The other day I spoke with a friend who owns tons of XOM stock. I commented that the dollar was going on 30 year lows and the response I got was that stocks were doing so well. Sure, XOM is at highs but cash is not king.

I also commented about currencies and how gold was back to 740 or better and the response I got was that gold was unstable. Sure, stocks are at highs but cash is not king and the dollar is stable?

If cash is not king, then maybe they're believing that stocks must go higher. It will be interesting to see just when the pigmen orchestrate the next attack.

750?

Friday Sept. 28

Gold for December delivery surged $10.10, or 1.5%, to end at $750 an ounce on the New York Mercantile Exchange.

The contract earlier hit an intraday high of $752.50, a new 27-year high. The record intraday all-time high for a benchmark gold futures contract on Nymex stands at $875 from Jan. 21, 1980.

C.O.T.'s

I don't keep track of the COT's.

But the Commercials are massively short.

Numerically, they are short 296,412 contracts to 88,400 longs.

Their short interest at 296,412 contracts to an open interest of 440,945 ( a ratio of 67.2% ), is as large as I've ever seen in the last 3 years.

Does anyone have any long term statistics?

http://news.goldseek.com/COT/1191008035.php

http://www.softwarenorth.net/cot/current/charts/GC.png

Depends how you look at it.

I'm looking for a pullback in a huge bull market.

When I look back to December, 2005, there was a nasty and swift 10% correction.

$GPX:

I've gone over all the charts for the miners, the indices, and gold itself off the October 2006 lows.

I was looking for the cleanest technical and Elliott pattern.

The $GPX has the easiest pattern.

It's very bullish in the longer term, but it indicates that the rally may be due for a short pullback---likely a minor 4th wave.

Typically, a 4th wave retraces only 38 to 50% of the 3rd wave and a natural stopping point is at the 4th wave of the prior 3rd.

Thus, I'm looking for a pullback to between 965 to 980, and closer to 970.

That Comex percentage chart says future gold is not over invested either way.

So far most miners haven't reacted to Friday's gold price.

The next correction in the regular markets is going to be very telling while watching the miners react.

A revisit of the breakout would be quite a gift. Buy the dips.



71.04 is support and that is about the 20dEMA.

The media are trumpeting gold and yes, COTs are shorter. Silver is not being mentioned very much and rose off support this week.



The haha Heckler has resistance directly above, but should be good after that...



In general, XAU 172 is major resistance.

HUI:

I've been pondering this chart.

A few things caught my eye.

Most important is the lower trendline. Impulses move in a channel. With a possible 5 wave count, the trendline takes on very important significance.

Second, there's a very pronounced support/resistance zone at about 358-368. It seems very likely it will be tested. Right now, a 38.2% retrace would hold at 357.42.

The rally has been 25 days in duration. Thursday would be the (Fib) 34th trading day off the August 16th lows. It could be a pivot. It would tend to resolve the ambiguity between my incomplete impulse on the $GPX chart posted above and this chart.

Right now the retracement zone is from 329.70 to 357.42.

Like Meta says, if the chance to get on board this long-term rocket ride presents itself, it will be a "gift".

The Fed has decided to re-flate the ecomony and "inflation and the dollar can be damned."

Someday, I'll tell my grandson how I bought into the gold-rush of 2007.

this move has just begun. i dont see any divergences in xau/hui/gold. sure there will be corrections. i just dont see one w/the data we have @this point. corrections are buying opportunities @this point. dharma

BV,
HUI 398.19 is resistance.
372 and 357.52 are strong supports below.....agreeing with one of your numbers, but derived differently.

We'll soon know if this apparent reversal is merely a b of an abc, by watching 398.19?



I'm just holding and adding more to dips.

largest commercial short in a year on the cot.
the large specs are long, very very long. correction on deck? dharma

COTs and charts say a pullback is inn order.
Everyone already seems to be waiting for that so either it doesnt come yet or it goes much lower here than most expect.
I like BV's count: we will see a c down of an abc correction to the impulse we just had up.

Looks like all-time closing daily highs for HUI and XAU and tie of all-time high for GDX? But my stocks were laggards today (TRE, SLW, RGLD). Expecting a correction but holding full long. I'm solidly in the "any correction here is a gift" camp. I might consider buying on margin if that correction comes. I'd probably stick to a diversified vehicle like GDX.

looking for 710ish on gold, not today, but by the time this correction is over. rsi on hourly xau/hui is Dover Sole. this should not take very long correcting.
dharma

dharma: how far down you looking for the miners? XAU?
Also, this move down today was quite impulsive looking: cant rule out a C wave down here can we?

i dont really like to look for #s except as support and resistance. doing so, for me, then i cant listen to the market. 162-164 xau is support. i dont think 710 gets broken. the market has had a big move up and is over bought w/divergences. i made some room for buying yesterday. so i am looking to buy. silver looks very interesting to me.http://www.traders-talk.com/mb2/index.php?showtopic=76899
dharma

I see the pigmen attacked gold today. I'm seeing December gold back to 734 or down 19.

