Gold, Silver and Other PMs

Top 542. Sep 26, 2005 10:17 AM

» Kirk - Gold Bug Index about to Break out?

.
Chart of Gold Bug Index

Looks like Jan02 and Jan03

Signaling inflation?

-- posted by Kirk

Top 543. Sep 26, 2005 10:59 AM

» Normxxx - Re: Gold Bug Index about to Break out?

In response to Gold Bug Index about to Break out? posted by Kirk:

Looks that way; even AG is getting worried. But beware; a sure economic 'lead-in' to a bad DEflation is a bad or 'hyper' INflation. And, if things go really bad (which I don't much expect before 2009 — 2010), you can expect waves of inflation and deflation.

In that case, I suppose Richard Russell is right, and gold may be the only thing we can depend on.

In the present instance, I would no longer advocate any leveraged buying of gold (e.g., even the gold mining stocks); gold has recently run up too far too fast, and is overdue for a correction— especially now that the hedge funds have switched from net short to net long. Also note that whereas stocks tend to make a "spike bottom;" gold seems to make a "spike top" (before plummeting).

-- posted by Normxxx

Top 544. Sep 26, 2005 1:58 PM

» Normxxx - A Note of Caution

Parabolic Spikes: A Note of Caution

By Jack Chan | 26 September 2005
www.traderscorporation.com

Since the gold bull market began four years ago, I have witnessed many spikes, and without exception, all these spikes gave back about 70% of their gains in subsequent corrections.

Spike #1 - a sharp rise over six weeks off the double bottom of $255, the bear market bottom; gave back 70% of its gain by dropping back to the 200ema before the next upleg.

Spike #2 - another sharp rise over eight weeks and gave back 80% of its gain and also dropping back to 200ema.

Spike #3 - a monstrous rise of over 20% in twelve weeks, gave back 80% and again, dropping back to 200ema before the next run.

Spike #4 - a sharp rise in six weeks was followed by a 70% loss, and back to 200ema.

Spike #5 - a four month rise of 15% was followed by a 70% correction and the 200ema support.

Spike #6 - its been eight weeks now, and bullion has gained about 12%, when it will end, nobody knows. But if past history is a guide, we can expect a sharp correction back to the 200ema once the parabolic spike is over. I cannot predict when this spike will be over, but I will be prepared to buy when the next setup appears.

$XAU and $HUI

Despite a breakout on the $HUI:GOLD ratio chart, actual prices on both the $XAU and $HUI remain in a giant consolidation.

I first published this chart in early 2004, only expecting a small consolidation before a breakout, but that consolidation is now twenty one months old, and this week we had an excellent shot of breaking out, but so far we've been rejected at resistance.

$HUI is in the same predicament: what appeared to be a sure thing days ago is now turning back from resistance. It is quite possible that there is one more leg down to complete this ABCDE correction.

Summary

My job as a trader and technical analyst is not to try to figure out what the market will do tomorrow, or the next day. My job is to enter the market when we have a favorable set up, and the risk is manageable. Since the current market does not meet my criteria, I remain patient until such time.

End of report.

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 545. Oct 3, 2005 9:44 AM

» Normxxx - SKI Gold Stock Prediction

SKI Gold Stock Prediction

By Jeffrey M. Kern, Ph.D. | 3 October 2005
Email: skigoldstocks@yahoo.com

...a "hum-in-the-car"

The SKI system remains on its true and rare long-term bull market index buy signal from 8/9/05 at USERX (the gold mutual fund) 8.07. The "stop" on this buy signal has hit its nadir (as of last Thursday) at 6.28 and will now begin its rise. The stop should be irrelevant for many months to years. The current USERX price is 9.43, having surpassed (as predicted) its prior high for the decade at 9.37. The conclusions of this Update are to remain very long-term bullish.

