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Morning Gold Fix: September 2
Submitted courtesy of www.fmxconnect.com
This May Be the only chart that matters for Gold 2 Weeks From Now.
Yesterday’s
opening in Gold was suspicious, as it tracked stocks for a while. Seems
like the Risk-On crowd thought Gold was a “risk” asset, not a safety
asset. Oops, they were wrong. Bonds got hammered so maybe it was the
inflationistas out in force buying the beginning of the new Weimar
republic monetary system (free wheelbarrow with every 1 Milliard Marks).
Oops that didn’t work either. Smells a little toppy here, might be a
good play to short with a stop out on a gap higher. Or sell a rally as
it comes back into yesterday’s range. I’d buy calls if bullish, futures
seem prone to liquidity gaps.
Right now we are sitting on the
sidelines directionally. Yesterdays’ option activity corroborated
evidence of a transition point. Vol came in screaming bid like blow-off
tops often do, and then collapsed much more than it should have in the
sell-off. If you must trade, buying a gap higher and reversing on a
filled gap seems better than buying dips at this moment. Following that
thesis, buy it now(1250.50 currently), and get out if we go below
yesterday’s low for a trade. Or just sell it short on a piercing of
yesterday’s low for the bear side. Expect to be chopped up. Which brings
me to the Bollinger Band chart above: It says DO NOTHING yet, but a
storm is coming.
We have mentioned Bollinger Band use before in
predicting volatility. Volatility signals are much more reliable
indicators than directional signals. This is in part due to the lack of
noise in the signals generated. Less people playing this way, means less
noise. So, while it is still a lagging indicator, false signals are
extremely rare. The chart above is a set up for a volatile, yet trending
move.
You can see the Bollinger band oscillations are pretty
reliable. I use this as part of a proprietary system for gamma hedging
and Vol trading. But it can be used in part for generating excellent
risk reward directional plays.
What you want to see is the top and bottom bands widen in opposite directions
for a signal to hit. This is your expanding volatility. Then pick a
direction by entering in whatever slope the mid line is pointed (up for
bull, down for bear). Then use the mid-line as your trailing stop out,
or if you prefer, the other side of the Band. Reversals are fine too.
Extended periods of low volatility and tight bands happen, but you won’t
be trading those so who cares?
Look for the bands to pinch a
little more this week if we don’t make new highs and then next week we
could be off to the races. If we make new highs this week, the bands
will begin to widen, but make sure the lower band is moving away from
the upper one.
But which way to play?
Monthly says
higher, Daily says to be careful. We have no opinion until the Bands
widen, then we will go with the flow. If losses occur, stops are tight
in the beginning. We are always on the lookout for “first way, wrong
way” moves. If profits occur, stops will trail. Stay tuned.
The Bullish Case:
h/t FX Options Ltd.
The Bearish Case:
-Vince Lanci vlanci@echobay.com
(Elizabeth Thawne is on Vacation)
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OK but youre leaving out the so-called 'errors' where gold was marked at $1,500 for hours, and the 'glitch' that had gold pegged at $3,500. Clearly theres far more than 'fair value' pricing going on here.
Can you just IMAGINE if the DOW trippled (30,000) for a few minutes?! That would make front page of most newspapers.
But when gold does it... they say it's just a "glitch" :) Yeah, some glitch!
Bollinger band oscillations Bitchez!
Love those Bollinger bands. A lot of information is contained therein.
What happened to Gordon Gekko?
He's selling insurance.
GG still posts from time to time. Not much to say thats new anymore...
Many people still miss him. On a related note, it is nice to see you again, Hulk. I've only seen a few posts from you lately.
Not much for me to add at this point tmosley, its very interesting to watch things unfold, but the human wreckage left behind is quite sad. I have been seeing "decent people" (as opposed to druggies) begging for money at stop lights in our area, for the first time ever, which reminds me of the magnitude of our financial woes up close and personal...
Go Silver!
Rockin and Rollin...
I agree most wholeheartedly. Since my wishful thinking bought me back into SLW at a liitle lower position than I sold at Tuesday. Giddyup and create some room for stops.
