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Will a “Cold / Frost” Full Moon cool off Fiery Hot Gold Futures ???

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Fibozachi

Will a “Cold / Frost” Full Moon cool off Fiery Hot Gold Futures ???

 

In light of an especially noteworthy Full Moon, both gold bugs and those who are particularly 'in tune' with the waves of collective social mood (akin to social tuning forks) ought to remain extra cranky for an additional few days.  02:28:xx, Wednesday morning (12.2.09), marked a Full Moon; we at Fibozachi always reference time in EST, which is universal 'market time' while everything else is just ‘noise,’ though apparently there is something
other than just dead 401(k) money scattered across mutual fund
sub-accounts domiciled in Manhattan/ Boston (equities), Chicago
(commodities) and Newport Beach (bonds).

 

@GC 1 Minute

 

And while we jingoistic Anglophiles know this December Full Moon iteration as the "Oak Moon", Native Americans refer to it as the "Cold Moon" or the "Frost Moon." By the way: thx for the land; turkey dinner; and really sorry for the T + 6 year Bataan Death March-esque "Trail of Tears" that, while certainly not a SNAFU by any stretch of revisionist history, was totally FUBAR, by explicit design.  Our collective bad; enjoy your duty free goods and casino's though. 

 

In Elliott Wave parlance: corrective waves of extremely large degree, such as Supercycle wave (IV)'s and the latter portions of Cycle wave c's, are notoriously characterized by a persistently negative trend within collective social mood, which continually leads to recurring bouts of physical xenophobia.  After we examine the technical posture of front month and continuous
contract Gold futures as well as the DXY/ US Dollar Index, we will
highlight some choice quotes from an author/ strategist who is one of our
favorites.  This highlight will provide several enlightening insights into the secondarily confirming nature of and truly profound substance within the new, revolutionary study of Socionomics

Which, as a rabid Socionomist, is just a lovely segue into price action across financial markets!

… the spot PoG (price of gold) nudged above $1216 overnight (as of 02:30) while front month gold futures (current basis, February, GCG10) continued to register considerable volume
right out of the gate; especially when segmented by rolling 233 or 610
minute (Fibonacci) interval periods across the continuous contract (
@ GC).  Futures are a "natural time" instrument, which trade continuously, whereas equities are a "cash session"
instrument, which primarily trade within an almost arbitrarily fixed
time schedule of 09:30 - 16:00 (which is what equity indices are solely
based upon) with small pre/ after-market sessions.

@GC 144 Minute

 

Volume within the GCG10 has been potent since effectively becoming the front month contract on 11/27/09; well after "news" of default from Dubai, the crown jewel of 21st century capitalism (a fantastic by Marla Singer of Zerohedge.com), wilted the ephemeral 'green shoots' of emerging markets and sent 'em sliding back down their impossibly steep "slope of hope."


 

Our
personal belief in the 'value' of "news" itself is best summarized
through a timeless quote of R.N. Elliott's:

"At
best, news is the tardy recognition of forces that have already been at work
for some time and is startling only to those unaware of the trend."1

And while initial volume within the GCG10 has been contextually
impressive, it is still rather pathetic sum in
terms of aggregate notional dollar value
 … while the DX/ $USD
sits just above its daily S2 pivot point, yet to
plot either a fresh swing low or a FNL
(failed new low).

 

DXY 144 Minute

 

Should
any key commodity, currency or equity market plot a high probability trading
signal (buy or sell), we will immediately update you within these
pages.  In the interim; please click anywhere
within this sentence to read our previous piece, "A Detailed Technical
Update of the S&P cash, S&P futures, DJIA cash, Gold futures, the VIX
and the US Dollar Index ... as well as a look into the "Crown Jewel"
of Dubai
.
"

 


 

Having presented that brief technical update, we would like to turn our attention toward one of the greatest, yet most consistently misunderstood, legends of technical analysis, Robert R. Prechter, and his conceptual brainchild of Socionomics; which seeks to cogently unify the otherwise loosely structured social sciences.  Below are but a few select quotes from Mr. Prechter's, 9/11/01, "Special Report” of the "Elliott Wave Theorist" publication - without any alterations/ edits.

