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Monthly Digger - July 2006


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There's nothing like starting over mid month. It appears stocks are under pressure.

 

I believe I kick started July off with AEM and a fib at 1/2 back. Looks like we have about 8 days of cause for another move as it grinds 2/3 back inside the trading range from high to low. There is a fight going on, but supply hasn't gained the upper hand to break price down. I can see what looks like a probe on Wednesday and a low close, but today at least didn't break down.

 

http://www.StockSharePublishing.com/ChartL..._1152922415.png

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Back from vacation, having spent 2 weeks in unusually sunny Scotland.

 

Apart from the meltup on the day I flew out-- June 30th-- we seem to be consolidating in a pair of 4th waves. If so, we should see a 5th wave up that challenges gap resistance at 153.28.

 

There is no short term pattern, though we may be forming a short term megaphone top.

 

A case can be made that 5 waves are in and the strong 3rd wave accounts for the abbreviated 5th. That alternate count moves red 3 to where blue iii is, and replaces red 3 with red 5.

 

By far, the most important feature on all the charts is the uptrend line running from June 13th.

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Uptrend line:

 

The importance of the uptrend line cannot be underestimated.

 

It's apparent on the indices and most individual miner charts.

 

EGO, FCX, GG, and MDG have already violated it.

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war markets are trecherous.

to me, the charts, the last few days, look like consolidation. the miners have been acting like stocks. not gold shares. i am long but unless something seems like an opportunity, i am not adding. i expect the metal to go higher on war fears. be careful. i am still waiting to add to my metal holdings,although i think hadjins buy will in retrospect be seen as very profitable. volatility is the name of the game, it appears from here on out. dharma

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war markets are trecherous.

to me, the charts, the last few days, look like consolidation. the miners have been acting like stocks. not gold shares.  i am long but unless something seems like an opportunity, i am not adding.  i expect the metal to go higher on war fears. be careful. i am still waiting to add to my metal holdings,although i think hadjins buy will in retrospect be seen as very profitable. volatility is the name of the game, it appears from here on out.  dharma

 

 

Silver must start to confirm the upmove period or we will eventually head back down.

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Unfortunately, gold shares are now completely disconnected from the gold price. Mining companies are being treated as broad market equities which are tracking the US indexes without much regard to the gold price itself. My intuition from the slaughter back in May was that using gold shares to leverage the inherent gold price was not working anymore. GLD/SLV has likely extracted a significant amount of capital from the gold share majors as a result (ie, NEM).

 

YTD Performance:

 

Gold +26.5%

GLD +25.81%

HUI +14.6%

XAU +7.13%

 

http://stockcharts.com/webcgi/perf.html?...6;HUI,$XAU

 

To me, utilizing these ETFs or gold futures is a much better way to leverage the gold price. If the broader indices are truly resuming their US secular bear market decline, then the gold shares are likely to go along for the ride down while the gold price continues to trade as a global currency. Same instance follows the Energy shares as well. CL is trading close to 80 while the OSX is clearly lagging, this indicator says to utilize the underlying commodities itself.

 

YTD Performance:

 

WTIC Oil +25.35%

OIH +8.75%

XLE +11.55%

 

http://stockcharts.com/webcgi/perf.html?$WTIC,OIH,XLE

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Index Trading:

 

I was unaware of GDX, a market vector that follows the $GDM.

 

http://www.amex.com/?href=/etf/prodInf/EtP...duct_Symbol=GDX

 

It is also closely co-related to the more widely followed HUI.

 

I've traded NEM and XAU options as market index proxies in the past. NEM's co-relationship as an outperformer up and down has waned since its addition to the S&P 500. XAU options are too thinly traded and require a large premium for the market maker.

 

This looks like a good trading vehicle, which, coupled with GLD should provide excellent vehicles to hedge, dong or short.

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For the star gazers, I want opinions on this matter.

 

Moon - Sun Tidal Effects Any events falling with selectively within 9/56 year patterns will always correlate with the ecliptical position of the north (ascending) node (see Diagram 2.2, McMinn, 2004). The lunar nodes are imaginary points in the heavens where the plane of the Earth?s orbit around the Sun (the ecliptic) is cut the plane of the Moon?s orbit around the Earth. The north node occurs where the Moon passes from below the ecliptic to above. All 9 Californian earthquakes in Table 1 occurred when the lunar north node was within two narrow segments approximately opposite in the ecliptic circle: * 310 ? 340 E o - a 30o segment * 130 ? 180 E o - a 50 o segment. There were no exceptions, a factor very unlikely to arise by chance.

Source

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war markets are trecherous.

to me, the charts, the last few days, look like consolidation. the miners have been acting like stocks. not gold shares.  i am long but unless something seems like an opportunity, i am not adding.  i expect the metal to go higher on war fears. be careful. i am still waiting to add to my metal holdings,although i think hadjins buy will in retrospect be seen as very profitable. volatility is the name of the game, it appears from here on out.  dharma

 

 

Yeah, what the heck happened? Did Hezzbollah and Israel make nice?

 

When I went to bed 7 hours ago the POG was up $7

 

War news is up and down.

 

I don't understand the gains in the buck today. WTF is up with that?

 

Long term this is still the place to be, I still think the Fed is done for now.

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