Gold is down 17% since March 17...

[bobola]

Based on advice from various sources saying it will hit $1,500, does this mean I load up on it at its current 'low' price of $850...???

[Honzajs119]

Re: Gold is down 17% since March 17...

Good Bye Kiss?
http://www.gold-eagle.com/editorials...eld050108.html

[FRED]

Re: Gold is down 17% since March 17...

Good Bye Kiss?
http://www.gold-eagle.com/editorials...eld050108.html

Chalk up another great forecast from the genius of Elliott Wave.

Our March 5, 2008 gold analysis Gold Update: The small trade within the big trade stated:

We remain long gold as we have since August 2001. Recent price action compels us to remind readers that the precious metals markets have two primary drivers, with the currency depreciation and inflation trade driving long term prices and highly leveraged trades by funds driving short term price action.

We also noted:

Since 2001, the gold price has increased in four distinct growth trends as depicted.

A. 2001 - 2006: Post-bubble gradual currency depreciation and inflation trade
B. H1 2006: Rapid speculative trade
C. H2 2006 - 2007: Resumption of gradual currency depreciation and inflation trade
D. 2007 - Present: New rapid speculative trade two

Within the current rapid speculative trade, we are watching for short term price volatility much as occurred at the end of the previous similar period C (H1 2006): a 20% correction from $720 to $580. A similar correction today would take gold prices down $200. We are also within the long term for volatility that will portend the end of the currency depreciation and inflation trade that began in 2001.

We concluded:

Within the long gold and silver trade are players that create price movements that at times are counter to the long term trend and at other times exaggerate the long term trend. It is our position that the pullbacks created by the short term counter trends are buying opportunities for long investors and for traders the peaks of exaggerated short term price movements are selling opportunities. More importantly it is critical to distinguish between the kind of price volatility that funds can create with leverage versus the kind of price volatility we will see at the end of the long term PM inflation trade in place since 2001.

We do not foresee in light of ongoing liquidity problems in global bond markets, combined with slowing economic growth and rising inflation around the world, how governments will be able to make bonds more attractive than hard assets by raising yields above the rate of inflation to draw money away as occurred in the early 1980s during the previous cycle at a time when increased liquidity is needed to manage the debt deflation.

As long as future real interest rate expectations remain negative, the long PMs position that we took in 2001 remains in place.

[Guest]

Re: Gold is down 17% since March 17...

Not impressed with technical analysis. Gold is headed in either direction based on valid fundamental reasons. The short term ups/downs are like going to Vegas and playing with the roulette wheel.

And you can never discount the ability of those who want to to continue to pull the wool over the eyes of the shortsighted investor/trader. It may take quite a while for the unknowledgeable 401k type investors to figure out that while their mutual fund or CD or money market fund didn't lose value nominally, it lost 10% of its buying power.

Until the statistical BS we're being handed by the government and others becomes common knowledge, these little rallies/happy days are here again parties will continue to happen.

There are a lot of people who think they got a raise this year if the boss gave them 3% more dollars than they got last year.

Once their ability to make up the shortfall with credit cards is maxxed out or reduced by lenders, or rates go way up, THEN you'll see gold continue its move up.

Remember, if you're visiting this website you're in the top .0001% of investors in terms of knowledge. Your world may be populated with people who can discuss things like this, but the typical schmuck out there can't reconcile his checkbook, doesn't know macroeconomics from macrame', and is too busy wetting his pants over who's going to get voted off American Idol to even try to understand the real picture.

Gold investors, think of yourself as Gulliver being held down by the tiny ropes of the little ignorant people out there. It will take some time to cast them off and rise up.

Think it's a rational market filled with equally savvy investors? Explain this.

The dollar rises .01 vs the Euro and they throw parties. Meanwhile middle eastern nations selling us oil announce they're about to depeg from the dollar. Like they always depeg just as the dollar is about to rally.

News reports in the major media on the soaring cost of food claim its due to the transportation costs related to oil prices.

The talking heads repeatedly refer to $850 as the "all time gold high" till recently and imply gold is sky high now w/o bothering to mention that high was 25 years ago. While the price of a loaf of bread back then was 35 cents.

