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Morning Gold Fix: September 15 - At Crossroads
Submitted by FMX Connect
Daily B-Bands widen ever so slightly- but that is all that you need.
The
bottom Band on the Daily chart widened intraday yesterday and we picked
up an extra $12.00 on the upside, essentially letting gamma run on our
buys from the previous 2 days. The question for today is: If the market
pulls back, do you buy it? The short term evidence is mixed. Yesterday’s
new highs did not bring confirmation in the RSI. At this point I’m
still more likely to buy into strength for day trades than dips. If the
bottom line on the weekly chart capitulates then I’m a dip buyer. For
now, stay aware that this could very well be the pump and dump many have
warned about. If you buy dips, consider stop outs below the 20 day
moving average as dictate d by the B-Band signal. Volatility is
expanding. Trade less contracts with wider stops and you will have a
forgiving market with multiple opportunities to make money. Or you can
be long gamma like us.
Volatility breathes in cycles. Already
today it shows the bottom band tightening a little, but that will change
intraday. Ignore it until the close. Ranges will increase in scope, and
direction will be definitive. Again, we are NOT buying dips yet. We may
miss opportunities, but it is not worth the wash out risk.
Implied Vol was out over 1% in Oct10 sloping down to .5% in Dec 11
Options
told the story once again. As funds came in early and often buying
calls, call spreads and butterflies while some Dealers scrambled to get
their Gamma back before “something happened”. This is significant
because since GLD became the dominant vehicle for gold investment, the
options market has behaved in a decidedly put skew manner. Meaning
implied vol would often decrease in a rally and increase in a fall.
Yesterday was not the case, and we suspect several large market-makers
and dealers have some upside exposure. The call skew is confirming this.
Much to our joy, funds are no longer buying the 1 option in back
spreads. This translates to a fearful upside. Furthermore, in the GLD
product, the call selling is drying up, making it hard to spread Comex
shorts against GLD longs. Which we think is totally backwards since being long Comex gold has less counterparty risk than GLD, but that is another story.
Our Sprott Indicator
Recently,
Eric Sprott has stated that Gold could be in the beginning of a
parabolic move. We hope he is right but cannot act on the statements of a
man with a product to sell, as good as that product is. Nobody can ever
be truly objective. As stated before, here and here,
at the beginning of a move, the B-Band volatility tool is the best way
to gauge breakouts we have seen. Unfortunately they do not consistently
serve well for exits, at least not for us. Look for that lower band to
drop and you’ll be happy you did before you pile on the longs.
As
for our fund, we are lightening our load in AU, NGD, and GDX, but
remain long and getting longer Gold short dated and long dated
straddles. And if all this options talk is putting you to sleep, look at
the open interest this morning. If it went up, that is a good thing. If
it decreased in the rally, be careful if you are long. For Market Prices Click Here
-Vince Lanci
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Trading is a tricky since this is a rigged market.
But sticking to buying physical gold and silver when manipulators drop price a bit, is good long term strategy for later stages of our lives.
How's this for physical,
from numismaster,
In another interesting development, a buyer of a COMEX gold contract for delivery in September 2009 just received confirmation that the physical gold has finally been posted to his account.
Apparently, you only have to wait a year for COMEX physical gold.
thats his temp short position talking. he s upset the normal manipulation is not working. turn around george, the hoards are here
Maybe its just me but the "Sprott Indicator" chart directly above does not seem to support Vince's TA.
At the band's widest peak in March of 09, the gold market corrected. At its narrowest in Sept 09, the market rallied. At the next widening in Dec 09, the market again peaked only to narrow by April and the market rallied again. The bands widened in June and down went gold.
Using this logic, the current narrowness of the spread between the bands leads me to think the gold market is ready to blast forward again.
I noticed that too. Not that I understand it all that much but it looks when it narrows like that it is poised to rally?
Man that chart is just screaming. Buckle up i'm headed to 1450 before crashing back down to 1390.
Tyler, thanks for posting the Daily Comics. I could not start my day without them.
