Tuesday Metals Show


Could gold be acting any more predictably? Stopped right at the 144 (or 150) day moving average, or similarly, the 30 wk moving average (first two charts, below).

The question is, can it break on through to the other side?

 I'm not convinced, and took profits on my longs, opened when my trademark weekly 3-line break charts (see third, fourth charts below) gave me the signal. Looking at those, we've seen three consecutive red trend-reversal bars before during this long bear stretch... a fourth (and especially a fifth) would be highly auspicious. A few more red bars, and the general upward trend since 2011 would be damaged. That would be a big deal. As of now, not so much. So I'm giving it a few more weeks before making any bottom calls.

Silver has broken through the long term log-parabola, though (see fifth chart below) -- so a very good sign.

Why am I not more bullish? (see chart after break)






(Sorry folks -- it's the only way to know how many clicks I get. But seriously, will these clowns be vindicated? I guess they've been wrong for two to three years now... so perhaps. Stay tuned!)

23 comments:

Elmer Habavilo said...

well the CAD put in what seems like a convincing bottom two Fridays ago at .89 ... seems to me like the bottom for gold is also in too (double bottom in the last few months at 1180)... people who said gold was a bad buy at 1250 were wrong, and maliciously so, though perhaps not consciously maliciously so ;)

Elmer Habavilo said...

though there's an outside chance of 1180 in gold again, 1150 will never been seen again, as measured in current USD dollars... we will probably also not see 1200 again... $2000 to be topped next year... $2500 possibly to be touched... $6000 in three years... the long-awaited inflation in consumer goods (esp food) to pick up this year and next...

Lara Crouch said...

GM you should venture over too palins trading corner on tf's website. I'm fairly certain we have more vistors than his actual site.

Elmer Habavilo said...

Days like today lead me to believe that mining shares are manipulated in some way... gold up .3%, oil up only .6%, S&P flat... GDXJ down 3%, GDX down 2%...

from around 2009/2010 to now, GDXJ has gone from 120 to 30 as gold didnt move at all... During basically the same period, GDX has gone from 50 to 25 as oil has basically been flat, and as the S&P has doubled... To my mind, I havent seen an argument that effectively rebuts the fairly logical presumption of manipulation there…

Was it Jim Sinclair who talked about all metals assets-- the commodities and also the shares -- being manipulated? if this is indeed the case, and there is manipulation there, I'm in part in favor of it because it helps support the dollar and gives confidence to the USD and the US bond market. Though troublingly similar to a 17th century New England preacher/ theologian, with his seemingly mystical attachment to numerology etc, i do believe Sinclair has a decent feel for the gold market, and is somewhat truthful about things... hes actually a very interesting character, in terms of pathology. As a very experienced trader and also a descendant of the Rothschild-linked Seligman family, one of the most powerful banking families in NYC a century ago, i do think he has insight that others do not have.

But then he also has this mystical preacher/ numerologist side of him which is really the antipode of a clear-minded and uber-realistic banker... the preacher side of him leads him to make dramatic, and monolithic pronouncements like hes a fucking oracle or something… and the numerological/preacher side of him makes him attach exact figures like $1224, $1754, etc. to his predictions…. and then he sometimes ends up being wrong, and sometimes grievously so (e.g. in 2009, he was talking about gold at $4000 or something in 2010 I believe)... Apparently, no one has told him that another approach that some commentators will avail themselves of is to say, e.g., "I'm not completely about exact dollar and cents price levels, and exact time frames, but I am generally bullish (bearish) and a level of $x wouldn’t surprise me a year from now." I.e., Sinclair seems to be unaware of the option of remaining quiet or at least giving major disclaimers about your guessing, if you arent really sure of your prognostications.