I bonds now pay the "official" inflation plus......ready for this?? ZERO percent interest! Even by the government's own numbers that's ridiculous. Spend it now or see it lose value. Think maybe the game is rigged?

[jtabeb]

Re: Gold is down 17% since March 17...

Think maybe the game is rigged?

Yeah, and I think people are acting stupid, but it still doesn't change the fact that all the common sense I can muster can't make sense of shit right now. Every event I have observed now for the past 3 months yields the OPPOSITE of what I expect. Saw the same thing at the end of the tech boom (was making money THEN however). Everything is acting 180 degrees out from rationality. SO don't beat up on poor sheeple too much. I'm either confuesed, wrong, or a sheeple, or all three?

Hard to win when you don't make the rules (which BTW can change at a moment's notice).

It's like they say, "he who makes the rules gets the gold."

I personally don't like ******* people over for a living, no matter how big the financial reward. I guess I'm in the minority. Too bad.

[Finster]

Re: Gold is down 17% since March 17...

Not impressed with technical analysis. Gold is headed in either direction based on valid fundamental reasons. The short term ups/downs are like going to Vegas and playing with the roulette wheel.

Not such a bright line always between fundamentals and technicals. As you point out, there are fundamental reasons for gold to advance. But does that mean that gold goes from where it was to where it’s going all at once? Or that it goes there in a straight line? As Fred’s comments suggest, there is an underlying value path, and investor enthusiasm can move prices above it. At that point. gold is overvalued. That to me is fundamental. So it sells off. Investor fear or apathy then results in the price going below value. At that point it is undervalued, so it advances. TA can be viewed in this context as a way of illustrating that oscillation about the trend.

I bonds now pay the "official" inflation plus......ready for this?? ZERO percent interest! Even by the government's own numbers that's ridiculous. Spend it now or see it lose value. Think maybe the game is rigged?

Yes, that zero percent represents the interest above and beyond the CPI, not an "absolute" rate. IBonds pay the CPI plus some rate of interest. The zero percent is therefore ostensibly the "real" rate of interest.

Of course, CPI understates inflation, so real interest rates are actually negative, and so is your real return on IBonds … especially after taxes!

[metalman]

Re: Gold is down 17% since March 17...

Not impressed with technical analysis. Gold is headed in either direction based on valid fundamental reasons. The short term ups/downs are like going to Vegas and playing with the roulette wheel.

And you can never discount the ability of those who want to to continue to pull the wool over the eyes of the shortsighted investor/trader. It may take quite a while for the unknowledgeable 401k type investors to figure out that while their mutual fund or CD or money market fund didn't lose value nominally, it lost 10% of its buying power.

Until the statistical BS we're being handed by the government and others becomes common knowledge, these little rallies/happy days are here again parties will continue to happen.

There are a lot of people who think they got a raise this year if the boss gave them 3% more dollars than they got last year.

Once their ability to make up the shortfall with credit cards is maxxed out or reduced by lenders, or rates go way up, THEN you'll see gold continue its move up.

Remember, if you're visiting this website you're in the top .0001% of investors in terms of knowledge. Your world may be populated with people who can discuss things like this, but the typical schmuck out there can't reconcile his checkbook, doesn't know macroeconomics from macrame', and is too busy wetting his pants over who's going to get voted off American Idol to even try to understand the real picture.

Gold investors, think of yourself as Gulliver being held down by the tiny ropes of the little ignorant people out there. It will take some time to cast them off and rise up.

Think it's a rational market filled with equally savvy investors? Explain this.

The dollar rises .01 vs the Euro and they throw parties. Meanwhile middle eastern nations selling us oil announce they're about to depeg from the dollar. Like they always depeg just as the dollar is about to rally.

News reports in the major media on the soaring cost of food claim its due to the transportation costs related to oil prices.

The talking heads repeatedly refer to $850 as the "all time gold high" till recently and imply gold is sky high now w/o bothering to mention that high was 25 years ago. While the price of a loaf of bread back then was 35 cents.

I bonds now pay the "official" inflation plus......ready for this?? ZERO percent interest! Even by the government's own numbers that's ridiculous. Spend it now or see it lose value. Think maybe the game is rigged?

best post of the day... bar none. thanks!

