{Edited and Updated 5-10-2005}


My thankyou's out to so many of you that post and respond here and especially to those that subscribe/contribute to CS as I do

I have updated and posted the trade history table below is the new chart of the updated signals. Buy and Hold on HUI for 2004 resulted in @12% loss, trading the FCS resulted in less than 2% loss!

Gold Fund Trader


I did some updating to the FCS on the HUI index as end of 2004. This involved "tuning" it to include more recent data on it's backtesting and fit.
Also I have been working on the V.A.S.S. (Volatility Adjusted Signal Sensitivity)
Some slight changes occurred in past signals but only the most recent one was eliminated(now known to be a loser of about 3%) . I have only done this twice now (2003,2004) since implementing the system in 2002.




Hank

I am now working off the Neely EW count which I have spent way too much time reviewing and contemplating alternate counts to his but it does give the best fit. Besides that, it is the most bullish

Some concern here as the DTSToch is starting to roll over on weekly.
Bearish divergences are already in place on the daily on many lower panel indicators. I have FIB and Cardwell Projections to 260 area on the HUI, see if we get a nice pop here but time to be very cautious and you can count 5 waves up in this latest rally leg since August.

Neely's EW count calls for a "B" wave down of this larger degee X wave somewhere in this vicinity!

FWIW Hank I'd be looking to load the boat on any move down in the HUI 200-225 or so. I don't think you have to be the greatest trader to make money the next few years in the miners. I like CDE best of all the pm stocks for the long run. Staying fully invested and ignoring all the noise will be the best thing you can do.

TFH,
Yes, I am actually hoping for a move down with any decent reversal pattern to start really "loading the boat" as you say. I am kicking myself for not having the
b____s to do it at the wave W terminus. I had seen many indications this was a major swing i.e. perfect 9 wave down of larger A-B-C with osc divergences right at the .618 retrace. Great set-up and I entered a few like NEM but then got cold feet and sold out. Got too hung up on thinking another wave down was due, letting preconceived EW notions get too much in the way of my trading. Thanks for your posts and helpful trading insights!

Ohh I have a daily Cardwell on gold at $460 so I have a good notion we are about to see a pretty good top and larger pull-back...only to be bought for sure

I have to look at CDE, tanks!


Hank

Before you condemn GSS and CDE to the scrap heap put them up on 10 year charts and tell me what you see.

Put my sell order on UNWPX before the 2 O'Clock MF deadline and hopefully we won't get clobbered tomorrow and I can exit with a only a slight loss.

FCS issued a SELL today.

Chances are this is the start of something bigger unless we get a very strong bounce tomorrow.

I feel just like the little guy here with Santa bullion and the Miner's elf

Chart: 50 DMA and TL's obliterated, doesn't look much better on weekly,
Support at 220 then 210...50 week SMA lies just over 210 also.

Worst case I would think is the 50% retrace off the May lows around 206.

81.7 support broken. Definitely looking for sub-80 now.

Looks like wave 4. Check out the STOCH position. Don’t ask me why wave B is going to be longer then A wave

It’s got nothing to do with Preacher

Not sure where the wave 2 will end but it should end lower then wave 1 high but lot higher then Wave A Low. E wave should come down very fast,

Shake em baby then wow wave 3

FF,

Well, I am looking at the following for this immediate correction. I see a lot that points to a very minor correction not taking out the recent low @218 but I think worse case is actually a bit lower than what TFH is looking for with the following reasons.

We are at the 13 week SMA which has served as important support during recent bullish runs. However one time with this oscillator configuration (first ST OSC sell with strong LT Osc buy was during the last major correction before the huge 2003 run... here the lower 13 week BB and .618 retracement held the correction so this would be maximum damage here and really great opportunity to load up but this very well could turn around right here and rocket upward. Everything points to this being corrective and this very well being the final wave down before an explosive move up

SQ 144 on buck bloodbath...

Think bullion could pop again one more time with final $ SC for this leg down then a few months of consolidating before the next fall.

I think where we're getting tripped up here is in focusing on the dollar versus that other piece of ultimate garbage the euro. The miners have been sold because the world sees support in the buck 80-83 in that area you know. Ultimately we will get a separation and the metals and the dollar or you can pick your pos fiat also go up. Gold wins in the end. Mining shares should be worth one monster pop when the public gets involved. Let's not miss the forest for the trees. 198-212 would be my guess and it is a guess for a bottom in the HUI if and I mean if we go down from here. This is I believe a bull market and they are very tricky to time. I still hold my USERX position with a stop at 8.02. Bought GSS Friday for a long term speculation and am buying CDE in size shortly.

i agree the next stage is gold gaining against all fiat. euro probably bubbled strickly from $ exodus. now what, well, I think we all know and are waiting for the rest of the folks to catch on for the real blast off.

The daily +reversal target on gold has been hit but the weekly points to
$475. Also the -reversal target on dolar is at 77.5.

XAU daily has been met at 110. Weekly not real clean signal but portends 130ish.

HUI has 260 target on daily and developing a smaller weekly +reversal on this pull back which confirms we are definitely in bull mode
HUI has an established weekly + reversal pointing ultimately @316 which I think I have shown before:D

Big test coming up shortly. I can see risk down to 7.15 Silver. Currently 7.66. Gold may want to test area of breakout now at 432. Or maybe we get JM's big blast off a shakeout bottom shortly. Miners must hold 203ish. In that area + or- 2%. May get a capitulation bottom in here. Some of your favorite 4 dollar stocks may be wearing a low 3 buck and some handle in a few days.

GOLD / HUI

Which market leads?

Was the double top @ 258 a gross overshoot?

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)?

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

Neely EW on HUI

Help Hanky my boat is sinking.

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

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 analyst 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

Weekly DTF still on buy!

