Gold vs Silver, the US Dollar vs Gold and the US Dollar Index

Fibozachi's picture

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Anonymous's picture

lets sick to the topic at hand and with gold and USD as the inverse correlates that we all know them to be the play is there, take advantage now before the arbitrage opportunity in the correlation deficit is not possible post-Q2'11 - JD

Anonymous's picture

Not so interested in the TA gibberish, with Elliott
Waves etc so many windmills of the mind.

However, headlines like these make me want to fade
the trade:

Chopshop's picture

thanks for reading Anon ... as per TA: to each their own.

And thanks for underscoring a point/ joke we often make ... traders who analyze competing technical methodologies across an analytical foundation of E dub versus casual investors watching television ... Criminal Narrators Boosting Crude, no less.  

Anonymous's picture

VWAP (lol);

TICK divergence;

ADD/ VOLD/ TICK/ VIX derivative ratios;

intra-day trendlines;

any Bill O'Neil (IBD) pattern;

intra-bar breakouts across small interval periods of either time, tick or volume, which are extremely susceptible to stop hunts when the wick of a candle triggers obvious sell/ buy stops while its real body closes well away from the assumed line of demarcation;

Elliott Wave by its lonesome;

almost any/ every standard indicator/ oscillator with default settings ... and this just barely scratches the surface of basic, secondary conditional filters, which make easy fare for Predatory algos.

This is so true, have been there and done that, they just don't work when programmed and tested.

time123's picture

Gold upside is totally dependent on the dollar. But notice that for the Europeans all this rally we have seen in gold prices is actually much less. 


FreddyInBangkok's picture

that's true with one exception $GOLD:$XBP up 338%, $GOLD:$USD 332% - (ZAR 464%)

Gordon_Gekko's picture

Exactly how much money does Steven Hochberg manage? Right. It's funny how the very people who didn't see this move in Gold coming - and, in fact, were proclaiming a move down to $600 no less - are now proclaiming how it's a bubble/mania about to implode. To me, all the Prechterites/dollar-deflationists fall in the same ignorant category as the likes of Ben Bernanke.

Chopshop's picture

GG ?? Of all people ... thought the name of your game was 'the power of information.' 


I don't work for or have an affiliation with them but apparently have become the unwillingly anointed defender of.  Clearly, a few people out there find the work of the world's largest market forecasting firm worthy.  You don't buy TA; it doesn't work for you.  Great.  By your comments, you clearly miss the point of noting such metrics and measures.  That's fine, but why ya gotta dump on that which you just don't like; because point blank, you are dead wrong about what you think above.  Can not/ will not speak to whether SH trades but would be more than happy to put on a show and disprove damn near any claim of TA doesn't work, EW is stupid, Fibonacci means nothing.  The books most read aren't from traders/ design developers, they're from career anal-ysts who write for a living and live in the right yesterday.  Such is why we try to highlight valuable insights from design developers for folks to see.  If you trade, run a book, oversee a group list or are anything like your namesake, I would have thought that you would enjoy learning of PrizmaL; rather than just poorly bashing E dub and bobby prech's, again (for the record RrP does NOT trade, he swings only and is worth a filthy, filthy sum ..  Van Tharp, in his latest newsletter, talks about how he plays poker for fake money and after an evening might do so well that he actually earns $2 out of nowhere.  Re-read the interview ... I like highlighting those who correctly bash the living crap out of the mainstream piece of crap media and disgusting sell side complex which is more contaminated with filth than the water park from the most recent South Park.


It is funny how the very people who didn't see [insert a-z cubed] coming - and, in fact, were/ are/ and will always continue to proclaim that a move up to infinity is coming based on their emotions and feelings.  


As for inflation ??  Let me know when and where you find it, ok?  3/13 month M2/ staggered M3, hell recreate your own M5, you simply cannot counter with a valid argument that does not shortly resort to, 'yeah, but. it's coming. you'll see. just you wait. in a flash, soon.'  


What is so difficult to see/ understand about how targeted inflationary pressures can be used as simple ropes to hold back the brunt of deflation and obfuscate underlying realities ... everywhere.  The all-encompassing belief in the power of the shiny, metal thing that you can't eat and which has zero intrinsic value outside of that which is imbued upon it ... by what ... how you/ we feel about it.  


Bottom line: u crap on RP, while clearly not being familiar with his work.  EW is not for everyone; TA is not for everyone and that is cool, but why muddy waters without any merit to you argument(s), especially when you clearly do not practice or understand.  