[phirang]

Re: Gold is down 17% since March 17...

itulipers, find out what the blackmarket gold situation is... i've been hearing it's roaring in the near-east...

also, the impending strategic defeat of the US in iraq will not help the situation with respect to our slavish creditors... they'd quickly turn coat if they found a new weapons/intimidation ho (i.e. russia).

it's too bad that bush is just an idiot and not totally nuts: if he were crazy, he'd be less predictable and perhaps more menacing to our "enemies" (an enemy to me is only attached to the hand that takes from me).

we need a thread on post-withdrawal iraq: the US can not afford this imperial ruse much longer, and the political will to finance it continues to attenuate... i would be interested in how a post-US iraq will look: clearly, there'll be an agreement between saudi, syria, iran, khaleejis(lol), and of course the US, europe, turkey, and russ/china.

[santafe2]

Re: Gold is down 17% since March 17...

Based on advice from various sources saying it will hit $1,500, does this mean I load up on it at its current 'low' price of $850...???

Since TA is roundly discounted by some and summarily dismissed by most on iTulip, I'll just refer to it as FM. That may satisfy more people. So here's my response:

Through an intense study of FM I have been completely lucky in divining the PM top in 2006 and the one this winter. I know, just Ouiji board logic, I may as well have gone to a palm reader. I've spent 10 years working out the astrological details of the financial market and with a deep faith in FM, I've managed to prevail. Lucky me.

So you have to ask yourself, do you feel lucky?

I'm tossing out bones, consulting the stars and getting a Ouiji vibe regarding a PM bottom in the next few weeks. I'm feeling the FM.

But even those of us crazy enough to consult the FM oracle will tell you it's never time to 'load up'. Investing is like swimming in the ocean. Wade in. Gauge the waves in front of you and keep swimming out unless you see a huge set you can't handle. Then it's time to head for shore.

I'm just starting to wade into positions I sold in early March. FM is indicating that PM will begin to move up soon. I'll be busy with my tarot/astrology/numerology adviser so further terrestrial communication on this subject will be difficult at best. But I'm feeling the FM and Las Vegas lucky and you know what they say; I'd rather be lucky than smart.

PS the FM says $1,500 PM is very low. Peace out.

[Jim Nickerson]

Re: Gold is down 17% since March 17...

Since TA is roundly discounted by some and summarily dismissed by most on iTulip, I'll just refer to it as FM. That may satisfy more people. So here's my response:

Through an intense study of FM I have been completely lucky in divining the PM top in 2006 and the one this winter. I know, just Ouiji board logic, I may as well have gone to a palm reader. I've spent 10 years working out the astrological details of the financial market and with a deep faith in FM, I've managed to prevail. Lucky me.

So you have to ask yourself, do you feel lucky?

I'm tossing out bones, consulting the stars and getting a Ouiji vibe regarding a PM bottom in the next few weeks. I'm feeling the FM.

But even those of us crazy enough to consult the FM oracle will tell you it's never time to 'load up'. Investing is like swimming in the ocean. Wade in. Gauge the waves in front of you and keep swimming out unless you see a huge set you can't handle. Then it's time to head for shore.

I'm just starting to wade into positions I sold in early March. FM is indicating that PM will begin to move up soon. I'll be busy with my tarot/astrology/numerology adviser so further terrestrial communication on this subject will be difficult at best. But I'm feeling the FM and Las Vegas lucky and you know what they say; I'd rather be lucky than smart.

PS the FM says $1,500 PM is very low. Peace out.

SantaFe,

I guess it is clear to everyone but me, but I have no freaking idea as for what "FM" stands.

There are several contributors here who in my estimate truly must use divination in order to characterize iTulip community as having some universality in thought. I think it is impossible to put all the contributors here under any single label or grouping with regard to what they may or may not believe, e.g. any validity to technical analytical tools, peak oil, etc. On the other hand maybe everyone believes anything EJ writes and rejects most everything else. I really don't know.

I, for one, am interested in how anyone reaches opinions, technically or otherwise. All of your words possibly being apologetic for whatever is your method(s) is a waste of words. Put down whatever you think important and let people decide to accept or reject it--which I imagines is what happens with a lot that is put up here.

