334 replies to this topic

[Julius]

And PF, since you seem to be a technical guy, for AIG I think you take the 50% fib of the move between the 32.50 and 35.30 to use as your 1st buy point = $33.90. Stop remains at $32.49.

[PeaceFrog]

And PF, since you seem to be a technical guy, for AIG I think you take the 50% fib of the move between the 32.50 and 35.30 to use as your 1st buy point = $33.90. Stop remains at $32.49.

ahhh! thank you very much... that makes much more sense than what I was thinking... fib retracements... of course!

it works out perfectly because the most I can lose is 5%. awesome.

[Julius]

IMO, this is a great day to buy gold. You would think it would be up given a weaker dollar and Japan doing its own QE program but it's not.

Quick trade school: all commodities often trade together and oil is down big, so gold can't go up today.

I bought UGL, which is 2X gold. So for every 1% gold goes up, UGL goes up 2%. I think it will be a nice ride up to $1930/oz.

[PeaceFrog]

why not silver?

it looks like UGL will really pop if it goes above 97.41...

I see what you mean by today looking like a good day to buy gold since it just recently crossed up over the downtrend line...

I might buy this instead of AIG now, except that it looks like a long way down should it go in that direction.

[Julius]

why not silver?

it looks like UGL will really pop if it goes above 97.41...

I see what you mean by today looking like a good day to buy gold since it just recently crossed over the downtrend line...

I might buy this instead of AIG now, except that it looks like a long way down should it go in that direction.

PF, I did buy silver as well, in the form of SLV. I just cannot in good faith recommend that to anyone else because of the high risk and volatility.

Gold just looks like a no-brainer technically as well as fundamentally. . . we're days away from a "golden cross" where the 50 day crosses the 200. That should be good for an instant pop when it happens. Load up.

[PeaceFrog]

Done... I bought at market (96.76) and put in a 5% trailing stop (UGL)

I don't have enough funds to do both this and AIG... so I'm forgetting about that one.

Let's hope gold goes up to 5K (or 1900 at least)

I could also do a bracket order with a profit target and stop loss (instead of the trailing stop)... I'm kind of just winging this trying to learn.

[Julius]

Don't be afraid to sell that puppy on a big pop. Leveraged ETFs are inherently risky and a few big down days can really kill your gains fast.

My plan is to get out of UGL right after the golden cross pop to the next level and replace it with a more stable gold product like IAU or GLD to hold on to longer term.

[PeaceFrog]

nice... so I'll just stick with the trailing stop for now.

[Tim the Beek]

PF, I'm compelled to mention this - diversification is very important when investing or trading (two related, but different concepts, IMO).

None of my business, but if you can only afford to put money into one asset, this isn't the realm in which to be doing it.

Again, IMO, and without knowing what your broader financial picture looks like...

[PeaceFrog]

which asset would you recommend?

[PeaceFrog]

Julius, I have an amateur question. So, if a derivative such as UGL is pinned to the price of gold, is some broker under obligation to buy and sell it according to some formula? In other words... how exactly do they make this happen? If it's too complicated then don't worry about it. I can look it up.

and Tim, I'm not trying to invest. I'm trying to swing-trade... not sure if that makes any difference to you.

[Tim the Beek]

which asset would you recommend?

Time was, I would have said a savings account or CD, until you'd saved enough to buy across more than one asset class. These days, yields are so poor that it's hard to stomach putting money there. If it were my money, I'd be more inclined to put it in a couple of mutual funds, or ETFs which are invested in more than one asset/issue.

That said, I'm kind of skittish right now though...I think the markets are pretty fully valued, and am not really eager to put money into them right now.

I do come from more of an investment/long term mindset than a trading one though...

[Tim the Beek]

and Tim, I'm not trying to invest. I'm trying to swing-trade... not sure if that makes any difference to you.

I see that from the discussion above...still think that diversification matters in trading, though it's not something I have a lot of experience with.

[Julius]

Diversification is important if you are a buy-and-hold investor, no doubt about it.

But if you're nimble enough to hold assets only for as long as they are going up NOW, (which is what I do) then diversification isn't really relevant as long as you have the discipline to sell those fuckers and not get attached to them emotionally. In my world, the only kind of asset you buy and hold for a long period of time is something with a big safe dividend.

And PF, yes, that is the function of the market makers. The only issue is how big the bid/ask spread is. . . notice it's a lot wider on UGL than on IAU.

[PeaceFrog]

on a scale from Gilligan to Thurston Howell III, I land squarely in the realm of Gilligan.

