Category Archives: Metals

Gold: Contrary Indicators

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By Biiwii

It was bad enough that a numbered bullet point, (!) using tout has been lathering the gold “community” lately with an amazing fundamental consideration he calls “the Chindian love trade” (you know, in China they buy gold for love and as their economy grows gold will go way up in price). Never mind that he promoted gold for Indian Weddings and China demand all through the bear market or that as recently as last week he predicted that the US ‘jobs’ number would be huge and gold would sky rocket due to panicked institutional demand in the face of rising inflation.

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Big Moves are Coming

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I follow four areas of the market very closely; volatility, miners, gold, and the SPY index, and everything smells of deflation.  I trade on the 2 and 4 hour, but I took a step back and looked at the monthly, weekly, and daily charts and everywhere I look it smells of lack of oxygen.

The broad market has a decreasing positive slope (8% y-t-d), and why not, you cannot continue to have 10-14% (from 2014) annualized growth rates with no GDP, Income, or fixed income rates.  The charade started with a relative yield trade, then a squeeze volatility trade, and now we are wrapping up the leverage the balance sheet trade.  The Central Banks and politicians have done everything except the right thing, and maybe because the  right thing is the hard thing.

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Pushing Up From The Triangle

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SPX made the second day of a daily upper band ride on Friday, and might do a third today. Until demonstrated otherwise though I’m leaning towards seeing a decent retracement in the near future. Short term rising channel support is in the 2124-8 area today, and if we should then see a retracement to channel support, that is currently just under the daily middle band in the 2085-90 area. SPX daily chart:

150427 SPX Daily Patterns BBs MAs

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It’s Not Getting Any Smaller

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I would like to make my own modest effort to put to rest a trite little phrase that gets trotted out every time silver and gold are getting trashed (which has been the case for years now). “I just checked, and my pile hasn’t gotten any smaller.”

These precious metals kooks – sometimes called “stackers” (since they stack up coins, as well as losses) somehow make the point that since their physical asset hasn’t changed shape or amount, it hasn’t really dropped in value. Not in a real sense. Honest Injun.

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