This chart has the FIB time extension on top, not even to the .382 (4 Feb 05) yet.

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

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.

Hank.. That was an especially sober post. Thank you for your work here.

Mr. Hanky,

This TA beginner finds your charts and comments very helpful.
Many thanks!

OldMan

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

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

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.

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.

Weekend Update
FCS HUI = CASH

RAFF system has had similar performance on the HUI and I will start posting its signals too. Also on SELL.

bd,

Here is a performance comparison chart. I use UNWPX because it most closely tracks the HUI and it is no-load and a minor .5% short term trading fee on less than 30 days. However TFH's USERX seems to be leveraging on the upswings and hedging the downswings, very impressive, I may need to switch!

TFH Please tell us what's da scoop on USERX?
Tanks!

Hank

Hank excellent stuff, thanks so much. I'm always stunned by how little I know when I listen to traders like you. Now that I am back in it looks like I'll resign for Doc's stuff and set up metastock for disciplinary purposes.

What is your take on Silver? I usually renter positions after steep falls and then am surprised how much farther they fall. This is an emotional issue with me and requires discipline and supervision.

Do you have any take on the explosion in small caps and junk stocks over the last week or do you avoid setups in these. There are many now and it appears that this is where most of the money is for the present in the crack comp. Stuff like Isis,Ardm,Cray,Trph,Lqmt,Cien,Mscc,Mrvl etc. Do you attempt to system or pattern trade any of these or is this too risky for you?

Also do you ever trade in energy like OIH? I am quite curious as to what might be a bottom in that and am tempted to bottom pick after this crash but again, this is an emotional tendency of mine. Gas and oil are seasonally up now thru February so the temptation to buy too early is obvious.

all the best Hank, great stuff, really great. You and Doc and so many of the others are an education for me day by day by day. I will inquire about Metastock and Neuroshell. best , b.d. trader formerly known as buddhad.........g

I have been posting my pattern trading into the OIH since late last year along with my HUI FCS posts but started a new thread here:

I am fully allocated in OIH, entered most late last year but recently added one small position and definitely my last one here recently. If just starting I would still be a buyer. Look here:

Hanky on OIH

I don't riverboat much on stocks anymore and don't own or trade silver, gold is stomach wrenching enough

Great charts
Thank You

Goldfinger Update:

Obviously we are in a larger swing down now:

I am looking at the 40-42 area first...would make a nice big inverse head and shoulders wouldn't it
Worse case is back to May Low @ 35.
Only two places where I would try to get in if a nice reversal pattern sets up.


EW sidenote:
If Neely is correct this is a RUNNING DOUBLE COMBINATION, W-X-Y correction up and this is the X wave up then this is B of X, it should only correct mildly <.618 of A of X (40-42) then make another strong C move up blasting the old highs. Gee I hope he's right.

There is a potential this is a FLAT, A-B-C correction. There are 3 very distinct waves in the A down (again notice the choppy B wave up in March-April, this latest move up as I have commented before again has a B wave smell very strongly, choppy as all hell and usually B's do take the longest timewise. Also it is a "Typical" or Normal Flat since B just did a 100% retracement of A. C down which we are in now most frequently will be equal to A and takes us back to the May low @35. C waves are ALWAYS 5's. Chances are it will give good clues when it is terminating just as when the final C of A down completed with a clear 9-wave impulse with divergences on final wave. I remember a lot of knife catching going on during the plunge as I continually warned to stand aside until some evidence of a reversal pattern set up appeared.

GG - I really like this company but the chart is just too scary.

Clear 5 wave A here (instead of 3 wave like NEM) and sure enough looks like we got a ZIG-ZAG (.618 or less retracement of A by B ). Rarely does C end up less than .618*A and usually = to it


EW note:


ZIG ZAG 5-3-5
FLATS 3-3-5
TRIANGLES 3-3-3-3-3

Another note:

Parabolics tend to be deeply retraced...even this B wave was a parabolic just like the 2003 impulse up.

M.H.--

Thanks for your tireless efforts on this board. I truly appreciate your occasional divergence into E.W. As a neophite, I appreciate your sharing the E.W. sidenote on NEM. It has a pattern, recently, that has eluded me.

Quite apart from that, your charts represent a dilligent and scholarly effort to present a diverse range of technical indicators so that each of us may weigh matters in the balance.

We are all enrichened by your presence.

Bearvest

Bearvest.. coming from a capable practitioner himself, that was beautifully and graciously said.

GG Chart

Do your own R&D

If we see 407 to 410 gold, I expect we will also see the euro at 1.15 to 1.20. Does seem imminent, but possibly within a few months.

$ made thrust out of the triangle precisely equal to its base but so far the reaction here has not been strong enough to reverse the downtrend. Reliable indicator has been RSI crossing it's 35 period SMA.


Sidenote: I always have 13 and 35 period SMA's on RSI if you have not already noticed and consider them an integral part of reading it's signals (Cardwell)


bearvest and Hadjin,
Thankyou so much for your very kind and encouraging words

FCS Weekend Update - Remains on SELL and doesn't look too promising.
Ho HUm....

HUI:Gold

plantigrade......key chart there. Looks like a bull flag?

HUI still quite comfortably on multiple weekly supports.



I believe Doc's analysis is on the money.

Feedfool, I am impressed with GG bullish action.....

5 golden rings
4 palladium bars
3 uranium mines
2 silver coins

and the buck belowow eeeeight eeee

HUi daily sure do look like spike and ledge REVERSAL in the works.

XAU- weekly always been good to buy at this technical set up ( secondary Cardwell RSI buy signal is the first touch back of the slow MA after the MA's cross over(primary buy). Have a nice coil on the XAU daily, an upward break offers nice buy set up and easy stop placement.

As long as 213 holds in the HUI we go higher.