750 area was it.

HUI:

Double tops ( or "M" patterns) are not terribly reliable signals, as far as price projections go.

Rectangles are more reliable.

Of course, price hasn't broken down, and MACD and Stochastic "sell" signals haven't triggered yet.

I'd place my bets on the bearish divergence apparent in both these oscillators.

Selling call options against long positions or buying puts on GDX is a way to hedge against a price decline.

But it isn't recommended for the faint of heart.

Hello Gold "Miners"..

been awhile and I recognize Bearvest & Charmin & Metamucil...
been terribly busy with a baby and thus no time to trade or fade the charts and noise news..

but Ihope to be able to participate from time to time...

LOL to everyone here...

cheers, 5th element

Glad to see you back 5thelement

This last week I was looking at CHNR. A chinese stock. At one time I thought they had some mining business or were involved in some.

I didn't buy any. Don't look.

Ouch. Looks like it went from over 800, split-adjusted, to 1, between 1996 and 2002. Now it's up over 300% over the past 2 weeks. I guess that's pai-gow.

Gold:

Keep a sharp eye on Gold.

GOLD:

Elliott analysis and MACD histogram:

Faramir:

You'd asked about Barrick last month.

As a Canuck, you want to add this site to your favourites. He posts nightly at midnight EST.

He mentioned that Cramer told his audience to buy Barrick on Tuesday....

Need I say more?

Wait for the dip. It never holds at its 50 day. If this is a trend reversal, this time it could be different--but I doubt it.

http://dvtechtalk.com/October/October4.htm

hourly divergences taken out. still waiting to buy. dharma

Waiting to buy too
But since the daily and weekly charts are still at 80% slowstoch
I will wait some longer since I sold nothing sofar

Picked more up at the lows today. Wave 4 looks done....

It may be that jobs numbers come in lousy tomorrow and the metals react upwards with the market.

Today we either saw some short covering before that event or someone wants more inventory.

it sure looked liked someone got the #s, but who knows. the correction is either over or this will just be a bounce! cycle lows are due in the broads next week. we shall see dharma

AEM:

I suppose it's somewhat silly to post a prediction hours before what will be important "news-noise"--the jobs report.

I'm short AEM from 49.80 from last Friday.

The point I wish to make deals with Bollinger Bands. As they narrow or compress, they indicate a neutral market or a trading range. Any move out of the Bands will likely be fast and furious--as it is a break from a trading range that had been stagnant--and, clearly, something has changed. In other words it, has found a catalyst that has significantly impacted investor sentiment.

Bollinger insists that the compression in the Bands is not a clue to the direction of the breakout.

Elliott helps, im my opinion. Most sideways moves are 4th waves. Repeating 1's and 2's also create compression. Thus, these pattern are continuation patterns. On the other hand 5th wave patterns such as rising or falling wedges can also produce compression--in which case the pattern is a reversal pattern.

As BB's are constructed solely on price criteria, Bollinger suggests that volume measures should be viewed as a clue to breakout direction. After all, what good is another price oscillator--if it merely measures the same thing?

AEM is one of the few miners with contracting BB's. All the rest have expanding BB's. On Balance Volume in AEM is in a falling trend---the peaks and valleys are successively lower.

My reading of the entrails suggests AEM will head lower. I'm looking for a gap fill in the 43's.

You mean I should do opposite to what Cramer, the boiler room hack, says?

Gracias

Free to roam higher.

AEM:

It outperforms up and down.

Still a short term bear. The count looks like an irregular flat, according to the oscillators.

I held through the short covering rally Friday.

GSS:

I think the rally has peaked in an impulse up on the indices.

Others see 3 waves up and last week's action from Monday to Thursday as a 4th wave. Thus, they believe that we'll see a 5th wave rally. The P.M.'s and commodity stocks often have strong 5th waves that are longer than the 3rd.

GSS is a stock that falls into the extended 3rd--current 4th type of count--a 4th wave triangle (it appears too long to be a bear flag--which I view as 3, 5 or 8 day moves).

If so, it could reach $5.00 if that gap proves to be a runaway gap.

Interesting BV, we're definitely on opposite sides of this trade. ~50 is good support.

We got a strong job number and market absorbs higher and the day before it appeared to me they wanted more inventory. If we keep inside a tight trading range on stocks like GG near highs then I'd be ready for a breakout.

Actually, I'd like to see a grinding pullback building more cause before gold gets another big whif of inflation.

I find it hard to believe that this country could actually be in the situation where the dollar is par or less in value to the canadian dollar.

