February Gold (ZGG8)

Quote from SethArb:

hi realist ... your prices mentioned :

are they for Gold and silver in the "spot- cash" or "futures"?
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Cash unless otherwise mentioned. Traders should also be aware that some funds are now in the process of rolling over to April Gold (GCJ8/ZGJ8). Many should take notice that the dips are being bot in a fast and furious manner. Many fund traders that got off the train are now looking to get back on. The DX looks very susceptible to some sustained selling pressure in the very near future. The risk is being out of gold/silver imo and not being positioned...
 
Gold got hit down to 878 and silver to 15.66 on the cash market. As I previously stated, I was looking for a pullback and we are getting it even though there was a breakout above 900 and 16.30 respectively. Sometimes this is the way the bull works. I would likely stand aside if gold is unable to hold 890 and silver 16.20 on a closing basis today. The metals need to keep building cause higher otherwise they will be subjected to further harsh fund and commercial selling...
 
I am considering yesterday's gold trade as a washout session. As gold was hit for close to $27/oz. at one point, the sentiment has gotten extremely bearish amongst many pundits. If ZGG8 closes positive today, then the odds of a further downslide become very narrow. Whenever gold gets hit for more than $22/oz. in a single session, more times than not this ends up being some type of important price low. Also, the GLD has back-to-back record volume days and the tonnage didn't slip by all that much. The last few times that the GLD had more than 15M shares traded, those days ended being major lows in the gold price (06/06 and 08/07 were very similar). Right now I have taken on small April Gold positions and will begin to gradually add into this position should I see evidence that gold begins its recovery and resumes its near-term target price of $1150 or thereabout...
 
After looking at the 1hr. charts on both gold and silver right now, there is clearly additional selling coming in and I am now biased to open a small short since the upside appears very limited at this juncture. Downside target on gold could be down to 840-860 area while silver could get hit all the way down to 14.50-15. The metals had their chance today to rebound but the selling across the equities markets and the strength in the Yen has all but capped any upside momentum in the metals complex for the time being...
 
Metals continue to weaken and are now putting in intermediate sell signals via the MACD and support break of 875 cash gold and 15.80 cash silver. Even though silver has rallied, this appears to be a bull trap as it is very common for the commercial interest to run prices up before the takedown. The 91-day T-Bill Yield has dropped close to 9% this week and the S&P is close to a 10% loss for this month as well. What this tells me is that every asset class except short-term treasuries are about to get hit severely. I believe that a massive unwinding is coming and the commodities complex is likely going to get hit very hard. This time period has similarities to the May 2006 timeframe when the Yen strengthened significantly and knocked just about everything very quickly. Be careful out there and remember that cash is a position too...
 
Quote from Realist:

Metals continue to weaken and are now putting in intermediate sell signals via the MACD and support break of 875 cash gold and 15.80 cash silver. Even though silver has rallied, this appears to be a bull trap as it is very common for the commercial interest to run prices up before the takedown. The 91-day T-Bill Yield has dropped close to 9% this week and the S&P is close to a 10% loss for this month as well. What this tells me is that every asset class except short-term treasuries are about to get hit severely. I believe that a massive unwinding is coming and the commodities complex is likely going to get hit very hard. This time period has similarities to the May 2006 timeframe when the Yen strengthened significantly and knocked just about everything very quickly. Be careful out there and remember that cash is a position too...
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No, really, Realist, if you could enlighten me on your "intermediate" MACD sell signals... I really don't know what that means... Here's what I see in this chart...

1) No signal of even a Lower High
2) No broken trendlines
3) No MACD crosses
4) No MA crosses...
5) The thing didn't even consolidate 30% of the up run..

How's this bullish again? I simply have a hard time understanding why people insist on picking tops, it has been attempted 100 of times with the Euro on this board... and now it seems that Gold is the "top" du Jour... :D

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1754274"></img>
 

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I happen to agree with Realist. Look at the hui, which has just turned negative. We might see abit of an upswing in gold but, with gold making new tops, the stocks didn't confirm. :D
 
Like I said before, I am not a gold bug. I make my best attempt to trade the charts from a technical perspective and also from an intermarket standpoint. Here is what I see right now:

- Crude PMO has reversed to "Down" on the weekly since turning "Up" in 2/07.

- The USDX has stopped going down for the time being anyway and is currently establishing a series of higher lows.

- The weekly volume on GLD matched the volume made on gold just before it topped out in May '06. Roughly 30 tonnes of gold was sold from the trust this week.

- The XAU/HUI have put in close to a 9% loss this week while gold only fell 1.3%. This is usually a bearish omen as the gold shares typically lead bullion.

- The junior gold minor have lagged gold severely on this latest leg up. This is not a good omen as the small speculative shares typically run hard before gold does.

- The COT as of the latest week shows a very alarming commercial short buildup in both gold and silver right now.

So these are the underlying reasons why there could be a serious downdraft to come imo...
 
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