 

First, as a basic preface: some folks (like your author) find Mr. Prechter's work both intellectually fascinating and technically rigorous while many others simply have no interest in it.  As technicians/ traders who practice a rather comprehensive and quantifiably systematic approach to technical analysis, we at Fibozachi find the unique insights below rather prescient and hold them to be essential off-peak reading for professional technicians and serious students of techinal analysis who are interested in learning more about the fractal nature of financial markets.  Again, such is simply our personal opinion; we have no formal affiliation or business relationship with either EWI or RrP and are simply studious admirers of their priceless work.  For wholly un-random reasons, EW, Socionomics and even Mr. Prechter himself are typically either immediately loved and intellectually cherished or simply loathed and forcefully derided.

 

Again,
to each their own; obviously, our intent is to share pertinent
information that has helped us grow as both technicians and traders.  And we highlight this material simply because we believe that many others will find it similarly interesting and highly thought provoking.

"Understanding
the Engine of Social Trends

 

The
radical thesis of The Wave Principle of Human Social Behavior and the New
Science of Socionomics
(New Classics Library, 1999) was unmistakably manifest in
the raucous social comedy of the 1990s, and now it is playing out in the first
act of a developing worldwide social tragedy that will last years. The primary
thesis of this book is that changes in social mood cause and therefore precede
changes in the character of social events
. In contrast to this idea, most people
erroneously try to divine the implications of events in attempts to forecast
financial markets and people's collective feelings. Their approach cannot work
because markets are driven by natural trends in mass psychology, and events
resulting from those psychological trends come afterward. It is the changes in
such trends, as indicated by turns in the stock market, that signal a coming
change in the tenor of social events.

 

An
equally radical thesis underlying socionomics is that social mood is patterned,
and it is patterned according to the Wave Principle
. Since these patterned mood
trends precipitate social events, you can forecast the character of social
events
by tracking the trends and patterns in the primary meter of social mood,
the stock market.

 

Socionomics
explained why global atrocities followed the 1929-1932 crash and continued
during most of the rest of the bear market pattern, which ended in 1949. It also
explained why the worldwide peace initiatives and unprecedented acts of
reconciliation of the 1990s followed nearly half a century of social mood
uptrend. The dramatic, historic pictures shown in Socionomics to convey the
power of these moods were not placed there simply for academic purposes. This is
real life we're talking about. You have to live near those events to
sense that fact.

 

 

SOCIAL
IMPLICATIONS
[excerpted from At the Crest of the
Tidal Wave (1995), p.432-433]

 

While
the Wave Principle is the single best method for anticipating the behavior of
markets, its value at times goes way beyond even that great benefit. As
explained in Chapter 12, the effects that a change in market trend will have on
society are not in evidence at the start of the trend. They become intensely
manifest by the time of its termination ....

 

A
long term trend toward a positive social mood always leads to times of peace
and political cooperation, such as we enjoy today. An extreme trend change in
social mood toward the negative always leads to calamities. The average level of
conflict during the bear market will be far greater than it was during the bull
market and will lead to periods of turmoil, not just in financial markets, but
in society. Indeed, the trends now implied by long term market patterns have
always produced dramatic social upheaval. The last time a bear market of the
currently projected magnitude took place was 1720 to 1784, a period that began
with a market crash, ended with the Revolutionary War, and led to a deep and
global five-year depression.

 

The
coming trend of negative social psychology will be characterized primarily by
polarization between and among various perceived groups, whether political,
ideological, religious, geographical,racial or economic. The result will be a
net trend toward anger, fear, intolerance, disagreement and exclusion, as
opposed to the bull market years, whose net trend has been toward benevolence,
confidence, tolerance, agreement and inclusion. Such a sentiment change
typically brings conflict in many forms, and evidence of it will be visible in
all types of social organizations. Political manifestations will include
protectionism in trade matters, a polarized and vocal electorate, separatist
movements, xenophobia, citizen-government clashes, the dissolution of old
alliances and parties, and the emergence of radical new ones. Tariffs will
become popular, regardless of the fact that virtually everyone knows they are
dangerous and wrong, because they are a consequence of an increasingly negative
psychology involving fear, envy and a misguided attempt at self-defense.
Xenophobia will be practiced regardless of people's generally good intentions,
because fear and hatred become pervasive in major bear markets regardless of
whether or not they are justified. There will also be a danger that governments
will impose police-state type controls as a consequence of the bear market. Such
periods often end with emotional political oustings, whether by vote,
resignation, impeachment, coup or revolution.