And Uncle Ben is a moron ?  Really now ?  Look, Tiny Tim is decent enough, not good but certainly decent and Greenspan was a true hustler's hustler (suggest you examine his statements of last few years a little more closely) ... but Bernanke ... ohhh sweet Uncle Ben was born and bred for this very part.  His entire modern career has been spent fostering a rock-solid image of Textron-ity ... he gave himself his own nickname.  He has everyone so thoroughly confused and misdirected as to intention and direction right now as per $USD and QE tightening.  The BoE's Mervyn King explicitly such a CB playbook tactic some 5-7 year ago. 

Wanna get fundamental .. look 3 Q's, 5 meetings forward and write the FOMC minutes ... what do you see?  Ahhh, #'s are needed. Fed-Treasury policy is a battleship that takes time to turn; especially since the Fed doesn't steer the ship they just talk about the alleged "reasons", while keeping the public fixated on the back door and walking right out the front, paintings and piano in tow. 

Good spirited give and take: I'll raise my shield and await the next sling of hyper-inflationary arrows and 'slams' toward various technical methodologies and those who practice them publicly.  No offense GG, but I stand up for my ilk and don't take kindly to unwarranted slaps in the dark towards my friends.  When I/ we botch a call here I fully expect to be held to it, such is partly why I/ we are so rigorous in our work ... that and we actually do it each day, every day.  Talk atcha babe !

Gordon_Gekko's picture

Whoever said I don't buy TA? I find it extremely useful, to say the least.

Chopshop's picture

You are a fictional idol of mine GG and your posts clearly show a high intellectual prowess so I naturally jump atcha more than most, especially in the name of E dub.  I always tell folks  ... do NOT bother looking at it for years and firmly believe that is has killed infinitely more followers than helped effective practitioners.  And believe you me sir, I am RIGHT there alongside you when speaking of those who write about lame vagaries yet have no skin in the game or a clue where to start.  

On a lighter note ... man is it fun watching the off-peak hours advertisements for gold, make 1000% on this guy's picks and my new favorite ... "you are about learn the secrets of technical analysis"... that one gets me every time. 

Anonymous's picture

A harsh comment, Gordon. And not befitting a man with your professional credentials.
Markets go up as well as down. Keep physical gold for a rainy day, it makes a great paperweight!
But if you are still sitting on physical with the market at $1150, you either got into this trade very late, or you are not a wise trader.

Grand Supercycle's picture


Bearish warnings for the DOW / SP500 / EURO daily chart continue.

Bullish warnings for the USD index / VIX index / USDCAD / USDCHF on the daily chart continue.

I am still expecting a USD rally.

Is the bear market rally from March 09 ending ?

fresbee's picture

Robot trader, Thank you. great perspective. Gold is moving to a quick fast blowout phase. No doubt about it. Silver may too follow.

What am not able to understand is dollar having a multi year lows at 74 ? I dont think it is multi year low at all and it will go down to 72ish...before some strong bounce which will take it back to 80is. This bounce will not be like a fundamental bounce but a pure short covering based, the likes of which we saw in Pound a few weeks back. 1000 pips in a lil under 10 days rallying on no fundamentals at all. You must understand dollar role has diminished greatly and there cannot be a gold rally and a dollar rally for the simple reason that there cannot be two reserves in place. Even when Gold was at 800, dollars high were 85. How will dollar be at 100 when gold reaches 1300? World does not have that kind of liquidity. And then there is EURO which also has sucked some of the liquidity away from the dollar. So dollar reaching 100? impossible. I mean the charts can be looked at any way...technical charts are at the end of day "An art work" and art is to be best understood as "beauty lies in the beholders eyes".

Am a writer at investing conrarian

Fibozachi's picture

Just because I have no idea how to speak or read Russian does not allow me to say that 'Russian is stupid and doesn't work'; simply because I don't understand how or why it is constructed. 


As for gold and the USD, the two of them are the only two 'normal' inverse correlates that could/ can move higher in lockstep during the initial kickoff phase of the next leg down within the full-blown deflationary depression that lays before us all.  That said, we firmly anticipate that within the next 2 - 2.5 years (with a huge red circle around Q3 2011) that the USD and precious metals will confound the living hell out of most market participants when they do begin to move together while the vast majority of individuals refuse to acknowledge/ cannot understand the actual nature of the USD and its inherent role ... long story short: anything can happen and our job as technicians/ traders during peak market hours is simply to respond to what the market itself presents us and to listen to what that 'the market' and all those squiggly lines on our screens whisper to us. 

Comrade de Chaos's picture

I just saw info that GLD & similar precious metal funds are taxed @ 28.5 instead of 15 on the lond term capital gains. 

