Guest Posted December 9, 2004 Report Share Posted December 9, 2004 GOLD / XAU Does gold lead the XAU? Is the XAU setting up for another five waves up (of which the first one just completed and retracement under way)? Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 9, 2004 Author Report Share Posted December 9, 2004 Which market leads? I will post some charts on this later but generally the stocks should lead or at least confirm the moves in gold or you are in troubled waters! This latest non-confirmation is coming to fruition now. It would be nice to see the miners lead the next big move up but if Neely is correct it may not happen either since this is one big running correction up! So far his scenario is playing out so for any longer term perspective I am going to go with it but trade my FCS (IT) indicators as usual. Two longer term indicators I use the 50/200 day SMA and LT Detrended Osc, first is still bullish, second which has the lag out just turned red. I don't think we will be turning right back up again here soon but in a big messy frustrating consolidation (B wave of a larger corrective X). Hank Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 9, 2004 Author Report Share Posted December 9, 2004 Neely EW on HUI Link to comment Share on other sites More sharing options...
traderfromhell Posted December 9, 2004 Report Share Posted December 9, 2004 Help Hanky my boat is sinking. Link to comment Share on other sites More sharing options...
beardrech Posted December 9, 2004 Report Share Posted December 9, 2004 Hank et al Assuming this sm is going down deeper than we think,some saying below heaping mounds of whale shit and in the process of an unfolding panic stricken catastrophe dragging Gold shares down with it ---momentarily at least--How do we protect ourselves against this intermediate decline???--- Or do we just ride the storm out and hold on for dear life-- beardrech Everytime we are in a situation like this--I have to check in to my local Urologist who gives me an assay to see how much gold is left in my liquid Arch Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 10, 2004 Author Report Share Posted December 10, 2004 These sharp declines are never very pleasant experiences for those long whatever your fancy. I am not very good at buying and holding anything except maybe my Volvo's. Even during the roaring 90's I only held a few stocks for more than a year, fortunately two of them were Amgen and Oracle. But I have been convinced enough that we are indeed entering an entirely new global investment era with our planet's natural resources being the next "big thing." Having accepted this belief to the extent that I have bought and am holding enough gold bullion that if it fails to continue it's upward trajectory, I will suffer a material loss of some magnitude. The stocks I do not buy and hold and will not. I do not even like trading individual miners as you have probably noticed. They are volatile firecrackers that can easily blow up in your face! Even GG has shown it is not news insensitive, so I choose not to add that risk to an already risky business. I admire those that do trade and build positions in them like Charmin. He is a very impressive and intense anal cyst and trader. I have found my comfort level in trading and most of the time I system trade. If a perfect low risk set-up happens in an IT trend reversal situation I may take a chance, and sometimes on a strong trend rolling I may add some individual miners. I won't short them. How to protect from IT declines whilst holding long positions can only be done by hedging which is not my forte. I am sure there are ways to do it but with what vehicles and how to determine how much and what type of options I haven't a clue. So aside from getting into some fairly complex hedging strategies, I think all one can do is decide how much you want to risk on pure "belief" and buy and hold bullion, GLD and/or a pm MF to the extent one is comfortable if their faith proves to eventually be misplaced. Even when entering on buy and hold basis, it should not be done haphazard and one should try to use good trading technique on where to enter and add to try to help avoid immediately big losses. As disturbing as this current drop has been, it still has not violated any LT critical support. On this chart I have highlighted the level right around 200 on HUI. This is loaded with important supportive convergences not the least of which is the even 00's level of 200. Two important FIB ret and extension levels and the 13 week lower BB, and prior major swing tops. If this is a B wave and Neely is anticipating another stronger C wave up then this retracement of A should ideally not exceed .618 and give us the possibility it is just a ZIG ZAG down and we could get a fairly quick return to the C wave rally. This is what now needs to be hoped for! If we exceed the .618 then we are in FLAT territory and we should hope it doesn't exceed the 80% retracement area still indicating a potential quick turn around and strong C. 80-100% portends weakness and beyond 100% very sad situation but by then everybody will be completely disheartened but it still doesn't negate Neely's count, just that C may not take us to new highs. One thing must be kept in mind, this larger degree correction has NOT even reached .38 fib TIME extension of the 3 year rally. Corrections are rarely less than .618 of the preceeding rally timewise and often take LONGER. So find your level of faith and expect your patience to be yet tested to its limit. But to help, condsider system trading, it's so much easier on the trader. Trust me on that one. When this does show a turn around and the FCS says buy you will know! Best Wishes, Hank Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 10, 2004 Author Report Share Posted December 10, 2004 Weekly DTF still on buy! This chart has the FIB time extension on top, not even to the .382 (4 Feb 05) yet. Link to comment Share on other sites More sharing options...
bubbadropping Posted December 10, 2004 Report Share Posted December 10, 2004 Hank, what is system trading? Sorry. And are you acquainted with any gold mutual funds that might spread the risk out amongst the miners? thanks, bb Link to comment Share on other sites More sharing options...
traderfromhell Posted December 10, 2004 Report Share Posted December 10, 2004 Hank, what is system trading? Sorry. And are you acquainted with any gold mutual funds that might spread the risk out amongst the miners? thanks, bb <{POST_SNAPBACK}> Profunds with a 15K minimum has a 150% index fund you can trade. It used to be the XAU but I think but am not positive it is now the Dow Jones Precious Metals Index. At any rate 150% of the daily move of the index up or down. Pick your poison. Link to comment Share on other sites More sharing options...
Guest Posted December 10, 2004 Report Share Posted December 10, 2004 Hank.. That was an especially sober post. Thank you for your work here. Link to comment Share on other sites More sharing options...
