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

Fibozachi's picture




 

Fibozachi

Gold still has an explicit price extension target just overhead at $1152 - $1168 spot, where wave 5 equals wave 1 within wave B (circle) at c. $1152 and where $1168 equals the 1.382 price extension of wave A (circle), which is the most likely extension target for an expanded flat; as per Prechter's "EWP", Neely's "Mastering Elliott Wave" and Nison's "Applying Elliott Wave Theory Profitably.

In stark contrast to the handful of “banks” (staunchly led by JPM) who continue to amass near-record short paper positions (futures), the COT (Commitment of Traders) and DSI (Daily Sentiment Index) each show that public sentiment has reached mesospheric levels; where fast-racing momentum driven meteors “burn up” and die within earth’s orbit.  The Monday evening Short-Term Update from EWI, written by Steven Hochberg said:

".... The Daily Sentiment Index (tradefutures.com) has been at, or above 90 percent gold bulls since November 3, a string of 10 straight days. The only other comparable streak of optimism over the past 22 years of data is leading up to the December 2, 2004 gold high when the DSI was at, or above 90 percent for 20 consecutive days. At that time, prices made a high at $458.70, declined over 10 percent, and did not exceed the December 2004 high again for the next 10 months. But during this entire 20 day stretch, optimism never reached the single day extreme that today did, with fully 97 percent of traders optimistic on gold's future prospects."

 

As for a quick overview of price action within the primary domestic equity and international currency markets ... yesterday’s internal market readings were reflective of only one thing: HFT algos attempting to pin XOM et al. ahead of  OpEx as the DJIA takes decisive leadership across domestic equity markets while the NDX-100, SP-500 and RUSSELL 2K considerably under-perform.  For a more detailed explanation of this concept, please see “Technical Profiles of 8 Key Stocks: AIG, BIDU, CAT, CELG, DRYS, GS, IBM, SKF.

VOLD lame … ADD weak … TICK highly erratic while the VIX continues to coil lower and register serious positive divergences on the weekly.  The $DXY US Dollar Index plotted a new swing low yesterday at 74.68 yet reversed sharply to close well over the 75 handle.   ONLY a 135 minute (1/3 the cash) or 144 minute close above 75.77 will shift the hourly profile from bearish to neutral; and until there are two consecutive closes above 76.89 there is NO uptrend to speak of.  The EURO appears to be initially confirming a possible USD bottom.  Swissie (CHF) and EuroYen (EURJPY) are the next two majors/ crosses needed to confirm any possible US Dollar bottom.  For a more detailed explanation of both the VIX and the $DXY US Dollar Index, please see “Comparing the 6 Primary US Equity Markets, VIX Fibonacci Cycles and the US Dollar at a Critical Juncture.


After plotting a Three Inside Up candlestick pattern on Monday (11/16/09), the @ ES (S&P futures continuous contract, current basis December, ESZ09) shook off a possible Hanging Man plot yesterday at 15:54 and closed with its real body above the daily 610 EMA (1105.40).  This level had not been touched since 5/20/08 at 1412.99; just 1 day after the onset of Intermediate wave (3) of Primary wave 1 (circle) of cycle wave c (we know, it is a mouthful and does sound like gibberish).

 

To regurgitate our chat room thoughts from 11:17 yesterday morning:

'...
don't be caught dead in XOM ... DOW components are going to see a
massive influx of interest over the next few days/ weeks as traders/
investors sell beta and move to the alleged "safety" of blue chips; can
keep running into 1121 IF enough people jump on board the short train
and open new put interest.  There are three singular issues that
traders MUST be aware of - XOM, IBM and AAPL. 


XOM for its
mkt cap weighting and its function across ETFs ... IBM bc of its
massively outsized weight within the Dow Divisor ... and AAPL bc it is the true ringer within the NDX, the NASDAQ 100, at 17% of its weighting (thanks Allocation Committee, really cute) and the
'Cult of Cupertino' is THE cult du jour for everyone's sister, neighbor
and local fast food cashier.
 
