Monday, May 21, 2012

James Turk & John Embry

The experts are still very bullish on the precious metals longer term. (Years, David Morgan has mentioned 2016)  The fundamental reasons for holding and investing in the PM's are still solid.  The cartel cannot suppress the price forever.

David Morgan Interview

Thursday, May 17, 2012

Gold Double Bottom

Gold has declined back to the lows that were produced in late December 2011 and had a reversal day which shot it up $34 for a close of ~$1575.

Previous posts mentioned that a potential uptick would occur due to the oversold RSI and Slow Stochastics readings.  Both are now heading in the upwards direction (Blue Squares), but will the trend continue?  Especially going into the summer months...?

Circled in Pink are the low points over the last 6 months which many would call a double bottom.  Is the 1530 area the bottom for Gold in 2012?  It's anyone's guess at this point.  It may be a good area to add to a position for those waiting to get into the market.  (And for those that do not believe that this bull market is over).

I'm expecting the trading range to continue until late August, early September.  The seasonals at that time may kick Gold back to the highs that were produced last year.

Gold and Silver stocks are trading at yearly lows, P/E ratios are low for many of the senior and mid tier producers.  When most people want to sell, the Wall Street sharks will gladly take your shares and anyone else that wants to cough them up.  Ride out this storm and if your want to get out, wait for the next oversold / Parabolic move in the HUI, GDX, GDXJ.  (This may be a while)

Monday, May 14, 2012

Gold - Bottom soon?

Gold is still in a sell off downtrend which may be bottoming out soon ?  Sometimes a stock will over shoot to the upside and to the downside before a reversal. Gold may produce a double bottom near the $1550 level which was near the end of December 2011. (Indicated with the light blue line)

If there is a breach through the $1550 area, Gold may do a 100% retracement back to the low point before last summers rally which would be near the $1475 area.

The 50 dma crossed over the 200 dma a few weeks ago indicated with the red arrow.  RSI and Slow Stochastics are oversold, so a rebound to the upside may be realized within a week?  That is unless the sell off continues and the Slow Stochastics become embedded to the downside.

This may be a good time for shorts to cover their positions? Going into June and July, more consolidation and volatility is probable.

Saturday, May 12, 2012

Bottom fishing Gold

Sell in May and go away until Labor Day, is there any truth to this?  Specifically with the Gold market?  Maybe...

Mid term, Gold is in a down trend with lower highs since the top back in August 2011.  It may retrace back to the low in December if the trend continues. No one really knows where the bottom will be for this short term bearish Gold market.  

Should it break the December low, the next significant support low is back in July 2011 just under 1500. That will be a 100% retracement from the major summer rally last year.

RSI and Slow Stochastics are in the oversold area which typically rebounds within a few days.  If the slow stochastic embeds, Gold will be heading lower.  Many see this a a buying opportunity and will be accumulating.

This consolidation period will most likely last for the next few months.  The seasonal demand for Gold in August / September may be the catalyst for the next uptrend. ?

Saturday, May 5, 2012

Gold, Silver, HUI/Gold Ratio

3 year Gold chart, the consolidation continues.  Gold is still trading under the 200 day moving average and is in a slight downtrend.  A mid term wedge pattern is formed which typically ends with a break up or down, we should see some movement one way or another within a few months...?  Possibly post summer...?

3 year Silver chart - A clear downtrend is seen with Silver as well as a mid to long term wedge pattern. It is trading below the 200 day moving average and the RSI and Slow Stochastics are near the oversold level. Similar to Gold, the price will typically break either up or down through the wedge trend lines. The question is, which way is it going to break?

If the cartel want's to cover their shorts, expect the price to break down.  They can load up on ZSL, purchase puts on SLV and short the futures contracts and make a lot of fiat. Maybe the CME will raise margin a few times to slam the price back to the low 20'ies?  Easy money when you know when the margin increases will be announced and in effect.

If Silver should get slammed, the cartel as well as others (Soro's, Carlos Slim, Goldman, etc...) will probably go long to make a few more fiat bucks. A few hundred million is pocket change for them, but they will take the profit...

Gold/HUI Ratio  (HUI Index divided into Gold)  Gold and Silver stocks are trading at lows that haven't been seen in a few years.  Why purchase Gold or Silver shares when the S&P500 is up 8.87% YTD?  (For reference, the GDX is down 14% YTD)

The long term PM charts are still in a bull market, so those with physical bullion can just go about their business without worry. The PM savings account should not be viewed in fiat currency, but in how many ounces you actually own.