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Gold Short-Term Trading Update

Tyler Durden's picture





 

Submitted by Nic Lenoir of ICAP

Game plan has been to play long in Gold since 1,063. However we advised taking chips off the table partially at 1,125 as the market has not validate a break-out with a daily close. We have pulled back on the 1,097/1,100 support zone today, we would be cautious here. If we break lower the market will drop to 1,076 (61.8% of recent rally, and support zone established January 28/29), and possibly down to 985/1,011 which cannot be violated at the risk of invalidating the bullish dynamic completely (keep in mind we are still fighting deflation in most developed economies...). On the upside we need a daily close above 1,125, and then 1,165 to confirm a rise towards new highs. Note that a drop to 1,076 followed by a rise past 1,125 would form an inverted H&S so the market would likely accelerate past 1,165 at that point.

Price action here again is to watch in parallel to the Dollar Index which is disaplying quite a bit of bearish divergence in the short-term. Our macro view is still for the USD to continue appreciating rather sharply, but short-term pressure is building for a correction lower. of later we have had Gold climbing concurrently with the USD but on a large scale/ timeframe I am not convinced such a dynamic is very sustainable.

Good luck trading,

Nic 

 


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Tue, 02/23/2010 - 15:19 | Link to Comment LoneStarHog
LoneStarHog's picture

Hey Nickie, breaking news:  Today is Options Expiration

Tue, 02/23/2010 - 15:47 | Link to Comment lsbumblebee
lsbumblebee's picture

Strange how gold always gets crushed on this day.

Tue, 02/23/2010 - 16:40 | Link to Comment Anonymous
Tue, 02/23/2010 - 18:42 | Link to Comment caconhma
caconhma's picture

"Obamas administration is the same corrupt like the ones before. No chance, no belief."

I disagree. Obama, like many other minorities, feels himself as an outsider to America, its culture, its values, its well-being. On a top of everything, Obama is an extremist with Marxist ideology in his background. Unfortunately, Obama is very intellectually shallow and incompetent.

The bottom line: we have the worst of everything with very grave consequences to follow.

Tue, 02/23/2010 - 20:29 | Link to Comment lsbumblebee
lsbumblebee's picture

Toronto’s Harvey Organ sent the following this morning to Gary Gensler, the chairman of the CFTC…

"As you are aware, today is options expiry on the comex. For the last 10 years, at this juncture of the month, our major banking cartel has decided in its great wisdom that they must hit gold at precisely 3 am NY time which coincides with the first morning fix of gold in London. The object of the exercise as we have pointed out to you on many occasions is to try and remove all option holders in the money contracts. Throughout today you will seea relentless attack by the cartel bankers to get gold below the 1100 mark as over 5000 contracts are in the money.

This is flagrant manipulation. The bankers do not have any comex gold behind these trades and yet you sit there on countless occasions and do nothing.

You have called an investigation into the silver arena due to the same circumstances. This investigation commenced in Sept 2008 and as of this date, Feb 23m 2010 you have not announced anything as to why you have allowed this constant manipulation over many years with unsuspecting individuals losing countless dollars in the process.

I urge you to finally stop this criminal practice and set the record straight.

You may file this email as part of the hearings for position limits on the precious metals and the need for them. As of right this second, gold fell from 1120 at 3 am and right now is trading overseas at 1105.30"
Harvey Organ

http://harveyorgan.blogspot.com/

Wed, 02/24/2010 - 02:04 | Link to Comment Hephasteus
Hephasteus's picture

haha they failed. 1105

Gold is getting tired of being kicked in the face month after month.

http://www.youtube.com/watch?v=vimZj8HW0Kg

Tue, 02/23/2010 - 15:24 | Link to Comment merehuman
merehuman's picture

seems to hold at 1,100.00.

Just dont get the price of gold going down when it shouls be heading up?

Ask PPT. Moron traders they are, not just immoral

Tue, 02/23/2010 - 20:37 | Link to Comment Anonymous
Tue, 02/23/2010 - 15:29 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I like support at 1101 right now.  today, rather, as reality (gold) is trying to buck the matrix, and anything can happen.  JPM might send out the calvelry of Market Manipulators and Monie Masters tomorrow, and take a little off the top.  We will be entering either massive inflation or deflation soon (your guess is as good as mine, I say HYPE) and gold will be the only asset class to hold up either way.

Silver snitches!

Tue, 02/23/2010 - 15:43 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:25 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Silver.... less common than gold....the metal that does not grow alone, always with a sister....silver, that which the rothschildes hoard, that which got Dorthy home albeit the wizard OZ flew the coup.  Silver, considered money since gold, but not the metal that the US does confiscate.  All this and it is sitting 70% below it's real high.  Gold is about 50% below it's real high.

