Gold Blog

Not Bad, Waking Up On the Right Foot

2012-01-26T06:50:00.001-05:00

Following up from our last post, we have in fact increased our position @ USD 1670 and now we are raising stops to B/E @ USD 1645.

Don't take it for granted but in our view the POG has taken off for the big one, so our plan, considering that we are already long at a good price, is to take it easy and protect those positions by raising the stop every 2 weeks.

Target for May? unknown. Will it go through USD 2000? very likely. Nice thing about this move up is that we don't have to check on our positions anymore for at least two months. 1Q is commoly bullish and the move in the last 2 weeks has confirmed our statistics.

Not Bad, Waking Up On the Right Foot

2012-01-26T06:49:00.000-05:00

Following up from our last post, we have in fact increased our position @ USD 1670 and now we are raising stop to B/E @ USD 1645.

Don't take it for granted but in our view the POG has taken off for the big one, so our plan, considering that we are already long at a good price, is to take it easy and protect those positions by raising the stop every 2 weeks.

Target for May? unknown. Will it go through USD 2000? very likely. Nice thing about this move up is that we don't have to check on our positions anymore for at least two months. 1Q is commoly bullish and the move in the last 2 weeks has confirmed our statistics.

Raising Stop To Allow For a ST Correction

2012-01-16T18:42:00.000-05:00

It is quite possible that the options expiration due next week prevents the market from rallying just yet.

We will raise the stop on our USD 1607 long to USD 1621 so as to lock-in some profit.

If the market rallies from here we'll be just fine and would actually increase the position on a break above USD 1667.

January is tipically sort of range bound until February when there is usually a breakout to the upside.

Going Long Again. Thighter Stop This Time

2012-01-05T17:42:00.002-05:00

It seems like the low for January may be in. It is interesting to notice that even though the USD is strong at the moment, the POG has not given up considering the bearish sentiment in the charts, however it is noticeable as well that the sell-off is all about EUR weakness rather than USD strength, that's is quite evident by looking at the other crosses as well as equities around the world.

Anyhow a base has been building above USD 1600 and right below the 200-Day MA @ USD 1632 and therefore we feel that a little risk may be worth it either before or after the NFP numbers tomorrow.

We do not have an entry level yet as the volatility is so high that few pips make the difference so that anything between USD 1602 and USD 1614 midmorning will be very attractive to go long.

Our stop is going to come @ USD 1590. There is no strategy for shorts at the moment and we hope there would not be before the summer. We will keep you posted anyway.

Taking Profit On Our USD 1590 Long

2012-01-04T10:47:00.000-05:00

Upon the rejection of USD 1613 we are taking profit at USD 1605 and will not open a new trade until when we see a more stable, trending EUR/USD or a break above USD 1630.

Apparently resuming the uptrend for the POG would not be an easy task due to USD strength.

Although POG always wants to go up sell-offs are magnificent and that's why we do not want to be in the risky side of the trade. Going short? difficult task at the moment but we will probably attempt it if the EUR/USD cross breaks below 1.2860.

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Put At Play Some Risk to Start Off the Year

2012-01-03T09:00:00.001-05:00

Happy New Year to everyone. We will kick-off 2012 with some big boy's trade.

We are going long at current USD 1590 with stop @ USD 1510, above USD1621 we will raise the stop to B/E and leave the trade open for either 1 or 2 weeks depending exclusively on technicals.

This will give us time to figure out what the 1Q is going to be while keeping a calculated risk at play.

We may try a ST short trade from the 15th of January through the 30th but the EUR/USD rate will pretty much lead us to decide what to do from the 1st of Febreuary onwards.

Our best wishes for 2012.

Remembrance of My Post From Nov. 2009

2011-12-23T09:12:00.000-05:00

Before going offline I just wanted to point out why the long term perspective in the Gold Market is the right strategy to succed. See below the post that I wrote back in Nov. 2009. I still have the same view for the next 2 years, let's see if it works LT.

Showing posts for query 850. Show all posts

Thursday, November 5, 2009

Will There Be Simmetry In The Annual Chart?

I went back to my posts published back in Feb. 2009, when I expected gold to reach USD 1200 by Jun. 2009, and then realized once again how important it is to maintain a long term perspective in this market. If you read those posts you would know what I am talking about.

Let´s speculate a bit about what´s going on. As usual this is not going to be one way straight up to USD 1500 and we would like to keep a long term investment but also be able to cash out from volatility. Looking at the annual chart only 3 important supports remain in place, USD 730, USD 850 and the newly built USD 1000, now when USD 550 was broken back in 2006 the market corrected sharply after a USD 230rally to then reestablished the uptrend until when it reached USD 1030, needless to say that USD 850 was the bump on the road either way but the final line can be traced from USD 550 to USD1030, USD 730 was then left behind and USD 850 became the new floor. If my simmetry theory plays out well, USD 1132 would cap the market short-term and then a sharp correction would be expected down 230 pip to USD 900 or so(second kiss to USD 865)) to then, as it happened before, resume the multiyear uptrend stragiht up to USD 1460. I´m NOT saying sell short, no shorts anymore, what I am saying is buy sharp dips and add on the way back up. Entry levels for the next six months are USD 850, 930, USD 1020 and USD 1070 but buy on the way back up not on the way of the falling knife in the correction.

Going Long @USD 1606 With Stop @USD 1566

2011-12-21T10:16:00.004-05:00

We booked profit a bit earlier yesterday but the point is that we actually booked a nice profit. As mentioned before we were looking for a dip to the USD 160x level, which came this morning after a strong sell-off from USD 1636, however the truth is that the price broke above the 200 day MA yesterday with no problem at all.

If the Christmas Rally materializes within the next couple of days we will just add to our position above USD 1621 and take profit on January 2nd to then buy the next dip depending on the techical development observed on that particular date.

Merry Christmas to everyone. This blog will be inactive until Jan. 3rd 2012!!! Happy Holidays

Booking Profit And Setting a "Buy Dip" Order

2011-12-20T09:56:00.001-05:00

Although markets began to recover to the upside, with some strength, we believe it is nothing but short covering as we approached the christmas rally.

Since the market still has to overcome the 200-day MA is it wise for us to book profits today on our USD 1570 long and then buy the next dip within the next couple of days possibly somewhere between USD 1571 and USD 1603.

Our risk will be the full 4500 pips booked today.

Weekend Setup Stop @ B/E On The USD 1570 Long

2011-12-16T10:25:00.003-05:00

As an update on this strategy, everything seemed to work as planned.

Lack of follow-through may lead us to book profit and reopen at on a dip to USD 1600.

Will update at the close on Tuesday.

Long In Full Force @ USD 1570 Stop @ USD 1520

2011-12-15T03:58:00.007-05:00

We think we are making the right call here as the profit/risk ratio seems to be in our favour.

The trigger for a resumption of the LT rally will be a weekly close above USD 1610 and since we switched to long positions as a result of our NY session follow-up (see post from yesterday) we now have 17000 pips from the sell-short trade @ USD 1739 to risk, well we are going to put 5000 of those pips at risk by setting a stop order @ 1520.

The aforementioned stop will be raise to B/E prior to the close on Friday so summing up the result will be zero risk with a great potential of revisiting USD 1900 and then USD 2500 (after a USD 1900 to USD 1720 correction).

If we are able to setup the trade that we dicussed a month ago and enter Feb. 2012 with either a 1.000 oz or a 5.000 oz position life will be good by July 2012.

Lowering Stop to USD 1641 On Our Sell-Short Trade

2011-12-14T06:22:00.000-05:00

The price of gold is in consolidation mode with bearish bias, however we believe that either today or tomorrow we are going to have a reversal from anywhere between USD 1585 and USD 1610.

Our stop & reverse level will be define during the NY session bearing in mind that a close below USD 1600 this coming Friday will be very chart damaging MT with a new trading range between USD 1700 - USD 1300 to be on the menu, if there is a weekly close below USD 1600 we will raise the stop to USD 1570 on Friday (for our long if we happened to enter the trade as planned).

For this purpose our stop for the long trade will go on USD 1520 that is risking 9000 pips out of 11500 pips booked this week (worst case scenario).

If the reversal between USD 1585 and USD 1610 actually takes place within the next couple of days then the minimum target will be USD 1900 and then USD 2500 after a correction from USD 1900.

Protecting The Sell-Short Trade

2011-12-12T09:20:00.000-05:00

Our short trade from Friday is working out well so far, and therefore we are lowering the stop to USD 1703 today and would close the position and swicth to long positions either by @ 12:40 pm today or during the london AM fix tomorrow.

It's very important to keep in mind that a weekly close below USD 1600 will change completely the MT forecast for the POG so that whenever we switch to long positions there would be an unmovable stop order @ USD 1585, if the USD 1600 level is able to withstand the current sell-off then we can bet on a long term recovery which will eventually exceed USD 2000 by March 2012.

As far as our short trade is concerned we still hope that USD 1620 would be the turning point however since we will be booking almost 10000 pips today our risk will be minimized if we switch to longs on a higher level, let's say USD 1635 and still placing the stop @ USD 1585 (5000 pips risk).

Taking A Bet On The Short Side Today

2011-12-08T06:41:00.000-05:00

Considering that we have been keen to protect our profits within the past 3 weeks we are taking a risky bet today by selling short at USD 1739. Our target would be the USD 1620 - 1640 area as mentioned last week.

Stop has been set at USD 1769 (sticking to our 3000 pips stop) and we will switch to full longs somewhere between USD 1635 and 1640 with stop coming @ USD 1550 (90% of the profit eventually booked).

We are aware that we are using our gut feeling and historical data from previous years to setup this trade, it is not that we are quite convinced about the actual move that may occur.

The break of USD 1770 on the topside would lead us to go long with a tight stop below USD 1755.

In our view the next leg, after testing some significant support next week (either USD 1640 or USD 1610, will be huge and may easily go through USD 2000 with no effort at all in 2012-1Q

Taking Profit and Standing Aside

2011-12-02T09:16:00.008-05:00

We are booking profits @ USD 1755 from our long @ 1735 and we will stand aside for a couple of weeks as the market has become increasingly volatile which reflects nervousness from market players.