Apparently those are collectibles rather than your average investments. Yet there is another reason to praise our "ingenious" tax code.

Gordon_Gekko's picture

Or you could just buy physical and keep your mouth shut.

Comrade de Chaos's picture

the transaction cost for physical will make your haircut even wider. I am nether long nor short gold. I was just surprised by the special treatment of gold/silver investments. 

graspthemarket's picture

I think silver is more telling than gold in terms of the US dollar.  I discuss my point here.  scroll down on the page to read the article about my view on silver.

Anonymous's picture

Very clear and concise. We appreciate you posting this comment.

Anonymous's picture

I updated more comments about silver and posted them here. Anything to help in figuring this whole thing out.

Paul E. Math's picture

I'm a newcomer here and I do a little trading myself so I don't mean to sound preachy or presumptuous - but in what way does all of this technical trading contribute to the economy?

While other people are actually producing tangible value, aren't we just skimming off a little piece of their labours without contributing anything ourselves?

I just see a bunch of really smart people who are applying this intelligence in a way that benefits only themselves.  Please help me understand why this is not the case.

ChickenTeriyakiBoy's picture

i could offer some arguments about the social utility of price discovery, liquidity, etc.


but i'll spare you. i'm not going to help you "understand why this is not the case." because this is the case. and there's nothing wrong with it.

Howard_Beale's picture

Were you looking for the next Google from a financial blog?We are all collectively trying to survive what we perceive to be a serious global financial problem--for our own benefit, yes. Many of us are technicians but there is plenty of fundamental data presented here. It is not for the greater good, it is for our greater good as a community. We make our own decisions based on a plethora of information presented in a myriad of ways. We aren't China yet, Paul. This site is for those that want information that is not available elsewhere that allows us to make intelligent choices in a world gone mad. We are not in the widget making business. Let me add that the labors that make this site are not small or insignificant. There is plenty of productivity here.

(wow that sounded good with a 101 fever!)

Paul E. Math's picture

Hey, I appreciate the response, thanks.

I also appreciate Zero Hedge and have come here only after having read Tyler Durden on seekingalpha for a few months and noticing that he doesn't post there as much (if ever?) anymore.

I agree with the general take of this blog.

It seems to me that arming yourself with information, trying to help others and trying to preserve what value you've saved is valid.

Spending hours studying patterns in charts, though profitable, is much more questionable.

I do not have a clear conscience about using my intelligence, not to create value that I exchange, but merely to gain advantage over my less intelligent and ambitious brothers and sisters.

Anyway, thanks again.

delacroix's picture

northwest territorial mint

Anonymous's picture

Sir, like your analysis very much. Thanks.

loki's picture

Was wondering..  where would you feel safest buying physical gold?

Would you assay it?

Uncle Remus's picture

Have purchased from Bullion Direct and Northwest Territorial Mint. The latter is slow to ship, but they do.

I purchase from APMEX - order online and pickup at their store in Edmond as a pass through.

Howard_Beale's picture

From the sick bed--the safest place to buy personal gold is in person with the car parked nearby.

deadhead's picture

i'm saddened that you're in the sick bed Howard....i hope you are out pronto!!

Howard_Beale's picture

It's a campground now. Haven't traded in 2 weeks. Thanks for caring. I miss the banter and fun and would love to really be able to watch the options market but I can't. Braindead. I'm feeling a bit perky tonight but I slept 16 hours and am already getting ready to rest again. Hope you and your family are well, DH.

Gordon_Gekko's picture

Get well soon Howard. Our best wishes are with you.

deadhead's picture

you are wise to stay away and get your rest to get back up to speed.  the options market will continue to do their best to screw everybody so nothing has changed lol!

your "fav" bank can't seem to get lifted at all from its current level....i still think obama may consider jd for the treasury job. 


Howard_Beale's picture

In the voice of Eric Cartman: Timmay is a douche! Jamie is just another douchestitute for that crazy helicopter pilot!

delacroix's picture

Howard,  gatorade and chicken soup, deep breathing and warm showers. I feel for you. the bug hangs on like a limetick.

Howard_Beale's picture

Thanks delacroix--I've had enough organic chicken soup to last a lifetime but I'm still craving it all the time. Talk about a limetick--my caretaker looks at me and says nice things like, you are a little less green today. Yay!  

loki's picture

Hope you feel better!   Would you buy from a site like APMEX?   I got a bit from them a while ago.. seemed easy enough, but I want to buy more.. I don't know any dealers, let alone reputable (in person) dealers.