So Sinclair is clearly a mixed bag, and he actually seems to be a troublesome mix of banker/pracher-mystic, which is about as schizophrenic as one can get-- at least in the sense of "split-phrenes" "split-brain".. i do think, though, that his $1600 - $1650 number for gold is very important, as he has maintained for some time now... There is definitely something going on with that boy that is as curious as fuck though… I think he is a pretty conflicted individual on a personality level, though in a way, that is of little importance and that just makes him a more interesting character… I concede that he is sometimes very informative and once in a while even oracle-like (oracular, if that’s a word)…

Mining shares could also be discounting price because of expected windfall taxes in the future... "it is dangerous to be right when the govt is wrong" basically... or "dont fight the fed/govt"... I generally agree with Andy Hoffman who I believe stays away from most mining shares... there are possibly some exceptions though -- SLW, for example, which has basically tracked the price of silver remarkably well over the past 5 years...

pardon the long post... this site is helpful, even just for me to give form to my thoughts,.. So I appreciate that… though i try not to put long posts like this in the middle of ongoing discussion about unrelated matters, as that is obviously annoying

GM Jenkins said...

Good stuff, Elmer. Not sure if you're aware but the Metropole Cafe crowd makes a big deal about an attack on the miners being a "signal" that gold will be knocked down the next day. Sounds tin foil hat, but whatever the explanation, it's worked every time I've tried it (or at least hasn't cost me). I last mentioned here. Let's see if the pattern holds tomorrow.

And hey, if Jim Sinclair shoots himself in the next few days, at least we'll know he was a closet Screwtape reader...

GM Jenkins said...

Thanks for the invite, Lara -- I've visited Palin's Corner in the past (as when someone links back here) and I've been impressed by the savvy and consistently "on point" commenting there. I'll stop by more often.

Elmer Habavilo said...

GM -- if that "signal" works, then gold should be down a lot tomorrow. gold, silver and the S&P were all flat today. GDXJ was down 4.4%, GDX was down 3.4%. SLW was up a few cents. I think most miners should be acting like SLW on average

S Roche said...

Hi Elmer,

Jim Sinclair's "numerology" is based on Jesse Livermore's "Square of the Numbers".

Jim would know about manipulation, he happily admitted to paying an actor to go onto a trading floor dressed as an Arab Sheikh when he was long some of the (up to) 22,000 gold contracts he held until January 20 1980.

The best thing about Jim's numbers is that the most important number is the square of 42.

All the best,

Elmer Habavilo said...

S Roche -

Greetings... What is the mathematical or scientific relevance of the squares business, as it relates to gold trading... Or is that just more numerology?

That's a gullible crew of traders... To be influenced by the mere appearance of a dude dressed up as a sheikh.... Reminds me of something like paying ur friend in junior high $5 to come up and ask for ur autograph while ur on a date with a hot girl...

What's the supposed numerological significance of 1764? Incidentally, for anyone interested in the way numbers/ digits can enthrall weak-minded individuals, just check the Wikipedia entry for "42".... It's like a chalk line and a hen ...

http://en.wikipedia.org/wiki/42_(number)

Warren James said...

@Elmer, this link may explain it better:

http://hitchhikers.wikia.com/wiki/42

S Roche said...

Hi Elmer,

Not an expert on the Square of the Numbers, there was a detailed report of how Jesse Livermore used them published in the WSJ in 1923 but no-one has retrieved it yet that I have found.

It seemed to have worked for Jim Sinclair very accurately on gold's run up, until it didn't.

I don't think the traders in the 70s were any more or less gullible than today's, but I wasn't there.

Anyhoo, remarkably good price commentary recently GMJ, well done. I would just add we are poised at an important Fib retracement at $1290ish.

GM Jenkins said...

Elmer's last comment was garbled, so I'm re-pasting here:

Elmer Habavilo said...
"@ Warren - interesting about the hitchhiker's guide... Its pretty crazy what people will spend their coming up with, at least in my view...