We will leave the dust settle before taking a position again, however a dip to the USD 1602 - USD 1632 area will be a "must buy" for us placing a stop below USD 1590.

If we don't see a clear buy signal before the Christmas Rally we won't do nothing other that a short-term buy on Dec. 23 with a target date on Jan. 3rd then we will reasses the yearly strategy when the bulls take control of the market for good, sometime between Jan. 15th and Jan. 30th.

Booking 2000 pips today (USD 20) puts us at a breakeven level again considering that our short @ 1731 was close with a 2000 pips loss @ USD 1751.

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Going Long Above USD 1730

2011-11-30T08:53:00.001-05:00

Price has consistently broken up above USD 1731 which leads us to leave the short trade opened @ 1731. Our stop @ 1682 was trigerred on friday but we kept the order to sell @ 1731 with stop @ USD 1751 and although our stop is still good we expect a bit of a pullback to the USD 173x area where we are going to switch to long positions, giving up a few pips in the process.

Our USD 30 risk tolerance from last week is still good so we see this deveploment as a wise turn in our strategy still using those 30 bucks which is nothing but less than 50% of the profit booked on Friday @ 1690.

Our expectation is for the price to continue the rally to new highs into 2012 so that as soon as the price reaches USD 1770 our stop in the USD 173x long will go to B/E. Stop will go below 1710 for the new long trade @ 173x

Quick Pre-Holliday Setup

2011-11-22T12:59:00.007-05:00

Stops to B/E, Limit @ 1730 Sell-Short Order @ USD1730.5 with Stop @ 1751, Target for next week @1620.

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Target Reached, Next Setup Waiting To Be Trigerred

2011-11-21T11:10:00.000-05:00

We have reached our target @ USD 1690 today. Our next setup is to go long @ USD 1682 with stop @ USD 1652, it's been planned in such a way that the risk will only be less than 50% of the profit booked @ USD 1690.

There are 3 options from here:

1- The price finds support @ USD 1682 and rebounds for the rest of the year in order to resume the bull trend in 2012.

2- The sell off continues until @ USD 1642 to then rebound in choppy trade until Jan. 2012 and then resume the bull trend.

3- USD 1642 and USD 1610 are broken before December and then the Gold rally would have come to and end for now.

Any of the aforementioned scenarios will always be traded with a USD 30 stop until when we figure out the most probable forecast for next year, one scenario at a time.

Good Call Yesterday

2011-11-17T16:19:00.000-05:00

We made a good call yesterday and now we are targeting USD 1690 in order to switch onto a long position.

Since we will likely book another 70 pips tomorrow it's been decided to put at risk the USD 30 we spared this week and then go long at USD 1683 with stop @ USD 1653, considering that USD 1684 is a major support and if broken things are gonna get uglier.

If our long position works out well we will play the USD 1690 - 1737 range until next Wednesday when the options expiration thing is out the way and the pre-holliday short covering could give the market a nice boost for an MT trade.

We need a close above @USD 1803 this month to confirm a bull trend resumption, otherwise, as we said before we would either stand aside until Jan. 2012 or go short with minimum risk to the topside.

Exiting Our Long at USD 1770

2011-11-16T16:21:00.001-05:00

POG failed to rally from USD 1762 which has prompted us to leave the trade B/E.

Next attempt is a quick short from here looking for either USD 1731 or USD 1690, stop has been placed at USD 1776.

Whatever level we decide to swicth on to a long position will have a USD 30 stop which is the same risk tolerance we decided to play with this week and has not been lost yet due to our B/E strategy.

Short OK Next Try Long @USD 1762

2011-11-14T11:57:00.002-05:00

Our quick sell-short trade from Thursday gave us a nice cushion for our next attempt; we booked 40 pips which we intend to put at risk in today's/tomorrow's setup.

Since we believe that the bullish trend has resumed considering that a daily trend line has already been established, we will attempt a long position between USD 1761 and USD 1772 (whenever the hourly divergence indicates a good entry point) with stop @ 1731.

If the price goes below USD 1731 then our previous setup will be back in play which means we will buy the dip to USD 1700. Now if the long position @ USD 1761/72 works out well then we will add to the very same trade on a break @USD 1802 and that could possibly be the right setup to go into 2012, in this particular case we would bring the stop order to B/E on December 15.

Buying the dip to USD 1700 will be protected with a USD 30 trailing stop, in the event that the price goes below USD 1670 we will stand aside until January 20, 2012.

Looking to Exit At B/E

2011-11-10T07:34:00.002-05:00

We don't like the move seen yesterday and we'll leave our long trade B/E.

There is a number of factors that might keep the sell-off moving, like options expiration on Nov. 22, Veterans Day on Nov. 11, Thanksgiving on Nov. 24 etc.

This may not relate with fundamentals but with ST market cycles and seasonal movements; we plan to reenter the long trade on a dip below USD 1700.

We may also try a quick sell-short trade at USD 1778 with stop @1787 just on an attempt not to miss the continuation of the sell-off, if that were the case for the next couple of days.

Reassesing The Next Entry Level

2011-11-08T11:15:00.002-05:00

We may be reassesing our entry level this week considering the fact that the USD 1770 area was penetrated, with no problem at all, reaching USD 1798 in no time.

We initially thought that the USD 1740 - USD 1720 area would be the ideal level to reenter long; however, looking closely at the daily chart and the weekly chart, that may not be case in the end.

Considering the analysis conducted in the weekly chart, a much better entry level would be USD 1770, in that case our stop would go @USD 1721; in this scenario we will be respecting 2 essential rules for this week, the first one is the USD 50 stop mentioned a couple of posts ago and the second one is to put at risk basically half of the profit booked yesterday.

In order to build up the 1.000 oz position, part of our yearly strategy, we will add to our longs @USD 1801, not in the first hit though but when the level gets hit for the second time. Depending on the strength of the move we may take profit at @USD 1845 and then buy the dip to USD 1800 again. If the price runs through @1850 in the first try then we will keep the position "as is" and target USD 1966 which may be the high for the year.

On the downside @USD 1690 is the level to watch on a closing basis, in which case we would stand aside until the Christmas Rally.

Profit Booking Day For Us

2011-11-07T07:51:00.002-05:00

We will be taking profit today @USD 1785. The price may go through that level due to strong momentum seen overnight, however our position has given us a nice profit in less than a week and we don't want to get too excited for now, otherwise the effort may not be worth it.

We'll take it easy the next couple of days in order to reestablish our long position on a drop to the USD 1740 - 1720 area risking half of the profit booked today so that last week's setup continues working with increased flexibility in order to absorb volatility.

Our view regarding 2011 and the first half of 2012 remains unchanged at the moment and we will not consider a sell-short scenario as long as weekly closes are above @USD 1700 and the price does not drop below USD 1680 on a closing basis, technical wise.

Entry Level Reached Today

2011-11-01T15:55:00.003-05:00

We've gone long, as we planned last Friday, @USD 1681 however due to the uncertainty created around the Eurozone situation we've decided to place a B/E stop in our trade so that if there was a spike down we will be fully protected. We expect however that tomorrow's low would not go beyond the USD 1691 level.

If we were wrong and the price drops below USD 1682 then we will buy again @USD 1662 with a stop below USD 1640 and reasses our LT trade trade in November 15.

Needless to say that if the market runs against our forecast any weekly close below USD 1610 will be very damaging, Medium Term.

We are even thinking in adding to our position on a drop to USD 1691 tomorrow, not so early though, but sometime between 9:30 AM and 10:30 AM ET.

Buy Signal Given

2011-10-25T11:57:00.002-05:00

As posted a month ago (see post from Sep. 29th) weekly closes above USD 1610 and a monthly close above USD 1704 will give a clear signal that the uptrend has resumed for good.

Although we still need to see a consistent close above USD 1704 this coming Monday, momentum is strong so that we'll buy the retracement of today's rally for a USD 1813 target and then USD 1920.

POG will likely consolidate between USD 1813 and USD 1920 for the remaining of 2011 to then post a wonderful rally in 2012.

Our entry level for tomorrow will be the USD 1675 (possibly USD 1668) area with stop below USD 1659 and then take some profit at USD 1737 and buy again on a drop to USD 1704 for a USD 1813 target where we will book some profit to then buy the retracement around USD 1740 for a USD 3000 target by mid 2012.

That should be good enough to build a long-term position targeting the USD 3000 levels within the next 2 years. Our strategy is to build up a 1000 oz protected position above USD 1800 which will give us a 1000 oz * USD 1200 = USD 1'200.000 profit with a USD 20.000 account, taking a maximun risk of USD 5000 at a time.

We do not have a strategy for short postions other that protect any long position with a USD 50 stop.

Not Too Excited but Sticking To The Strategy

2011-10-20T11:41:00.002-05:00

Our Strategy is working well so far, however we are not getting too excited in order to control our emotions and the inevitable neurological response to what otherwise would be a sensible aproach to the market under current conditions.

The reason why we mention the emotional preparedness for the the remaining of this week is because we are wating for a bottom on or around USD 1550 or a weekly close above USD 1610 so that we can go long MT however USD 1610 is a very critical level from which strong volatility would easily erase any gains we may have booked lately.

Our approach to the market, regardless of the final direction it takes, is to be always protected by trailing stops until when a weekly close confirms either that we have resumed the LT bullish trend or a MT trend change has been trigerred.

A Promising Wait

2011-10-18T08:16:00.002-05:00

POG has begun the sell-off we were expecting for last week, some analysts believe that a new test of the 200-day moving average should be seen during the NY session as opposed to the test seen in the European session few weeks ago.

In any case the next 2 weeks will give a clear hint as to whether or not the 200-day moving average will provide support in order to establish a LT bottom, so that the bull run can continue into the end of the year and then 2012.

We will stick to our previous strategy even if the wait extends beyond this week.

Note: When we refer to the 200-day moving average we are actually pointing to the daily chart on a closing basis.