This chart suggests to me that $silver is not at a bottom: http://stockcharts.com/h-sc/ui?s=$SI...795&a=80106790

Further it doesn't suggest to me when some bottom might be reached. Any extrapolation of when a bottom will occur is purely speculation in my opinion.

Gold chart with same parameters as the one above shows a similar picture using the RSI and MACD patterns.

Though I have probably committed all errors that can be made, or at least most of them, it seems unwise to be buying something as long as the chart is going down, sure it may reverse tomorrow and hooray! someone picked "the bottom," but that is uncommon.

$CRB http://stockcharts.com/h-sc/ui?s=$CR...413&a=90422087 is headed down.

$copper is hanging tough it seems to me. http://stockcharts.com/h-sc/ui?s=$CO...833&a=90295935

DBA and RJA have either got to bounce here soon or they are headed lower.

$USD chart looks constructive to me, and if it continues a bit, that would seem negative for PM's and commodities. http://stockcharts.com/h-sc/ui?s=$US...40&a=132940973

[GeraldRiggs]

Re: Gold is down 17% since March 17...

SantaFe,

I guess it is clear to everyone but me, but I have no freaking idea as for what "FM" stands.

There are several contributors here who in my estimate truly must use divination in order to characterize iTulip community as having some universality in thought. I think it is impossible to put all the contributors here under any single label or grouping with regard to what they may or may not believe, e.g. any validity to technical analytical tools, peak oil, etc. On the other hand maybe everyone believes anything EJ writes and rejects most everything else. I really don't know.

I, for one, am interested in how anyone reaches opinions, technically or otherwise. All of your words possibly being apologetic for whatever is your method(s) is a waste of words. Put down whatever you think important and let people decide to accept or reject it--which I imagines is what happens with a lot that is put up here.

This chart suggests to me that $silver is not at a bottom: http://stockcharts.com/h-sc/ui?s=$SI...795&a=80106790

Further it doesn't suggest to me when some bottom might be reached. Any extrapolation of when a bottom will occur is purely speculation in my opinion.

Gold chart with same parameters as the one above shows a similar picture using the RSI and MACD patterns.

Though I have probably committed all errors that can be made, or at least most of them, it seems unwise to be buying something as long as the chart is going down, sure it may reverse tomorrow and hooray! someone picked "the bottom," but that is uncommon.

$CRB http://stockcharts.com/h-sc/ui?s=$CR...413&a=90422087 is headed down.

$copper is hanging tough it seems to me. http://stockcharts.com/h-sc/ui?s=$CO...833&a=90295935

DBA and RJA have either got to bounce here soon or they are headed lower.

$USD chart looks constructive to me, and if it continues a bit, that would seem negative for PM's and commodities. http://stockcharts.com/h-sc/ui?s=$US...40&a=132940973

Jim:
I think he means "fu%&ing Magic", if I'm not mistaken.

[FRED]

Re: Gold is down 17% since March 17...

Jim:
I think he means "fu%&ing Magic", if I'm not mistaken.

Quick reminder of what is different about our approach.

iTulip Approach

Primary method:

• Start with the market and economic data in the context of history
• Consider a wide range of economic theory
• Develop Market and Economic Thesis based on process principle (Ask: Who are the participants? What is the process?)
• Seek out contrary evidence
• Interpret events in the context of theory of process
• Refine thesis as needed
• Repeat process of refinement for 10+ years

Secondary method:

• Take a decade to develop relationships with people in the indsutry
• Spend time with the professionals who control more than 50% of the the money in the markets
• Find out what they are thinking and doing
• But keep in mind, they change their minds often and on short notice

Results:

• November 1998: Warns on Internet Bubble
• August 1999: No Y2K Disaster
• November 1999: How the Internet Bubble Will End
• March 2000: Internet Bubble Top
• April 2000: A Bear Market is Born
• January 2001: Post-Bubble Recession
• September 2001: Gold Price Bottom at US$270
• August 2002: Warns of Housing Bubble
• January 2004: How Housing Bubble will End
• January 2005: Housing Bubble Correction
• June 2005: Housing Bubble Top
• October 2006: Recession Q4 2007
• July 2007: Before the Stroke of Midnight
• December 27, 2007: Start of Debt Deflation Bear Market
• March 5, 2008: Gold Update: The small trade within the big trade

Alternative approaches

Idealogue's Echo Chamber:

