Gold, Silver, and Indexes Using Price Action
- Thread starter Gringo
- Start date
GLD price may start to rise today. Just because price came to a halt doesn't directly mean a persistent rise is in the offing. Yes, the conditions may change but they are still bearish. This being said, the drop has been quite significant from 133 to 119. It is normal to have some pullbacks along the way.
Whether this pullback leads to a change in trend to me is not yet certain. Although some may believe this is the end of the down move, I am yet of not that opinion. More price evidence is required where demand shows its strength before the mind is changed. One could reduce the positions and take some profits and that's not a sin. Outright elimination of the short position does appear a bit premature to me around here. We still have the last swing low and highs and the supply line that are intact. Lets not be impatient and keep in mind: Find reasons to stay in, not out.
Gringo
Whether this pullback leads to a change in trend to me is not yet certain. Although some may believe this is the end of the down move, I am yet of not that opinion. More price evidence is required where demand shows its strength before the mind is changed. One could reduce the positions and take some profits and that's not a sin. Outright elimination of the short position does appear a bit premature to me around here. We still have the last swing low and highs and the supply line that are intact. Lets not be impatient and keep in mind: Find reasons to stay in, not out.
Gringo
There have been many claims of gold going up hundreds of points. Admittedly opinions are divided as to when that's going to happen. Today I was randomly looking at a totally clean monthly price chart and a slightly different view became apparent. Whether this view leads to anything tangible trade wise is yet to be seen. What piqued my interest was how removing even the simple lines at times can help the mind see a cleaner picture. Lines have their value, great value, but they are only for illustrative purposes, and are a figment of one's imagination. Price on the other hand is tangible, and a record that a transaction took place between a seller and a buyer.
I would have preferred to just post the clean chart as it is, but that wouldn't have made much sense to those not yet accustomed to pure price movement. At times even I find myself unable to comprehend all there is to comprehend without the help of sign posts. The straight lines have been those sign posts, with trading ranges, support/resistance, trend, volume, and supply/demand lines adding colour to the picture. Despite all this help, it's the cleaner picture that spoke to me most clearly.
Below I have posted the monthly gold price chart with some comments. The comments and the highlights are there to identify what I am looking at. I must emphasize here that it's price that tells us what we must do, and it is up to us to be nimble enough to hear that message. If price changes its stride at any time, the onus is on us to change our stride with it, not on price to cater to our whims. This in practical terms means if we believe something and the price behaviour sends a contradictory signal, it is up to us to change our opinion, instead of expecting price to cater to our false opinion.
The tape reader is not the captain - he's the engineer who controls the machinery. The tape is the pilot and the engineer must obey orders with promptness and precision. (Wyckoff)
In this case, the analysis seems a bit bearish, maybe a lot bearish, than I had initially anticipated. The reasons are given with the chart. Again I must reiterate that the bearish to bullish switch doesn't take long, and if that happens we must not have our eyes closed to that possibility.
GLD Monthly:
After looking at the chart, it appears the bearishness is quite deeply rooted. The supply has been overwhelmingly dominant, and demand has been on the run. We would have to see serious effort by demand to counter the supply, and then show strong intent, before we change our outlook from bearish to bullish.
Gringo
I would have preferred to just post the clean chart as it is, but that wouldn't have made much sense to those not yet accustomed to pure price movement. At times even I find myself unable to comprehend all there is to comprehend without the help of sign posts. The straight lines have been those sign posts, with trading ranges, support/resistance, trend, volume, and supply/demand lines adding colour to the picture. Despite all this help, it's the cleaner picture that spoke to me most clearly.
Below I have posted the monthly gold price chart with some comments. The comments and the highlights are there to identify what I am looking at. I must emphasize here that it's price that tells us what we must do, and it is up to us to be nimble enough to hear that message. If price changes its stride at any time, the onus is on us to change our stride with it, not on price to cater to our whims. This in practical terms means if we believe something and the price behaviour sends a contradictory signal, it is up to us to change our opinion, instead of expecting price to cater to our false opinion.
The tape reader is not the captain - he's the engineer who controls the machinery. The tape is the pilot and the engineer must obey orders with promptness and precision. (Wyckoff)
In this case, the analysis seems a bit bearish, maybe a lot bearish, than I had initially anticipated. The reasons are given with the chart. Again I must reiterate that the bearish to bullish switch doesn't take long, and if that happens we must not have our eyes closed to that possibility.
GLD Monthly:
After looking at the chart, it appears the bearishness is quite deeply rooted. The supply has been overwhelmingly dominant, and demand has been on the run. We would have to see serious effort by demand to counter the supply, and then show strong intent, before we change our outlook from bearish to bullish.