Ongoing MT Consolidation

2011-10-13T08:22:00.001-05:00

POG is stuck between USD 1600 and USD 1700. We will play the range with a MT bullish bias.

Timeframes are not what they used to be so that even though we believe our forecast is accurate, as it has mostly been this year, our historical timeframes are not working so that we are gonna give it a chance to consolidate, slower than we expected, before analyzing a MT entry level.

As we said before we would expect a somewhat strong sell-off from here in order to then resume the MT bullish trend. Our "buy" zone is somewhere between USD 1500 and USD 1570.

If we get a weekly close above USD 1610 this week we will buy around this level with stop below USD 1550. The opposite scenario will lead us to begin selling rallies in the vicinity of USD 1700 for a USD 1300 target, however this is the riskiest strategy and we will avoid it until when the dust settles if we in fact see a weekly close below USD 1610.

Our bias remains bullish above USD 1610 on a weekly close basis.

Plan "A" Still Good

2011-10-04T10:38:00.000-05:00

Considering the strength of the sell-off today we are reassesing our entry point at @1575. It is very likely that USD 1530 and even USD 1480 be tested within the next couple of days.

We will wait for a bullish divergence to show up on the falling knife in order to try our long. If the week closes below USD 1610 there will be another bloodbath in the Gold market.

Do not even try to fish a bottom in the POG before either tomorrow morning (ET) or the day after tomorrow. We are so glad to have booked profits today at @ 1670 in our long position.

There Is Still Panic On the Floor

2011-10-03T19:08:00.000-05:00

We commented on the similarities of the initial sell-off in all markets compared to what happened in 2008 and it is indeed developing in a similar fashion except for Gold which has doubled since then and it is not showing signs of slowing down so far.

Looking at the EUR/USD and the S&P 500 it seems like a new round of widespread selling will be seen this week, although we favoured the resumption of the bullish tone in Gold it won't happen before some consolidation above USD 1530 has been completed.

In our view the EUR/USD will go down to 1.29 and then back up to USD 1.40 this year, that would trigger a buying spree in Gold to at least to USD 1900 by Nov/Dic 2011, again weekly closes below USD 1610 are going to have significant impact MT in the POG.

We are taking profit in our USD 1575 long position (@1670) and then will be looking into buying at the same level again with the same stop used before, below USD 1530.

Be careful with your stops considering that volatility will likely mirror the one seen 3 years ago.

Rebound or Break This Week

2011-09-29T07:19:00.001-05:00

As posted previously we went long at USD 1575 with stop below USD 1530, our indication that a strong rebound is likely will be a weekly close above USD 1610 and a monthly close above USD 1704.

We are watching the EUR/USD as an indication of market stabilization, a lower USD will support the rebound in Gold.

A weekly close below USD 1600 will prompt for additional liquidation of MT long positions as well as the addition of speculative shorts.

We do not have any strategy setup to try short positions neither this week nor for the remaining of September.

Sticking To Medium-Term Techicals

2011-09-19T07:39:00.000-05:00

We are taking a shot this week using our long-term technical indicators as indicated previously. ST charts have proven useful only to selecting an entry point but at the same time have shown its uselessness as far as predicting intraday targets.

Our USD 1955 does not seem to be achievable under current market conditions (check the Weekly Chart), as a matter of fact and in spite of continuous bounces from significant supports we will be selling yet again in the USD 1830 - USD 1850 area with stop above USD 1905 targeting the USD 1600 levels, where we will flip to net longs using a stop which put at risk 50% of any profit made in our short try, if it, in fact, works out as expected.

The timeframe for this MT strategy will be 1 month which takes us to the last week of October 2011.

Updated Target

2011-09-06T09:20:00.000-05:00

POG came back up to hit USD 1921 which is USD 3 below our former target at USD 1924, however this time with very strong momemtum, after having close above USD 1720, following the correction that took place last week.

As we said before we were watching the USD 1720 and USD 1610 levels carefully and then we went long at USD 1730 with stop below USD 1699; even though it looks like a good "buy and hold" trade we are not so confident today as to the short-term techicals leading to a sustainable break above USD 2.000.

Anything may happen in this environment however this excitement could lead to painful ST corrections so that we will be flipping to short positions either in USD 1965 or USD 2013 depending on how strong the momemtum is on the first try on either level.

In order to relieve pressure, cash in good money and open up technicals for the remaining of the year and therefore next year we favoured a deeper correction to at least USD 1610 (we would prefer USD 1575), the aforementioned planned trades will have a USD 40 unmovable stop.

If this were the case and in fact we correct down to the USD 1600s level then I would bet on a USD 3000 Gold in a year time.

As mentioned in our previous posts, weekly closes below USD 1575 will drive MT players hesitant regarding the MT forecast for Gold.

And It Finally Collapses

2011-08-24T12:12:00.001-05:00

POG came USD 10 below our target at USD 1924 and then collapsed as it should have, taking out all major ST supports.

The question now comes to find out 1. How low it is gonna go and 2. Is this a the big correction we expected or is it an MT trend change, as usual nobody will know until when it is too late.

We do have and will monitor 2 important turning points if the uptrend resumed in the 3Q, those are USD 1720 and USD 1610 if weekly closes are seen below those levels the trend will continue down and may gain extreme momentum particularly below USD 1610. Of course consolidation will be seen in a wide range so we'll work with short-term charts and long-term targets.

A monthly close below USD 1610 will have a significant technical impact for the remaining of 2011.

For now we expect to remain short as long as the price is below USD 1813.

The Advantages Of being Older

2011-08-22T15:55:00.001-05:00

If you were 20 years older than I am then you would have experienced the parabolic move that took place in 1980 and then you would be looking at the Gold market with great accuracy and you would for sure have bought and held Gold since 2001.

Well I did not experience such an scenario, that's why although we've been bullish in Gold since 2007 we have never actually held a position for more than 3 months and then you look at the market and say to yourself "If I had kept the 2.000 Oz that I bought at USD 575 back in 2006 WOW I would be a millionaire now", simple math USD 1.900 -USD 575 = USD 1.325 * 2.000 = USD 2'650.0000, That's is actually being a millionaire ( 2.6 millions).

Well lesson learned is not to accumulate so much crap information from everyone, if your gut feeling is telling you something and the long-term indicators support so just go for it and be patient.

We are still bullish on a multiannual basis and will try to buy at correction levels by the end of October, anything between USD 1500 and USD 1700 protect it with sell orders and wait for the American government to continue its screw-up business for years to come.

Mindset Re-Setting

2011-08-18T16:44:00.002-05:00

We were right as far as saying that GOLD was gonna blow one top after another following a big sell-off, however we were terribly wrong understimating the 10-day moving average that gave a buy signal on July 12, however we mentioned that we were in uncharted territory once we passed the USD 1575 level and then everything was going to be a guess for us.

It is common to try stick with a trend change that is nothing but wishful thinking in this type of scenarios so that we are going to go with the trend, hopefully buying around the USD 1780 level with a stop below USD 1750, our initial target would be USD 1925.

A daily close below USD 1740 will force us to reasses our strategy and go back to previous posts associated with the big correction before the resumption of the multiannual bullish trend leading to what? USD 2000? USD 3000? I don't know 2014 will tell us.

Not Advising Just Posting!

2011-08-11T19:16:00.000-05:00

We are selling yet again, fortunately our cash from the 1604 to 1660 long provides us with some flexibility to sell short, as long as we keep tight stops.

Our entry level ranges from USD 1805 to USD 1740 and we will sell using purely techical levels, apparently USD 1813 was the spike over our USD 1721 level which we expect to be broken on the way down tomorrow, that will put the price right into the former resistance in the monthly chart.

If USD 1680 gives way within the next 4 days we will stay short for the big sell-off we mentioned before.

Anything above USD 1805 and we will back to the sidelines waiting for USD 1924 to be reached.

What A Bloody Ride!!!!!!!!!!!

2011-08-09T18:49:00.000-05:00

There was blood on the street today,as we said before this is 2008 all over again.

We will stand aside until we see clearer waters probably scalping is the best option at the moment.

Be so careful anyway.

Back to June 22nd Forecast

2011-08-08T07:18:00.000-05:00

This weekend we have further proved the importance of placing stops in such volatile markets.

For today we are going to go back to our forecast on June 22nd Quote "As we posted last month targets are in the area of USD 1620 and USD 1720, however don't take my word for granted because I may always be wrong as it has been demonstrated in the past" Unquote.

Our strategy today is to sell the rally to the USD 1726- USD 1729 area with a tight stop in USD 1736, there is no plan for longs because although the momemtum is high the risk/reward ratio is not worth it considering that we continue in uncharted territory. Resistance in the monthly chart comes in within the area subject ot our forecast back in June 22nd.

2008 All Over Again

2011-08-04T19:54:00.000-05:00

Well done, that's what I whispered to myself this morning. Our take in Gold just took a little longer to develop. We are going to go full short either in any rally between USD 1660 and USD 1675 or anything below USD 1640 in case that tomorrow we don't see any rally at all. Needless to say that USD 1685 is your stop level just in case.

If you thought 2008 was the worst year for global economies then hold tight because nothing has changed so far, we will go through a second dip following the same pattern that we saw 3 years ago with a little difference as far as Gold is concerned, once the 3Q sell-off is done (Sep.-Oct) Gold is likely to skyrocket for the next three years. We have not visualized the scenario for Gold yet but it is likely to be a 25% sell-off and then the continuation of the multiannual bull market, so sit tight and try not to fall in love with neither side of the market, play volatility and build up enough cash for the 2012 big rally. If you decide to stay short just make sure you have tight stops and a sensible stop and reverse medium term strategy.

Finally if Gold goes below USD 1300 then we will reasses the MT perspective accordingly.

Interesting Development

2011-07-25T18:53:00.001-05:00

We did not believe that the POG was in a bubble until this week, looking back to the last 5 years Gold has risen in a steady fashion without short-term spikes that would have led one to believe that the 1980s scenario was present in this bull market.

