I'll re-post here Jeff...you are still off on your GLD charts.

You are way way off on your chart of GLD. Perhaps you have taught me too well, as I am better than you with charts now.
I have re-charted GLD...and here is a technically correct chart of what GLD looks like..from a true Option Addicts point of view...

http://img176.imageshack.us/img176/6174/gldaddictgm3.gif

I love you man. Old resistance is new support. Have a wonderful weekend Jeff!

Jeff - first time post.

Thanks for the GLD discussion.

Big fan of your blog and your (rare) appearances at IT.

I took Eric's and your advice and got into GLD back in Aug 07 - got stopped out Nov 20 and got straight back in - so adding to GLD around 90 looks like a good low risk entry to me.

Thanks for sharing your insights and humour (Aussie spelling) You would fit right in down under with your larconic wit.

Yes - and Aussie Pete - Happy Australia Day from one Aussie to another. Are they doing the lamb roast thing this year?

If you believe in quant trading and coorelations as I do.

Gold mining stocks have not gapped up as much as gold recently. This can mean 2 things gold mining stocks are going to fill the gap or gold is going to fill the gap. Based on the history of these indexes which I admit isn't as long as I would like you can see some considerable deviation.

Long GDX
Short GLD

Should pan out in 6 weeks

Hey gang,

I've just finished reading the posts, which has been extremely informative. GLD is the only trade I'm in right now. I got in at $66.59 and my stop is now up to $85. I would highly consider getting in at this price with a tight stop. However, I'm not buying more due to money management rules.

Thanks again for all of the insight. I've learned a lot. Everyone have a great weekend!

DEES

This Blog Rocks. Thanks Jeff for the discussion.
Have agreat weekend everyone!

Jeff aka "OA" aka "GLD", let's create a market right here to compete with STT's GLD holding vs. paying them a fee to hedge. Absolutely appreciate your tech insight on positions and market. excuse the figures, U.S. Gold Reserves= 8,134 metric tons. 35,273.96 oz.= 1 metric ton. do the math at todays prices. We're good. Germany, France, Italy are the next closest, combined equal our total. STT owns 642 metric tons w/ GLD. China has 600 metric tons, Russia 438, an easy place to make a quick buck. U.S. Should is going to fart out 50 metric tons in this stimulus plan and we'll go dig 50 metric tons to replace it this year. Point is go ahead and rise Gold, our country get's richer just like the Arabs get richer with oil prices rising. Long STT or GLD, it's all the same, Short $300 check from Uncle Sam, so we don't have to dig for more gold (I don't fall in their dumb income threashhold to even get it), and Long OA.

Ahh, the classic Raimo-nacci series.

thanks Raimo

I have a little more to say about gold and the ETF.

First on gold the commodity - It was the famous WD Gann who said that the longer it takes for a commodity to breakout to new highs the greater the rally tends to be. Now tell me how long has it taken Gold to break all time highs? I bet longer than many of you have been around.

Now about the ETF which I already mentioned I do own. At the end of the day one should be cognizant that there is some funny business in the GLD ETF. For one who really knows how much Gold they own, read the prospectus all the Gold they own has never been audited. In fact some think that lack of Gold supply will eventually do the GLD ETF in -I dunno.

Everyone here really out to read this article just so they know what they are buying;

http://news.goldseek.com/ThunderCapitalManagement/1201035428.php

Here's the main point from the article:

"The following example a second grader should be able to follow. Yesterday GLD traded at a price of $87.05 while gold futures were $882.00 and spot gold was at $881.00. I called my best sources and the best quote I could get for purchasing one ounce of physical gold was $897.00. So here is the question: If you were buying ownership of gold at an effective price of $870.50 for an ounce of gold by buying the gold ETF at $87.05, how does the gold ETF turn around and purchase real physical gold for you when the spot price is $11.00 higher, the futures price is $12.00 higher and the physical price is $27.00 higher? That is a neat trick. I wonder how they do it. YOU SHOULD START WONDERING TOO! Do you really believe the GLD ETF can survive loosing $27.00 for every ounce of gold that they buy for you? Now you know why the custodian and sub-custodian’s agreements for these ETFs are so complicated and un-auditable".