Howard_Beale's picture

I have never bought online but do you hold physical possession from APMEX or is it in a depository? Do they charge for shipping direct to you? Most dealers, even small town, will ship direct for no cost.

bilbert's picture

APMEX is good, Tulving is good, Northwest Territorial Mint is good - take your pick.

Anonymous's picture

franklin sanders moneychanger


bullion direct
austin texas

on coins fakery is not a problem yet .........and i do mean yet....

it might at one time but inho the coin situation is a lot different than the 400oz bar situation....

Cursive's picture

Also, since you mentioned Neely, I heard that he issued a late-day call to go long.  Can you confirm and what are your thoughts on it, if so?

Fibozachi's picture

Anyone have an update on those long calls from yesterday ??  Long dollar, short gold/ silver/ S&P on the basis of actual trading signals worked out pretty well. again.

Chopshop's picture

While his book is great ... we don't follow Neely or his rogue NEoWave interpretation of Elliott.  That said, I think that he actually trades, unlike the vast majority of EW practitioners who count squiggly lines til the cows come home but never address the actual trading issues of timing, execution and management.


At 22:41 the ESZ09 is right back to 1104.5, once again.  

Cursive's picture

Uh, the ATC algo thing is a bit over my head, but I agree with your basic thesis.  I, too, am waiting on the "surprise" unwind of the dollar carry trade.  This question, however:

Can you explain a bit more the 20-second pulsed basket orders to induce a bear trap?  Is this a day trading bear trap?  Because I'm thinking longs are picking up nickels in front of a steamroller at this juncture.

Fibozachi's picture

Absolutely, Cursive ... if you can bear with us for a bit as we finish up client calls into 10/ 1030 EST, will sift through today's chat logs and put together a good example or three with snapshots (hopefully by midnight EST) so that it/ we  can make visual sense as well.


At 8:31 EST / 20:31 "market time" ... the ESZ09 is right back into mid-afternoon congestion at 1104.75 and about to attempt a baby bounce on the back of small lot retail short covers since 1104.50 just held with a clean subminuette five down that looks like a clearly subdivided mini iii.  Watch for wide-range 1/2 min candles whose real bodies form either an out-sized Marubozu  that bullishly engulfs the real bodies if not the entirety of the 2-4 prior bars  OR  a string of 2 consecutive (or 3 out of 5) Hammers. 

If your charting platform provides access to charting methodologies such as tick bars, volume bars, M bars (momentum) and Kase bars ... each are much, much more accurate and robust than arbitrary interval periods of time; especially in the after-hours.  Oh, almost forgot ... set up a simple (+) and (-) DMI, ADX and some sort of Bollinger Band-ish measure of average true range and short-term volatility on that quick chart setup ... and if you have access to a Matrix order screen, then set up two distinct workspaces side-by-side with the exact same interval period and technical indicator/ oscillator setups where one employs 'candlestick with trend' on either time, tick or volume (if not offered, classic 'candlesticks' are still good) and another trying out either momentum or Kase bars on the exact same interval period.  At 20:50 , ESZ09 is up into the underside of initial rez at 1106.50 ... long scalp now flat into target here and done for evening; should 1/2 min DMI stay pos and push higher here, signaling another point or two then 1107 & 1108 will likely cap anything before Asia opens (20:54).   Hope that helps a bit.

Anonymous's picture

do i have to read all of this...?


silver bug....

RobotTrader's picture

World record volume on new price breakout on Silvercorp:

Next big gold to move might be HMY:

Note the huge volume thrusts off each low, the last one being Nov. 2.  This is a classic "falling axe" pattern that morphs into a huge price breakout after a 3 month accumulation phase.

New closing highs on Minefinders:


Fibozachi's picture

Thanks for the heads up RobotTrader !

We're big fans of your work, love your style and certainly hope that you get a kick out of our take today.

As always, we would love to start a technical conversation about not only trading within today's hyperactive financial markets but also about how to best identify, isolate, time, execute and manage ideal trades across various technical methodologies.

RobotTrader's picture

Nah, most of these Wall St. methods are too complicated for me.

I mainly just buy off 50-day support or buy nipple bottoms, then let them run for a bit.

I never try to pick tops, I just scrape the cash off the table when I make some decent coin and wait for another setup.

I'm still holding SVM and IAG from a month ago, but unloaded half the position today.

Simpler for me to be a nimble hit and run trader than to get too complicated with the slide rules and waves and stuff.

I make a living at this, so I have to be out of the market more than I'm in, so I just wait like a Goldman Crocodile, wait for some setups, and take my money and run.

If the trade doesn't work, I'm usually out within 2 days max.