However the pressure seen lately has taken the POG to a new highs in a very short period of time. Although we said we were not going to go long at these levels, we have reassesed our view and we are taking a shot tomorrow somewhere between USD 1604 and 1610 with stop at USD 1589 looking for either USD 1660 or USD 1729 within less than 2 weeks (probably 1 week only).

If the price were to correct 25% in the 3Q the bull market would still be alive and will present a lovely opportunity to go long at the USD 1300 level. Down below at a new review would have to be conducted.

POG Is In Uncharted Territory

2011-07-21T16:19:00.001-05:00

POG is naviganting through a path never seen before and therefore forecasting the market has become more of a guess than anything else for me.

For now on and for the next 3 months we'll do just that, guess. Our guess is that long-term the market will follow its bullish path blowing one top after another. Short-term we are totally scared of trying long positions at this level.

We will raise our sell-short order to USD 1565 with stop @ 1585 and then go long again in Sep. 2011. It is highly unlikely that we attempt to initiate any long positions at the USD 1600 level even though the POG looks as bullish as it gets.

Back to First Base

2011-07-13T07:48:00.001-05:00

Well, we actually did it right by not guessing the market, the POG is definitively bullish but we don't think the price is right to go long at this time, the risk/benefit ratio is simply non-sense.

What we will do now and for the remaining of the 3Q is to raise our sell-short order to USD 1547 with stop @ USD 1565 and then find a better long entry level by mid-september 2011 looking into a 2 year rally ending in 2013.

For now our former targets for the 2Q came into play again. Meantime it is worth to look into currencies that are posting all time highs, such as NZD, and provide a good sell-short entry opportunity.

A Cautious MT Play

2011-07-07T09:17:00.000-05:00

It's been quite difficult to visualize the MT forecast for GOLD lately, particularly for the 3Q.

It's quite clear that the long term uptrend is still there and that fundamentals and market behaviour will support higher prices in 2012, however we see the POG posting lower prices within the next 2 months.

Since we intend to maintain sort of investor-like prospective in the market rather than a day-trading approach and considering that the sentiment is bullish today but POG has been unable to recover above the USD 1550 - USD 1575 we'll setup a sell-short order at USD 1522 with stop at USD 1536 for the remaining of the quarter.

It seems like the market has one more week to go before the next sell-off, we would prefer to think about July 15th but the cycles have not proven to be precise since a couple of months ago.

Intitial target will be USD 1436 and then USD 1310 by September 2011 otherwise we will reasses our view by the end of July.

Buy Order Trigerred

2011-06-22T10:53:00.000-05:00

Our old buy order at USD 1553 has been trigerred today, support now comes in the USD 1546 - USD 1553 area. If the market manages to close the week above USD 1575, well hold tight because the likelihood of a 3-week parabolic move will be right around the corner.

As we posted last month targets are in the area of USD 1620 and USD 1720, however don't take my word for granted because I may always be wrong as it has been demonstrated in the past.

Anyway you may want to be protected using a stop order below USD 1535 in case that you go long before the end of the week, again USD 1575 will give the signal and we will keep our long at USD 1533 with stop at USD 1535 for the rest of June. a Monthly close below USD 1550 is an inmediate sell order with a MT target around USD 1300.

Staying Bullish Before Important Seasonal End Rally

2011-06-21T09:12:00.002-05:00

Typically the POG posts an interesting rally in the first 2 weeks of July before crashing down into the 3Q, much more considering that the stock market is not doing a good job avoiding summer thin trading.

In many occasions the aforementioned rally is trigerred by the interest rate announcement in the USA, this event happens to be tomorrow, so although volatility will be high, we would like to buy dips either prior to the event or right after it, depending on the levels we see.

Levels at which we would like to enter long are USD 1520, USD 1526 and USD 1534, always protected by a stop order right below USD 1510. We are likely to see USD 1650 by Mid-July, if the rally in fact develops as expected.

If the price goes below USD 1515 into the close tomorrow then we will sell-short at USD 1514 with stop at USD 1525, looking for an extended move down until September 2011.

Cautious Approach Into Short-Term Setups

2011-06-06T19:52:00.000-05:00

Although Gold has shown its strength this week, we are not convinced that the impulsive move that we are expecting is underway just yet.

We would like to see a sell-off down to USD 1529 with a decent pullback above USD 1540 in order to get some assurance that USD 1553 will be effectively broken during the week, however we will be taking direction for the POG by following the development of the EUR/USD, which we believe is going to test 1.4950 again before the end of June in order to open the door to the 3Q cycle. A pull back to 1.4500 followed by a close above 1.4570 will confirm the technical picture.

A sell-short order below 1.5000 in EUR/USD will be an interesting trade to play into the 3Q, as well, when we expect a somewhat important sell-off in all markets.

Sidelined For Now

2011-06-02T12:09:00.001-05:00

We were stopped out @USD 1528 this morning. Although the market was a bit overbought short-term we did not expect such a reversal much less when the EUR/USD made fresh highs.

The other thing we were forecasting to occur by the end of June apparently took a head start, since yesterday, and that is the sell-off in the equity market, tipically Gold is being sold during those equity sell-offs to obtain some liquidity and to make up for stock losses.

We feel that we would be using wishful thinking if we setup a trade right now so that we will keep our long order @USD 1553 only and avoid short positions until when we see the weekly close and then, only then we'll reasses the next move. Keeping the long order is based in market dynamics and the fact that once the sell-off is done Gold will be seen as a short-term safe heaven.

Continuation Of The Bullish Trend

2011-06-01T11:47:00.001-05:00

As posted before we took profit at USD 1549 and then placed a sell-short order with stop at USD 1558, however the price is not backing off from the highs very much so that we will close the position on any approach to USD 1541 and then flip it out to long at USD 1541.

Targets still are USD 1618 and USD 1729. On a note June 30 is still our date to go full short regardless of whether or not our targets have been reached.

Stop for the long trade at USD 1541 comes at USD 1528 and we are trailing the intraday short so as to properly protect it.

A Quick Review Of The Medium Term Strategy

2011-05-23T12:13:00.001-05:00

We've decided to avoid swing trades and take a look at the technical development leading to a next big move in the POG.

We will only enter/stay in the market around the following levels

1. Remain long, as we are, until USD1549 where we will setup a sell-short order with stop @USD1558
1. if the above sell-short order is trigered and the ST trend reverses we will lower the stop to B/E and add to the position @1498 with @USD1421 as a MT target in a couple of weeks.
2. On a daily close above @1553 we will go long for USD1618 where we'll raise the stop to 1590 looking for USD1730 by the end of June.
3. If USD1527 is not broken at the close on Wednesday the 25th we'll go short at the close on Wednesday with target at USD 1421 in 2 weeks.

Intermediate levels are not worth it under the current conditions of volatility.

Make or Break on May 20th

2011-05-19T15:53:00.005-05:00

I believe we've come to the point where the POG will either make or break and based on recent volatility, as well as the ups and down in liquidity, Friday will offer the perfect scenario for a big move either up or down.

Since picking a bottom is quite difficult we'll setup 2 trades as follows:

1. Short at current levels (USD 1494) with a 10 pips trailing stop and then lower the stop to USD 1480 in the event that USD 1470 is consistently broken, we do not expect the price to go lower than USD 1465 tomorrow so that we would just leave the stop there just in case the market followed through on Monday looking for our USD 1420-USD 1430 area. In this case the stop and reverse level will be USD 1471, of course, in order to welcome the second leg up of the 2Q rally.

2. If the POG has not broken below USD 1480 by 8:45 ET then we'll lower the stop to B/E on our short and then setup a buy order at USD 1501 increasing the number of contracts at USD 1511 with a USD 1618 target by the beginning of June and then USD 1730 by the end of June when we expect to go full short for 3Q.

On a note, we believe that in August 2011 we are gonna have a huge slump in every single market, not as bad as 2008 but bad enough to take advantage of it, money wise.

Sticking To The Plan

2011-05-11T14:38:00.000-05:00

On a macro view there is a convergence in the monthly chart between the MA 10 and the trend line drawn from Nov. 2008.

It should be noted as well that monthly prices have never closed below the MA 10 (monthly chart)since Jan. 2009 and the area of convergence matches the MA 100 in the daily chart, which has always been excellent support in the multiannual trend, except for a couple of times during recession.

The above analisys did not support the price during the market crash in Aug. 2008 but come on it was a market crash.

Due to high volatility I would not recommend establishing short positions unless you have the muscle to withstand a spike to the week's high at USD 1526.5, however we've increasingly become very simpatethic with the USD 1420 level which we expect to show its strength within a couple of weeks.

We remain short at USD 1495 but will leave the trade inmediately on any spike about USD 1530 otherwise the positions will be flipped out at USD 1421 with an unmovable stop at USD 1389

Sell In Rallies but Always Protect The Trade

2011-05-05T17:22:00.003-05:00

We are glad everything work out well this week. We have taken profit today in our short position, so as to build up enough excess revenue for our next septup at USD 1421.

It's not guaranted that USD 1421 is going to be the short-term floor not is it guarantee that we'll get there, however we believe that building a USD 26 stop by going short again somewhere between USD 1485 and USD 1495, tomorrow, would do the trick, aiming to take profit at USD 1421 and then flip positions out to net long having a stop-loss order at USD 1395, that is because a close below USD 1390 is going to cause a significant technical damage. mid-term.

In any event there seems to be a strong chance of a bearish engulfing pattern in the weekly chart, this week, so that USD 1421 is not that far away, target will be 1670 (for the USD 1421 long position) by the end of 2Q. If we see a daily close below USD 1390 we will reasses our setup for a bearish continuation pattern in 2Q. On June 30th 2011 we'll become full bears for the 3Q.

Reestablishing Shorts at USD 1542

2011-05-04T10:53:00.000-05:00

We have reestablished our short position upon the rejection of USD 1542, today, with a tight stop in USD 1553.

We are looking to take some profit at USD 1503, however if the rebound from USD 1503 does not break above USD 1515 we'll sell short again looking for USD 1420 in a couple of weeks time.

