GOLD

[lardoon]

DrBubb,

 

I understand your theory and thanks for sharing it but are these 2 bits not contradictory:

 

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.

 

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.

 

I am assuming that the C wave would drive Oil price to a lower low (and Gold).

I am not trying to criticise but I personally feel (worried) that Oil could easily fall further (maybe after a wave B/rebound) and this could drive Gold even lower than 800. Or do you think that Oil and Gold will somehow "decouple" before the Oil C wave - which would therefore not drive prices lower?

 

I think Oil at 80 is a possibility (and so do you if I am not mistaken) and am worried that this could translate in Gold at less than 800..

[wrongmove]

For example, here is another possible interpretation, real basic stuff

 

Double Top/Bottom

 

"When price peaks after a rise, and the decline that follows leads to another rise in prices to form a second peak at or about the level of the first peak, a double peak is said to have formed. A neckline can be drawn across the base of the two peaks. A neckline is simply a trendline and penetration through a neckline after a decline from the second peak is a good indication that the price of the tradable will continue to fall. Traders often allow for a 5% penetration through a neckline to avoid whipsaws. Volume is generally greater in generating the first top than in making the second.

 

......

 

Waiting for confirmation is important for trading double tops. Twin peak formations usually show a decline of between 10% and 20% between the peaks. Volume is usually higher on the left peak than on the right peak. The confirmation point is the base of the peaks. A breakout through the baseline is more convincing if accompanied by higher volume and predicts a continuation of the trend in that direction....."

 

 

 

That chart seems to have all the warning signs. But clearly your experience tells you to see past these.

 

 

[drbubb]

That chart seems to have all the warning signs. But clearly your experience tells you to see past these.

 

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]

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

 

Thanks. And I respect your willingness to do that. Especially when the "chips are down" somewhat.

 

 

[lardoon]

WOW

Silver did not hold 14! (at 13.50 now)

Will gold hold 800?

[bitbigt]

Thanks. And I respect your willingness to do that. Especially when the "chips are down" somewhat.

Thanks for the various technical analyses, all of which make some sense.

 

But my own view is that just now the technicals may be less instructive than usual. It seems that, as of the last week or two, conditions (dollar strengthening, oil falling) have changed (which makes technical analysis using data before and after this time point rather dodgy). Just now there seems to be less 'conviction' in golds moves, and it seems instead to be swept along by dollar and oil moves (which is where manipulation is probably hapenning).

 

I think it may be a little while longer weeks or even months) before confidence and conviction comes back to gold - and this will require an enduring base formation and/or a change in the fortunes of the dollar & oil and/or some major geopolitical event.

 

Therefore, I would tend to view any bounce these next few days with caution.

 

All that said, I do think oils drop may decelerate and even reverse (as DrBubb indicates) for a while, and am hoping it first passes my 110 target to buy. This would then create a nice updraft for gold.

 

Bottom line - lots of clues, lots of subjectivity about what to pay attention to, and lots of uncertainty. I'm just going with the flow (as bought far lower) and spending my time trying to really understand the inflation/deflation stuff - as that its what wil matter in the time frame I'm interested in

[G0ldfinger]

WOW

Silver did not hold 14! (at 13.50 now)

Will gold hold 800?

There is a discrepancy between USAGold and Kitco at the moment. The Kitco charts are still >800 and >14. In doubt, I trust USAGold more.

[BurningRingOfFire]

There is a discrepancy between USAGold and Kitco at the moment. The Kitco charts are still >800 and >14. In doubt, I trust USAGold more.

 

Try this:

http://www.thebulliondesk.com/

 

gold just broke 800

[Catflap]

Isn't it 'normal' to get a strong pull-back half way through the commodity cycle?

 

http://www.marketoracle.co.uk/images/adench2-jan15.GIF

 

[lardoon]

There is a discrepancy between USAGold and Kitco at the moment. The Kitco charts are still >800 and >14. In doubt, I trust USAGold more.

 

I have noticed that.

I use my broker (OANDA) and NetDania and they both have Silver <14 and Gold ~800 now after having dropped at 13.4 and 795 respectively

 

What a freaking drop for Silver since 19.40 a few weeks ago. Its back to Sep 07 levels!

[lardoon]

Whats your take on this sudden drop?

 

PPT again?

[enrieb]

I've been looking at that chart that seems an odd patten to me, Gold at $805 then rising to $820 for half an hour before falling back to $805, then falling to $793. I'm not really knowledgeable on charts but I've not seen anything similar to that since I've been following gold.

 

I'm confused but still very confident about gold as an investment, I just wish I had some spare cash to buy right now.

[G0ldfinger]

...

What a freaking drop for Silver since 19.40 a few weeks ago. Its back to Sep 07 levels!

I am soo going to buy silver tomorrow!

 

I mean what is this? Is it Christmas already?

[enrieb]

Whats your take on this sudden drop?

 

PPT again?

 

I suspect this must have something to do with the recent fall in price.

 

http://news.bbc.co.uk/1/hi/business/7560485.stm

 

Where the hell did spain get hold of $30bn all of a sudden?

[lardoon]

I am soo going to buy silver tomorrow!