As
the equity markets continue their topping process, being led by
currency, leading commodities, lagging the Bond markets and paying no
attention at all to credit spreads or such notably leading metrics as
the Ted Spread ... $$$ will flow into blue chips and $$$ will come OUT
of risk assets and anything beta-driven.  Therefore, for equities this
means that the RUSSELL 2K and NDX-100 will decisively under-perform while the DJIA markedly leads each of its higher beta brethren into a rolling top for all of Primary wave (2) circle.'

Bottom line: it is a scalpers market, best suited for those who work across interval periods of 2-3 mins or the tick. 

Quantifiable inter-market divergences – check

Subtle hints from the VIX, $DXY, EURO, average true range, short-term volatility and extremely low volume – check

A frenetic NYSE TICK (11/17/09) yesterday, which repeatedly touched +900/ +1000 (+1051 high) before plunging to -300/ -600 (-951 low) during yesterday’s session – check

A frenetic NYSE TICK (11/18/09), which today plotted an intra-session high of +1082 at 10:31 and an intra-session low of -914 at 13:26, as of the MOC (market-on-close = the cash close from 15:30 - 16:00) where we attempt to finally put this piece to print after a hectic day – check and check

We at Fibozachi contend that during the last two cash sessions there have been blatantly obvious HFT algo trails of 20 second pulsed basket orders/ flashed futures orders, specifically surrounding non-confirmed TICK induced bear traps.  We firmly believe that this 'market' is NOT structurally sound and that anyone who remains an "investor" ought to weigh their effective risk/ reward at this extremely high probability juncture of time, price and sentiment.  Yesterday (11/17/09), marked the exact 50% time extension of Primary wave 1 (circle).  In addition, yesterday also marked the exact calendar day where (Y) = 1.618 the time component of (W), within the double zigzag structural composition of Primary wave 2 (circle).

 

Boiled down to its base elements ... Predatory algos, which are distinctly different from the Pips-Hunter family/ type of EA/ strategy are basically just using what THEY know YOU are using to help screw you by forcing your "technical" trade, which is based on specific parameters.  Either click this sentence or gurgle “PrizmaL interview” to read about the the winner of the 2008 Automated Trading Championship,  in one of the most uniquely vague and oddly fascinating design developer interviews that we at Fibozachi have had the pleasure of reading.  We have provided some of the interview's most pertinent snippets below.

 

Interviewer: Vladimir Lekhovitser (PrizmaL) didn't wish his photo to be shown now. He explains his position as follows:

 

"I am not superstitious, but there are certain natural laws I try to follow. For example, I think that it is really possible to manipulate or to change the fate of a person imaged in the photo". However, in case he wins, he promises to send us a picture of him holding the prize. Vladimir works in the Software House Kaful FS, a company that develops and codes AI (Artificial Intelligence) for automated trading on the markets of Forex and Futures. The company has developed over 70 profitable trading systems since 2004."

Interviewer: Hello, Vladimir. Could you tell us about yourself, please? What is your education? What do you do?

"I don't think a formal education influences the man's way in life. It is the society's stereotyped world-view which just doesn't exist for me at all. I can give you many examples that break this world-view: It's sufficient to read the biographies of eminent persons or have a look at the statistics of the disasters the persons responsible to which were well-educated constructors or specialists in certain fields of science. There are talents and there are swots. A person who is connected to the "bank of ideas" is well aware of his or her capacity potential and goes in for learning something he or she would love to do in life. I'm an autodidact, so I make my decisions considering the voice of my soul or my intuition. Knowledge and information come to me by my request, I only should find and interpret them sometimes.

I submitted to ATC 2008 an EA I developed together with Mr. Shay S. We represent the Software House Kaful FS, a company concentrated on developing and coding AI (Artificial Intelligence) for automated trading on the markets of Forex and Futures. Our company has been existing since 2004, and today it employs 14 persons. We try to find some structures that suit us to obtain ideal results in our work. For this purpose, we use various tools, programming languages, all kinds of analyses, strategies and systems. During this time, we have accumulated in our arsenal over 70 stably profitable trading systems coded on different bases.