Yes, I couldn't resist writing, as this is what I enjoy doing. Over the past two weeks since the last Update, the gold stocks have gyrated 2% a day up and then down, up and then down, but have now surpassed the last hurdle at USERX 9.37. Note how the gold stocks couldn't manage even three consecutive days down (that's a bullish sign, folks) and how key reversals up and down were simply the typical "fakeouts," shaking both longs and shorts out of the market. When I looked at Friday's Commitments of Traders (COT) report, it looked like gold traders have been bailing out of both long and short positions due to the short-term gyrations. Hopefully, skiiers simply held long and ignored all of that as the gold stocks continued to work their way higher. (My colleague, who really does exist, sold on 9/19 at USERX 9.28 and bought back the next day at 9.10 for his second successful little in-out trade).

Although you might believe that the gold stocks have exploded since the 92-96 index buy signal, prices are only up 17% over 7 weeks. Historically, during a LT gold bull market, that represents a very gradual rise. We can become concerned about a major high when USERX rises 15-20% in a week. For example, during the last LT index buy signal commencing in December 2001, USERX rose 24% (from 5.18 to 6.42) in 6 trading days (5/15/02-5/23/02), causing me to write the following alert, "The run is now at 2 down and 7 up, rising an average of almost 3.5% per day. Such runs have ALWAYS marked major highs. THIS RUN PATTERN, ACCOMPANIED BY A 3-DAY WEEKEND, AND A 1106 INDEX SIGNAL EXECUTED ON FRIDAY'S CLOSE, HAS ALWAYS MARKED MAJOR HIGHS." We are currently nowhere near such a high, which resulted in a 45% drop over 2 months and marked a multi-year high in the South African gold stocks. The South African gold stocks are currently the strongest performers and their new bull phase has only just begun since the recent LT index bull market buy signal. Again, the conclusion is that this bull phase is in its infancy and will result in the largest and longest rise of this decade. Is that bullish enough? Note that this is bullish in the intermediate (monthly) and long-term (yearly) sense and does not predict what will happen next week.

In the short-term (next 2 weeks), the current run pattern is 1 Down and 2 Up. Although that run pattern can be bearish, during LT index buys such runs only mark highs 28% of the time. "Highs" mean that if you look back years from now, prices have dropped 10-20% or more from the high. The odds are that this was NOT such a "high". Therefore, I cannot predict the short-term beyond what I have previously stated: It is still possible that prices can drop 5-6% (back to below USERX 9.00), but within 8 trading days, prices will be at current or higher levels so as to avoid a IT index buy signal (there won't be another SKI index signal for months).

Furthermore, the gold stocks in the short-term have support from the 439-443 index as well as the 218-222 index! We CAN fall back, but then would be expected to explode upwards. I am NOT predicting that the fall will occur; I am simply stating that one shouldn't be scared by any such drop. Remain long, but if you haven't yet bought your psychological quota of gold stocks, use any hard drops into that level to buy.

Folks, your worries that there will be so many subscribers that the indices will fail are inappropriate; the psychology of markets is such that few people are currently interested in gold stocks.

Note that my personal emotions (some kind of indicator) are happy, and I did "hum-in-the-car" on 9/21 after USERX surpassed the prior high of 9.37 by one penny, but I have NOT reached the rare extreme of "singing-in-the car", and I was quite concerned by the lack of power exhibited on 9/29's close at new decade highs of 9.50 (a false breakout?). This personal emotional indicator, as well as the current run pattern, suggest a short-term pullback to the 439-443 levels followed by a continuing rise.

The LT index bull market continues.

Best wishes,

Jeff Kern
email: skigoldstocks@yahoo.com

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

<img Width="520" src="http://www.gold-eagle.com/editorials_05/images/burak100205a.jpg">
Click Here, or on the image, to see a larger, undistorted image.

Top 546. Oct 3, 2005 3:55 PM

» Normxxx - Technically Speaking

Gold: Technically Speaking

By Mervyn Burak, CMT | 3 October 2005

New highs in gold, new highs in natural gas and new highs in the Canadian dollar. Plenty of excitement for the futures traders or the options player. Will it last? Of course, but for how long and in what direction?