• Fall in love with a school of economic theory
• Shoehorn events into it
• Ignore evidence that contradicts it
• Entertain, lose money, miss major turning points

Pedantic Lecturer's Echo Chamber:

• Develop a home-spun nonsense school of economic theory
• Reinforce by repetition
• Ignore evidence that contradicts it
• Entertain, lose money, miss major turning points

Fantasy Island of Magical Thinking

• Develop a theory based on magic (e.g., charts can predict the future)
• Reinforce by repetition
• Ignore evidence that contradicts it
• Entertain, lose money, miss major turning points

[bart]

Re: Gold is down 17% since March 17...

...
As Fred’s comments suggest, there is an underlying value path, and investor enthusiasm can move prices above it. At that point. gold is overvalued. That to me is fundamental. So it sells off. Investor fear or apathy then results in the price going below value. At that point it is undervalued, so it advances. TA can be viewed in this context as a way of illustrating that oscillation about the trend.
...

And another way to state the raw reasoning behind the workability of TA:

“All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope – that is why the numerical (technical) formations and patterns recur on a constant basis”
-- Jesse Livermore, "How to Trade in Stocks"




... and in the context of many other tools & views, etc.

"In fact, I always made money when I was sure I was right before I began. What beat me was not having brains enough to stick to my own game - that is, to play the market only when I was satisfied that precedents favored my play."
-- Jesse Livermore, "Reminiscences of a Stock Operator" (page 14)

"One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent."
-- Jesse Livermore, "Reminiscences of a Stock Operator" (page 51)


"I cleared about three million dollars in 1916 by being bullish as long as the bull market lasted and then by being bearish when the bear market started. As I said before, a man does not have to marry one side of the market till death do them part. "
-- Jesse Livermore, "Reminiscenses...", page 143


"Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend."
-- Jesse Livermore, "How to Trade in Stocks"

"I can't tell you how it came to take me so many years to learn that instead of placing piking bets on what the next few quotations were going to be, my game was to anticipate what was going to happen in a big way."
-- Jesse Livermore

[jimmygu3]

Re: Gold is down 17% since March 17...

Since TA is roundly discounted by some and summarily dismissed by most on iTulip, I'll just refer to it as FM. That may satisfy more people. So here's my response:

Through an intense study of FM I have been completely lucky in divining the PM top in 2006 and the one this winter. I know, just Ouiji board logic, I may as well have gone to a palm reader. I've spent 10 years working out the astrological details of the financial market and with a deep faith in FM, I've managed to prevail. Lucky me.

So you have to ask yourself, do you feel lucky?

I'm tossing out bones, consulting the stars and getting a Ouiji vibe regarding a PM bottom in the next few weeks. I'm feeling the FM.

But even those of us crazy enough to consult the FM oracle will tell you it's never time to 'load up'. Investing is like swimming in the ocean. Wade in. Gauge the waves in front of you and keep swimming out unless you see a huge set you can't handle. Then it's time to head for shore.

I'm just starting to wade into positions I sold in early March. FM is indicating that PM will begin to move up soon. I'll be busy with my tarot/astrology/numerology adviser so further terrestrial communication on this subject will be difficult at best. But I'm feeling the FM and Las Vegas lucky and you know what they say; I'd rather be lucky than smart.

PS the FM says $1,500 PM is very low. Peace out.

santafe2,

I for one do not know much about TA. For that reason I cannot say for certain whether it works or not. That being said, it seems to me that TA is a tool for predicting short and medium-term movements in charts, and perhaps longer ones as well. EJ and iTulip focus only on macro trends and major turning points. To me, there is room under the tent for those who can divine trading opportunities from charts while being aware of longer term forces observable from other methods of analysis.

Jimmy

[Jim Nickerson]

Re: Gold is down 17% since March 17...

santafe2,

I for one do not know much about TA. For that reason I cannot say for certain whether it works or not. That being said, it seems to me that TA is a tool for predicting short and medium-term movements in charts, and perhaps longer ones as well. EJ and iTulip focus only on macro trends and major turning points. To me, there is room under the tent for those who can divine trading opportunities from charts while being aware of longer term forces observable from other methods of analysis.

Jimmy

Jimmy, you should run for some elective office.