Since we believe there is still a strong bullish leg to be completed before the end of 2Q we'll be looking into establishing long positions either at USD 1500 or USD 1431 (provide that USD 1500 was effectively broken) with a tight stop at USD 1395, there is no target in sight for the 2Q however we'll anyway be flipping positions out on June 30 2011 until September 2011.

It's All About Discipline and Patience

2011-04-27T16:08:00.001-05:00

Well, our sell-short level was nicely reached today (see previous post). When it comes to Gold it is all about planning your trade and trading your plan. From this level we expect a quite nice correction which may well follow into the "Sell in May and Go Away", however one can't predict speculative markets like the one we are in (remember July 2008?) and then a fixed, unmovable stop has been placed at USD 1542. Although the long-term view for Gold is rather bullish we believe that going beyond USD 1532 without seeing a strong correction will just put the market into a short-term bubble and that would be scary enough to prevent new longs from being established on our part.

Only God knows where the floor could be between now and September 2011, USD 1420?, USD 1300?, USD 1200? USD 1030? I don't know but there will be a significant multiannual floor level to be established this year. On the topside we don't see a real ceiling for the POG may be USD 2000? USD 3000? however don't get too excited, this will only happen in a couple of years, it's worth the wait as long as there is not short-term bubble forming as I mentioned before.

One More Leg To Go

2011-04-18T18:38:00.000-05:00

The interesting thing about Gold is that corrections are followed by panic but in the end the multiannual trend continues to go up.

Our take at this time, digging a bit in historical behaviour and technical charts, is that a correction may be near. We believe the fundamentals for Gold are not only strong but likely to stay that way for a number of years so that downturns should be seen as buying opportunity.

We are looking at taking a shot either side of the trade, it may be at USD 1460 buying or selling at USD 1529 whatever comes first using a fixed, unmovable stop USD 15 from the entry point, either one (if it works) will bring a minimun 1:3 risk/profit ratio with a significant chance of a nice follow through of around USD 70. Not looking at intermediate levels which will for sure be "harakiri" for small investors like us.

Short Term Outlook Change

2011-03-15T08:55:00.005-05:00

The POG has come to a crossroad apparently as a consequence of the recent events that have taken place in Japan, which in turn have significantly affected some markets, particularly those associated with risk appetite.

Our take on the Gold market is that there has been a widespread need to raise cash due to Japan's earthquake.

Since momentum is building to the downside we would not think in buying Gold at the moment until when momentum stabilizes which tipicaly occurs after 3 daily closes with nearly unchanged price, so that we'll keep and eye on USD 1390, USD 1360 and USD 1311 levels in order to reenter the market.

A weekly close below USD 1300 will dramatically change the outlook for the 2Q.

Profit lock-in is the right thing to do for now.

Volatility a la Carte

2011-03-03T16:05:00.000-05:00

Needless to comment on today's move, I still believe in the long-term bullish scenario but as posted, a couple of weeks ago, a lot of volatility was going to be in the menu.

Altough we did not jump into the market at 11 ET as planned, today's move seems to be strong enough to indicate continuation of the sell-off into tomorrow's session, even if it rebounds in the NY session. What we will do tomorrow is to setup a buy order around USD 1418 with a stop-loss below USD 1413, that should do the trick; however if it doesn't we will call off the day early, anyway, and enjoy the weekend.

How Do You Like It So Far!!

2011-03-02T16:39:00.003-05:00

I'm glad that whoever reads this blog have not been let down lately. One would expect a bit of consolidation between USD 1426 and USD 1440 however do not even try to believe the market is topping out because shorts would pay their price if at all attempted. The buy on dips is the play but do not underestimate the power of POG to mislead technical analisys, just buy a bit higher than the technical support and you will be just fine. There may be a deeper dip to USD 1421, if short term stops are trigerred below USD 1426, but that would be it, my plan is to let the market make its erratic moves tomorrow morning and then buy between USD 1421 and USD 1426; if that particular level is not reached by 11 am ET tomorrow then I will add to my position looking from a break above USD 1450 on Friday and then we are going to see a huge run up up to USD 1728 in the 2Q where shorts would be adviced for 3Q in order to resume the bull scenario into the end of 2011 for not less than USD 2300 in 2012.

Healthy Correction Underway

2011-02-22T17:06:00.004-05:00

It would not have been good to run through USD 1430 with the pace seen within the last 3 weeks so that I see the correction as very healthy. Supports are identifiable at USD 1390, USD 1379 and USD 1362 for a resumption of the bull scenario.

-

Confirmation Update

2011-02-18T10:45:00.002-05:00

Having overcome the USD 1377 level on a closing basis the 1Q bull run looks good. On a yearly basis the target for 2011 seems pretty achievable at USD 1688.

Time to increase longs in a decent amount protecting the investment below USD 1370.

Some Insight for February

2011-02-02T09:14:00.002-05:00

As indicated before the POG continues posting new lows, capped by the previously broken level at USD 1350. Whatever the development within the next 2 weeks may be the buy on dips strategy is the right one at the moment, Fridays have become the proper day to initiate longs with some certainty that the rallies are strong enough not to make your weekends miserable. Given history of price behaviour for the month of February and generally for 1Q then a turning point may be close enough. I would love to see the USD 1261 level however I find it unlikely at this time so that the setup will be buying dips on Feb. 4 and Feb. 11 mid-morning (Eastern Time), provided that the price has not become a falling knife on Feb.3 and Feb. 10 respectively, are either USD 1261, USD 1294, USD 1310 or the current USD 1332, below USD 1240 this post become worthless and would point to a serious technical damage on the weekly chart. The beginning of USD destruction has probably begun, who knows, supporting the bull run continuation. I'm not very sure about targets for 2Q until when the first break up shows us its strength.

Lack of Momentum Better to Hold On

2011-01-19T10:55:00.002-05:00

The lack of momentum in the last rebound from USD 1350 doesn't seem to be avoiding the break through that particular level. The lower low theory kicks in again, we'll better wait 2 or 3 weeks for reentering long Gold. Taking profit for now is the plan, there is no rush.

Ok It's Now Up to your Risk Appetite

2011-01-12T15:36:00.002-05:00

The correction expected by the end of December came right on time and it's given the market a nice relief. I would hope for a lower low soon, let's say somewhere between USD 1288 and USD 1342, to enter the market in full swing, provided it does not go down below USD 1250. 2Q target will be anywhere between USD 1530 and 1630 with lots of volatility down the road.

I'm not sure if it will actually post a lower low (2011) so I would go by date then and buy on January 14th (Friday).

Time to Lock-in Profit

2010-12-29T08:02:00.006-05:00

In preparation for the nice run that is looming into 2011 it is time to lock-in profit and wait until January 2011 in order to reestablish long positions in Gold. The market is very susceptible to position squarring this week which may carry on into the first week of January, the very same date would be interesting to try establish long positions in Silver which looks equally interesting when looking into the yearly chart.

Could Forecasting Gold Become Boring?

2010-09-28T11:47:00.003-05:00

I seriuosly thought about shutting down my blog considering that, speaking about a multiannual forecast for Gold, this blog would become either annoying or disappointing at some point. Annoying because from October 15 on and for a 2-year time duration it would be pointless to say "buy dips" on a continuous basis and disappointing because if you thought I was really good about forecasting the bullish run for Gold it may eventually fall like a rock.

Anyway I will stick with the bullish instance beginning on Oct 15 when a serious dip could be expected just to leave room for the 2011 bull run, I will not take chances with a short term bearish alternative, if it falls (it may why not?,) I will let it fall without stepping in no matter what, if that were the case.

For my preferred scenario (bullish) I´m going to buy a good dip and leave it that way for a significant period of time of until the number of zeros in the profit field be more than I expected, God willing.

Don't Wait a Second to Sell Short

2010-07-16T10:46:00.001-05:00

As expected Jul 15 gave the signal. Can't wait to go full short with a stop order over USD 1200.

Buy back and go long on either Sep 15 or Oct 15 and stay long until May 2011, it's gonna be awesome!!!

Cheers

Watch Out

2010-06-05T07:52:00.002-05:00

Well, again I would say so far so good, but I don't think we are headed for a new high just yet.

Charts and fundamentals are very supportive however the seasonality of markets is coming back to the average historical behaviour, you can call it "Sell in May and Go Away" or just put a customized name on it and the result is the same, lock in profit and wait just for a week or 2 to reenter the market at a slightly better price.

Nobody has the last word when it comes to forecasting the Gold Market but it's my feeling that investment adjustments, I'm not talking about physical Gold buyers but investment banks, will take the price down to USD 1.000 within the next couple of months for a huge bull run by the end of the year going into 2011.

We are locking in profits now and propably sell short with little risk should the price turns around and we plan to stay that way until the end of the 2Q then we will watch the market carefully until September so we can asses the suitabilty of buying again a good amount of the precious metal for a medium term profitable investment.

On The Look Out

2010-03-23T05:07:00.003-05:00

If we were to pick a date for our setup, it would by the end of this month, very likely on Friday the 26th of March or Tuesday the 30th. Stars are set to be aligned on month-end portfolio squaring, the end of Japanese fiscal year, seasonal market behavior and the no-so-convincing global economies turn-around that is preventing investors from being more aggresive.

Technical levels have not changed at all and the window of opportunity will be as short as this post, be alert.

On Track So Far

2010-03-08T13:23:00.003-05:00

Currenciy markets and consequently gold are trading in a wide, volatile range since a while ago now.

Considering that we are looking into a long term setup, we will definitively not rush into anything at this time but rather be alert regarding the technical development of such markets within the next 4 sessions.

We believe it is a matter of time for several instruments to break out of the actual range and as far as EUR/USD is concerned (and USD denominated pairs) it will be USD negative.

Until then we will be cautious not get caught into strong volatility but looking for a safe buying zone, still likely to be between USD 1.000 and USD 1.080, long term target still between the USD 1.490 - USD 1590 area.

Showtime

2010-02-17T12:24:00.003-05:00

I would tend to believe that if you blinked you missed it, but I still believe patience is the mother of succesful investments.

Why should the gold price rise to over USD 1226 and is lilely to reach USD 1.500 in the 2nd quarter.