 

The
worst economic and social programs are years away, but advance planning is
incalculably better than trying to react when it is too late.

 

 

Wave
Form as the Key to More Specific Timing in Social Forecasting

 

An
Elliott wave analyst can even put a fine point on when the best and worst
social times will occur. The Socionomics book explains that wars always erupt
during or immediately after "C" waves in bear markets of Cycle degree or larger.
More important, the bigger the corrective process, the bigger the war. We are
in only wave (a) of the Grand Supercycle bear market, which will have to do
mostly with financial destruction. So shocking though they may be, events to
date are in fact correspondingly and comparatively mild, like Hitler's takeover
of Czechoslovakia was to ensuing events within Supercycle wave (IV). Within
wave (a),wave c, which should unfold from 2002 to 2004, will bring greater acts
of conflict and instances of physical danger. Yet as At the Crest explained, the
worst global horrors - and this is good news for now - will not occur until
wave (c) of the entire Grand Supercycle ....

 

 

Forecasting
Styles of Social Events

 

Here
is another esoteric point but one of great value. A section on "Nuances" in
Chapter 15 of Socionomics explains that negative social themes due to appear in
any approaching bear market first express themselves in milder form in the
preceding fourth wave of one lesser degree. Stop for a minute until you get
this idea. Here is a more detailed explanation: Social mood repeatedly traces
out five waves up followed by three waves down. The negative themes in "wave
four" within the "fives waves up" presage those that will dominate, more
dramatically and on a much bigger scale
, in the ensuing "three waves down."

 

This
is true of the styles of cultural trends. For example, Psycho came out in 1962,
at the end of a fourth wave correction of Primary degree. In the larger bear
market of 1966-1982, slasher films (the Halloween and Friday the 13th series)
were a dominant theme.

 

It
is also true of the character of social events. In an earlier fourth wave from
1916 to 1921, collectivists took over Russia. In the larger fourth wave that
followed, from 1929 to 1949, collectivists took over nearly half of the earth's
population, in Germany, Italy, Eastern Europe and China.

 

 

The
Utility of Socionomics

 

Are Elliott waves and socionomics
purely academic toys? They are not. Like good philosophy, they are not just
theoretically correct; they are practical and useful in everyday life. At major
junctures, understanding the change at hand can mean the difference between
success and failure, life and death. The people who started successful
businesses in 1949 and 1982 or went bankrupt in 1933 and 1975 understand the
first point. The people who got out of Europe in 1938, or who stayed there,
would understand the second.

 

In coming months and years, others will repeatedly
be shocked over "surprising" single events, which they do not understand as
being part of a larger pattern. At least you will know that we are in a pattern
and even, most of the time, where we are in it. From that, you can make
important decisions that will guide your life.
"

 


 

And
for those of you with an interest in learning much, much more
about the lunar synodic cycle from another truly brilliant technician; please see
Chris Carolan's seminal tome, "The Spiral
Calendar"
, his excellent recent article "1929 + 1987 = ????",
and also his landmark technical treatise
"Autumn Panics: A Calendar Phenomenon
", which won the 1998 Charles H. Dow Award for
Excellence in Technical Analysis; "given to the research paper which is
judged to contribute creativity, innovative though and professional
presentation to the study of technical analysis
." 

 

As
always, we hope that this quick overview is helpful, thank you for taking the
time to read our thoughts and promise to try to find, if not make,
the time to answer thoughtful questions.

 
Disclosure: we anticipate becoming (1) considerably long the $DXY / US
Dollar Index via DX futures; (2) about as short various commodity futures as
Danny Devito and (3) about as short the ES (S&P futures) as Verne Troyer,
once a multiple confluence of proper trading signals confirm themselves; during
any given session we may trade any of these instruments bi-directionally.

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, bonds, futures and FOREX across interval periods of
time, tick and volume.