 

.... It is a normal phenomenon - the "cloud" of an idea is spread widely.
Those adjusted to certain waves can get the same idea simultaneously,
like it was with that of radio or telephone.

 

.... As to our EA, PrizmaL, it belongs to the family of PH
(Pips-Hunter) strategies. Those comparing it to scalping, or pipsing,
are mistaken. Perhaps, they lack information or experience in trading.

 

The main difference between those systems is that a quality EA based on
a scalping strategy observes the price changing bar and catches price
leaps up or down. Once having recognized such a leap, the EA opens a
position in the direction of price changing or in the opposite
direction, according to the trading idea it is based on. There is
another, cruder alternative for trading by scalping: It differs from
the first one by that the EA tries to open dozens of positions within a
relatively short period of time. However, no broker would allow such
trading. Both versions of this strategy have similar disadvantages.
Testing such EAs in the Strategy Tester, you shouldn't rely on their
results. The reason is the logical code of the program, which attempts
to overcome the file of historical prices, that's all. This situation
vividly shows the relationship between an EA and the Strategy Tester.
The Tester doesn't, basically, give troubles processing the requests of
such an EA and allows it to open technical positions differing from
those of real trading. That was many times tested by comparing the
results of real trading to those obtained from the Strategy Tester for
the same period of time."

 

Interviewer: In the description of your
contest EA, you wrote that 17 external parameters had been used in it.
Many people (including the well-known authors of books on technical
analysis) believe that such a large amount of parameters is an evil and
may result in fitting the trading system to history. How would you
comment on this?

"I respect people writing books on the topics they don't work at in
their life. 17 versions of parameters were obtained during
optimizations for the 10-year history, which have been bringing us
profits on real accounts for a long period of time. Fitting means the
setting parameters obtained within a short-term optimization on history.

 

.... There
is no ideal trading at all. We have many strategies that hunt hens,
too. I chose this strategy for the Championship just because it was the
best one considering the conditions published in the Championship
Rules, and because it produces stable profits without hoping for a
chance.

 

It is impossible to give an accurate estimate of a trading system without knowing how it behaves ....

 

.... I
never comment on people or their work - it doesn't produce anything
constructive or useful. I'm ready to use my time for enjoying the
results of the work, no matter mine or others'. Radiating negative
emotions always implies a destructive element. On the forums of and in
discussions about the Championship, in the topics devoted to trading,
traders often talk about that their EAs are good, but not often
profitable: either entering was ok, but closing failed, or flat started
and his EA is unlucky on flats; or something happened and the price
upset all StopLosses; or today their EA shows itself in all its beauty
and tomorrow it omits closing a profitable trade and takes only the
rests; and those whose balance charts are moving up accurately complain
of that their EAs don't work on real accounts. A depressing picture.
The vector of these traders' intentions is initially doomed to failure.
And it is not important how much time they would spend on sitting and
studying speculations on markets. There are traders of two types only.
Traders of the first types are those whose thoughts of their EA working
on their account or of their open positions makes them feel that the
ground is slipping from under their feet, which at best results in
stagnation. Traders of the second type are those just enjoying the
results of their work."

 

Interviewer: If ATC 2009 takes place, what EA would you submit: the same one or another one?

 

"We are developing a system now the indicator of which
should be connected to ESA (European Space Agency) or, more
specifically, to Kopernikus GMES. This indicator can get information at
first hand. It will be connected directly to a space fleet of various
sattelites informing about forthcoming crises on the Earth. This will
be like getting weekly weather forecasts from meteorologists. Having
such information, the indicator can inform us about forthcoming changes
on the market before the crisis starts affecting it. This indicator
will probably accompany other trading ideas that you may get to know on
the Championship in 2009."

 

There is a voluminous list of burnt "strategies,” which are so glowingly radioactive that they make Derek Jeter's ‘blazing copper’ Ford Fusion look like Sammy Sosa's pigmentation.  A quick list of basic (read: crappy) 'strategies,' which kill retail traders and boutique firms alike, includes:

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.

