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PMS Weekend Digest for August 9/10


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Well I can't imagine anybody more pissed off in the entire world than me right now but here goes. Bad time to decide to sit out for a couple of days. Didn't hang in, then didn't buy the break out.

 

The bullish set-up that I mentioned after I pledged to try harder seems to have come to fruition. Signs are now building for a Hooey run to 200 and a major major top in September. The more bullish set-up I see, which is of a high probability is a 6 to 8 week run to 250. Just have to keep the mo-mo goin'. The pullback after a move like that would probably bring us back to 170. The least bullish, which is also of a high probability, is for a 4 week move to the 188 - 190 area before we get a serious tree shake ie a move down to the 140s again, although back to the 155 breakout is a more reasonabull target. An uglier scenario would lead to a fall to the low 130s.

 

What am I going to do now? Well after a weekend of eating lightning bolts I might be better prepared to decide.

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ThorA$$, selling into strength and taking profits is goodness.

 

Personally though I'm sitting on my semi-trailer load of pennies. They'd have to drop below my IT MA before I sold out of this bull. On the other hand, I bought a bunch of OTM calls on NEM and a (much) bigger bunch of ITM puts on the broads, techs and bios. I'm looking at the GCZ3 and GCZ03 trying to figure how a bit player can get some of that action.

 

Charts screamed at me to do it.

 

BAA

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70f11 you asked about volume in friday's thread. I'll try to check into the gold futures chart this weekend.

 

I'll put this out there:

It is not demand that causes rising stock prices but rising stock prices that cause demand :grin:

 

Some would then ask - is high volume in a rally proof of strength - and then answer no. When I look at price I have to ask what is the volume and especially at swing highs in a bull. Now I don't know just how much specialist activity is going on behind the scene to control the price but I believe volume is a window into that world. Hey, he is the one who has the inventory and he can add or dispose of it. I am still working on examining the "movement" of volume. What strikes me is that when Wall-mart wants to creat demand for its junk they conduct a sale by lowering prices but when the big boyz want to conduct their sale they attract investors by raising prices. :lol:

 

That said the "smart money" mutual fundies according to friday's IBD are investing in GSS at 9 million, GOLD at 31 million and FCX at 70 million. Not sure the time spand this report covers. If you don't want gold buy vitamins - NBTY - its almost as good as gold :lol:

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Lets get Physical ,,, IRAs.....

 

The 1997 IRA amendment now offers IRA investors the opportunity to diversify their investments from pure paper, stocks, bonds and mutual funds, to solid hard-asset investments-precious metals.

Gold bullion and silver bullion were approved for IRAs by the US government in 1997. Heretofore, only Gold Eagles and Silver Eagles coins were acceptable for IRA Plans. This change is especially beneficial to IRA investors who would like to diversify their IRA holdings to include more than stocks, bonds and mutual funds.

 

Gold Eagles are the only gold coins specifically approved for IRAs. Other gold coins to be eligible as IRA investments must be at least 995 fine (99.5% pure 24-karat gold) and be legal tender coins. This provision puts Gold Maple Leafs, Kangaroo Nuggets, Austrian Philharmonikers and Perth Mint's Gold Dragons on the approved list. In fact, all the coins of the Perth Mint's Lunar Series (9999 fine) are eligible. Conversely, many gold coins, such as Krugerrands (91.67% pure) and old numismatic US gold coins (90% pure) are not legal investments for IRAs.

 

Silver Eagles are the only US silver coins specifically approved for IRAs, though the 999 fine clause makes Silver Maple Leafs also eligible. However, pre-1965 US 90% silver coins are not eligible for IRAs. For IRA investors who prefer silver, bullion bars are recommended.

 

Platinum Eagles were also allowed by the 1997 IRA law revision. American Platinum Eagles have become very popular bullion coins in the US.

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Nice day to end a productive week. I was 80% long when the buying capitulation came in, while 3% long on Natgas, 7% in Krugers and 10% in cash. Needless to say that my cash found its way into the pm market yesterday. While I'm still in the process of doing my homework, I see the top of this rally before the end of August and it will be followed by a multi week consolidation.

 

I mention consolidation here, instead of correction. As I said previousely, I don't believe in charts which don't comply or confirm fundamentals. When you know the fundamentals, you know what to look for in a chart. Despite strong gains in the pms market over the last month, nothing has occured which requires strong correction on a fundamental base. That doesn't mean that a technical consolidation at some point won't take place, but it's not going to be a huge correction.(like 30% of the index value)

 

Enclosed a chart on which you can see that the current upside is somewhere around 240. However, it seems very unlikely to me that we'll hit that mark within the next few weeks. However, at some point over the next 6 months we'll test that resistance, which will have moved up by then. On a fundamental basis, it's more likely, we top out within the next two weeks around 185-200. This would complete the second 30-40 points rally, I envisaged a while ago.