1. Historically, Gold has been strongly bullish in the first 2Qs for the last 5 years.
2. It was strongly bullish in the first 2Qs last year even though the crisis was in full swing.
3. USA Federal Reserve will not raise rates before June 2010.
4. Europe is reaching the bottom in its crisis, right 18 months after the crisis began in the USA (historically speaking this is a sound number)
5. EUR/USD will likely bottom out around 1.35 for a bull run to last years's high on risk appetite.
6. Everybody wants Gold now, whether or not the risk is high, because there is a lot of liquidity waiting for the world's economy to come back and Gold has made them quite some money so far.
7. Miners are dehedging on higher prices, hedging cost a lot of money to companies like Barrick last year.
8. Banks are not selling at the moment.
9. Investment Banks are running out of physical gold, which limits their ability to short contracts which cannot then be delivered, considering the actual demand.
10.And finally I want Gold and you do as well.

Why have we likely missed the entry point?

1. USD 70 rebound from the USD 1.044 level in less that a week.
2. Monthly close may leave a buy signal if the rally continues.
3. The last USD rally has not been able to penetrate the 1.35 consistently.

Why it still may show the USD 1.032 level.

1. Because the USD has not change the bullish trend just yet.
2. Because the USD 1.032 level has not been appropriately tested.
3. Because there may be month-end profit locking leading to portfalio squaring.
4. Because nobody needs to rush in now, knowing that the close in February will give the adequate entry level whether it is USD 1.032 or not.
5. And finally because I blinked as well, my buy order was at USD 1.030 with stop below USD 1.010 as posted before.

Watch out for fixings on February 19 and February 26 (both Fridays).

Cheers

Don't Rush Into It, Just Yet

2010-02-11T13:34:00.004-05:00

One may be tempted to believe that the Gold price rebounded for good this week but do not allow the market to fool you. Patience is needed now, USD 1025-1033 is coming, so lock in your profits if you went long this week and buy back at more trustable levels.

Two Financial Gurus And One Key Level

2010-02-04T12:49:00.004-05:00

One of them will prove right within the next couple of weeks, either Warren Buffet when he said "When everybody is scared then there is an opportunity" or George Soros when mentioned "Gold is the next market bubble" and of course the make or break level will be USD 1032.

When I wrote a couple of posts ago "there may be a USD 200 sell-off, if there is one at all" I did not mean it to be a prophecy, however it luckily was because USD 1032 represents the multiannual high level broken in 2009 which has already been tested once in the 4Q, when the first correction took place in the Gold price, after having broken USD 1032 on the way up.

Well there comes the second test and that is the level when either WB or GS will make a point, I tend to go with WB and buy anywhere between USD 1032 and USD 1018 in the midst of big players liquidation (named panic for small players) for a resumption of the uptrend leading to USD 1490 in 2010. To build up a position I would buy USD 1033 on the way back up, double the position at USD 1076, and triple it at USD 1116. The initial stop goes below USD 1010 to then raise it up to breakeven once USD 1116 would have been reached (stop up to USD 1074), target is USD 1490 in July 2010.

That particular uptrend will go hand to hand with EUR/USD reaching 2008 highs until when the USA Government begins raising interest rates by July/August 2010, then GS' bubble may mercilessly explode. As usual I hope I'm right but don't try follow my posts in your platform at home, please. Disclaimer: I will actually play this strategy on my own.

Happy New Year

2009-12-30T10:47:00.004-05:00

No change in the actual setup for 2010. if you got guts and financial muscle sell short at USD 1090 with stop above USD 1005, otherwise stay calm and buy between the 6th and the 15th of January / 2010, establish an exit strategy at the first opportunity and rest in peace for the 2 quarters.

Entry points continue being valid as posted before, take care and have a wonderful 2010.

Make or Break Discussion Again

2009-12-14T12:06:00.005-05:00

I truly believe in the continuation rally for Gold into 2010, there may be a UDS 200 sell off, if there is one at all, and the multiannual bull trend will reamin intact. The clear break above USD 1032 will simply replicate the same clear break of USD 580 back in 2006, this view will also be very well supported with the anti-dollar mood which is meant to continue into next year.

There is no such a thing like the US economy going back to what it was before and therefore the only aid that the dollar could get would be an increase in interest rates at a much higher pace than the European increase, whenever the time comes to begin increasing rates globally.

The underlying problem in the economy is still there and countries like China are not backing off from the economic leadership take over that is underway, to what extent is the dollar going to suffer? I don´t know, what I do know is that nobody cares about the US dollar nowadays and speculators are getting confident in their preferred markets like commodities.

I stand by the plan put in place in my last post and will be buying the next dip either by the end of next week or by January 15 / 2010. The entry levels will still be within the USD 998 - USD 1032 range and the target for the first leg up into 2010 something around USD 1500.

Will There Be Simmetry In The Annual Chart?

2009-11-05T13:29:00.005-05:00

The Next Multiyear Bullish Leg Has Just Begun.

2009-10-07T15:43:00.005-05:00

Well, all the speculation about GOLD going to USD 2000 is becoming reality. USD 1000 will become a solid floor, as mentioned in a previous article as an alternative.

My expectacion of finding an entry point below USD 800 is fading away and now I´m expecting to become a buyer @ USD 998 and then add more to my position @ USD 1075 down the road, otherwise I will ioncrease my position in Jan. 2010 @ whatever price I get in Jan 15.

Bears say Goodbye to the past, Bulls welcome to the future, if you look at the yearly chart the cycle may take between 2 and 4 years to consistently reach USD 2000. Beware of volatility meantime and realize profit on a quarterly basis and then buy back dips on the weekly chart risking half of your previously realized profit.

There comes my retirement plan I hope. Laura this is gonna be for you baby.

The Endless I Can´t See It Story

2009-09-29T14:00:00.002-05:00

You wonder what the next move is going to be, up? or down, it really does not matter anymore, as long as you have an strategy with an eventual loss alreay accounted for if the strategy does not work.

I finally entered short at USD 1015 with the same stop that I had before at USD 1040, my exit point, if there is not follow through on the curent liquidation, will be given by the weeky close, emotionally I would say I´m ok being short, realistically nobody knows what the final break is going to be.

We are either consolidating the last run up or beginning the seasonal liquidation for a continuation rally from November/December well into 2010.

Let´s patiently wait and see.

No Change in Strategy

2009-09-21T13:28:00.004-05:00

I'm taking it easy. From our sell short order at USD 1029 the spot price only reached USD 127 to then drop down to 1002 in no time, however I'm not gonna push it, it the price is not reached for our sell short order to be trigerred then I will wait for a weekly close below USD 1000 to establish a short position at 1005 with stop above USD 1010, if the price is in fact reached, it would be the second try to the all-time high which has 2 alternatives, either a clear break above USD 1032 for a quick run to USD 1090 (not my preferred scenario) or a drop down well below USD 865, luckily down enough to trigger a buy order that I have at USD 761 which is indeed my long awaited entry level. Either way next year is to be full bullish in Gold, I just wanna have a good entry point, hopefully USD 761. For now I'm taking it nice and easy.

Crazy Ride

2009-09-16T14:54:00.002-05:00

Well, I don`t feel that bad about what I have advised here because fortunately we were protected on our 2 shorts from USD 960 and USD 992 (see post from August 3rd). What I did not expect was the follow through above USD 1.000. Well I will stick to my guns however I resist to believe that markets will comtinue climbing without a significant correction before the end of the year just to get a breath before 2010.

What I´m quite convinced of at the moment is that ths USD will be punished as it has never been unless the FED increases interest rates which is unlikely, the USA Government is broke and the economy is living of the good results of the FED intervention but will it last or better can the US Government keep printing money forever? undoubtedly the US economy will not collapse but the 14 trillion dollar debt is just keeping reality hid behind curtains, do the math with your home finances, if you spend more than you make for an extended period of time you will end up like I did last year, broke!! I´m not the US Gov, though nor do I have 300 million people to look after. Bottom line is either Gold correcting down to my USD 760 to then go back up to USD 1500 or USD 1000 becoming a floor for the next shot up to USD 1500 sooner than I wanted and even expected. For now the last try short at USD 1029 with stop above USD 1040, other wise buy USD 997 in Jan 2010 for USD 2000 in a couple of year either way EUR/USD is likely to reach 1.90 next year if there is not intervention.

Waiting for the 3Q Collapse

2009-08-18T13:17:00.005-05:00

I'd like to be more active in this blog but the principle of doing fornightly analysis does not go along with rush decisions. It's hard to keep up with a rangebound market as far as trying to predict what the next day brings, a 2% move down one day and a 2% rebound the next day followed by a 2% sell-off day the next day, it is a broad summer rangebound market. I certainly believe that markets topped out for the year and the next move will be a significant liquidation of assets in order to cash in and ensure enough liquidity for the multiyear bull run that should begin by 2010, after having made a higher multiannual low this quarter (stil to come). If you followed the sell short strategy at USD 960, stay short but cover in any rally above USD 964, otherwise exercise patience looking for our USD 760 within the next 2 months.

Other than that if you love day trading (I don't) then sell anything whether it is oil, commodities, stocks, whatever rallies in August then sell it.

A Lovely Patience Test

2009-08-03T18:43:00.003-05:00

Wondering where I have been? well just testing the patience I always talk about. In my last post, more than a month ago, I said I was going to sell short at USD 960 and I did, a month time wait but there we go, close to the great setup I've been waiting for more than 5 months.

I may be wrong this time to begin with, so that any strategy that I take on this time will have a 10 USD stop on my short. The first scenario is the USD 960 sell, this must come with an exit strategy above USD 970 to then reestablish the short position at 989 with stop right above USD 1.000. If neither strategy works then just leave it that way for a couple of months. If either one works, then the target will stil be USD 760 or so, as I have mentioned for quite some time now, that level will be the perfect buy/go long setup for the next 3 years. Whenever we get to USD 760 we should try not to fool ourselves by not using a stop/exit level to protect capital on the long strategy. If I'm right oh boy USD 2.000 will be a piece of cake, no question about it. I will be back soon when the gold price reaches USD 860 and then will see what happens.