@ S Roche - i recall Sinclair coming through with 32*32 = $1024 in mar 2008 (though the intraday peak was more like $1032).. and he nailed 35*35 = $1225 remarkably well post-Sept 2009 breakout... $1225 was an important level for a while... also $1600 - 1650 remains an important level (JS has included 1650 in various illustrations, a la William Blake's illuminated manuscripts maybe)... but yeah , it did breakdown somewhere in there, and he was just horribly off on his dogmatic pronouncements at some point… JS should get into that though-- mix biblical prophecy with metals trading, put together an illuminated manuscript with this angels stuff, and see how saleable the whole thing is as artwork… and for god's sake, don’t forget to throw in the S&P's hitting 666 on 3/6/09--- maybe a momentary victory for Satan over God, until the angel $1764 cast Satan out of heaven…

Interesting that theres a Fib retracement level at 1290... i havent watched that Fib stuff too much, though i know the 23.8 and 38.2, 50 (or whatever those numbers are) are commonly enough referred to by people… Fib might be essentially numerology too, but of course theres the old argument that if everyone is aware of it, it takes on somewhat more importance... "We're all numerologists now", it would appear, to paraphrase Milton Friedman/ Nixon…

GM Jenkins said...

Thaks SRoche, glad to see you back. How's that fellow debauchee SProchemian doin anyway?

You mentioned the CPI/gold a while back. Any knowledge on how I can get CPI values? Ideally in some kind of spreadsheet form where i can save into a csv file and load them into stockcharts.com.

GM Jenkins said...

^ and yeah i know i could google it, but i'm really *that* busy. It ain't easy makin' green... Ok, back to work.

S Roche said...

@GMJ

I'm tempted to suggest you just make the CPI numbers up, but I will hunt around and see if I can find a source.

As to that publicity-seeking pRocheimian rascal, I find talking to him interferes with my trading.

All the best,

Gary said...

Interesting to see those moving averages that were in GM's charts have been hurdled with some ease so far today, let's see if they hold as support.

So many commenters (I'll name Costata and VtC as two examples, plus every living fofoabug of course) were expecting miners to keep falling in price, along with paper gold and GLD inventory.

So many fail to realise they project their biases out into the world, rather than accepting reality.

It will be fascinating to watch how these people attempt to rationalise their erroneous beliefs over the next few years of gold's bull run. Fascinating.

ssgtrader said...

Elmer, thanks for your post on CAD plus someone else I followed (paid subscription), I managed to get back on the train before silver moves up. Since I missed NDX and I don't like to chase so I look at those that hasn't move yet and got on the silver train.

Elmer Habavilo said...

SSG - no problem... yeah, CAD's chart in the last 3 weeks has been an important one for the metals... I still think that gold at $1250 in Jan 2014 was a better buy than gold at 4750 in the Oct - Nov 2008

Elmer Habavilo said...

*750 in Oct - Nov 2008

ssgtrader said...

The paod subscription showed CRBS chart broke out of long term down trend last week, so it got me interested in commoditires again, anyway thanks again. Hope is a train ride to the moon ... ha ha I know your 2014 target only $30, that is not really the moon level.

Elmer Habavilo said...

SSG - if you are talking about the Commodities Research Bureau (CRB) index-- yeah, that might be turning around and heading back past 300. To me, 300 - 350 on th CRB is the pre-inflationary stage for the USD.. when its over 350, like it was in first half of 2008 and first half of 2011, then we're getting some inflation... im looking for the CRB to get back to 350 this year... next year too 400 and over maybe... that means oil in the $125+ range... it will be interesting to see when the whole commodities complex picks up again like it did in the first half of 2008

Elmer Habavilo said...

SSG - if you are talking about the Commodities Research Bureau (CRB) index-- yeah, that might be turning around and heading back past 300. To me, 300 - 350 on th CRB is the pre-inflationary stage for the USD.. when its over 350, like it was in first half of 2008 and first half of 2011, then we're getting some inflation... im looking for the CRB to get back to 350 this year... next year too 400 and over maybe... that means oil in the $125+ range... it will be interesting to see when the whole commodities complex picks up again like it did in the first half of 2008

ssgtrader said...

Both gold and silver broke through the all important 150DMA, good sign. But short term HUI is showing a doji, maybe at risk of some pull back. My stops will be beloe those 150 DMA for now.