I'm thinking AEM to 63 if the pigmen can't do better at suppressing the price of gold at the 750 level.

http://www.StockSharePublishing.com/ChartL..._1191720744.png

I'm thinking NAK is ripe to show us whether it turns out to be a shakeout. In that case it's gunna react to take out the highs.

http://www.StockSharePublishing.com/ChartL..._1191721110.png

If RGLD can consolidate anywhere above 32 for a bit of time without reacting much then putting it all together with some of the other stocks may bode well to see it retest up near 42.

http://www.StockSharePublishing.com/ChartL..._1191721694.png

Strength:

As a trial lawyer, I am often away from the markets throughout the day. If in a trial, I may have limited time to review charts and market action outside of trading hours.

As a result, I have adapted my trading strategy to accommodate these shortcomings.

My strategy can be distilled to the following principles:

1. Trade with the trend. If the trend is up, trade long---and vice versa.

2. Determine the trend with a trend indicator--MACD, PPO, Aroon or Wilder's ADX. I like MACD.

3. Buy the strongest stocks in rising markets, and the wekest in falling markets. I use MACD and On balance volume for this.

4. Look for patterns that confirm the trend---breakouts from rectangles, triangles--or that indicate a trend reversal--wedges, broadening patterns, double bottoms (but not always tops).

5. Employ Elliott to determine position within the trend--completed impulses, 4th wave overlaps...etc.

6. Engage in occasional "thrill-seeking". Play a counter-trend move in a wave 2 correction but not wave 4. Trade at the "b" wave. These positions are always very small and never more than 5% of trading capital. This may include options, in which case, the amount is never more than 1% of trading capital per position.

In my next post, I'll try to say where this analysis takes me.

Wave 2:

I think we've seen a completed impulse up on HUI and XAU. As MACD on HUI and XAU are at their highest levels since the October 2006 lows, I believe the major trend has changed since that date. I won't venture a count as to where we are in the mega-trend, but I believe we're in a huge 3rd or 5th wave up that will see unheard of levels for GOLD and the indices in the years to come.

As the indices stall, MACD is declining creating increasing bearish divergence. Although in positive territory, the crossover is a trader's sell signal.

The pattern looks like a double or triple top---It's possibly a "rounded top" which is a relatively accurate barometer---should we fall from here.

Many strong individual issues are at resistance. AEM and GG are 2 examples. KGC broke and fell back. GFI, despite it's parabolic pattern on the daily candlestick, is at long term resistance. I've used the P&F charts for this.

Individually, only about half of the HUI components are showing significant On Balance Volume accumulation. For a new high, we should see 12 or 13 or about 75% plus. The strongest is FCX (and I'm positioned strongly in Canadian copper stocks--IMN.TO, AVN.TO and RBI.TO). Stocks with both favourable OBV and MACD in HUI are:

AEM,
FCX,
HMY,
IAG,
KGC,
MDG,
and NEM.

Some of these may surprise you.

Wave 2's often correct to 61.8%. They are nasty. They occur when all the early birds are filled with bullish sentiment--especially if the "early birds" are latecomers in a 3rd or 5th wave.

Here's the chart of much-despised NEM. Price has lagged, but the trend and volume oscillators are long term positive

Bollinger Bands:

I've posted on what Bollinger said about his bands---compression leads to sharp moves.

He denies that expansions should be interpreted as reversal signals. It depends on the degree of expansion and the number of times the Band is hit ---though others argue that when expansions end, the end result is a reversal or a regression beyond the mean to the lower exreme

Here's the last several months for XAU.

i think we are in wave 5 up off the 8/16 lows. i am looking for a move to 710 which is short in time. the miners may have a bigger correction in price as i see a top coming in the broads later this week. the feeling in the market has changed, dips will be bought. i have seen each low since 8/16and including this low as accumulation taking place.
i just one to point out that oscillators in bull markets will always get one out too early . divergences will occur, only to be taken out by the next upthrust without much of a correction. if you must trade be advised of this character of bull markets. dharma

HUI.

Wave 2 or wave 5 at one degree of trend lower?

Ive posted that I believe we've seen a completed impulse up from the August 16th lows.

Dharma and Meta think we've seen 3 waves up and last week's action was the completion of a small wave 4.

McHugh posted his long, medium and short term counts at Safehaven.com.

His charts for HUI depict my counts.

http://www.safehaven.com/article-8561.htm

yes, bv and we are in wave 5 now, which i think completes this week. then a couple of weeks of correction. which will get bought up. dharma

I am not into Elliot but my cycle analyses makes me believe Petch is right
in the conclusion we are about halfway up in the fast rise part
Does his Elliot comply ?


http://www.gold-eagle.com/editorials_05/field100107.html