Gold is down 17% since March 17...

[jimmygu3]

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

Jimmy, you should run for some elective office.

I don't disagree with that. ;)

[Jim Nickerson]

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

I don't disagree with that. ;)

You realize of course that ever doing so would mean forfiture of anything resembling honesty in your non-public behavior--that would be my unadulterated opinion of what happens once people get elected to offices that entail their being responsible for spending OPM.

[metalman]

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

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

patience vs...

[bobola]

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

Fred, Thanks for that succinct post.

You reminded me why I keep coming back to this site.

I am paying attention to what's said here.

Bob...

[Guest]

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

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

Fred - iTulip's procedure of seeking out contrary evidence is not flawless. It has reacted to contrary evidence on certain issues in a distinctly reluctant manner on first examination. Some aspects of the implications of resource depletion for example, around here were scoffed at as a myth 18 months ago - or is it 'not OK' to mention that? And I will further note, that even people whose views are 85% - 90% congruent with iTulip positions on a wide variety of critical issues are summarily referred to here for our general edification, (without any apparent hesitation and on the very briefest of acquaintance) as 'doomertainers' - this to a moderate skeptic might suggest your process of 'seeking out contrary evidence' has a couple of small squeaky wheels in the mechanism. I'd be more frank, and say something like "we do like a lot of varied input, but we reserve the right to be reactive on occasion". :rolleyes:

[bart]

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

patience vs...

No question... we are having fun yet.

[c1ue]

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

Santafe,

I'm glad your TA is working - perhaps you can post your positions and stop out/ins as a lesson for all of us.

[rabot10]

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

patience vs...

AMEN Brother

[santafe2]

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

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.

Jim - This is a good example of a useful chart and silver is a commodity I've followed closely since the late 90s "Buffet bubble".

As I said in another thread, (maybe more than one), I've no interest in proving that TA works. It works as one of my tools and I find it useful. And I've also observed that it may only be useful because there are so many people using the same 10-20 TA tools. That said, I do see very clear early support at this level and that's why I'm beginning to retake my positions. The bottom is most likely in the $14 area but since no one knows where or when silver will resume it's bull run, this is a good place to start. Personally, I would favor gold in this enviornment to silver on a fundamental basis, but silver should do fine over the next few years as there will be plenty of inflation and rampant speculation to go around.

So how did I call the two overbought periods in this bull cycle, (or so I claim)? A blind squirrel could have found these two nuts. In 2006 and again earlier this year I was simply taking profits on a market that was so obviously making a speculative move, I didn't care what silver did in the future, I only cared that I captured profits and reviewed where I would want to re-enter positions.

So there is no reason for ANYONE to ask me to defend TA here. I've put my stake in the sand as I did at the March market bottom on another post, (yikes, that was a storm of iTulip aggravation). The market will tell us all if I'm wrong. But then, how can I really be wrong? I sold above $20 and am buying at $16. I'm competing with buy-and-hold. Damn, I just remembered that when you're explaining your losing so time to stop this nonsense.

I'm not volunteering as I have no spare time but there are several important threads which should be started on iTulip. One of them would discuss and analyze the impact of the huge amount of speculative capital circulating and looking for a quick buck in the 'trickle down' economic period that started in 1980 and how that locust capital drives mini bubbles. I see the effect everywhere and our little example, silver, has no immunity. There is way too much capital in speculative hands and until it's redistributed or destroyed, all investment products will go through speculative bubbles. The Euro is another speculative bubble example I've pointed out here in the last month or so. Does one really need TA, FM, tea leaves or any other tool to understand that the Euro is overvalued?

[Guest]

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

... So there is no reason for ANYONE to ask me to defend TA here.

This point is absolutely not controversial. The $15 level has been a technical ceiling for silver for over a quarter century. It was a very important level and a number of very senior market observers wrote all about it when silver finally broke through 15 dollars last summer.

That's the very best kind of technical analysis - the channel busting moves that occur just once in a quarter century. You can be sure when any asset breaks a quarter century channel it is not a "meaningless datum", and that long time nominal price ceiling then becomes a nominal price floor until it is well surpassed. Thus it does not require a market genius to figure out that silver anywhere in the vicinity of $15 is a "don't fool around too long" price level. $14 - $16 is the new value buying price window for silver.