 

However, IMO, it will be a rocky ride from now on. It won't be like moving 8 days up in a row like last time. The volatility is to increase dramatically within the coming two weeks. There'll be ugly days as well, but on balance the upside forces will be stronger than the downward ones. The volatility comes with smaller specs entering the fray, and that is clearly something to anticipate at this point. But let's enjoy the ride, and thanks to those who share their work and insights.

post-11-1060426992_thumb.png

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John @ Trending 123:

 

$GOLD:$XAU RATIO CHART--Suggests more upside in the index to

possibly as high as 88-89 level "Short Term." Now that doesn't mean

all gold stocks go up the SAME "percentage" How you can play that is

getting in the less overbought stocks and scale out of the very

toppy toppy stocks. Longer term swing traders and investors should

still be sitting tight with their positions the "TOP" is far from

in. But this is wave 3 and that top will come next week and finish

the week after. That is where short term traders (Day traders i.e.:

traders like me) go back in and snap up more shares). When we hit

3.73 on the ratio chart that should equal the wave 5 top. As you can

see it could be MONTHS before that happens.

 

http://trending123.com/stocks/chart_of_gold_ratio.htm

 

These 3 charts all show WAVE "3" getting close to a top but possibly

just not yet, again its a bull market and very hard to be exact as

panic buying drives this higher. The $XAU is not anywhere near as

overbought as the $HUI, I for the most part prefer the $XAU to the

$HUI so keep in mind the $HUI will likely "top" on this wave sooner

than the $XAU. The reason I prefer that is because most technicians

and gold bugs for that matter don't like the $XAU because of

hedging, that is reason enough for someone out there to keep a close

eye on it for "clues".

 

http://trending123.com/_hui.htm

 

http://trending123.com/_gox.htm

 

http://trending123.com/_xau_.htm

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Well I can't imagine anybody more pissed off in the entire world than me right now but here goes. Bad time to decide to sit out for a couple of days. Didn't hang in, then didn't buy the break out.

 

The bullish set-up that I mentioned after I pledged to try harder seems to have come to fruition. Signs are now building for a Hooey run to 200 and a major major top in September. The more bullish set-up I see, which is of a high probability is a 6 to 8 week run to 250. Just have to keep the mo-mo goin'. The pullback after a move like that would probably bring us back to 170. The least bullish, which is also of a high probability, is for a 4 week move to the 188 - 190 area before we get a serious tree shake ie a move down to the 140s again, although back to the 155 breakout is a more reasonabull target. An uglier scenario would lead to a fall to the low 130s.

 

What am I going to do now? Well after a weekend of eating lightning bolts I might be better prepared to decide.

Thanks Thorass. From your chart it appears the HUI is acting conservatively. It has not broken the upper channel to give an overbought signal. I keep hearing how gold stocks are outperforming gold too much. Well in May/June it was obvious gold was outperforming gold stocks, so to me gold stocks have simply "caught up". There is no overbought situation at all IMO.

 

Also I am always careful about reading too much into the 50 day and 13 day moving averages. Sometimes they perfectly give a signal and sometimes they don't. Sometimes they are useless because the buy signal happens after 50% of the move has already occured. Is that your opinion?

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Nigel THORnberry has been eating lighting bolts??? all the best when they come out the other end mate...........

 

NEM came out and talked up the gold market last week and that is IMO the catalyst for the buying panic...

 

But why????

 

Well the AU-ASL merger will make NEM # 2..... NEM wants to make AU pay top dollar...

 

What advantage does NEM gain by making AU over pay... well it will hurt AU's balance sheet and it will solidfy NEM as the number one choice of the large pension funds and Institutions that are poised to enter the sector.....

 

Again please remember i am just a smelly dog and lift me leg to squirt just like all the other dogs......

 

Woof Woof

 

Have a nice weekend all

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BGO - Friday Aug 8 range 1.73 - 2.02 and vol. 9,088,700

 

Tim O

The weekly chart looks good on BGO. An ABC daily pattern has an upside target near the 1.90 range, which is the June 2002, highs. If BGO can get through the 1.90 range with volume 8.8 million shares or more then next target will be 3.00 to 3.50 range.

 

http://www.marketweb.com/commentary/ord0805.htm

 

Not sure how he arrives at his targets but:

A .30

B 1.92

C .90

D target 1:1 2.52

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I've swapped over to the 6 month view on my pubic farts. (Damn that pornolized spewchucker.) Go have a look. Pretty interesting to flip through about 40 miners at once. About 3/4 of the way thru updating. Looking for issues that aren't TOO overbought. One thing is interesting is that extremes in price usually come on extremes in volume. Volume often preceeding by 2 days. One thing to watch will be GOLD. If they buy that and push it back up and over then forget it, throw everything at the PMS because they'll be buying all dips and the dips won't be much. So I'm cautious but watching. Next week I could be fooly long or remain out.

 

DrAu's 6 Month PMS Charts

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