I want to take advantage of my ability to get in and out of the market quickly and profit on short term moves.

I'm very nimble.

(someone like Warren Buffett does not have this advantage. He can't get out of a position without affecting its value)

[Tim the Beek]

Diversification is important if you are a buy-and-hold investor, no doubt about it.

But if you're nimble enough to hold assets only for as long as they are going up NOW, (which is what I do) then diversification isn't really relevant as long as you have the discipline to sell those fuckers and not get attached to them emotionally. In my world, the only kind of asset you buy and hold for a long period of time is something with a big safe dividend.

And PF, yes, that is the function of the market makers. The only issue is how big the bid/ask spread is. . . notice it's a lot wider on UGL than on IAU.

I'm guessin' you're rarely making one move at a time though, are ya'?

Again, not a world I'm much a part of, but I would think that all of your eggs in one basket is kind of a dicey play, no?

[PeaceFrog]

well... if I were investing all my fortune in order to avoid the loss of inflation you would be quite right.

However, I'm Gilligan... remember?

and up until now I've been playing with Forex.

It's just for kicks, more or less.

I wouldn't even know what you call this market... stocks? commodities? it's a leveraged ETF.... like a mutant. I like the idea of leverage, but you have to be aware of the potential risk involved, and I am.

I'm OK with losing 5%... and yeah I just don't want to be in 2 positions right now because I'd rather just do one thing, and do it well.

[Tim the Beek]

Oh, and regarding something Julius said above...the silver market does tend to be very volatile, yup.

Less important for someone with my mindset, as when I do buy it (not lately), it's physical, and paid for up front.

[Tim the Beek]

well... if I were investing all my fortune in order to avoid the loss of inflation you would be quite right.

However, I'm Gilligan... remember?

and up until now I've been playing with Forex.

It's just for kicks, more or less.

I wouldn't even know what you call this market... stocks? commodities? it's a leveraged ETF.... like a mutant. I like the idea of leverage, but you have to be aware of the potential risk involved, and I am.

I'm OK with losing 5%... and yeah I just don't want to be in 2 positions right now because I'd rather just do one thing, and do it well.

Hope it works out well for ya'!!!

[PeaceFrog]

it is a different mindset, and it does depend upon your financial situation. Thanks for your perspective, and thanks for your well wishes.

[PeaceFrog]

this is fun!

[Julius]

Golden cross confirmation of the move. Buy more.

[Julius]

SLV looks to be heading for a golden cross too, maybe a week or so away. Probably good for a move to 38.

[PeaceFrog]

which chart do you see the golden cross on? When looking at the daily chart, I see that it's about to happen... but not quite yet. Are we on the same page here?

[PeaceFrog]

you must be using the Exponential Moving Average, not simple... am I correct?

[Julius]

you must be using the Exponential Moving Average, not simple... am I correct?

no, always SMA. EMA doesn't do much for me, none of the longer term players pay much attention to it. Looks like it crossed yesterday/today at 160 on the GLD.

[PeaceFrog]

ohhh ok... right... looking at the regular ETF, not the 2x... so that's good news

guess this little dip it just took is nothing to worry about.

[PeaceFrog]

yup... now I see it. Just crossed today. Thank you.

[Julius]

ohhh ok... right... looking at the regular ETF, not the 2x... so that's good news

guess this little dip it just took is nothing to worry about.

Don't chart the leveraged ETFs, the leverage distorts the chart. Always chart the underlying instead and use that as your guide as to when to buy/sell the leveraged.

And the intraday dip makes complete sense: look at what oil is doing. Traders sell all commodities together first and then it tends to shake out later and equalize. Don't worry about the daily action too much.

[PeaceFrog]

yeah oil definitely looks like it's on it's way down...

so, like you said, gold won't go down because oil is going down?

[Julius]

I don't use a stop on gold, there will be some end of quarter/start of quarter shenanigans for the next two weeks. Don't let it stop you out unless you're real quick on the trigger to buy back. Dips are for buying.

If I could own just one asset between now and the end of the year, it would be gold.

[PeaceFrog]

I got stopped out about 10:00 this morning... but just like you said it went back up a little bit.

That's alright... I'll just keep watching for now...

I didn't lose more than I can afford, but if it kept going down I would have... so life goes on.

[TakeAStepBack]

Self storage as a buy in and PSA should be a boom for those looking to make a dollar on disaster.

[PeaceFrog]

good call

[PeaceFrog]

Is gold about ready for a correction?

it broke a 4 year uptrend line.