Trichet's chat probably made everyone re-assess how much of an inflation threat there is and hence buy gold.
For anyone who can't read Trichet - rewind and look for the following:
Touching nose = lying/misinformation
Covers mouth = I'm worried about this
He can't seem to help himself doing it.
ah yes, but now...there's tomorrow....a jobs number...
and so who is going to bring the popcorn to the JPM takedown?
and should we invite bart chilton?
I'd like to ask andrew maguire if you all don't mind.
it keeps going up despite the nay sayers.
Bravojuice.
Bravojuice.
Bravojuice.
This guy below me. Spitzer. Knocked him unconcious in the 1250 gold thread.
"looks toppy" fuck these chart geeks. It looked toppy before India bought too.
I, for one, am stunned that gold isn't down $15-20 today. I've seen action like yesterday so many times I took for granted that today would bring the real beatdown. We shall see. It may still be coming.
you betcha. its time for our government to wink at JPM, and for JPM to walk in and beat the orney peasantry and anyone else who dares to try and protect their wealth bloody...
absolutely senseless.
because, the key to understand is....every dime you have, every ounce of gold/silver, rightfully belongs to the masters of the universe at JPM.
so kneel down peasants!!!
The smackdown will come when you start to see headlines or mentions on TV about the strong gold price. Once we see that, the drop is near.
yes, it's like tuna fishing; get'm all in the net; take their bitches. fuck'm good.
Russia just added 16.2 metric tonnes of gold to its reserves. China + Russia + India seem to be building reserves at quite an alarming rate.
"Alarming"? Not so much alarming as unexpected. But only unexpected by those who don't see gold/silver as the store of wealth it has always been. "Bubble"? Not until every American has put some in the sock drawer or under the mattress. Maybe then I'll look at selling some.
Yesterday might have been "buy on weakness day." I put my toe in the water but I'm hanging on to most of my cash. My crystal ball is not in sync with the oracle at Delphi.
Ankle biting going on at the moment.
why ? its September.
You got it. The fall is when seed corn is put away for the winter. Not hard to understand that we, as still having animal instincts, put away our wealth for the spring. We forget our ancient heritage. When this season sees no stashing of gold then we will have seen the abandonment of hope for a better future.
GOOOOOOOOLD BITCHEZ AND HOOOOOOOOOS!!!!!!!!
Awesome to see ZH et al considering the bearish case.
Gold still below $1265 highs, targeting $1050, free fall possibility below $1220
http://stockcharts.com/charts/gallery.html?s=%24gold
DZZ an alternative to gold puts:
http://www.jubileeprosperity.com/market-psychology/dzz1035-lady-gaga-mar...
"Russia just added 16.2 metric tonnes of gold to its reserves. China + Russia + India seem to be building reserves at quite an alarming rate."
What about this don't you understand, ATG? Have you somehow failed to notice the consistent bid under every selloff?
Gold still below 1265 highs? Well no shit. Its also retraced about 80% of the correction from July. After initial price-capping and chart-painting efforts by The Evil Empire are defeated, gold will trade through 1265 and onto 1350 by Halloween. Then on to 1500 before 12/15/10.
and then we have the 400 tons that India bought from the IMF at $1040/oz - that's pretty good support IMO - talk to me when the price drops below that level
India is importing ~ 680 tons this year for jewelry consumption...just to put things into perspective about the Indian Central Bank purchase...
Turd's the word! Who does number two work for?!!
QE to infinity.
I have not seen this much worry and bearishness in a long time, even the boys at Casey Research are pussing out.
Its gotta shoot up.
Johnny B must be off studying for finals or some such useless endeavor.
We won't see him until the next sell-off... and there will be one.
I don't know if anybody noticed, but with the decline of the Euro against the Swiss Franc, gold lease rates jumped. All the while the discount rate was declining. For a brief moment, lease rates were above the discount rate. This implies that the face value of leases fell below the gold price. So fluctuations in the currency market will affect the price fix on leases on a day to day basis.
http://www.kitco.com/charts/popup/au0030lr.html
Lease rates ???