OldMan Posted December 10, 2004 Report Share Posted December 10, 2004 Mr. Hanky, This TA beginner finds your charts and comments very helpful. Many thanks! OldMan Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 11, 2004 Author Report Share Posted December 11, 2004 Hank, what is system trading? Sorry. And are you acquainted with any gold mutual funds that might spread the risk out amongst the miners? thanks, bb <{POST_SNAPBACK}> There are two distinctly different trading methods in my view, they are: SYSTEM TRADING which involves using indicators (RSI, MACD, CCI, etc) in combination to trigger specific trading signals(Buy, Short, Hold), backtesting the system to determine it's past performance, and optimizing to hopefully enhance it's forward performance. Special software is obviously necessary to accomplish this and there are now many programs on the market that offer these features. Indicators can also be custom formulated (many of mine are) or "out of the box." I use Neuroshell Daytrader Pro and Metastock. I also have some experience using Wealth Lab and Tradestation but prefer Neuroshell and MS. Risk control should be built into the system via high winning trade rate, small losses on losers and low drawdown(consecutive losses). Position sizing is still very important (Don't risk it all using one system on one market basically). PATTERN TRADING is what most people are familiar with and involves seeing a certain "picture" on the chart (price plus indicators usually) and placing a bet on how it will turn out in the future. To be successful you must use stop losses and only take trades with good set-ups which means a clean pattern that offers a low risk entry. I don't really believe a whole lot in being able to assess risk:reward that well, only risk can be measured with certainty because you MUST KNOW where you will exit with a loss no matter what before you take the trade, but you should at least think the trade will make more than it will loose if it does go in your direction. R:R > 1:1. Again position sizing is critical and you should never risk more than 5% on any trade and many keep it to less. It's much harder to learn and follow the rules without emotions and burn out getting the best of the trader but there are many successful pattern traders out there. Most losers jump in way too fast and don't manage risk or position size even if they do learn some good pattern set-ups. Performance is impossible to even approximate ahead of time. At least with system trading, statistics help you get a better estimate but even there I say, estimate, because of the nature of markets summed up so often in the statement, "past performance is no guarantee of future returns." My Cube Trader and FCS gold fund trader are systems. Here is a recent pattern short trade on TLT I posted a while back as an example. Look below at the chart to see where it is now! WILD and could have made a little if you exited in time but back to the entry point now. Could have been worse and at least it never went against us. Well, would you try it again here???? Best Regards, Hank Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 11, 2004 Author Report Share Posted December 11, 2004 Hank.. That was an especially sober post Cheer Up ...lots to smile about on Gold Chart Can't believe Woods bailing out based on some bogus cycle work of his. Not even waiting for some legitimate LT negative price confirmation tells me he's no trader and not much of an anal-cyst either. Maybe he will get lucky and figures its time to try a shot at picking a top and being the next guru. Well, anyhow I don't expect to see him on Puplava's newshour anymore, but maybe the Prechter goldy-bears will now adopt him This week was absolutely nothing to even waste one drop of sweat over and even though we are very, very likely dropping down more, technically there is NO REASON whatsoever to be concerned unless 400 is decisively broken. Chances are we are going to make a deeper retracement below the prior 435ish highs. Notice the enormous supportive convergence now lying at exactly the even 400 level begging to be tested! Would this make me do a chicken shit Woods move and sell all my bullion? Of course NOT, I would welcome it as a healthy, normal, expected pull-back. Even a break down below 400 on a weekly close basis might ruffle my small emerging chicken feathers, but the next level at 375 is CRITICAL LT support and although not pleasant, still holding above it will keep my gold right here in it's safe. Below 375, OK time to start clucking nervously and maybe unload. Notice golds two prior $75 runs have been met with $50 retraces or the good ol' fibo .6 backstep. Where does that put us here...uggghhh OK. I have marked the 3 major support areas but 400 is the one to really watch and nobody should even start getting LT bearish gold on me unless and until it gets violated. If you are not already in this thing look to add an initial postion at the first $425 and actually hope you get a dip to $400 to add the next. Use $370 as a stop area. Back to the Woods and his cycle crap. I am no expert on cycles but have studied all the cycle guys and subscribed to some of their news services, have some cycle software, etc. Curry, Harley, Bressart, Ehlers. Read all of Ganns work on cycles and Hurst's "Profit Magic" The only cycle work I subscribe to and utilize anymore is found right here Doc understands and applies Hurst better than any of them, and they all try to use some variation or component(s) of Hurst methodology. Doc is hard working, honest, and extremely dedicated to his analysis. He also has an incredible knowledge of finance and workings of the credit markets and has many of his own custom indicators pertaining to them. Liquidity is the foundation underlying our markets and no one gives you a better read on what is happening there than Doc. I know that Doc is not pulling the plug on gold here, but if and when he does, you'll only know by subscribing. Nuf Said, Hank Link to comment Share on other sites More sharing options...
traderfromhell Posted December 11, 2004 Report Share Posted December 11, 2004 Great stuff Hank. Didn't think we could get a break like this in Gold and Silver but I guess we bugs will never learn will we. Actually I think this sets up a great buying opportunity but not from these levels. Probably 410 or so in Gold. I am getting much lower projections for selected shares on my list. Any move under 430 turns the picture decidedly bearish short term. A pop from here should be short lived. I do not see any demand coming in at these levels. Back to the drawing board. Perhaps we get the turn on January 20th. Sweet irony. Link to comment Share on other sites More sharing options...
MrHankydoesWallStreet Posted December 11, 2004 Author Report Share Posted December 11, 2004 Here's a handy chart for seasonality on XAU, up until now I have only had one on gold itself, grant you they are fairly similar. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.