GOLD

Long term charts change very little from week to week. Anyway, looking at the P&F chart (not shown this week) provides the comfortable feeling that gold is not about to fall over the top. With new highs and projections to the $600 level what more can one ask for? When we have long term trends in motion I like looking at a P&F chart. It just emphasizes in a very simple manner what's happening.

Since mid to late 2001, when the long term price momentum first broke above its neutral line into the positive zone it has stayed there throughout. On a few occasions the momentum line came very close to breaking below its neutral line but remained above. It is once more moving aggressively into higher levels but is at an interesting point. We have a negative divergence in the indicator during the Jan 2004 high and the Dec 2004 high. Price making higher highs but momentum making lower highs. By drawing a down trend line through the two peaks we come to just above where the indicator is today. So, we're looking to break above the trend line, which would give us some additional hope that the divergence may be nullified and no reversal is ahead. The price is far above both the popular 200 DMA (40 WMA) and my more aggressive 150 DMAw (30 WMAw) lines. The volume indicator, using a weekly chart, is very, very positive but I do not place too much emphasis on this time period volume information.

On the long term I can only remain BULLISH.

Looking at intermediate term charts we are in a bull trend right now and far away from any reversal, P&F wise. We need two things, an up trend line break and a move below two previous lows. At this point in time that could not occur until the $430 level.

Both the volume indicator and the price momentum indicator are well inside their positive zones. The price is above its moving average line and the line itself is aggressively pointing upwards. From the intermediate term standpoint there is nothing in the charts that requires caution.

Short term does indicate some caution here.

But, on the intermediate term I can only remain BULLISH.

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 547. Oct 15, 2005 5:48 PM

» Joanie22 - Re: A Note of Caution

In response to A Note of Caution posted by Normxxx:

Hello Normxxx. I am a novice who would like to learn how and what to trade, other than gold mining stocks. I found this site by listening to the Roger Arnold show. I enjoyed reading the posts for insight but when it came to the market I was totally lost until I was laid off and decided to put my time into something I have always wanted to learn. I took myself to the library only to come away frustrated. There were many shelves filled with books written by "see how much I know-aren't I smart" authors and geared for those with some background. I recently bought a book called "If It Doesn't Go UP Don't Buy It" by Al Thomas, found a radio show that talks stocks, and with investorwords.com I am chipping away. I believe this introduction to be important because I would like to ask you a question about your $HUI 9/23/05 chart and if you didn't realize my level your answer might be too complicated. My question: Is line A&C called the support line & B D resistance line/level? Also, if the "leg", which would become point E breaks through the support line then began to push back up is that the buy point?
When I go to bigcharts.com I put in 1 yr. and the 200DMA and I look to see if the priceline is located above or below.
I got the impression you are a patient and wise investor when I read, "...job is to time the buy/sell points to minimize risk." Well, it went something like that. Anyway, I felt you were approachable.
Perhaps you know of this web site, www.321gold.com/editorials/hoye/hoye101405.html? If not you may find it interesting as Bob Hoye too shows his charts and offers opinions.
Thank you for your time.
Joanie

-- posted by Joanie22

http://www.suite101.com/discussions.cfm/... )

Top 548. Oct 15, 2005 8:11 PM

» Normxxx - Re: Re: A Note of Caution

In response to Re: A Note of Caution posted by Joanie22:

Trading in Gold is not for novices, although after you have surveyed this board (check out the many other threads at

and have done some other study for at least a year (peruse our many book suggestions), you might want to think about adding the Exchange Traded Fund (ETF) GLD to your portfolio.

My question: Is line A&C called the support line & B D resistance line/level?

For all (or at least most) Technical Analysis (TA) charts, the overhead line is referred to as the (or a) resistance line and the bottom line is referred to as the (or a) support line. So, the answer to your question is 'Yes.'

if the "leg", which would become point E breaks through the support line then began to push back up is that the buy point?

