Just a quick update for all the traders out there. Gold and Silver triangle setups are compressed and coiled up as they get ready to break in either direction. As you can all see, I've uploaded a basic chart below:
So I thought it would be interesting to see what the readers of the blog think over the next several hours or days (depending on how long it takes for the break to occur). So please take time and vote in the Blog Poll regarding technical price movement and thank you in advance.
Update: poll is now closed and the results can be seen below.
Update: poll is now closed and the results can be seen below.
I am bullish because gold refuses to go down but ain't going to buy until I see a catalyst. which would change people's sentiment.
ReplyDeleteMunicipal (California high quality AAA rated) bonds have been going up almost every day. In my bond ladder, those bonds maturity in the 2030 range with say a 5% coupon are gaining the most...that say affluent ppl are convinced that the future is about very low growth and low inflation.
I have taken my first bond shorting position via TBF (1X so no decay) yesterday and plan to hold it for an eternity.
Hahahaha I love the last quote. Eternity in Kondratiev words would be about 30 yrs til it goes above 10% again!
ReplyDeleteHey Tiho, what did you vote for?
ReplyDeleteI voted for the bearish side. If I have any skills in tape reading then, it is telling me price is action rather bearish. However, I am not so sure the breakdown (if it happens) will go down a lot, because sentiment is super negative.
DeleteHello there Tiho,
ReplyDeleteThis 9m descending triangle is so anticipated, I can see a quick move lower followed by a whipsaw to stop out the shorts. Then a drift lower. I think the catalyst for the next sustained move higher will be a combination of gold being classed as a Basel 3 Tier 1 asset in January (if I'm not mistaken), possibly roughly coinciding with post election QE. Tier 1 status obviously removes a lot of the risk of a major sell off in the liquidity crunch scenario everyone's anticipating.
I agree with you anon. Even if Gold breaks down from current compression triangle and descending triangle patterns, it seems more likely it will only be a stop clearing run given the very negative sentiment already in the precious metals sector.
DeleteA drop below $1500 will see the bears come out in force, calling for $1200, $1000 and lower where it might only spike down to $1400 or thereabouts before bouncing back strongly and resuming the bull market.
Buying Gold (and Silver) now and I will buy more if it drops further.
can you add a "confused" option to the poll? that would be me LOL
ReplyDeleteHahaha I will next time. That is quite a good option to chose right now to be honest!
ReplyDeletehaha. Yea. I can actually give you like 5 reasons to be a bull and 5 reasons to be bear. Not gonna trade much until I see some good tape (either bull or bear). This kind of volatility we're seeing indicates a trend change at hand. But hey who knows. This is election year in the US and BB could start printing.
DeleteTiho, I have one question to you. When you do the poll, and let's say we all answer we are bullish, in this case about gold, should you and we take this as a contrarian sign or just the opposite? I mean you are not running CNBC show ... your readers we probably smart, well-educated and could be good at investing. So what exactly is the point in making this pool, if you don't know what your readers are? I would appreciate if you explain me. Let's say that you have 1000 readers of which 500 are professional successful contrarian investors and 500 are CNBC lovers who always go with the crowd and buy Apple at $600, Buy gold at $1800 ... then what exactly these polls mean?
ReplyDeleteDo you consider us all the crowd as a whole? Or the real smart money? With your current poll about gold, it's even more difficult as people are in disagreement by voting for both scenarios.
I (not speaking for Tiho)consider this sort of poll as "just for fun and speak your mind stuff". No pun intended.
DeleteMy (older) friend who owns Walmart with a cost basis less than $10 warmed me all the time that too much analyses would lead to paralysis....well, so I try hard stay with the right side.
Man, what are you talking? This blog is not for fun I guess. People are reading investment stuff and they might base their decisions on it. Your friend's advice is nonsense. One trade is not a barometer for success. Even though we better for for gold to take its decision I'm trying to understand the sense behind this poll or challenge it's rational and sense for doing it. Isn't there a reason for anything we do ?
ReplyDeleteThis comment has been removed by the author.
DeleteHey Illi. To try and answer your question is really difficult. That is because I do not know who takes the votes and I do not do polls regularly enough to track previous historical pattern of the readers I have (maybe I should... I dunno?). I do not consider readers of this blog anything other than interested financial types. Some could be beginners and others could be professionals.
ReplyDeleteRegardless, it also comes down to the prevailing consensus of the votes. If the outright majority votes for something, it probably is very obvious outcome, no matter how experienced readers of this blog are. However, if the voting is even as it currently seems to be, than I do not know what to conclude other than a 50 - 50 coin flip (heads or tails type of an outcome). I just do it to see what the readers of this blog think...
Sentiment is extremely negative on Precious Metals sector as well as in the European currencies, when I checked the recent sentiment data this morning.
ReplyDeleteBullish sentiment on the Dollar is now at a record high according to the Public Opinion by SentimenTrader website. Furthermore, confirming this is the amazingly low bearish sentiment on the Euro and record low sentiment on the Swiss Franc. In the Precious Metals sector we have Gold, Silver and Platinum at bearish extremes right now.
As I already mentioned in the previous comments posts, there are now less than 7% bulls on the Euro according to the DSI. Furthermore, Euro shorts on the COT as a percentage of open nearest are close to record lows and more than 2 standard deviations from the mean.
Finally, Gold Miners bullish percent index, a good breadth indicator for the overall PM sector, is ridiculously low at 7%. All in all, conditions are ripe for a mean reversion rally, so I wouldn't be surprised if someone out of the US, EU or China announced something that market uses as a catalyst or interrupts in a bullish manner just for the sake of a mean reversion rally!
Just for fun, I like to load up every momentum indicator I know of and look at the monthly timeframe. Gold is easily more oversold (under owned?) than the "financial crash" of 08 where investors ran out of everything and the VIX 96! Today the VIX is at what, 18?
ReplyDeleteAlso, look at the volume holes on the run up. I wrote about this on my blog the other day. Seems to me if gold does decide to break down here, then there's not a lot of sellers left at lower prices (esp starting at $1480 or so). Bottoms are in when everyone who thought of selling has already sold.
Pretty good move today on strong volume.
On sentiment, the world's most hated investment is about as hated as ever. Who's left to sell?
So I think a likely play out is a false breakout followed by a huge bear trap and then a launch. Forget the QE blabber, the PM's don't need it. In late 2010, gold went up $200 after Ben "hinted" at Jackson Hole...he hadn't even tweaked the balance sheet yet.