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Gold & Precious Metals

Gold Stocks: Core Position Focus

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Posted by Morris Hubbartt - Super Force Signals

on Friday, 08 December 2017 06:18

Today's videos and charts (double click to enlarge):
 

SFS Key Charts & Video Update



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Gold & Precious Metals

Stop Searching For The Holy Grail

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Posted by Charlie Bilello - Pension Partners

on Thursday, 07 December 2017 06:39

In a recent post, I came to the following conclusion:

“the notion that simply ‘following the trend’ in Gold will lead to vast riches is a false one.”

I made this statement after analyzing a simple trend following system (going back to 1975), using the 200-day moving average as a signal of when to get in (closes above it) and when to get out (closes below it).

The most common response to the post:

“You’re using the wrong moving average. You need to use the x-day moving average for Gold. That is the one that works.”

Translation: I should have used the Holy Grail. The only problem: it doesn’t exist.

In testing other popular moving averages such as the 100-day, 50-day, and 20-day, we find that they actually fared worse than the 200-day.

grail1

These shorter-term moving averages also traded in higher frequency, meaning the net returns after commissions/slippage would be even lower.



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Gold & Precious Metals

Golden Skin In The Game

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Posted by Stewart Thomson - Graceland Updates

on Wednesday, 06 December 2017 06:47

Dec 5, 2017

  1. For the past few weeks I’ve suggested that a modest US dollar rally against the yen (and thus gold) was due, and now it’s here.
  2. Please double click chart below.Double-click to enlarge.The dollar’s right shoulder rally fits with the US senate’s decision to finally pass some corporate tax cuts. That’s modestly good news for “risk-on” investors.2017dec5usd1
  3. It’s modest because it comes at a late stage in the business cycle.Many institutional money managers are trimming US stock market holdings. They are investing the proceeds into key Asian markets where corporate profits are rising but P/E ratios are lower.
  4. Please  click here now. This is typical market action in the late stages of the US business cycle; the Dow stocks keep rallying, and the growth stocks stumble.
  5. Please  click here now. I’m pretty comfortable with my Chinese stock market holdings. If there is a crash, I’ll simply buy more and urge savvy investors to do so too.
  6. Please  click here now. In the big picture, American citizens are outnumbered by Asians. There are about eight Chindians for every American. 


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Gold & Precious Metals

Jack Crooks: Gold quiet period about to end?

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Posted by Jack Crooks - Currency Currentsk

on Tuesday, 05 December 2017 11:17

Tuesday 5 December 2017

Quotable

“ It is better for you to be free of fear lying upon a pallet, than to have a golden couch and a rich table and be full of trouble. ”

                                                                                                                                                                  -- Epicurus

Commentary & Analysis

Gold quiet period about to end?

Screen Shot 2017-12-05 at 11.24.44 AM   

From today’s Wall Street Journal:

 “Major U.S. stock indexes have been historically quiet this year. Now, that inactivity has spreadto the precious metals market.  Gold stayed in a $34.50 trading range in November, the lowest gap between its high and low in any month since October 2005, according to the Journal’s Market Data Group.”

We believe this low volatility period is about to change for the shiny metal.    

Gold pays no interest. Thus, gold prices tend to be negatively correlated to interest rates; i.e. higher interest rates and lower gold prices, vice versa. So, if one accepts as probable the following we gleaned from this week’s Barron’s magazine

‘But a major risk for the market is the potential for a rise in US inflation,’ says Mark Haefele, the giant Swiss bank's (UBS) global chief investment officer.  That concern, which could push the Federal Reserve to tighten more aggressively, is shared by Deutsche Bank's strategists, along with the impact of the European Central Bank's tapering of its massive bond purchases.  

Deutsche last week joined the small but growing list of major banks that think the Fed could raise its interest-rate target four times in 2018, in addition to the quarter-point hike that seems to be a lock at the Dec. 12-13 meeting of the Federal Open Market Committee."

…then one should be very concerned about the price of gold.  We are short.  In the chart below, you can see a clear negative correlation between gold and US benchmark 10-year yields



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Gold & Precious Metals

Are We Ready For A Gold And Silver Rally?

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Posted by Avi Gilburt - ElliottwaveTrader.net

on Tuesday, 05 December 2017 07:11

Many of you who follow my analysis have learned quite well how I look at the market. And, those of you who have read me in the past know that I do not view fundamentals as being relevant to determining when we can see a major turn in the metals market. 

In fact, in 2011, the fundamentals for the metals market were exceptionally strong, with most everyone believing in the certainty of gold exceeding the $2,000 mark, just before we began a multi-year pullback. 

Moreover, the fundamentals were terribly weak just as we were hitting the bottom in 2015, with most market participants being certain that gold was about to break below $1,000.

So, I get many emails from followers who forward me other articles they think I will find amusing, especially ones that like to highlight the fundamentals. But, this past week, one statement really caught my eye.

At the start of this particular article, the article writer began with the following sentence:

“Too many technical analysts dismiss fundamentals. True, technicals usually lead fundamentals but understanding the fundamental drivers (when it comes to Gold) can give you an edge.”

Again, for those who read me often, I am quite certain you know what I am about to say. In fact, I even posted this sentence in my trading room at Elliottwavetrader, and asked for comments on this sentence. And, these were some of the comments I received:

"Too many people dismiss B. True, A is usually ahead of B but taking into account B can give you an edge." What? If A is usually ahead of B, then B is usually useless. So his statement makes no sense.”

“Reminds me of a good quote from The Complete Turtle Trader: A technical trader (trend follower) is purchasing quantitative information from a Wall Street fundamental analyst and notices that they both have a number of the same positions open. When he queries the fundamental analyst about this, he receives the reply, "That's true because even with all of our good (fundamental) analysis, if we don't put a trend following component in it, it doesn't do very well."

And, there were many others along the lines of the two I just quoted. I think you get the gist of the point. If one really understands that technicals will lead the fundamentals, what use would there be for something that is lagging? 

To use that which lags in order to make a decision to put your money to work is akin to using a several month delayed price quote.

But, investors have been so indoctrinated to believe that one must invest based upon fundamentals that we have become no different than the masses who were so certain that the world was flat. In fact, R.N. Elliott noted “[i]n the dark ages, the world was supposed to be flat. We persist in perpetuating similar delusions.” 

One has to ask if we really have a skewed view about the importance of fundamentals. I mean, if one recognizes that fundamentals lag technicals, yet place primacy upon fundamentals, are they not simply looking at the market with blinders on? Would you ever drive your car while looking out the back window? Just something to think about.

Price pattern sentiment indications and upcoming expectations



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