Tue, 02/23/2010 - 20:33 | Link to Comment nuinut
nuinut's picture

Gold is way below that currently.

 

Adjusted for inflation, by ShadowStats, rather than Uncle Sam, 1980s' all time high was $6400 in 2010 FRNs.

If you don't trust TPTB to safeguard the value of your $$$, why would you use their inflation statistics?

 

Wed, 02/24/2010 - 14:30 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

+1 on shadowstats.

I was being a little bearish on the numbers there ;)

Tue, 02/23/2010 - 16:52 | Link to Comment Anonymous
Wed, 02/24/2010 - 08:23 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:29 | Link to Comment DosZap
DosZap's picture

Severe deflation first, then Hyper Inflation second.

Hang onto your ass.Folks, if you have not prepared for this, PLEASE lay in at least 4-6wks of whatever it takes to get your families by.If you still have Dollars, they make  rough TP.

Remember Brazil?. 6 weeks, and all dollars stolen, and converted to their paper shit.

 

Tue, 02/23/2010 - 15:39 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:14 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:41 | Link to Comment Anonymous
Tue, 02/23/2010 - 15:42 | Link to Comment Anonymous
Tue, 02/23/2010 - 15:45 | Link to Comment hettygreen
hettygreen's picture

I don't get the gold optimism. Everytime the stock market declines so does gold. When the market tanks and gold heads in the opposite direction I will rethink this but for now it's a no-brainer.

Tue, 02/23/2010 - 15:49 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If you take a close look, you can see it decoupling ;)

Tue, 02/23/2010 - 16:34 | Link to Comment El Hosel
El Hosel's picture

 hettygreen,

  "I don't get the gold"... You are right about that.

It might have something to do with the fact that gold is up 300% the past 10 years and stocks are flat over the same period.

I wonder how much money was spent pumping up the banks and the major averages over that same time period versus how much was spent trying to  suppress the gold price.

Tue, 02/23/2010 - 16:41 | Link to Comment Anonymous
Tue, 02/23/2010 - 20:39 | Link to Comment nuinut
nuinut's picture

When gold clearly heads in the opposite direction to the stock market it will be way too late to get your hands on physical IMO. Be careful you don't end up the no-brainer.

Best of luck to ya though.

Tue, 02/23/2010 - 22:21 | Link to Comment merehuman
merehuman's picture

There is a long eneogh wait now.

Shining up my silver instead of washing the truck.

Tue, 02/23/2010 - 15:48 | Link to Comment Anonymous
Tue, 02/23/2010 - 15:52 | Link to Comment jc125d
jc125d's picture

Gold - it's the ultimate bubble, it's bubblicious. I have lots and I am going to buy some more. Please sell it to me.

Thank you,

G. Soros

Tue, 02/23/2010 - 16:42 | Link to Comment Anonymous
Tue, 02/23/2010 - 15:55 | Link to Comment Spitzer
Spitzer's picture

Gold got crushed today ? what the hell price are you watching ? an $ 8 drop is not a crush, for fuck sakes.

Tue, 02/23/2010 - 15:59 | Link to Comment lsbumblebee
lsbumblebee's picture

If I tell you it was $1121.90 right before the London market opened this morning will you stop soiling yourself?

Tue, 02/23/2010 - 16:16 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:40 | Link to Comment lsbumblebee
lsbumblebee's picture

Remind me not to use that word ever again.

Tue, 02/23/2010 - 19:23 | Link to Comment MsCreant
MsCreant's picture

Isbumblebee was stark raving out of control. Badisbumblebee, bad!

Tue, 02/23/2010 - 16:24 | Link to Comment El Hosel
El Hosel's picture

 A 1% bitch slap at best.

Tue, 02/23/2010 - 16:03 | Link to Comment Duffminster
Duffminster's picture

Tyler, I agree with your analysis for a short term trading position.  That being said, I don't believe in trading gold and silver. 

To win the WAR of the Gold and Silver market, the black boxes must be put away as well as short term trading strategies in my opinion.   Gold and Silver are the most manipulated markets and they are manipulated primarily through the derivatives markets.   The commercials and bullion banks dominate the paper markets.

When the big funds wise up, they'll unplug their black boxes and hunker down for the unmargined game.  On every Commerical and Quasi-governmental backed raid on gold and silver, they will use that as the opportunity to take delivery of as much physical COMEX and London Exchange based Gold and Silver as possible.   They will take local physical delivery to storage at non-London Exchange Bullion custodian banks and non-US based custodian banks.  This is so that gold can not be used in the derivatives short game.   They will be prepared to sit on that gold through major fluctuations.

Those who finally gain conviction to win the entire game vs. skimming risky profits through technical trading will do so for the following reasons.