 


1.    "The
Value of News," R.N. Elliott's Masterworks: The Definitive Collection,
ed. Robert R. Prechter, Jr., p. 277

 


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Sat, 12/05/2009 - 04:35 | Link to Comment maggitkd
maggitkd's picture

Excellent article.

This fake breakout in gold has been persistent, but it will fall back soon. Intermarket relationships will see to that, as mentioned in the article.

And -MobBarley - please keep your foul language to yourself. It doesn't contribute anything, and shows your level of maturity.

Wed, 12/02/2009 - 17:46 | Link to Comment Fibozachi
Fibozachi's picture

Thanks for sharing your thoughts, merehuman (who is apparentely a super trader) ... which echo so many funny-mental personal opinions above ya, which are similarly w/o any charts, #'s, fact, figures, metrics or even link.  We only flag that which is blatantly profane or personally derogatory w/o any hint of merit, substance or even a good joke.  As I've told GG above, who apparently gets his rocks off by talking ish about RrP/ EW at every opportunity, why even bother?  Other than being bored and lonely with your E-trade, honestly, what is anyone trying to prove by bashing, rather pathetically, actual technical methodologies that they don't understand or appreciate?  To what end? Are you folks really that incensed by anyone/ anything that actually has a clue what tomorrow might bring or how to trade? 

Quick machine gun for any/ every hater who would like to try to pick on someone who can outmatch your wit and has actual performance summaries, let alone a clue:

what is your actual trading methodology?

how do you actually trade?

what are your actual performance metrics, just basic?

considering that we do this professionally, make dozens if not hundreds of time-stamped mkt calls each and every day across financial markets, run several businesses and still poorly manage to throw up an article or three each week in the explicit design of describing/ teaching about advanced technical analysis ... seriously, outside of being bored at home by yourself while you watch CNBC and eagerly try to poop on anyone who might make you feel slightly inadequate in between doing chores around the house and passively monitoring your mutual funds/ ETFs, to what end is there?  I would LOVE to answer an actual question about TA or read legitimate criticism that has even the slightest bit of merit/ substance behind it.

And finally, bc i have actual trading to oversee bc we actually trade ( do you ? ) ... does anyone have anything to say other than gold is great, dollar is dead, ta is stupid (simply bc you don't get it), and prechter is [insert preposterous adjective here].   To everyone out there so willing to say "I KNOW this is gonna happen/ go to x because i THINK so" .. PLEASE put your E-trade account down and slowly back away from the screen.  As i sit n write at 03:40 and am telling folks xyz and get ready for a 2 min TICK pop to test the underside of sell size sitting at 1108.50 .. what are YOU actually trading?  please, enlighten me and help re-direct this pointless drivel (on my part as well) toward actual substance.

Wed, 12/02/2009 - 16:37 | Link to Comment gatopeich
gatopeich's picture

Beautiful rant, Fibo.

Short on indexes, looooong gold.

Wed, 12/02/2009 - 18:00 | Link to Comment Fibozachi
Fibozachi's picture

thank you sir, gatopeich .. and that is truly what it is, a technically oriented rant with an underlying motif that anyone who doesn't actually trade or have a clear mindset about conceptual inter-market relationships will mostly skim right through and say: 'stupid dollar bug looking at actual technical indicators which are truly predictive, how stupid, don't you KNOW that xyz is worth blah blah blah?'

considering that there are NO high probability trades on long enough time-frames to proffer up here to the public ...  seriously, do folks want real analysis or realmoney?  a straightforward and honest question. 

i can only promise our readers a few things: 1) we are technically rigorous/ technically oriented; 2) my brutal honestly is quite literally the hubris of my youthful hamartia; 3) we love good market-related banter, especially since we can't initiate it anymore and don't really get into anywhere else but on these ZH boards.  personally, i really do get a kick out of it and ONLY ask that if you really want to try and take a pointless pot shot, then please think about twice it and try to come up with a good joke ... that way if i do decide to hand out mental wedgies to folks i'll simply thank you for providing some levity.