Lastly, if this is a trade that's one thing. If you are someone who wants to diversify their currency, hedge against inflation or economic risk then owning GLD is not appropriate. The best and only way to go is owning physical. A $5,000 investment in gold won't take up much more than a shoebox. If interested in what to buy and where I can help, just ask.

Secondly, if you like gold as an investment please also consider silver. Yes it's a little more industrial but it could outperform gold here fairly soon. I am invested in SLW as I love their business.

Mission accomplished - Call/Put excel spreadsheet sent: Free2trade@commspeed.net (do not use the @mail as previously mentioned). Hope this helps everyone! File = Trading Workbook -2008 (OA).xls

If it helps, help someone else; change a tire for a stranded person, help an elderly accross the street, volunteer to help others. That's the gift we can give!

Free 2
are you still thinking the energy sector is turning the corner
and if so which way?
betred

If you look at the big chart (green, yellow to red) the answer is no, if you look at the price pattern of some of the core stocks in the XLE group - maybe, if you look at the oversold position (below the MA) - yes and looking at the IT Market Sentiment indicator -getting there and lastly, was today nothing more than no one wanting to hold over the week-end (especially after the foreign spanking this last Tuesday – hard to gage). Lastly, we are coming into spring/summer and look at past history energy moves up. Finally, not much of an answer but energy is getting close (very close) in my opinion.

Heck, I took MSFT today and I was wrong. The only thing I can say, right now I am in the outright stock ownership (few options), – my take, the Greek Gods (for whatever reasons) are chewing us up. So, nothing wrong with cash, dividends and owing strong companies – final answer, we still have 341 days left in this year – patience (something I myself need to work on). So,one big trade per month could put you in the 2008 triple digit club.

Check out this article as support that DBA should go higher:
http://english.chosun.com/w21data/html/news/200801/200801250008.html

'All that glitters......'
I'm surprised there has been little mention of the voo doo of gold here. Maybe I'm one of few 'oldies' that lived thru the John Burch Society era, the gold and silver certificates we had in our wallets, and the ownership prohibitions. The John Burcher guys almost took up armed revolution when we floated the dollar off the metal standards. I got krugerands and karonas as birthday gifts, as a mini revolt against monetary policy.
Every dark cloud brought an immediate flight to gold, a beef shortage in the 70's, grocers were selling meat at 10 cents a lb if you paid in gold or silver equivelants. Some of that is a factor here, I believe.
The voodoo is still with us. theres an article this week on worldnetdailey about the U.S Treasury attempting to manipulate the dollar against rising gold. Liberitarian consipry theorys are alive and well even today.
Double down depends on who else there is to dance with. There's nothing else on my dance card that looks tasty at the moment.

Should the Fed NOT lower the discount next week, or cut .25 when .50 is fully baked, GLD may dip and provide a handy entry for the 1000 ride, Saddle up,

Hi,

first of all, thanks to Jeff and other for this excelent blog. I am new here and I have learned so much allready. So again thanks to all for great effort.

Next:

can you guys please tell me what is that software that you use, for example in this picture:
http://img246.imageshack.us/img246/7921/gld6mo012508mn9.gif

I only know about stockcharts so far but you cannot draw lines on that site and you also cannot view further dates so calculating exit and entry points is hard. Hope you understand what I mean. The chart on the right side should have some empty space so I could see where the line continue. Do you know of any other site I could use that allows that? Also what software is used in Optionaddicts video tutorials on entry/exit points on Youtube?

thanks for all the help

regards

Tomaz

Tomaz .... it prophet.net If you your ThinkorSwim as your broker, you get prophet chart free. Also free to InvesTool students. Or, you can signup for memebership at prophet.net

I went with Calls on the KGC bounce Thursday.