Only if it breaks back over the old (ACE) 'support' line by a "significant amount" (2 - 3%), which becomes a resistance line once it is broken to the downside.

My strong suggestion is that you should play the market on paper until you have gained some confidence (or only with money you are willing to invest in learning about the markets— money you have fully written off as lost), but at least until after a year of playing on paper and reading everything you can about the markets.

When I go to bigcharts.com I put in 1 yr. and the 200DMA and I look to see if the priceline is located above or below.

I don't understand the significance of this statement; neither of the lines on the $HUI chart are a 'moving average' line.

Yes, I am familiar with the www.321gold.com site, and it is an excellent site.

Thank you for your time.

You are more than welcome.

______________

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

-- posted by Normxxx

Top 549. Oct 25, 2005 6:16 PM

» Normxxx - SKI Gold Stock Prediction

SKI Gold Stock Prediction: Update

By Jeffrey M. Kern, Ph.D. | 25 October 2005

The SKI system remains on its true and rare long-term bull market LT index buy signal from 8/9/05 at USERX (the gold mutual fund) 8.07. The definitive stop on this buy signal (a LT index sell signal) is rising into the 7.20 area and then the 7.60 area. The stop should be irrelevant for a long time, but on Tuesday of this past week the gold stocks fell through the critical point described in last weekend's Update. Therefore, by definition, the gold stocks are in an Intermediate Correction Phase. It is possible for the correction to have ended already on Thursday (10/20/05), but until that is proven, the Intermediate Correction should, in my opinion, be honored for safety purposes.

Please read this Update carefully; I would suggest saving it for reference purposes over the next week to two months.

Last weekend's Update reported that the ST index buy signal at USERX (the gold mutual fund) 8.81 should have marked the EXACT bottom of a short-term correction; If USERX fell below 8.81, a more severe drop was occurring. The gold stocks did their expected and required rise on Monday (10/17/05), with gold itself rising $5. However, the broad universe of gold stocks as measured via USERX was rising less than a paltry 2%, not quite the required "explosion" that I described last weekend. I wanted to sell, but since some of the required rise did occur, I refrained. On Tuesday (10/18/05), the gold stocks were engaged in a decline that appeared to be sufficient to drop USERX down below 8.81 and I sold (non-emotionally and correctly) at 8.78 (close-of-day price). I therefore sent out a SKI Note that evening to readers who have contacted me to indicate an interest in the upcoming website (except those who only emailed me while I was away last week, as I didn't have the time to update my email lists).

Note that selling this past week was NOT required by the SKI system. The only stop that MUST be executed is a LT index sell signal that ends the 8/9/05 LT index buy signal. My colleague did NOT sell and will not sell until such a signal is generated. If you didn't sell, you did nothing wrong. I simply did not want to take the risk of a large IT (not yet signaled; still only potential) fall nor did I want to wait through a potentially extended corrective time period. Selling was also an appropriate action, but could result in a whipsaw (i.e., quickly having to re-buy at a higher price).

The expected and obtained instantaneous drops on last Wednesday and Thursday totaled another 7% and brought USERX (8.31) into contact (once again!) with those falling very LT index back prices (support). MOST IMPORTANTLY, PRICES HAVE NOW TOUCHED THE IT INDEX. On Friday (10/21/05) the rising IT index back prices reached 8.60. So what price did USERX skyrocket up to on Friday? 8.60! If it had closed at 8.59 I'd be confident that prices were going down again next week. If prices had closed at 8.61, I'd be saying that I was about to be whipsawed and that prices would rise next week. How can a mutual fund composed of 100+ gold/silver/diamond mining shares repeatedly move to an exact penny based upon the SKI indices? I have no answer and I do not attribute it to "manipulation" because I do not believe that anyone can perfectly manipulate such a large mixture of stocks to fit such an "unknown" SKI index for 31 years. In any case, Friday's rise brought the gold stocks EXACTLY into resistance at USERX 8.60.