As Carmine Jr. said..."We are at the crossroads of a great precipice."
Some more thoughts on the subject:
Precious Metals Outlook: Another Watershed Event, Once Again Ignored by Traditional Media Outlets, Propels Gold & Silver Prices Higher @ http://tinyurl.com/2b9su77
These posts might be useful for those who try to trade paper gold. For anyone else probably not.
Can't trust Sprott because he has a product to sell?
How about we can't trust this drivel because you guys are always wrong and have absolutely nothing to offer?
+++
Eric, duuuuude, how ya been? Get a cute avatar, join the conversation.
"Recently, Eric Sprott has stated that Gold could be in the beginning of a parabolic move. We hope he is right but cannot act on the statements of a man with a product to sell, as good as that product is. Nobody can ever be truly objective."
Vince, Eric Sprott is an excellent businessman and a self-made billionaire and if you've ever heard him, he's clearly one of the most honest and decent people in an industry full of lying, thieving crooks.
I need to ask you if you ever plan to address how the clearly documented naked short selling of paper PM futures figures into price action and market trends. Your analyses never include this factor and it's one that can render charts useless. It's the Bull elephant in the room you and Liz evidently share.
Seeing how you have concerns about Sprott's objectivity, you should know that many folks on Zero Hedge have concerns about FMX's. Not addressing the real issues behind our concerns only makes it worse. As a daily reader I'd say your credibility is down 50% lately.
Why are you both so afraid to discuss what's already known by so many?
+++
The emphasis should be on silver; industrial demand is up (Chinese quadrupled their purchases last 12 months); mining production down. Look for SLV to implode when its investors ask for physical. The whole COMEX, JPM, FED scam cannot be extended much longer. My prediction: Gold/silver ratio to 40 within a year.
For those of you who aren't monitoring this at this critical time, here it is again.
Required daily reading:
http://harveyorgan.blogspot.com/
Thank you again, TF.
+1 TF
Harvey is a must read each day... and I'm sure he would agree that Eric Sprott is as up front as it gets... and his Precious Mineral Fund is outstanding (as well as the new Physical Gold Trust for bullion).
the so-called dip lasted minutes; bot some AH last night and got a better price than this morning
Yup, Yellow Bubble...sell now so George can get a better price.
Yup, Yellow Bubble...sell now so George and I can get a better price.
Somebody fact check me to confirm, but didn't Soros just ADD to his already very large gold position a few months back, to the tune of about $421mm? Soros is a f*cking shark that chums the water for his own feeding frenzy...
Yes he did, he and Sprott also jumped in NG to the tune of around 8 million, if memory serves.
I don't believe Soros is trying to save us from ourselves.
I'm aware. Sprott is HUGELY concentrated in precious metals, something like 70-75% of his fund between physical and miners. This guy is betting BIG. I know he has his new and improved version of a gold fund (actually has the physical as opposed to GLD, etc., etc.), but I believe his actual flagship fund has the concentration I speak of. That type of concentration is unheard of. All I can say is I wouldn't ever want to be on the other side of a Sprott position, the man has an amazing track record that commands respect.
Hey ZH, how 'bout some analysis on silver? It is like WAY up, dudes. Correction imminent?
OK, I'll play.
If the Dec10 contract can close Friday above 20.80, it's headed to at least 22 in the short-term.
Turd, thou art a gentleman.
Agree with TF
Managed money seems to be catching on but net shorts are +3% YOY. Not as cut and dry as the price movements seem.
http://www.cftc.gov/files/dea/cotarchives/2009/options/other_sof090809.htm
http://www.cftc.gov/dea/options/other_sof.htm
i like the look of silver especially right here. there is no central bank silver to 'lease' into the market and players are swooping in for the hard stuff on every dip. ptb can only do so much before the price of silver has to rise dramatically and this could be very soon. either a short covering scramble or all out comex default, silver will shift. regardless of that, gold-silver ratio looks ready to decrease and POS rise from a purely a technical perspective.
I found lots of interesting information here. I love zerohedge.
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