Respective Relative Performances 6-month for KGC, GLD & GDX are 65%,38 & 27.

RP 3-mon: 21, 16 & 6 and 1-mon: 22, 11, 10

Utilites (does it follow gold in a recession, with a fear filled market where the pay-out of MM funds are very low)? So, safe haven with dividends? Look at the 5 yr Vanguard ETF VPU or other Utility EFTs. So, safe haven with dividends?

This is more of a question then a comment.

F2T,
My understanding is that utilities have a high dividend and yield a higher rate than cash and treasuries in a rate cut environment.

Off topic but....could someone out there give me some hints on how to get better quality on the weekly watchlist video. Some have suggested opening the video link in Windows Media, but when I right click the video all I get is an adobe screen.

JMS,

my video is blurry as well. I just watch along with my prophet charts open and type in the ticker.

Jeff,

Excellent post. Could you elaborate more as to why you don't like trading the gold related stocks i.e. ABX,NEM,...I did have a successful trade on ABX that I mentioned earlier this week. Overall these companies seem to be picking up steam.

Sarah,

Too much risk buying into a company in a bear market. I prefer the less risky approach in GLD.

Tomaz

You can draw trendlines, fibs, etc. on stockcharts. When you pull up your chart, hit "annotate" in the lower left. A new chart will appear with many tools you can use across the top. Good Luck.

Winace...

I perfer to post in the current thread..where everyone will actually see what is written. Go fuck yourself.

dc,

thanks for the article!

If you pull up a 10 year on the S&P 500, it looks to be a possible cup & handle forming.

winace must be a rogue trader...

CEG...is sitting directly on 2yr support trendline. $89.50 is also a horiz. support level.

A while back I heard (perhaps on Marketcast) that the price of gold-related equities were lagging GLD, in part, because gold miners had contracts to deliver gold at predetermined prices. There may be room for the equities to rally as those contracts expire and are renewed at current prices, narrowing the gap between equities and GLD.

Comments?

Doug..

Just for shits and giggles, (I have CEG on my watch list as well) I decided to post my chart of it....I think this is a great example of people seeing different things, and why we need to "make the trade your own".

I would love to hear others comment on this....it will show how we see things differently, and this is not meant to be a "who is right" thing..just an example of what different eyes see....

http://img409.imageshack.us/img409/8848/ceg9mo012808kd5.gif

Raimo,

CEG has broken through multiple levels of short term support while falling during the week of January 14th. During the week of the 22nd the stock broke through the two year trend line and bounced its head off it on Jan 23rd. There is also a lot of support around the 90.00 area.

THE TRADE: I wouldn't trade it; however, if I had to trade it, go short at around 93.50, stop at 94.00 target 80.00 or a test of the previous lows during August.

My two cents on CEG

CEG - earnings on WED - looks like a BF with IV up on earnings.

FOMC on WED.

What are you seeing that I am not?

Is there a way I can post my chart? I am using prophetcharts.net...not through TOS or Investools. I have silver level membership.

Thanks.

On CEG, same 2 yr. trendline as Harry and Raimo now acting as resistance. I have horiz. support a bit higher at around 90.25. I don't see a trade here yet.

"GLD, In my opinion"

Just watched the Friday recorded Fast Money, Tim Seymour thinks GLD is overdone. He would be buying the S. African miners.

It's a debate Jeff vs. Tim - now stay tuned for the outcome this week!

Jeff once said, "there a buyers and sellers." How will this play out?

Doug,
post you screenshot on imageshack.us for free.

Bearish Engulfing

Any takers on DIA, QQQQ, SPY, seeing how there is a major Bearish engulfing Patterns going on here.

I am interested in other Techs opinions

Friday was the pressure relief valve opening (no one wanted to hold over the week-end). For myself, I just might sleep thru the opening bell, eat a late breakfast, read the paper, go jogging and wait for Jeff to post and maybe, just maybe take a position. My concern: sooner or later, (I believe sooner) this separation from the 30 MA is going to kick a few tails.

