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Monthly Digger - February 2011


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The immediate attention appears to have turned down a dusty road and is focused on oil and the upset in Egypt. I'm wondering if GLD is a breakout to a new level above 130 and is meandering to meet the weekly rising 50 bar moving average. The spacing it keeps away from this line might give us a clue how much interest those bigger parties see down the road. If it does not bounce like it did back at the end of July 2009 then the construction of any new consolidation is a mystery waiting to be revealed.

 

GLD

http://www.StockSharePublishing.com/ChartLib/GLD_01_31_20_31_1296523900.png

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Banks still seem to be in control here, not that they know what they are doing but what they are allowed to get away with.

 

If one time line is a June spot low then drifting lower will continue with a rally around March which shouldn't take out the recent highs Nov/Dec. Miners need to play catchup to spot at some point in time but the major mining indexes shouldn't take out recent high either. To get to higher highs, you need a good low put in and that was a nice run starting back around Aug 1 ending in a rounding top. Taken with all the usual caveats esp. anything can happen.

 

Not saying the Middle East was contrived or expected but Armstrong already noted history travels in such patterns/cycles with the decay of fiats and overbearing governments leading to political upheavals. The underlying current of unrest rises to the surface as food supplies and costs come to the forefront. Pretty much seeing that now but takes time to play out.

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After being 10 years in this run I managed again to sell at the right moment my trading shares down to like 22% cash

But again I bought back about 6 weeks too soon and now am at 5% cash .

My immidiate expectations are that we are at the bottom of the 15 week cycle around now

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After being 10 years in this run I managed again to sell at the right moment my trading shares down to like 22% cash

But again I bought back about 6 weeks too soon and now am at 5% cash .

My immidiate expectations are that we are at the bottom of the 15 week cycle around now

ageka- as you know, gold has a yearly cycle, which is about 12.5 months. i have this bottoming by feb 8th. so we are close in our forecasts here. i am looking for a run into march, then trouble

dharma

-2f right now , its cold

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ageka- as you know, gold has a yearly cycle, which is about 12.5 months. i have this bottoming by feb 8th. so we are close in our forecasts here. i am looking for a run into march, then trouble

dharma

-2f right now , its cold

 

dharma

As you know I follow the seven doctrine

In an uptrend I only count tops and ignore bottoms

My main cycle is 22 months

I am now up to 10% cash

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dharma

As you know I follow the seven doctrine

In an uptrend I only count tops and ignore bottoms

My main cycle is 22 months

I am now up to 10% cash

yes, following the uptrend in a bull makes sense

i didnt realize that you followed 7almost exclusively

i think we are really close to the lows right here and now

didnt know that you ignore bottoms either, thanks they are unreliable

and on the 15week up cycle as well

dharma

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In Peter Schiff's latest email Gold report the Aden Sisters are featured with an article titled "GETTING A HANDLE ON THE GOLD BULL." They state the gold bull needs a rest.

 

They ask:

"The question is: has the worst of the correction already past or will it match last February, when gold fell 13.3%?"

 

They suggest the dollar is showing strength and "Investors who let their trades ride through the holidays will typically use January and February to liquidate and re-allocate."

 

Also, "For gold, a 10% - 15% decline from last year's high would be a healthy one and would show overall bull market strength. This means a decline to the $1280-$1200 level is nothing to panic over. This level coincides with the 65-week moving average, the major support level, now at $1220."

 

To sum up:

"Overall, we think the 65-week moving average could be tested."

 

On my GLD chart I suspect that would translate into 122 and the prior breakout area on Sept. 14, 2010. I'd prefer to see spacing above this area with price meeting a rising weekly 50 bar moving average presently near 126.

 

http://www.StockSharePublishing.com/ChartLib/GLD_02_02_21_35_1296700511.png

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It seems to me the longer the fed holds interest rates near zero and people holding cash in savings/CD's there will come a time of frustration for them as inflation flies upward.

 

Interesting:

Mexican Government successfully sheds the US Dollar from its economy

http://www.thepeoplesvoice.org/TPV3/Voices.php/2011/02/03/mexican-government-successfully-sheds-th

 

I guess those drug lords might have a problem if they have to launder their dollars into pesos.

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here we are in 2011. and there are many situations that are similar to 1979. the shah toppled. inflation was higher and raging. the hunts had the silver market cornered. the metals were in bull markets. along w/just about every other commodity. nothing is exact but the situation is quite similar. today the world is deep in debt and the economy quite fragile. inflation is just rearing its ugly head and the powers that be, due to high unemployment, are not starting to ratchet up rates yet.

in my trading, i dont forecast. its a bull market. so , most situations resolve themselves w/higher highs. i trade off the situations that the market presents. i buy weakness and lighten up into strength. w/broad parameters. we are in a bottoming process here. which smells of accumulation. i am long and waiting. for clues. the miners have had some good days last week. now we are @a natural resistance # 1350. and 1358 is a break through point on my work. i am patient in here. not doing much although i did sell orzcf @3.6 bought @.4 from here on out i want to raise cash. i am no hurry. most probably i wont sell anything until we reach new highs.

egypt does not have oil or power like iran did under the shah , but it does have the suez canal and it has been an ally. and the unrest is not just in egypt. this situation is explosive. and i think the market is fairly complacent. there are too many catalysts out there to talk about. but the similarity to 79 is worth noting.

patience in here

the cycles i watch are just turning up

the shorter cycles were trumped by the yearly cycle , which i think bottomed, we shall see

dharma

silver in backwardation

 

ZERO HEDGE:

 

JP Morgan Accepts Gold Bullion As Collateral – Silver Backwardation To Lead To Short Squeeze?

 

"JP Morgan announced today that from now on they will accept physical gold bullion as collateral. This is a sign of gold’s further remonetisation in the global financial and monetary system. It may signal that JP Morgan is having difficulty in securing gold bullion in volume. JP Morgan is the custodian for many of the gold and silver exchange traded funds. They will not accept ETF trust gold as collateral. In October, the clearing house of global exchange CME Group – CME Clearing – announced it will now accept gold as collateral for trades on the exchange. Gold bullion can be used for margins for CME trades, ranging from crude oil, gold, grains, equity indexes and Treasury bonds. Given the current monetary, macroeconomic and geopolitical risk gold is an attractive alternative to debt, equities or other paper assets as collateral. JP Morgans’s move shows how gold bullion’s fungiblity and tangibility as an asset makes it attractive and shows gold’s increasing importance in the financial system. Interestingly, the CME is storing their collateral gold at JP Morgan Chase Bank in London. The exchange said it hoped to add additional depositories in the future but there has been no announcement of developments in this regard."

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