 

I mean what is this? Is it Christmas already?

 

 

I think I too..

But to be honest I am bit scared!

[G0ldfinger]

I think I too..

But to be honest I am bit scared!

I more and more think that what we see is the psychological preparation of the markets (carried out by the PPT and global central bank collusion) for the strike on Iran.

[bitbigt]

There was a discussion on another thread here recently (between aSteve and hotairmail IIRC) about the role of the velocity of money, which has got me thinking.

 

Interesting, and something to think about more. My first (not fully thought through) reaction about money velocity is;

 

- maybe its nothing more than a secondary and rather useless indicator of debt/GDP: ...let me make an analogy...

 

As a medic (a long time ago) I was taught that when a disease shows itself its often too late. This is because organs have a massive spare capacity, and disease processes eat that up first with no outward symptoms. So when illness does appear, the underlying disease has been doing damage for a long time and is very advanced. In other words, symptoms show only when thresholds (of reserve capacity) are exceeded

 

Similarly, Joe Public's monthly pay served his needs and he had some reserve capacity left over each month. Then he started taking loans (pulling money from his future into the present) which added to his monthly bills, until his reserve capacity was almost all used up. Then interest rates rose and he passed his threshold - hence the disease called credit or liquidy crunch appeared. What we need to study though is not the acute symptoms (which are merely reflected in reduced money velocity), but how the amount of debt as a proportion of GDP has been growing (i.e., the full history/rate of disease progression).

 

It seems to me that the rate of growth of debt has been enormous. ...and since all new debt increases money supply, money supply growth has also been very large. And that's true globally, and that's the trigger for inflation.

 

But - I hear you cry - surely now we'll all stop taking on new debt, and so new money supply rates will fall to zero, or even become negative if people start defaulting or paying off debt. Well yes - we will reduce our debt - but just so much that we fall back under our 'symptom threshold' - and that's a tiny amount compared to the total debt (its a threshold effect, remember)! So only a tiny fraction of all the new money put in the system these last 10 years will be removed, and at the same time the government is creating loads and loads of extra new money on top to bale out all the distressed banks etc.

 

This simply isn't Japan - people will not start saving, become non-materialistic, pay off all their debt, and turn down even 0.5% loans for 20 years. We're greedy bast@rds in the West who will keep borrowing just below our thresholds, and at the same time our governments are desperate to clear their debt by monetizing it. Where will all this lead....?

[DanF]

I think I too..

But to be honest I am bit scared!

You aren't the only one. I agree all the fundamentals are behind gold, but I've been buying since January and am quite a lot down right now. I guess its just holding in there and waiting for the fundamentals to prevail. Not sure how low gold would have to go before I conclude I've made a stupid costly mistake and sell the lot.

edit: but Im sure we wont get there

[Compounded]

You aren't the only one. I agree all the fundamentals are behind gold, but I've been buying since January and am quite a lot down right now. I guess its just holding in there and waiting for the fundamentals to prevail. Not sure how low gold would have to go before I conclude I've made a stupid costly mistake and sell the lot.

edit: but Im sure we wont get there

 

It's a mind game, all of it.

 

If you think financial strive is ahead buy PM and hold.

 

25% corrections are normal. 50% crashes happen.

 

Few make money with PM's, they are not an investment.

 

They are a preserver of wealth when the financial world goes wrong.

 

We have the biggest, the first ever global credit bubble bursting, now.

[enrieb]

As a medic (a long time ago) I was taught that when a disease shows itself its often too late. This is because organs have a massive spare capacity, and disease processes eat that up first with no outward symptoms. So when illness does appear, the underlying disease has been doing damage for a long time and is very advanced. In other words, symptoms show only when thresholds (of reserve capacity) are exceeded

 

Similarly, Joe Public's monthly pay served his needs and he had some reserve capacity left over each month. Then he started taking loans (pulling money from his future into the present) which added to his monthly bills, until his reserve capacity was almost all used up. Then interest rates rose and he passed his threshold - hence the disease called credit or liquidy crunch appeared. What we need to study though is not the acute symptoms (which are merely reflected in reduced money velocity), but how the amount of debt as a proportion of GDP has been growing (i.e., the full history/rate of disease progression).

 

Thats a very good post and an interesting way of describing the problems.

 

[drbubb]

I am listening DrBubb, but it seems to me that there are always many possible interpretations of any particular chart. Some will turn out with hindsight to be correct, others won't. You always give a clear description of your reasoning, but would be the first to admit that you sometimes call it wrong.

 

All I am trying to ask is how I should decide between all these possible interpretations. Should I just look at the chart and wait for a "eureka" moment, or should I work through them, assessing each interpretation on its merits?

 

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 ???

[Compounded]

I more and more think that what we see is the psychological preparation of the markets (carried out by the PPT and global central bank collusion) for the strike on Iran.

 

I have read the French are in it too - very significant IMO.

 

[G0ldfinger]

I see a possibility that I will be buying silver at $12.XY tomorrow. Good night for now.

[lardoon]

Anyone know what is happening to Oil ???

 

I dont see it move too much.. at 114.6 right now

[drbubb]

Whats your take on this sudden drop?

PPT again?

 

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??