Thanks Alex.

Raimo,
I am using daily charts for 2yr trendlines and weekly for 5yr. My 2yr "daily" comes in perfect with CEGs Friday's closing price.

Jeff,

Nice inclusion of the SEARCH HERE BEFORE YOU ASK feature ;)

#1 I am not going against Jeff - but, it's raining in AZ and I am catching up on my reading. Here is what Money Magazine Feb 2008 (pag 102) states," Gold is for jewelry and fillings. You want more variety for a portfolio."

Heck (for me), more opinions than roles of toilet paper. This is one crazy market! Putting my money under the mattress - not!

Doug,

Here is my 2 year chart of CEG, all cleaned up, just one trend line. Log on. (I drew these lines using a line chart, then after drawing my lines, switched to candles)

Feel free if you want to send me your chart for comparison..I am curious as to what you see...

http://img253.imageshack.us/img253/3056/ceg2yr012808xv9.gif

Looking at my chart and Raimo's, my 2 year line comes in almost exactly where his does. I see that trend as broken. Ihave a 6 month trend line, much steeper which Raimo has in yellow as the support of an asc. triangle. I did not see this as a former asc. triangle breakout at all. But in any case, that trendline is also clearly broken.

Could this go higher. Possibly, if the energy complex goes higher. But I would not trade this from the long side. And there are better and more clear cut downtrending stocks to trade so I wouldn't trade it to the downside either.

F2T,
Does it really matter what the underlying is? We are Tech Traders and we trade the pattern. It would be very hard for gold to hit $1,000 without GLD following suit. In my mind... there's way too much thinking going on. What does the chart say? If I could find a chart that follows toilet paper sales... I'd follow that one too. No one will EVER stop using that stuff. And if they do... well I'm not even going to THINK about that.

CEG is forming a new pattern here and in my book there are too many other decent trades to take. I'll watch it but I'm not convinced that this is support. This downward trend has been on pretty heavy volume. I'd like to see support return with some volume before I'd consider this more than just a dead cat bounce. Earnings on Wednesday may tell a tale.

Chris (smile, your comment?)

I agree with you - it's still fun to read all this stuff. Does expend toilet paper always smell? I'm not the expert!
.
.
.
.
.
.
.
.
.
.
Someone's stuff stinks! Is that techinical?

Jeff, it's striking how several of your bearish picks from last week's watchlist (such as LM, EXPD, PNRA, TIF, KLAC, PVN, FLIR, LIFC, AMGN, JCP) seem to have landed at more attractive entry points as of Friday. Are you eyeing any of these for bearish trades this coming week, or have you moved on to other stocks such as the ones you mentioned on Friday?

Maybe I've just seen too many breakouts fail this month, but I'm also wondering about possible reversals with some of the bullish picks on last week's watchlist (such as HWAY, CVD, GENZ and PPDI). Is time to buy puts on these instead? Or will these stocks rebound - albeit with flatter trendlines than before?

Belated thoughts on GLD - I entered into a large long position here back in August. I could see the metal barreling straight to 1000 from here, but I also wonder if we're about to run through a symmetrical triangle pattern before that happens. From my (novice) reading of the 3 month chart, that seems to be how things unfolded in November and early December before the breakout into this year.

I'd like to hear more about the rationale for selling out when gold hits 1000. Will this necessarily lead to a reversal or a plateau? Not so long ago, 700 was widely seen as a formidable barrier for gold, so I can understand why heavy profit taking might follow $ 1000 gold. Then again, given the unstable economic climate, the Fed's inflationary policy, and renewed interest in gold in global monetary circles, couldn't gold (and commodities more generally) easily continue ascending much more steadily and smoothly than some of us might expect?

Jorge,

I am hoping it will help to reduce e-mails.

We'll see...

Hans,

Yes I am eyeing all of them, In fact, this weeks watchlist might be a repeat of my watchlist 2 weeks ago. All of the bearish ideas are setting back up nicely.