... now back to your regularly scheduled programming of when israel is going to take out natanz and how close some "news" story or stratfor piece says the royal guard are to arming an actual shahab-3. such an amazing waste of mental energy, simply because issues are palpable to normal folks sensibilities.  i get REALLY frustrated with idiotic people who spend all their working to make $ to then piss away in the markets because they explicitly refuse to open their eyes at all. honestly, is that really so out of line now?  particularly when juxtaposed against 'idiot, don't you KNOW that xyz is 'worth' 123." urgh. good luck with that. how'd it work for you last year? last decade? how bout last week?

then again, ignorance is truly bliss.

ranting over ... back in a few hours after client calls and going over performance summaries, just like all the retail buy and holders to reverse split/ bankruptcy are doing right now.  

still can't believe no one has written about how/ why N. Korea's latest 'news' was inflationary if not hyperinflationary, LOL. those damn facts suck! don't they inflationistas?

 

Thu, 12/03/2009 - 01:01 | Link to Comment Hephasteus
Hephasteus's picture

May I please offer a bit of cross discipline information exchange. You are bringing into this the tie between moon cycles. I know a tad about astrology. Moon cycles follow two paths. The full moon is a "filling" cycle. Supposedly all the thought energy goes up aggregates and then comes back down to us during this cycle in compressed liquid form known as emotions.

The new moon cycle is a draining cycle. Where not much emotional energy is present in the thought well and people are able to analyse their reactions to the previous thought well cycle.

The trick is that we are all fractured on those thought wells as well as operate on them differently. Some people are too open bring in everything with no discernment. Some people are closed and will only bring in what they want, what they believe what they see, they seek only verification or response to a narrow reality construction.

This moon cycle occurs in gemini and there's going to be debates about how to best achieve reality.

All that being said if people make fun of your technique i'd base it less on the underlying soundness of it and more on how people are processing the information thats coming in.

Lies shape those patterns you speak of. They create cooperation when there is none. They create placement of effort within larger spheres when that placement is a lie. As all this is unfolding those waves you speak of are changing. They create involvements and uninvolvements. The water that comes through the moon cycles has always been "tainted". More and more people are becoming aware of that. Less and less are responding to it or responding in radically different ways.

If you want some levity. Don't drink the water. Analyze the coolaide VERY closely.

 

Wed, 12/02/2009 - 15:51 | Link to Comment merehuman
merehuman's picture

so this article demonstrates the rising value of lipstick for pigs ? I Know i am not making sense, but neither does the article. Perhaps i should adjust future purchases to the low tides? Wearing red on tuesdays implies a rising bank balance and sheep do better without blinders. The gold bus is the best way to ride past the poverty storm. Good luck to all of us. 

Feel free to flag as junk, same with above article.

Wed, 12/02/2009 - 14:26 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Repeat after me - I WILL NEVER EVER SELL SHORT GOLD AGAIN.

Now go write this 1000 times on the blackboard as punishment.

Wed, 12/02/2009 - 12:45 | Link to Comment Anonymous
Wed, 12/02/2009 - 12:24 | Link to Comment jedwards
jedwards's picture

lol full moon

Wed, 12/02/2009 - 10:35 | Link to Comment Anonymous
Wed, 12/02/2009 - 10:20 | Link to Comment Project Mayhem
Project Mayhem's picture

Good stuff

Wed, 12/02/2009 - 19:05 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Love your sarcasm PM.

Wed, 12/02/2009 - 10:37 | Link to Comment BRAVO 7
BRAVO 7's picture

GOLD AND SILVER ARE ARE RIDING THIS FINANCIAL HORSE, THAT IS TO SAY, THEY ARE ON TOP. WHEN NOT IF, THE HORSE GOES DOWN, GOLD AND SILVER WILL WALK AWAY, INTACT.

THE FOLLOWING EXCERPT IS FROM BOB CHAPMAN'S...THE INTERNATIONAL FORECASTER

BOB HAS SOME CONNECTIONS ON "THE INSIDE"

http://theinternationalforecaster.com/

always the question about what the Fed will do, more pressure on small and medium banks, municipal bond meltdown, bailouts cant go on indefinitely, looking at the banks, and recalling the French Revolution, the truth of fractional banking

The following information may be the most important we have ever published. One of our Intel sources, highly placed in banking circles, tells us that on 1/1/10 all banks that have received TARP funds have been informed by the Federal Reserve that they must further restrict any commercial lending. Loans have to be 75% collateralized, 50% of which has to be in cash, which is a compensating balance.