1. Gold and Silver never stopped being real money. 

2. Only the continual Propoganda of Governments and Central Banks that wanted to go on a never ending borrowing spree try to promote the idea that gold and silver are not money and that paper currency  backed by nothing but un-repayable debt and a lot of hot wind are "money."

3. Real "Money" can not be encumbered by counter party obligations and even more so by counter parties that are technically insolvent in by every measure unable to meet their obligations on the losing side of the contract.

4.  And because is there only so long that the derivatives house of cards and ambiguos accounting rules and daily perceputal and paper interventions can continue to prop up the illusions they so hope everyone will believe as long as possible.

Gold and Silver ultimately represent real stores of value.  Gold remains below 1/2 of its inflation adjusted high while Silver is below 1/6th of its inflation adjusted high.  No other major commodities are so deeply depressed through quasi-governmental illegal manipulation in my opinion and the very fact that they are so very supressed speaks volumes to the arguments put forward by the Gold Anti-Trust Action Comittee (GATA). 

I continue to believe that silver prices provide leverage to gold prices and I believe the Anti-Gold cartel leverages this constantly.  By the same law of leverage, smart funds, willing to play a longer term strategy based on the conviction of the truth of the fundmental laws of "money", "currency" and "debt" can apply the same leverage by taking as much local physical deliver of silver as possible to non-bullion custodian storage. 

Duffminster

Tue, 02/23/2010 - 16:07 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Duff, I have a friend who is a technical trader of commodities.  I once asked him if he would look at gold for me for possible tech-trading.

He had something interesting to say about gold charts.  They never "worked right".  The kinds of signals that get him to trade (live cattle, etc.) do not seem to work with gold.

Manipulation may be causing that?

In any case, I will just buy the physical gold and silver (and soon: lead!).  I'll leave the short term trading to people who know what they are doing.

Tue, 02/23/2010 - 16:00 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:00 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:34 | Link to Comment RowdyRoddyPiper
RowdyRoddyPiper's picture

Now that is a reason to be short gold! Eric Sprott is one smart cookie and has lots of money...money he made off an IPO of his firm @ $10/share, currently $4.30. His Moly IPO didn't fair well either, $5.00 initial cost to around $1.30 on round up, for investors anyway.

Thanks, I'll pass on this one and am giving serious thought to selling all golds. 

Tue, 02/23/2010 - 16:46 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:49 | Link to Comment dumpster
dumpster's picture

and am giving serious thought to selling all golds

 

you may be serious about selling   but thinking is not one of the strong points

Tue, 02/23/2010 - 16:01 | Link to Comment Shameful
Shameful's picture

Please for the love of God go down! Lloyd if you can hear me use your magic to get this price down! Jamie, short this mother for me please! I need to buy more and I would like a lower price.

XOXOXO
This Goldbug

Tue, 02/23/2010 - 17:19 | Link to Comment Duffminster
Duffminster's picture

Shameful, 

I think on a 5 year time line, you'll see that in terms of current US dollar buying power, that gold is at a long term bottom.   A few tens of billions in physical off take in gold from the exchanges at today's spot prices and just a dozen or so in silver physical off take would break the back of the derivatives manipulators.  The only question is whether the exchanges would ever be able to deliver?  I'd rather be at the front of the line than the back, especially if I was a sovereign nation trying to protect my national treasures.

 

Duffminster

Tue, 02/23/2010 - 17:42 | Link to Comment Shameful
Shameful's picture

Oh I don't doubt you. My situation is I burned most of my savings burn for school. The savings I have which is far more then most people my age is in PMs, but I'm tapped out. So now I must wait for paychecks before I can buy more. So when it comes time to buy I appreciate it if they can knock the price down for me. I've been eying Austrian Philharmonics and want to own some.

Honestly it's my most sincere hope we goldbugs are wrong. I would gladly take a massive unrealized loss on my PMs if it meant a strong dollar. Much as I might dislike FRN system I still get paid and do business in dollars. My "gain" in PMs will be cold comfort while my purchasing power form my salary goes down. This is my insurance policy against the Fed Reserve.

Tue, 02/23/2010 - 16:03 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:17 | Link to Comment jc125d
jc125d's picture

There are other, better, more enjoyable ways to get screwed, don't you think?

Tue, 02/23/2010 - 16:43 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:41 | Link to Comment DosZap
DosZap's picture

Anon#242085,

The question of the day IS?

Will your Bank be still floating in 5yrs?.

Tue, 02/23/2010 - 16:04 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:09 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:08 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:29 | Link to Comment 10044
10044's picture

Nic, one question dude: please let us know how paper transforms into metal. Thanks a lot

Tue, 02/23/2010 - 16:28 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:12 | Link to Comment godfader
godfader's picture

You realize that this does not necessarily reflex a bullish take on gold but merely is the currency the gold share class of his fund is denominated in? If the gold share Quantum investors dumped their holdings then Soros would dump GLD and vice versa. This has (probably) very little to do with a major directional bet.