Sit Tight on Futures Rollover Day

2009-06-19T04:49:00.002-05:00

Well, I'm glad to see that we still are within our range but today is a special day, on the one hand because of the Friday's low loquidity scenario and on the other hand it is a futures rollover day so that knee-jerk moves will be on the menu. Don't look too deep into what news may bring to the market, today is a position adjustment and speculators follow-through day. As far as Gold I'm covering my short at USD 930 and may be, only may be, I will enter a new short position at USD 960 looking to cover the short on 06/24 which is the US Federal Reserve rate announcement day, then go long for a 1 week; that will be. in my view. the last try up to USD 988 for now.

I don't play volatility anymore but I trust this seasonal end of month/quarter (2Q) market sentiment and I have already built a USD 50 (500 pips) stop on my short from USD 988 to USD 930 (see my post titled "Stick to your Guns"}.

Now if you are looking for a nice and peaceful weekend then do nothing, just tight up your exit strategy and go play golf (or just pretend you are, it is classy).

Today's Trading Signals From Danske

2009-06-15T09:31:00.004-05:00

Since there is not much to add to our previous post, I just wanted to share a site which is very useful for day traders. They share the analysis on a daily basis and it's free, that is why I can link it to this post lawfully.

All I can say now is that the last rally for this year will begin probably by the end of this week (Remember June 20?) and will probably run out of steam by Mid-July, if it does not happen, as discussed previously in my posts, my recommendation would be to stand aside until August, if it does rally, then sell at USD 988 with all your guts on it, looking for USD 760 by Mid-October.

Today's Trading Signals From Danske

Stick To Your Guns

2009-06-07T06:26:00.002-05:00

Today, I'd like to refer to my posts published on Apr 30 and May 13 / 2009. The setup suggested could not have been better so that I will stick to it after having made a mistake by selling a long position at USD 930 due to impatience, even though I have stressed a lot on the benefits of having a long term investment mindset. Well the USD 988 was reached last week and I enter a short position having lower the stop loss to breakeven last Friday (actually USD 995), however I expect the USD 988 level to be retested within the next month, more than likely after the next meeting of the US Federal Reserve, so that I'll be booking profits on a fortnightly basis on the short position and use that profit to build up a stop-loss, large enough to absorb a possible loss for a new short position at USD 988 with stop above USD 1005, such a position will be established somewhere between the 8th and the 15th of July for a USD 760 target in Mid-October.

From there on I will likely be long for 2 years as stated before in one of my posts, play a long GPB/USD as well if you want to, so you can book profits from time to time and avoid the temptation of closing the long Gold position considering that volatility in the Gold market, once USD 1030 has been broken, could be as high as USD 500 / Quarter and that will scare the hell out of weak investors.

WS Has Not Changed And Will Not Change Ever!

2009-05-29T11:56:00.005-05:00

Looking at the charts you can't help it but get scared of what is to come. WS behaviour has not changed a bit, there are probably less investment houses alive today but the biggest scammers are still there, unharmed. After almost a year of the multidecade repetitive market crash speculators are back in business, a couple of scapegoats went to jail and that was it, nothing else happened. Speculators and fraudulent investors leave a clear trace of their practices but amazingly the only people unable to realize that are regulators and governments. I always contended the fact that the oil price has not represented the real supply/demand equation since about 6 years ago, it should have never been above USD 35 in a clear, tranparent market. Well they have just left a trace of what they intend to do for the next multiyear cycle. Do you actually believe that demand has doubled in the last 2 months? hehe, or much better, did you ever buy the argument that demand had tripled from 2003 until 2007? another hehe.

I feel sorry for the American Economy and its future but worse than that for the struggling Americans that still have to withstand a gret deal of additional pain for the next 2 years, however I'm not willing to try live in an ideal world because I do have a life to live on my own and a beautiful 3 year old little girl to fight for.

Well all the rubish that I wrote above is just to make myself aware that the market crash did not change the seasonality of the financial environment, in fact 1Q and 2Q moves just reinforced the possibilty of market stabilization leading to a predictable seasonal behavior, you should note that last year's panic led to strong volatility but did not change trends seasonal direction, not a bit.

Impatience led me not to hold a long Gold position that I had up to USD 988 as I predicted a month ago, however I'm not chasing it, the market is sending me a message saying that if I've been right for about a year now (more tha 80% of the time) there would be no reason to believe that I won't be right for 2Q and 3Q so that I'm standing aside until June 20 so I can figure out a monthly strategy, put my thoughts once again back together and trust my own forecast for the next 6 months.

I'll get back to you next week with my first approach as to what the end of 1Q and 2Q are going to be, for now let the scammers get back to the market and kill themselves softly with their greed and we'll follow suit when the winners step in.

If You Don't Have The Financial Muscle, Stop it Out

2009-05-22T07:14:00.009-05:00

Going back to those days when I used to read someone else's analysis, I did realize that it is always difficult to understand the whole message because when you write something, not being a writer by career, you leave out details that are in your mind but the writer unconsciously assumes the whole idea is being delivered at full.

Well today I want to put out that part of the analysis associated with stop-loss orders. By rule of thumb, your stop must be calculated so that the risk is not greater than 10% of the investment amount available (worst case scenario) or 50% of any profit previously realized for any given period of time, stop-loss order must also be moved to a breakeven level or at least to the closest safe stop level, if the position in the market is temporarily moving your way, but beware of electronic stop-hunting when chosing the price level.

This clarification goes out because not always the market forecast is an unquestionable prophecy, everybody knows that things may change in a blink of an eye much more when the market is moving by the "what if" strategy rather than fundamentals. From a P/L perspective it is not the same to have USD 100.000 available to invest than having USD 20.000 available, so that measuring your risk appetite goes hand to hand with you financial strength.

Having said that, let's do an exercise to further clarify that "I thought you understood" message in every market forecast:

If you followed the last post then you either sold Gold at USD 930 or sold short at the same level, the first scenario does not have any problem, you just realized the profit you had from the high USD 800 levels. Now if you sold short, which were the alternatives to stop out a losing trade?

You sold short at USD 930 and when the market reached USD 918 you place the stop at breakeven (USD 930), this is the least aggressive approach, highly recommended.
You sold short at USD 930 and decide to put at risk 10% of the investment amount available, this scenario is aggressive but not the most aggressive, it is valid for investors with a 6 digit muscle.
You place the stop-loss order well beyond USD 988 having bought few contracts, it is a sensible approach but probably you need to wait for months before seeing a very little return. This is probably one of the least rewarding approaches but it can be emotionally stabilizing because you feel you are in the market and at the same time you are not being stopped out, on the negative side you are not making any significant profit. Good for proud investors who want to talk about their investments but avoid talking about their returns.
You decided to stand by your investment decision and then hedge the Gold trade against either silver, crude oil or EUR/USD, this scenario is for Banks or people with a multiannual strategy, it is a capital preservation move with a long term (3 years) view, good for enterprises with a lot administrative operations. A sure losing move for the average investor. Not recommended at all.
You did not like the price level when it broke above USD 936 and then bought back without waiting for the stop to be triggerred. YOU ARE SMART. Now breaking a resistance/support level means going at least 0.3 % beyond the price level expected to be broken, don't be fooled by analysts saying that reaching USD 937 means that USD 936 was broken (i.e.). A broken level will be retested for confirmation at then you get off the trade.
You were stopped out at then waited, in no hurry, for 3 days before setting up a new strategy, this mindset, in my view, will keep you active in the financial markets for a long time along with the SMART guy mentioned in numeral 5.

I hope I was clear enough and did not leave another "hidden message" trying to explain my thoughts. It is time to stand aside and figure out a strategy for June 20, I can envision myself buying Gold by June 20 (don't know the level yet) then realize profit and sell short around July 13 looking for that USD 760 in October 2009 in order to re-enter long and remain long for 2 years.

I hope I was not as boring as I think I was but I can't keep those thoughts to myself knowing the social responsibility that I undertook by creating this blog, it is the only way to make you read my blog and trust my word as sincere and unbiased. Cheers

I Wish It Had Always Been Like This

2009-05-13T17:38:00.005-05:00

Thinking like an investor has a great advantage because you can be so brilliant just few times a year and it doesn't last long, whenever it happens.

If you have read my posts since I switch to a fornightly analysis, there has been a lot of succesful forecasts for Gold in this blog, however it needs just one bad investment to develop a chain of unfortunate events that often leads to long-lasting money-losing decision, it's not been the case so far because the bias given by dalily reports, the "so-called" market analysts and speculators technical noise is avoided by having a long term view in your investment decisions.

My last post continues being valid but there is room for more short-term opportunities. The USD 850 - USD 950 range remains valid and we are almost at the top of the band, in fact the USD index is bottoming out which is no supportive for the spot price in Gold, so that you can wait for the sell in July or just sell the rejection of USD 930 and setup fornighlty trades within the limits of the range. It all comes down to your risk profile and appetite.

Quick Money in 2Q

2009-04-30T10:03:00.005-05:00

Ok, the Gold price continue to be my friend medium-term but I feel like making some short-term money and here is how.

As I mentioned before I expect a broad consolidation range between USD 850 and USD 950 this quarter, however I'm bearish medium term with a USD 760 target, nevertheless there is an opportunity to make money short-term and that is by buying the low this coming week and sell around July 15 2009 somewhere between USD 930 and USD 988.

I believe this week's low could be around USD 850 (may be USD 845). Once you get to a breakeven + USD 30 price, on the way back up, rise your stop or place a sell order at breakeven. Sell in July for a target at USD 760, in Mid-October, that price will set the long-term bottom before a strong leg up to USD 2.000 in 2010/11 or in other words the continuation of the multiannual bull trend. Keep and eye on the EUR/USD, it may go down to 1.30 and then back up to 1.36, stocks may also give you a hint as to when this move would begin.