The Fed has to do one of two things: They either have to pull $1.5 trillion out of the system by June, which would collapse the economy, or face hyperinflation. This is why the Fed has instructed banks to inform them when and how much of the TARP funds they can return. At best they can expect $300 to $400 billion plus the $200 billion the Fed already has in hand.

 

Wed, 12/02/2009 - 10:14 | Link to Comment GoldmanBaggins
GoldmanBaggins's picture

There will be breathers in this gold bull, But a significant pullback (+15-20%) is highly unlikely. So much money is waiting to jump on even a small drop that we will be at $1750 before a significant drop occurs. If delivery or sov debt starts to fracture you may not find physical at anything near spot. Please do yourself a favor and make sure you have physical now while it is still available. Silver is still a bargain for those with gold price aversion.

Wed, 12/02/2009 - 10:30 | Link to Comment Anonymous
Wed, 12/02/2009 - 14:32 | Link to Comment Hephasteus
Hephasteus's picture

It's ok. The IMF can sell their gold.

Again.

Wed, 12/02/2009 - 09:38 | Link to Comment Anonymous
Wed, 12/02/2009 - 17:45 | Link to Comment Fibozachi
Fibozachi's picture

good point Anon ... even though its more like 2.875 or something like that and the REAL DOW (inflation-adjusted) is down c. 80% since THE top in 2000 ... but adjectives do sound better than actual charts, facts, figures, metrics  and links ... especially when actual trading isn't being discussed. lol.

again: i'm still waiting for someone to actually raise a legitimate technical gripe, make a really good joke OR at least put me on the actual defensive instead of just giving me a slight chuckle from weak attempts at personal insults.  cmon folks, we really do try to provide amateur investors (who don't trade) with great material to take issue with, lol, so at least gimme something to similarly laugh about or actually have to think about before regurgitating this simple plea. 

and if i didn't respond to these pathetic attempts then 1) what fun would you have bc obviously you funny-mental gold bugs who KNOW where gold is going aren't reading our work for either the technicals or our practical insights the nuances of actual trading.

everyone likes to chime in on how to trade gold using the infinite wisdom of the buy and hold to infinity strategy, yet, for some strange reason not many folks have much to say about actual trading itself; outside of obvious quants like, peterpeter, and obvious technicians like Neo of Zion

kinda funny how, outside of saying what you think w/o any actual reason for it outside of what palpable emotional bile you are regurgitating from first hearing elsewhere, there are so few actual #'s, let alone accurate ones.

for those who want to talk trading, please see a past rant of ours (mine) about ACTUAL trading via design development located here on ZH.  would LOVE to have an actual convo about something that actually matters and could actually help someone learn something outside of how utterly pointless funny-mental discussions are.

Four Basic Qualities of Great Technical Indicators & The "Stochastics Default Club"

Wed, 12/02/2009 - 14:36 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Dollar-bugs think the dollar will reverse all its losses of the past 100 years and we'll have 3 cent gas again...can anyone please tell me why we listen to such idiots? In fact, I cannot help but think that such individuals are merely tools/moles of "the oligarchs" whose job is to create a counterparty for them to dump all the worthless fiat dollars onto in exchange for real goods/assets. We see now what you really are Mr. Prechter.

Wed, 12/02/2009 - 16:26 | Link to Comment gatopeich
gatopeich's picture

Can't you accept that Dollar could jump a bit before entering the next grand leg down? That's what some call "the dead cat jump"...

Expecting a f*king straight line?

Wed, 12/02/2009 - 19:03 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

There would have to be a freakin screaming bull market in the dollar - not a "bounce" - for us to get $10/barrel oil and $400 Gold as predicted by Mr. Prechter.

Wed, 12/02/2009 - 09:01 | Link to Comment deadhead
deadhead's picture

I enjoy reading your analysis.

I also give you tons of credit for sharing your trades in advance; I've always respected people who put their money where their mouth is.

Do NOT follow this link or you will be banned from the site!