 
Low volume baby trend days, like the past two, typically crush retail speculators/ options traders who aren't taking high probability scalps of 0.5 to 1.25 ES points or say a single dime within the Q's (QQQQ) or CL (oil futures) but rather are looking for swing trades of 50 - 100 YM points (DJIA futures) or 2-5 points on Goldilocks (GS) and Gurgle (GOOG). 

To summarize basic price action from today’s session: 144 min $DXY showing POSSIBLE inverted H&S ... after registering a Bullish Engulfing & Tweezer Bottom candlestick pattern this morning, closed 10:24 at 75.00, the very next candle, closed 12:38, plotted a Hammer with a Tweezer Bottom whose low was 75.01.  The greenback's technical profile remains squarely bearish until 75.10, 75.23 and 75.36 are achieved on the hourly whereby those levels must then begin the process of morphing from resistance into support on either the 135 (1/3 the cash session) or 144 (Fibo) minute; those are the levels right now for the 144 minute.  A daily close OVER 75.62 and 75.77 would be a VERY, VERY strong initial signal of a POSSIBLE bottom by breaking both the latest downward sloping trendline and price channel, which, unlike either Ralph Waldo Emerson's "Concord Hymn" (Panic of 1837) or Bobby Thomson's pennant winning walk-off homerun from 15:58 on October 4, 1951, will NOT be a "shot heard 'round the world." 

 

Strong positive divergences within the $DXY US Dollar Index continue to abound across innumerable technical methodologies; and even if this recent bout of nimble short-covering turns out to be but a small fourth wave upward retracement before testing an extremely strong band of lateral multi-year support between 74.46 - 74.50, with an initial downside overshoot target that surrounds 73.80 ... we at Fibozachi firmly believe that the $DXY is on the cusp of a 6-16 month, hellaciously impulsive jaunt higher towards a first target of 81 - 84 and an ultimate target of 93- 96 with the outside possibility of a parabolic overshoot that reaches 103-107.  Much as gold could exhibit a similar blow-off move to the upside ($1340 ish) over the next 3 to 5 weeks should it blast through a target that surrounds $1168.  As per the far-reaching ramifications of a significant US Dollar bottom across global equity, bond, currency, commodity and credit markets: consider yourself forewarned !!

 

As always, we hope that this quick overview is helpful and thank you for taking the time to read our thoughts.

 

Disclosure: no positions held overnight;
anticipate becoming long the $DXY and short ESZ09 once a multiple confluence of proper trading signals confirm themselves

 

For similar technical takes, market calls and insights, please visit our brand new website, www.fibozachi.com
There, you can view both our complete body of analytic work as well as
detailed explanations of the unique design development and technical
methodologies within the proprietary technical indicator packages that
we use daily to perform a comprehensive technical analysis of stocks,
options, ETFs, futures and FOREX across interval periods of time, tick
and volume.

 

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Fri, 11/20/2009 - 03:13 | 137036 Anonymous
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

Fri, 11/20/2009 - 16:29 | 137748 Anonymous
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:

http://www.cnbc.com/id/34038650

http://www.cnbc.com/id/34034385/

Fri, 11/20/2009 - 21:38 | 138032 Chopshop
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.  

Thu, 11/19/2009 - 07:32 | 135608 Anonymous
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.

Thu, 11/19/2009 - 02:02 | 135552 time123
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. 

time123

http://invetrics.com

Thu, 11/19/2009 - 12:34 | 135822 FreddyInBangkok
FreddyInBangkok's picture

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

Thu, 11/19/2009 - 01:41 | 135534 Gordon_Gekko
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.

Thu, 11/19/2009 - 05:37 | 135584 Chopshop
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 !

Thu, 11/19/2009 - 07:09 | 135598 Gordon_Gekko
Gordon_Gekko's picture

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

Thu, 11/19/2009 - 07:25 | 135607 Chopshop
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. 

Thu, 11/19/2009 - 04:50 | 135578 Anonymous
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.