Several months ago I wrote that I would tell you when to leverage up your gold stock investments during a LT index bull market. The time to do so is on each new IT index buy signal. But first we need to get an intermediate-term IT index sell signal. The IT index will sell this coming Friday IF prices decline below USERX 8.50 by Thursday. The back prices on Monday will 8.59, 8.60, 8.25, 8.03, and 8.18. On Tuesday, the 8.18 will be replaced by 8.52. On Wednesday, the 8.03 will be replaced by 8.50. On Thursday, the 8.25 will be replaced by 8.67. DURING A BULL MARKET, AN IT INDEX SELL SIGNAL MARKS THE BEGINNING OF THE END OF THE CORRECTION. We reached 8.31 last Thursday. If we fall into an IT sell signal, next Friday's perfect closing price would be 8.27.

Therefore:

1. If prices rise back over USERX 8.81 at any time this coming week, the 8.31 price WAS the corrective low and the next large rise has begun: BUY (if you have sold like me). Seriously.

2. If prices fall to an IT index sell signal this week (probably generated on Thursday and executed on Friday's close), traders can try a short-term buy for 2 weeks. If that rise generates a ST sell signal, probably in the 8.70 area, I'll strongly recommend that everyone do a short-term sell into a spike bottom buy around U.S. Thanksgiving.

3. Do NOT use USERX 8.07 as a stop anymore. The only definitive stop is a LT index sell signal. If we get an IT sell signal, the corrective phase can last up to 39 trading days and can include a 1-2 day spike down to 7.51 (the 61.8% retracement of the 6.28 to 9.50 leg up) without selling the LT index. Perhaps that's why those LT index back prices are staying so low for such a long time. By the 39th day after the IT sell signal, if the corrective phase lasts that long, the LT back prices will finally be rising over 8.07 and we should get a new IT index buy signal by no later than EXACTLY the 39th day. That corresponds to approximately the last day of this calendar year. However, a new IT index buy signal will give the definitive "All Clear" signal.

In conclusion, hopefully this past Thursday was THE corrective low and I will simply re-buy on a whipsaw if prices rise over USERX 8.81 at any time this coming week. I am skeptical that this will occur because USERX rose perfectly and exactly into resistance on Friday at 8.60, breaking the IT index towards its potential sell signal. A fall back below 8.50 next week will generate an IT index sell signal, telling us that we had better be in the bottoming process of an Intermediate Correction. The system remains bullish, on a LT index buy signal that augers for the largest and longest rise of our lives until and unless there is a LT sell signal. The current Intermediate Correction should be followed by a monstrous wave up after the correction ends. The depth of this correction now shows that if this is a true LT bull, it is following a new pattern for this decade: Since it's corrected down to the IT index, THE BULL PATTERN NOW CORRESPONDS TO THE TRUE BULL MARKETS OF THE 1970s.

Volatility will probably continue to increase in the weeks ahead. I am out of the market due to wise (in my opinion) risk aversion, but I am ready to re-enter immediately once the ST sell signal is cancelled (and an IT sell signal no longer threatens).

Best wishes,
Jeff

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 550. Nov 1, 2005 8:02 AM

» Normxxx - Another Gold Opinion

Another Gold Opinion

I'm now looking to add gold on a test back down to the $454 area— and am still waiting patiently for that opportunity. In the meantime, gold has been bouncing around $463, which is an interim level. If gold is super-strong, it won't go much below this $463 level and I'll miss my chance to add at $454. But I don't think it's going to play out like that. I can also buy a strong daily close over $480 and look to ride up gold to the ultimate target somewhere over $500.

But I don't think gold is going to sky-rocket during this current cycle. My highest target is at $525, and it's more likely gold will top out well below that, somewhere between $500 and $525— probably just over $500— or whenever the gold bugs decide it's clear sailing to $1000 or higher. This top over $500 in gold— wherever it comes— should be the end of the line, and gold will come way back down in 2006 as the bond markets start to soar. Later, when inflation really kicks in— in 2007 and beyond— gold will really be the asset class of choice.

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx