to know about the trend.

$GOLD

On the daily chart the cloud is still green into the end of March but on the weekly chart it goes red from March into August which is meant to be bearish.

I don't know how it all works and how reliable it is, but from what I can tell so far the outlook for gold denominated in sterling looks to remain bullish whilst it will become bearish for gold priced in dollars. So this would possibly mean that:

1) Sterling is going to weaken much further - just read Nadeem Walayat latest article where I think he said pound/dollar would go to 1:1. The pound has always been devaluing faster against the dollar (I think it used to be $4/£1 many many years ago) probably through higher levels of inflation (compare 70's US inflation with the UK)

2) Will gold/silver mining shares still perform well if the POG in dollars goes down but goes up in sterling. Would it be better to have UK listd mining shares or would it not matter?

I hope someone else can have a play around and see what they think.

More here:

http://www.investorschronicle.co.uk/Invest...moku-clouds.jsp

Edit - just to say using this technique on the S&P, Dow and FTSE and it looks bloody awful

Landscape is different. The banks (primay) have already been bailed out and the loses from the home market havent even begun.

 

Consumer debt wasn't the significant factor it is now either. The method of bank funding is also a completely different beast.

 

The government may not be able to take on liabilites for the banking sector this time. The hole is already huge and probably still has a long way to go.

 

Was there a credit crunch after the 70's bank crisis?

 

This comparision is tenuous.

The 70's were far worse than now when we still had a large manufacturing base and strong unions. There probably was a credit crunch back then and banks were far more ruthless about getting their money back calling in the loans if they needed the money causing businesses to fail and more people to become unemployed.

IMO, only a fool would give gold away at the moment.

Gold is insurance - don't get rid of your insurance completely. Sometimes you need more insurance (with rising inflation, before a currency collapse or before a stockmarket crash) and sometimes you need less when these things have already happened. But you always need insurance of some kind to protect yourself.

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.

This is the ultimate play if you get it right and it plays out like we both think, but the big question is if - there are no guarantees of course. I would simply say don't buy this latest move if you are going to be a long term holder and sell some at the March peak if you bought recently - as ever it will always be those who bought at the peak that will be the short-term losers. I think silver and platinum are better bets right now and gold will be better value later this year and in 2010.

Was the whole banking system insolvent inthe 1970's BEFORE any downturn in the economy.

Possibly - ever heard of the secondary banking crisis of 1973–1975?

http://en.wikipedia.org/wiki/Secondary_ban...73%E2%80%931975

The Bank of England bailed out around thirty of these smaller banks, and intervened to assist some thirty others

We have been here before.

Yes, Warren Buffet is a shyster and Bolton is a fool.

 

For the stock market to go up there has to be earnings from somewhere. I can't see earnings coming from anywhere. We spent tomorrows earnings yesterday. It is time to payback debts.

General stockmarket valuations will be at their very lowest at the end of the commodity boom just like they were in 1982, so this could be around 2017 perhaps. It's a gradual process going from a high valuation peak as in 2000 to low valuation bottom in a few years time - in between this you get a global recession where stocks sell off in a panic as in 1937-38, 1973-74 and today's 2008-09 period.

Earnings don't necessarily have to come from somewhere for stocks to rise - stockmarkets have been cut nearly in half but the earnings havn't been cut in half. Low interest rates will ultimately force people back into the stockmarket looking for better yields than holding cash and a wall of money that is currently hiding in US treasury bonds and gold will also come back into equities for a better return - this will all happen once volatility comes back to normal levels.

Besides, there are too many commodity stocks at already depressed valuations that makes them worth buying and these will be what lead the main indexes higher in the short term since we are in a secular bull market in commodities.

We are nowhere near the bottom in stocks. The Nikkei 225 went from 48,000 to 7,800 and is still dropping. Stocks dropped 90% during the last depression. Sure you can trade this market and make some lolly, but you have to be nimble as the market could collapse at any time. During the tech collapse many were spouting the same claptrap as you only to be completely wiped out.

The reason for Japans deflation are many, not least it's demographics:

Japan’s Slow-Motion Demographic Catastrophe

Japan repeats its mistakes

Yes, the Dow dropped 89% from the autumn of 1929 to the summer of 1932 but unfortunately you are looking at the wrong part of the cycle. 1929 was the peak in p/e valuations and the Dow back then was full of the new technology stocks of the day just in the same way that 2000 was also the peak in p/e valuations and the Nasdaq this time was where most of the new technology stocks were listed, ie. dot.com

The Nasdaq fell 73% from the spring of 2000 to the autumn of 2002 - a similar large crash over almost exactly the same time frame as before. Had Alan Greenspan not done what he did then I'm sure the Nasdaq fall would have approached the 89% fall on the Dow. If you look at the long wave of the Dow from 1929 to 1938 (9 years) and compare it with the long wave of the Nasdaq from 2000 to 2009 (9 years) you will see the same patterns - we are in a period that is comparable to 1938 and not the early 1930's.

Would you bet against Warren Buffet and Anthony Bolton being wrong?

The panic is justified. Dividends and future earnings are being slashed left right and center. The stocks that were correctly priced are now way way overvalued based on future earnings. Don't try and catch a falling knife.

 

Stocks have a long way to go to the downside.

It depends on what stocks your talking about - having gold, silver and platinum miners in my portfolio (about 20% in total) has hedged the risk and overall I'm up. I would rather put money into undervalued stocks near a bottom at this point than into gold which is nearing a mid-cycle top - I think gold is now overvalued compared to silver and oil and will begin it's long correction once it reaches a new record high.

It's possible that stocks will fall further but I'm happy to trade this market - at some point it's going to turn up because no matter how bad the news has been everyday, we still havn't got below the November lows which is actually a good sign. 47% down on the Dow is more than the 45% we had in 1938 which was a far worse period for stocks than now - Japan was already at war with China in 1937.

A contrarian would say that because all the news is so bad that we are at a bottom - especially when many still fear the market will fall even further. Just remember that gold can perform equally as badly as the stockmarket and over the same agonising length of time.

Dow fell 45% from January 1973 to December 1974

Gold fell 43% from December 1974 to August 1976

I'm still bullish on gold in the short term on a week by week basis - I see a top coming soon but not before the March 08 highs have been taken out. The chart pattern looks bullish with the 18 day MA above the 50 day MA with the 100 day MA at the bottom and slow stochastics look like they will lock in above 80 as silver has done.

Anyone see the bit about gold on Friday's Tonight with Martin Lewis?....... had that awful property ramping bitch Rosie Millard on which was quite hilarious as she looks really desperate now. Martin Lewis went to Baird & Co. and spoke to Tony Baird who has talked about golds impressive performance these last few years. Hope the link works ok:

http://www.itv.com/ITVPlayer/Video/default...mp;Filter=35336

So there you go - gold is now mainstream and the general public in the UK are now going to pile in at the top and push it even higher

Why are you comparing this to 1974 and not the Great Depression? Are you of the opinion this is just a recession? I think you're right, but your timing is completely wrong. In the GD equities fell 90%, so if looking in the rear view mirror gives a good indication of what is to come, then we are only half way there. The dust has far from settled IMO.

I think comparing our situation today to the Great Depression has been greatly overdone, for starters the overvaluation in the stockmarkets peaked in early 2000 so that year is the equivalent to 1929. Once again the massive fall was in the new technologies but this time the extent of the fall of these shares wasn't shown in the Dow but instead in the Nasdaq which crashed 77% - had it not been for all the money that was pumped out by Greenspan and not being on a gold standard then I'm sure the Nasdaq could easily have gone to 90% as well.

So the way I see it, 2000 to 2008 would have been the equivalent period for the stockmarket and we are now past that point - I just think there's every reason to believe that the worst has been priced in and that the US markets see recovery beginning in late 2009. Even though it will take the UK much longer before there is any sign of recovery, the UK stockmarket moves with the Dow so will follow it upwards.

We will just have to see what happens but I feel gold having risen so much doesn't have much upside left (coming to a seasonal peak as well) and possibly more downside (low inflation, low interest rates) whereas stocks now have little downside left having fallen around 45% with the possibility of great upside potential. Nothing goes up or down forever and gold will have it's turn again once all this printed money starts flooding into the economies but I just don't see this happening for a little while yet.

A healthy debate though - gold bulls need to be careful right now and be psychologically prepared 'if' the price does go down by around 40% again over the next 18 months and not be shaken out at any low but instead go on to accumulate more. That is a challenge but also where the best profits are made if you truely believe in the fundamentals as I do too - I just see a window of opportunity to make some decent money on a possible stockmarket rally in the next 12-18 months but I could easily be wrong.

This was a great article and I'm sure Steve might like to read it as he also likes Adam Hamiltons work..... he might not now

http://www.marketoracle.co.uk/Article8285.html

In answer to your question, what about Hedge funds, Central banks or Pension funds? Are you not of the opinion that gold is headed higher until there is something else worth putting your money into? Cash is the one thing I don't want to own at the moment. There is no other light at the end of the tunnel except a golden hue IMO.