Thu, 11/19/2009 - 00:53 | 135509 Grand Supercycle
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 ?

http://www.zerohedge.com/forum/market-outlook-0

Thu, 11/19/2009 - 00:21 | 135488 fresbee
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".

Fresbee
Am a writer at investing conrarian

Thu, 11/19/2009 - 00:49 | 135506 Fibozachi
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. 

Wed, 11/18/2009 - 22:38 | 135439 Comrade de Chaos
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.

Thu, 11/19/2009 - 01:43 | 135535 Gordon_Gekko
Gordon_Gekko's picture

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

Thu, 11/19/2009 - 22:10 | 136792 Comrade de Chaos
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. 

Wed, 11/18/2009 - 22:06 | 135421 graspthemarket
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. http://www.graspthemarket.com/articles/20091115a.php

Thu, 11/19/2009 - 04:42 | 135577 Anonymous
Anonymous's picture

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

Mon, 11/23/2009 - 00:37 | 139048 Anonymous
Anonymous's picture

I updated more comments about silver and posted them here. Anything to help in figuring this whole thing out.
http://www.graspthemarket.com/articles/20091122a.php

Wed, 11/18/2009 - 21:53 | 135404 Paul E. Math
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.

Thu, 11/19/2009 - 00:00 | 135473 ChickenTeriyakiBoy
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.

Wed, 11/18/2009 - 22:26 | 135426 Howard_Beale
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!)

Mon, 11/23/2009 - 21:44 | 140088 Paul E. Math
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.

Wed, 11/18/2009 - 21:16 | 135366 delacroix
delacroix's picture

northwest territorial mint

Wed, 11/18/2009 - 21:11 | 135357 Anonymous
Anonymous's picture

Sir, like your analysis very much. Thanks.

Wed, 11/18/2009 - 20:26 | 135293 loki
loki's picture

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

Would you assay it?

Wed, 11/18/2009 - 22:28 | 135435 Uncle Remus
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.

Wed, 11/18/2009 - 21:23 | 135376 Anonymous
Anonymous's picture

apmex

Wed, 11/18/2009 - 21:04 | 135348 Howard_Beale
Howard_Beale's picture

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

Wed, 11/18/2009 - 22:09 | 135425 deadhead
deadhead's picture

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

Wed, 11/18/2009 - 22:28 | 135427 Howard_Beale
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.

Thu, 11/19/2009 - 01:45 | 135538 Gordon_Gekko
Gordon_Gekko's picture

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

Wed, 11/18/2009 - 22:58 | 135451 deadhead
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. 

 

Wed, 11/18/2009 - 23:46 | 135468 Howard_Beale
Howard_Beale's picture

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

Wed, 11/18/2009 - 21:21 | 135369 delacroix
delacroix's picture

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

Wed, 11/18/2009 - 21:42 | 135393 Howard_Beale
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!  

Wed, 11/18/2009 - 21:08 | 135355 loki
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.

Wed, 11/18/2009 - 21:59 | 135409 Howard_Beale
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.

Wed, 11/18/2009 - 21:16 | 135367 bilbert
bilbert's picture

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

Wed, 11/18/2009 - 21:01 | 135345 Anonymous
Anonymous's picture

franklin sanders moneychanger

or

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....

Wed, 11/18/2009 - 20:24 | 135289 Cursive
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?

Thu, 11/19/2009 - 23:34 | 136894 Fibozachi
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.

Wed, 11/18/2009 - 23:41 | 135466 Chopshop
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.  

Wed, 11/18/2009 - 20:14 | 135280 Cursive
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.

Wed, 11/18/2009 - 21:56 | 135399 Fibozachi
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.

Wed, 11/18/2009 - 20:07 | 135273 Anonymous
Anonymous's picture

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

signed

silver bug....

Wed, 11/18/2009 - 19:48 | 135248 RobotTrader
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:

 

Wed, 11/18/2009 - 19:55 | 135257 Fibozachi
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.

Wed, 11/18/2009 - 20:25 | 135290 RobotTrader
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.

 

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