Massive deflation driving the precious metals into a new bear market? That's why we have people like Mishmash, et. al. - if one fancies that idea - to guide the faithful deflationist multitude to Deflationist's Valhalla.

[GeraldRiggs]

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

@Fred

Thanks for the itulip lesson. I too am new to this but willing to learn.....:>

[santafe2]

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

Santafe,

I'm glad your TA is working - perhaps you can post your positions and stop out/ins as a lesson for all of us.

C1ue, it won't take much explaining as I like to keep my investing simple. Maybe not quite as simple as EJ likes his investing but none-the-less, very simple. There are, I think, good reasons I can't take EJ's approach and I'll try to explain.

To begin, I think most of us agree you have to keep your eye on long term trends and when you think one is about to reverse find a product or products with which your are comfortable and find a community with which you can discuss your idea(s).

Know how much you can comfortably invest in this area over time and parse your investment out into regular intervals. For me, 12-18 months works well but this strategy may not work at all for someone with a different temperament. After your fully invested, wait. Occasionally review your reasons for making this investment and adjust your targets based on current information and environmental changes, (inflation, currency value, etc.).

If/when speculative capital finds your little investment it's price will go parabolic for a few months until they get bored and move on. Hence my term, locust capital. If you have any doubt it's happening, it's probably not, it's just another run-up within a bull market. When it's finally so obvious that, for example, USA Today has a 3" headline proclaiming your investment the next great investment, it's time to start scaling out. Again, slowly. Generally not as slow as you entered your positions but give yourself plenty of time to be wrong and be happy you were wrong about this interim top.

Now to my point about why EJ's investing style doesn't work for me. Several of us have mentioned that investing requires one to develop a style that is their own or you'll not likely be successful and even if you are, you won't be comfortable with your investments.

Apparently my timing for PM was similar to EJs and to be fair, when the flag comes down on this investment he may realize a greater gain from this than I will. But, I would not be able to sleep at night if I had one investment that was comprising an ever greater portion of my portfolio so I use these occasional run-ups to move profits to other areas, (quite often a CD), and reinvest my original stake or slightly more when the market adjusts.

I don't see this as an issue of TA vs. fundamentals but more of an issue related to investing style and ensuring that your style matches your personality. If you don't find an overarching methodology that suits you well, fear and greed will win the day and you'll often make moves you'll later regret.

So to your point, I'm buying here and will continue to re-invest my original stake in this $14-16 area. If it moves up faster than I think it will, I may have to adjust my timing to allow me to be fully invested. If it moves below $14, I'll buy more, but slowly as a drop below $14 will mean I'm missing a piece of the puzzle. For gold, the numbers are different but the patterns are very similar.

To satisfy my need to gamble within the context of this larger investment, I buy and sell junior PM mining companies. This is never more than 5% of my overall investment and normally more like 2%. This is not investing, it's gambling. But for me, it's fun and it keeps me interested in the details of the entire industry. As I said, take a hard look at yourself and develop an investing style that works for you. Use iTulip and other great sources of knowledge and community to help you modify your thesis.

I'm sure that's more than enough for now.

[GRG55]

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

...Now to my point about why EJ's investing style doesn't work for me. Several of us have mentioned that investing requires one to develop a style that is their own or you'll not likely be successful and even if you are, you won't be comfortable with your investments.

Apparently my timing for PM was similar to EJs and to be fair, when the flag comes down on this investment he may realize a greater gain from this than I will. But, I would not be able to sleep at night if I had one investment that was comprising an ever greater portion of my portfolio so I use these occasional run-ups to move profits to other areas, (quite often a CD), and reinvest my original stake or slightly more when the market adjusts...

You and EJ may not be as different as you think. I have a recollection that in one of the interviews EJ did last year he mentioned that his original gold position of roughly 15% of his portfolio [I am going from memory here, so the %'age may be off a bit] had risen to more than 30% and perhaps it would make sense for him to consider selling some to manage risk.