No one seems to get this and yet it's staring them right in the face - equities is where the money will go next. Stocks are down a massive 45%, inflation is very low and interest rates are very low - as Adam Hamilton from Zeal says, this wasn't a stockmarket crash it was a panic and the two are different as crashes begin with overvaluation. We didn't have an overvalued stockmarket in in 2007/2008 - panics tend to reverse themselves when the dust settles.

So what happened at the end of 1974 when stocks had crashed by around 45% and gold was at a new all time high?. They traded places for the next 18 months - gold fell by 43% and the Dow went up by around 73% in that period up to August 1976.

Gold getting a lot of coverage lately

All signs of a major top coming - I hope no one is buying this final peak as the general public sure will be with all the stories going round. Inflation going lower (deflation) and stockmarkets poised to rally which is a disaster for gold - I think we have another 10 to 14 days left and we will hit an all-time high getting close to $1,100.

Time to think about taking some profits ready for much cheaper prices in 2010 before the exciting stage

Why is there a picture of a two dandelion leaves

You gotta be in it to win it.

 

Buy on dips and when gold ranges sideways. Then relax.

Yes, good advice G0ldfinger - if you can understand the seasonals then even better.

There's Gooold! In them there (banker) bailouts!

 

On a more serious note, just started reading this: Exchange control (gold coins).Commons sitting, Deb 13 June 1966. May be of interest (sorry if posted before).

 

 

Oh, and welcome back cdswamp!

Thanks - I knew about this already as read it in a book recently, but this is amazing actually seeing word for word what was discussed and I'll probably print it off for reference.

THERE SHE BLOWS - golds gone vertical! (to £608 in GBP, and still rising)

 

edit: now 611

Nice

Just coming out of an oversold condition on the daily chart as well so this is a turbo charged rise.

was reviewing support/resistanced today on the monthly, the real support , well-well traded between 400-450, and 550 is good psychological level, but was traded very briefly, so, i think we might hit it in 2010 and this would be a false breakdown below the 500 level and so, the final bottom

Didn't quite understand that Ker and are you talking £ or $?

Ta

post a chart if you dare

Gold is now looking expensive as people have less and less money - I really can't see gold doing much next year with inflation falling. Until all the extra money that governments are printing finds it's way into the wider economy and inflation concerns grow once again then I think there is little to propel gold higher over the next 12-18 months. This current rise may be the last - if stocks rally from here then that is where the money will go and not into gold, although I think it will go higher till about early/mid February.

These Austrian 1 dukat coins often supprise me. This one is going for £142 and yet you can get them for £68 on CID. Thats over twice the price! Think of a krugerrand going for £1300 on ebay.

 

http://cgi.ebay.co.uk/BRILLIANT-UNC-1915-A...%3A1|240%3A1318

That is crazy - 19 bids as well. Are these not reproduction coins, so dated 1915 but actually struck recently?.

We have a cat in our flat, a flat cat so to speak. But the entrance door to our cat flat has not really a cat flap for the flat cat. That's crap.

Now try and say that quickly

There has been some good action with Hochschild Mining (HOC.L) lately is anyone else in this one?

 

Another 10.6% up today.

(quote is from DrBubbs diary - didn't want to disrupt his thread)

Bought it this morning after some quick research last night - seems very undervalued for a gold miner in the FTSE 250 which makes a profit each year!. I can only think it's off a lot of peoples radar as I only just discovered it whilst searching for UK listed gold miners.... Randgold in the FTSE 100 has gone completely nuts and is above it's pre-crash peak and yet this share could triple from where it is today and still be lower than it's peak. I think this shows the mentality of some investors who are piling into the obvious gold 'mini-bubble' share as physical gold in sterling terms has risen so much - the reality is that Randgold was lower in mid-July when gold was a lot higher in dollar terms.

Hochschild Mining - I don't think the masses realise it's a gold mining share at the moment. Now if it were Hochschild Gold Mining, well perhaps the share price would be a lot higher as the masses would spot it straight away..... just my take on things.

I dont know what can be read into this, but whilist at work flicking through a copy of Fridays Sun Newspaper, came accross the Sun City section and " Six Sun Share Tips for 2009 " http://www.thesun.co.uk/sol/homepage/news/...icle2090516.ece

 

GlaxoSmithKline

Pice

888

Carillion

Vatukoula Gold Mines

BAT

 

Shoe shine boy moment ????

 

 

I saw there was a lot of interest/trading on iii.co.uk regarding Vatukoula so I had a look - it's made a loss every year for the past 6 years .... I wouldn't touch this share with a bargepole!.