Gringo
gaps up after Thanksgiving some 30-50 poits
i-ii--i-iii-i-ii--ii-i-i-ii- llllllll-l-l-l-l-l-ll-o-vv--v-v-e ittttttt!!!!!!!
i-ii--i-iii-i-ii--ii-i-i-ii- llllllll-l-l-l-l-l-ll-o-vv--v-v-e ittttttt!!!!!!!
The supply line has, had a breach
Price has something here to teach
The climax and test, a reality indeed
To go up more, more demand is of need
Will demand show strength, or succumb to supply?
Will it drown below, or rise and defy?
A slow drop here, and leading to a rise
The old short would become a compromise
Remember 50%, and the last swing low
Your guiding posts before the roof can blow
Give price some space, and panic not
If it comes to a boil, exit the lot
Remove your fear, before it removes you
Stick to your plan, and to the plan stay true
Gyrations come, and gyrations go
Who's to say, who's in the know?
All we can do, is play the game
With heads held high, and hearts aflame
The supply line has, had a breach
Price has something here to teach
Gringo
Price has something here to teach
The climax and test, a reality indeed
To go up more, more demand is of need
Will demand show strength, or succumb to supply?
Will it drown below, or rise and defy?
A slow drop here, and leading to a rise
The old short would become a compromise
Remember 50%, and the last swing low
Your guiding posts before the roof can blow
Give price some space, and panic not
If it comes to a boil, exit the lot
Remove your fear, before it removes you
Stick to your plan, and to the plan stay true
Gyrations come, and gyrations go
Who's to say, who's in the know?
All we can do, is play the game
With heads held high, and hearts aflame
The supply line has, had a breach
Price has something here to teach
Gringo
GLD price dropped to new lows but couldn't continue down. Not only did it not continue down, it actually reversed with quite a fervour. Demand was in abundance and it was clear there was a strength behind this rise. The supply line has again been breached. On the chart I have drawn the SL a bit differently but it wouldn't have mattered much.
Price has returned back to the small congestion area. The bounce was from an area very close to a potential support and this bounce in a way confirms that that demand might be serious about defending that 117 level (1210 for futures). I would under the circumstances not like to stay short anymore. We do need more evidence to go long, but whatever happens in the future the showing up of demand in the proximity of support is sign enough for me to become careful. Price is also close to the bottom of the larger trend channel and although not over sold is nonetheless a bit away from the mean.
So all the shorts have been liquidated. It's time to be in cash again. Those with a longer term horizon can chose to wait for weekly to get weaker as it's still a away from a danger point. I want to think things through with a clear head and being out is the best place to make those decisions. I'll be looking out for a long entry after a retracement if it comes.
There will be questions about me holding out longer and waiting for LSH to be breached. It's the nature of the rise that has alerted me to not take things for granted any longer, and in hindsight who knows this exit may be premature. The name of the game is to keep the emotions in check and make money. The moment we feel unsure and out of sync, it's better to exit and re-calibrate.
It's been a respectable run and hopefully I have been clear enough for us all to learn something valuable from this experience. We've not only gotten a fun ride down, but also gotten to read exceptional poetry along the way! Wouldn't you agree it's been a growing experience for all involved?
Gringo
Price has returned back to the small congestion area. The bounce was from an area very close to a potential support and this bounce in a way confirms that that demand might be serious about defending that 117 level (1210 for futures). I would under the circumstances not like to stay short anymore. We do need more evidence to go long, but whatever happens in the future the showing up of demand in the proximity of support is sign enough for me to become careful. Price is also close to the bottom of the larger trend channel and although not over sold is nonetheless a bit away from the mean.
So all the shorts have been liquidated. It's time to be in cash again. Those with a longer term horizon can chose to wait for weekly to get weaker as it's still a away from a danger point. I want to think things through with a clear head and being out is the best place to make those decisions. I'll be looking out for a long entry after a retracement if it comes.
There will be questions about me holding out longer and waiting for LSH to be breached. It's the nature of the rise that has alerted me to not take things for granted any longer, and in hindsight who knows this exit may be premature. The name of the game is to keep the emotions in check and make money. The moment we feel unsure and out of sync, it's better to exit and re-calibrate.
It's been a respectable run and hopefully I have been clear enough for us all to learn something valuable from this experience. We've not only gotten a fun ride down, but also gotten to read exceptional poetry along the way! Wouldn't you agree it's been a growing experience for all involved?
Gringo