Keep It Short and Relax

2009-04-18T07:39:00.004-05:00

I would love to write more often on this blog but fortunately I happen to be on the right side of the trend and I don't want to fool myself by telling you that I'm good, because I'm not, otherwise I would be a billionaire. Once you have done your homework by applying the rigth analysis to fundamentals, technical charts and market sentiment, the decisive factor for us to be succesful is the "50% chance" associated with every investment and trade. Yes the final word is given by statistics, every time that I play a strategy I believe there is a 50 % chance that the operation will end up being right and that is the point where you capitalize your inteligence+luck formula. Keep and eye on the EUR/USD for direction as the relation GOLD/EUR/USD seems to be working again, it stands at 666 against 740 which was the highest ratio in the previous decoupling attempt.

Working Its Way Towards a Long Term Bottom

2009-04-07T06:03:00.003-05:00

Although the fortnightly cycle continues working, as forecasted in previous posts, I thought it was time for an update. Momentun is supporting the downtrend in Gold, as expected; it won't be a one way move down but rather a roller coaster with a lot of volatility at least for the 2 next cycles, however our target at USD 785 is looking more achievable so I'm actually lowering it down to USD 760. If you look at the charts the multiannual lows have been increasing by USD 100 per year, it was USD 560 in 2007, USD 660 in 2008 and why could it not be USD 760 in 2009? I still believe that we are going to have to wait until Oct 2009 to see that USD 760 become a solid support and then build up an aggressive acumulative position for the next 2 years. Meantime, volatility will be high and a broad range between USD 850 and USD 950 will be the standard till July 2009. Playing the volatility in the fortnightly cycle will be very rewarding until when a clear signal for either a long term position or long term physical buying is given by the market. Beware of Goldbugs they don't know the word SELL and it is constantly reflected in their analysis and comentaries, hence their ability to make money short/medium term is quite disappointing, don't trust my word just look at the spot price USD 150 (or 15%) lower than the 110 weeks high.

Poll Is Closed

2009-03-30T06:27:00.003-05:00

Although there were very few votes, we noted that USD 1.000 is not in investors' minds anymore, further proof that it is just a psychological level. In any event the expectation for the spot price in May 2009 is either well above USD 1.000 or below USD 900, needless to say that our preference is for the price to be below USD 900 extending the long consolidation range once more. As stated in our last post we expect to be sellers in strong rallies for the remaining of the first half of 2009 to then take on the bull camp by September/October 2009, we believe USD 780 will be the price to buy, although a deeper correction cannot be ruled out, if that were the case the price can easily go down to USD 580, I know it sounds unreasonable for goldbugs, but somebody is gonna get bored and will break the consolidation range for the sake of bringing dymanism to the market and lure new buyers who are in the sidelines whether because they jumped in very late, were not able to buy at a good level or simply because they decided not to participate due to global economic conditions (i.e. jewellry market). For now the strategy continues unchanged, however our long term view is for a strong uptrend to begin much later in the year and continue into 2010.

No Change in The Strategy

2009-03-27T08:32:00.002-05:00

Considering that the site has already been established and setup we will go back to the fortnightly analysis for Gold, that is why you don't see a daily comment unless there is a substantial change in either technical or fundamental indicators. The price of Gold has not even been able to test the USD 988 level so far, this level was the one which triggered a major sell-off last year. I do really expect a try up to USD 988 within the next 2 months but also I still believe that the massive double top being identified in the chars will take the price down to the USD 800/700 level; some may consider it further consolidation of the 1 year-long trading range, which I would agree with, others will become bears, goldbugs will suffer a lot but in the end it will be the last run down prior to a strong 2 year long uptrend. We will be short-term buyers in June 2009, then strongly bearish from July to September 2009 and then will make every attempt to find a bottom between September 2009 and January 2010 for a 2 year bull run, provided that the price never goes below USD 500 before the end of the year. The bull run will take the price at least to USD 2.000 by 2011. Of course traders and scalpers will play the volalitibilty, long term goldbugs will make money but probably much less than they could have if they weren't that stubborn as far as not selling these days (they are really stupid, by not selling now) and I'll be happy so happy and richer, God willing. The strategy through the end of the year is to buy short-term, take profit on a daily/weekly basis then sell short strong rallies, take profit on a fortnightly basis and buy it all at the USD 700/600 level for a continuation of the multiyear bull trend until sometime between 2011 and 2013.

Lacking Momemtum

2009-03-23T08:59:00.002-05:00

As good as it seemed the last rally in Gold looks to have run out of stem. It may not be different than any other impressive rally we've seen in Gold before. Today, rather than analyzing technical indicators, we should be looking at fundamentals that won't support Gold any longer short term. On the one hand risk aversion is slowly dissipating and to prove it the DJIA is going to close above 7500 today, a 1000 points rally since the 6500 (around) lows, that is a convincing turning point. On the other hand Governments are increasingly working together to force the market to stabilize so that confidence gets back and then panic fades away. Remarkably, Corporate America is humbly giving the market a hand (as it should have been 2 months ago) and the US Goverment appears to be willing to deliver the message to the fraudulent executive staff that got us into this mess in the first place (you can read AIG and 80% of the investment banks, if you will) even though taxpayer's money is unlikely to be recouped from those scammers. Additionally, with deflation fears going away, it is unlikely that inflationary pressures coming from increased demand and higher commodity prices hit the market short term, Oil is going nowhere beyond the USD 60 level and regulatory measures taken so far will keep market bandits (speculators) in the sidelines for a little while. All the above scenario will be valid until when inflation numbers (still under control) begin to creep up as a result of the increase in Money Supply and stabilization of the demand with the supply side of the equation having been destroyed, however if won't happen just yet, so sell the rally in Gold and buy back later in the year somewhere between USD 820 and USD 850 may be USD 785.

Not Much To Add

2009-03-19T08:16:00.010-05:00

Well, adding anything to my last post would be a waste of time, if you jumped in as USD 900 raise your stop or establish your exit strategy at USD 910 and relax until May 15. Cheers

.

Getting Nervous!!

2009-03-11T21:39:00.002-05:00

Ok I have to accept that I'm getting nervous at this stage, although I would prefer to be a buyer rather than a seller at USD 900 it would require a massive rally to make me rest in peace for a month. Things are not looking pretty in the charts, however everyone knows that momentum can pick up in a blink of an eye, but to be honest I'll be shaking placing a buy order tomorrow anywhere above USD 882.

On the other hand I'm afraid that if I don't take the opportunity to increase my holdings at USD 900 I may be missing the opportunity for a strong leg up. Some believe USD 850 would provide good support, I personally think that USD 850 represents nothing and the next support, around USD 820/830, is going to leave a lot of people hesitant regarding the next move. In fact there is a significant volume for puts at USD 805 in Comex.

Well, we'll see, finger crossing is not a strategy but I'll use it anyway.

Is The 2008 Pattern Replicating Itself?

2009-03-10T05:57:00.003-05:00

Not much to add since the last post, the price of Gold is working its way down to USD 900/882. As stated in my last post, those senseless rallies can only end up with a nasty sell-off and history has proven right once again. I will still try to buy/add on a dip to USD 882 or probably USD 900 again if momentum fades out before USD 882, for a run to USD 1.200 however there is a scary pattern developing and it is nothing different than a carbon copy of last year's 1Q move. If USD 988 is not broken within the next 2 weeks so that the possibility of a massive double top is taken away then either a sell short trade (in order to hedge your physical Gold) or a sell will be mandatory, risking 50% of the profit made in the most recent rally. There is no manipulation theory working here, it is just a need for cash in one of the few profitable markets seen lately. Unless you are either an agressive short seller in the stock market, chose safe but unprofitable investments like treasuries or simply decided to go short USD then Gold and Silver have given you some financial satisfaction this year. Again I would expect a strong rebound at USD 882 for a try up to USD 988 but if USD 988 is not taken away this quarter, hold your horses because the sell-off is going to be tremendously painful, primarily for stubborn goldbugs.

So Far, So Good

2009-03-05T19:19:00.010-05:00

Cool, the USD 900 level read my comment yesterday and decided to go with me. A lovely USD 37 rally in 24 H, not bad.
On the positive side, the price managed to jump back over USD 930, which I don't like very much because the rush in the buy side will only trigger a nasty sell-off later on. I would prefer to see it trying USD 900 again or much better USD 882 and then begin a step-by-step up move for a USD 10 a day gain, that would guarantee a smooth rise to USD 1200 in a month or two and avoid the panicky investor/trader faithlessly selling.
The above may be a dream because the imbalance between big players and traditional individual investors is huge, it's like hate or love, no move or USD 37 move, that produces a disorderly pattern where the small one gets wiped off and the big one has to sooner or later come back and fix the technical mishap, this particular behaviour just reminds me how WS screwed itself up, hopefully that will not happen to the precious metals complex.
Responsible investment leads to long term stability. Watch out ETFs, Gold is the only safe haven investment at the moment, do not spoil the perfect set up we may have for the next 4 years.

Still Bullish

2009-03-04T06:29:00.006-05:00

Regardless of what Gold means to you, the price of Gold will always determine what your net worth is in your investment. There's been a lot of noise about holding Gold and the amazing increase in net retail investment in 2008 against consumer demand. Well with all respect to Gold holders (I own physical Gold) our holdings are worth whatever the price in the open market is. The reason I bring up this note up is because some, just some, Gold Bugs don't seem to have a view in the opposite side of the market making them quite controversial when it comes to discuss a possible downside in the price of Gold. Math is simple if you buy high and eventually the price comes down you are losing money, it's happened before and it may happen again, unless you bought Gold in 1999, so you are fully protected. It cannot be simpler than that, I'm not saying that the bull market will not continue, what I'm saying is that having an eye on both sides of the market (bull and bear) will allow the investor to properly hedge his investment. Diversification also means to undertake alternative strategies to protect yourself from volatility and unexpected market sentiment changes. One cannot be neither that bullish nor that bearish that the ability to identify the whole picture prevents you from being aware of eventual reversals of strong trends. Adding Gold to your holdings and/or making money from hedging may come today between USD 882 and USD 905, my preference is to buy/add at USD 900 or any dip lower for the next leg up.