Tue, 02/23/2010 - 16:51 | Link to Comment Anonymous
Tue, 02/23/2010 - 16:51 | Link to Comment Anonymous
Tue, 02/23/2010 - 18:27 | Link to Comment Anonymous
Tue, 02/23/2010 - 20:01 | Link to Comment Master Bates
Master Bates's picture

THANK you.  Jesus.  Long term, gold might be cool.  Short term, I'd be way careful.

Tue, 02/23/2010 - 17:10 | Link to Comment godfader
godfader's picture

When Peter Schiff goes on bubble vision and says that gold might have entered a bear market and this is more than a regular correction, THAT IS WHEN I LOAD UP AND BET THE FARM. Not before.

Tue, 02/23/2010 - 20:00 | Link to Comment Master Bates
Master Bates's picture

The one sure fire way to make money day trading is to watch CNBS' news stories and see what the sentiment says.

When it says that "stocks may enter a new bull market" you're going to have some downside.
When it says that "investors are cautious" it's time to rally.

I was unsure about the technicals of the market today, but I made my decision it would be down because CNBC started touting the market's praises again.

Tue, 02/23/2010 - 17:48 | Link to Comment Anonymous
Tue, 02/23/2010 - 18:08 | Link to Comment Anonymous
Tue, 02/23/2010 - 19:47 | Link to Comment Master Bates
Master Bates's picture

Why cost average up though?

Tue, 02/23/2010 - 20:24 | Link to Comment Anonymous
Tue, 02/23/2010 - 20:43 | Link to Comment Master Bates
Master Bates's picture

As far as the house goes, the signs were everywhere that this whole mess was coming.  When people need 1% mortgages just to be able to buy a house, the market is too high.
I've seen this recession coming for years, and luckily payed off my debt and saved as much as I could before it hit.  In some regards, I'm lucky.

As far as averaging down, you have a point there.  That's never a smart move.  I still don't know if I would buy more as it appreciated though, but maybe that's where I'm wrong as well.

I bought stocks at the March lows, and sold most of them by May.  Then I was always too scared to get back in, depsite the market going up all the time.  I commend people that have bigger balls than I in that regard.

Tue, 02/23/2010 - 18:31 | Link to Comment hettygreen
hettygreen's picture

At the risk of ruffling a few feathers here, how many of you folks are buying, holding or promoting gold as an investment because you fear:  a) hyperinflation, b) systemic collapse (to include US$ collapse), c) a deflationary death spiral?

Just an informal survey is all.

Tue, 02/23/2010 - 19:17 | Link to Comment boiow
boiow's picture

all of above, +promoting real money

Tue, 02/23/2010 - 19:21 | Link to Comment Anonymous
Tue, 02/23/2010 - 19:31 | Link to Comment Anonymous
Tue, 02/23/2010 - 19:36 | Link to Comment MsCreant
MsCreant's picture

All the above AND I think it is such a nice way to say f3ck you to a system that I had no hand in inventing, which seems to be set up to rip hard working people off.

Tue, 02/23/2010 - 19:57 | Link to Comment Master Bates
Master Bates's picture

That is the one part where we can agree.

I hate this system, and all it would take is the power of the masses to bring it to the right course again.
They may have 90% of the resources, but we have 90% of the power if we stand up.

90% of the resources means nothing swinging from a lamppost.

Until people turn off their American Idol and realize this, nothing will ever change.

Tue, 02/23/2010 - 20:53 | Link to Comment nuinut
nuinut's picture

fuck all chance of that happening anytime soon.

Wed, 02/24/2010 - 14:28 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

middle finger to the face of the doelarr!

Tue, 02/23/2010 - 20:28 | Link to Comment Anonymous
Tue, 02/23/2010 - 22:52 | Link to Comment merehuman
merehuman's picture

Silver. After much research. A good bit.

No regrets at all and dont care where the price goes as i have enoegh (enuf) ?

The only reason i peruse zerohedge is because i am watching the accident as it is happening and this is the best station.

Not an ambulance chaser, its just that real life has taken on all new dimensions.

Until a few months ago 1913, gold, PPT and zeitgeist were not in my mind.

Since the day George said our economy was on solid fundamentals my neckhairs all stood up.

Now there is no longer any doubt that we fell, had a quiet coup long ago.

Incredible to fool several generations of the public by keeping them ignorant!

And so we are now , the bulk of us still ignorant.

Would that the true patriots who understand the game make valid efforts to educate our public.

The responsibility is on all of us who have a conscience and recognize the danger

Wed, 02/24/2010 - 00:10 | Link to Comment Anonymous
Wed, 02/24/2010 - 08:51 | Link to Comment Anonymous
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Tom123456's picture

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