[concert andy]

Is gold about ready for a correction?

it broke a 4 year uptrend line.

goldman sachs calls for 1800 by the end of next year, others say it will continue to climb to 2100.

[PeaceFrog]

that's the thing about speculating on commodities... so many opinions... it's a gamble.

I don't really trust what big firms tell the public. They have ulterior motives.

I've studied a little bit about technicals... most likely it will just do what's called "channeling"... but we will see.

(my personal prediction is that it's likely to bounce back down to 1500 before it goes up again... but I am far from an expert.. just a guesser... then again, aren't they all?)

[Julius]

(my personal prediction is that it's likely to bounce back down to 1500 before it goes up again... but I am far from an expert.. just a guesser... then again, aren't they all?)

Great fucking call. We're already at 1600 and it's a SELL SELL SELL.

 

I will happily admit that I was wrong, that I lost money, and that the heady days of gold are over for now, and probably for a while yet if it will keep others out of it.  STAY AWAY.

 

P.S. I am now short gold and looking to get short silver, but am long platinum (PPLT) because it is supply-constrained and has industrial (auto) uses and autos are booming.  And I'm already down 3% on it.  

[TakeAStepBack]

http://www.thestreet...-spur-gold.html

[Tim the Beek]

Bein' more in it for the long term myself, if I didn't have other places callin' for money right now, I'd buy in a meaningful dip, though I think gold's still pretty fully valued right now.

 

And silver under 30 looks ok to me...another metal with industrial uses. Very volatile market though...lotsa downside risk.

[TakeAStepBack]

Silver is defintely extremely volatile.

 

The currency war will push gold back up in the next couple of months. Especially with US govt. about to do the "sequestration" theater for the plebs. There will be a deliberate weakening of the dollar.

[Tim the Beek]

Prolly will. Movements don't mean that much to me, as my meager purchases are a long-term store of value/inflation hedge/form of moolah if it all really goes to crap.

[TakeAStepBack]

Yep. it's one of the only true stores of value left available. Movement up or down on the short term scale to me isn't worth following. Although I know why Julius does follow it.

[MeOmYo]

what are your thoughts on the "P ot" stocks?  MJNA, CBIS, CERP and alike.

[TakeAStepBack]

what are your thoughts on the "P ot" stocks?  MJNA, CBIS, CERP and alike.

 

I'd be curious on Julius thoughts too.

[Tim the Beek]

This seems like a pretty sensible look at the "sector."

 

http://seekingalpha....rce=google_news

[TakeAStepBack]

From that link:

 

 

The first problem with marijuana stocks is that these are overwhelmingly penny stocks. Most of these stocks are not exchange traded and are not subject to the same filings to which most public companies are accountable. The underlying company for a penny stock can be on the verge of bankruptcy and an investor would never know it. Additionally, these stocks trade with absurdly low volume, therefore making these illiquid investments means that it is not easy to get out of a position since there are not many buyers. Where this can be particularly problematic is if a position is going against an investor and they wish to get out of it.

[Julius]

Yes, basically they don't trade on real exchanges and so there's no way to get sufficient information to make a decision. I have a friend who has been pushing these on me but I'm not interested. Penny stocks are a sucker's game unless you're the one doing the pump-and-dump.

[Julius]

Today my best trade was DUST, which is 3x short the gold miners (GDX). It was the only easy money of the day and I missed most of it but if gold is going down, this is the best ETF to use to bet against it.  I think it has some life left in it yet but don't be holding this thing for more than a day or two. 

[concert andy]

Is The Precious Metals Bubble Bursting?

 

 

 

 

Gold was in another correction mode on Wednesday -- the sixth in less than a year -- dropping briefly below $1590; a big disappointment to the bulls, betting that the world will come to an end by early this year. Silver dipped below $29.

 

Gold ETFs like SPDR Gold Shares (GLD) were also sharply lower (down 1.86 percent); silver ETFs like iShares Silver Trust (SLV) followed through in sympathy (down 2.12 percent), and Freeport McMoRan Copper and Gold (FCX) was down 2.57 percent. Other metals like Palladium (PAL) were down more than 5 percent. What's going on? Is the precious metals bubble bursting?

 

It is hard to say for sure. What we can say, however, is that thetechnicals do not look terribly good for the bulls. And many of the factors that blew air to the bubble are no long on investor radar.

 

First, inflation, the ultimate tailwind for the metals is nowhere in the offing, as evidenced by today's meager Producer Price Index (+0.2 percent).