I thought gold had no yield ? that is what Jonny Bravo told me.
Central banks pay you to lease gold in the short term. When these gold price-whacks come from the Eurozone, it probably sets everyone in at the COMEX on edge, because they only have the effect of raising lease rates to positive, instead of negative. After the price control effort, lease rates were a smidgeon higher. I assume there will be a point where gold leasing becomes impossible.
These kind of surreptitious sales into the market are raising lease rates, or closing them with the discount rate. Its very likely that shifts in the currency markets will adversely affect the lease rate and price fixing regime rather than physical gold sales or uncermoniously dumping leases onto the market.
The so-called "threat" of excessive amounts of physical sales into the market is a misnomer, because there simply isn't any gold to sell. Most central bank gold is spoken for, and any available physical gold for sales on precious metals exchanges will have to come out of mine supply, which is in decline.
Good post. The leasing / income stream thing is Fofoa / Antal Fekete territory; it is an important aspect to the whole gold thing.
Short one of the Largest Bull markets in History !!!
BRILLIANT !!!
;-)
Dat's dat bold daring move stuff dat evybody keep talking about.
Tyler,
Aren't the Cabel excellent chart makers ?
Isnt this the way they control all markets ?
Create/Draw the charts through trading for the sheep to see.............?
They make them and you read them.
Sell Sell Sell !
Tyler,
Aren't the Cabel excellent chart makers ?
Isnt this the way they control all markets ?
Create/Draw the charts through trading for the sheep to see.............?
They make them and you read them.
Sell Sell Sell !
Tyler,
Aren't the Cabel excellent chart makers ?
Isnt this the way they control all markets ?
Create/Draw the charts through trading for the sheep to follow.............?
They make them and you read them.
Sell Sell Sell !
Sorry ! something wrong with the browser.
can we delete 2 of these posts ?
Thanks
A Study of the Seasonality in Gold Prices @ http://rosenthalcapital.com/blog/2010/08/a-study-of-the-seasonality-in-gold-prices/
This may be helpful determining direction. Since 2006 September tends to be one of the strongest months of the year.
Gold production peaked in 2000, for the trillionth time.
Annual supply is declining against level or rising demand.
This sure ain't helping matters:
"Congo seizes First Quantum Minerals' assets".
See article here.
What time does the takedown start tomorrow? Blythe and Dimon didn't copy me on the evite.
Just after the NFP number is released, normally.
Good number = Small rise then smackdown.
Bad number = Immediate smackdown.
good post
I was actually expecting a PM smackdown not too long after Goldman Sux began pimping it recently. There was a slight pullback at one point, but it seems to be ratcheting higher. Is this reality throwing a wrench into the establishment's 'gold must die' plan, or is the needed smackdown coming in September?
And what's the deal with the Yahoo 'gold glitch'? Sorry if this was covered at length, I didn't get my ZH fix yesterday! Was this another signal meant to prod the establishment into making some sort of move? Or wait....did someone at Yahoo hit the '3' key instead of the '1' key? Yeah, that's the ticket...fingerus faticus syndrome.
http://www.youtube.com/watch?v=IGKAveMY0kc
It would have been more fitting for Google finance to do that considering the rumors that PBOC gov was missing at the time.
"Rep. Paul Calls for Gold Audit, Questions Whether Fort Knox Is Empty". GATA's secretary treasurer Chris Powell wrote a preamble to the story [with lots of links]... and that, too, is a must read as well... and the link is here.
(From Ed Steer's daily email newsletter)
China Precious Metal to pay 1.38 Billion HK for China gold miner (Bloomberg - no link yet)
No end in sight for gold rushhttp://www.iii.co.uk/articles/articledisplay.jsp?section=Markets&article...
China And India Are Quietly Changing The Landscape Of The Gold Markethttp://www.nuwireinvestor.com/articles/china-and-india-quietly-changing-...
South African Gold Production Declined 2% in Second Quarter, Chamber Sayshttp://www.bloomberg.com/news/2010-09-02/south-african-gold-production-d...
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