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BULLISH GOLD? - But only If "the 480 MA holds", that is...

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Richard Russell





Below is GLD, my proxy for gold. A pennant has appeared and GLD has fallen out of the pennant to 159.50. Thus, we are in what I believe is the ‘clean out’ correction for gold. This is the correction that will scare out all the in-and-out traders and the newcomers. It is here that those who hold gold in physical form will do best, since they won't be tempted to sell.


My advice is to hold all gold positions and wait patiently for the correction to end. Just before the huge 1979-80 surge, we saw a big ‘clean out’ correction in gold. I believe history is about repeat.”


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No wonder the sentiment on Gold is getting negative - the charts can be read bearishly

(the 480d MA did not hold, and Gold is now trading below it)



Gold Prices Fall For Second Straight Day; $1,625/Oz Area Eyed - Kitco News, Feb 14 2013


That would bring it back down into the congestion range of last summer.

You can see it on the Bernanke's Racetrack chart

The CONGESTION AREA (circled in Gold) needs to hold !




(From the article):


“The combination of (poor) European and Japanese economic numbers is near-term bearish for gold. There’s no real threat of inflation. Gold does not like recessions at all. There is some concern that the (economic weakness) will spread to the U.S. and that’s a valid concern as we do not have all that strong growth,” said Sterling Smith, futures specialist, Citibank Institutional Client Group.

. . .

“This market is so very jittery,” he said.

Grady said earlier in the session price popped higher when the daily open interest figures rose despite the lower price settlement on Wednesday. Open interest is the number of outstanding positions left at the end of the trading session. Higher open interest on a day when prices settle lower is a sign of sellers establishing new shorts.

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Sorry this is pound v gold http://stockcharts.c...929&a=291639175


That looks good !

But so did the Dollar Gold chart until a few days ago

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I am still looking for bright spots in a dismal picture today




Gold needs to rally back into today's big opening gap down...


GLD - 5day chart ... update



and then,

Next week, on Monday or Tuesday (probably) retest today's low on less volume


We have seen this pattern before at important lows.


They normal have a white knuckle day like this just before the final low

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It does feel that way.

But when you understand how lows are formed, it is all part of the battle drama

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Since late January, the February gold contract has been in backwardation. This means that one could make a profit by simultaneously selling a gold bar and buying a February contract. One would still have one’s gold plus a little extra. I coined the term “temporary backwardation”, to describe this curious and very recent phenomenon. In our “new normal”, most gold and silver contracts go into backwardation as they get close to expiry.


When the Feb contract first jumped into backwardation, it was well within the “contract roll” period. The roll is when naked longs sell the expiring contract and buy a contract for a more distant month. This heavy selling of the expiring contract pushes down its price. Since cobasis is Spot minus Future (oversimplified slightly), the cobasis rises purely due to the mechanics of this selling.


But today something more serious occurred. The April contract, which is not yet being “rolled”, fell into backwardation. See the chart.

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This is a massive short position based on the COTS data. In fact, the last time the short position was over 29% was in November of 2008 when gold was priced at $733 / oz - two weeks later the gold price was at $820 / oz, and it ended up closing the year over $850. That equates to a 15-20% gain over two months


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As the 480 day MA didn't hold, where do you see the next support?

Do you think last week's falls were manipulation or 'real' selling?


You are right, the 480d MA is broken.

I am now focussed on th 126wk MA / 610 days


Whichever they were - it worked.

Gold now will need some real buying to get back on track

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BULLISH GOLD? - But only If "the 480 MA holds"





Bernanke's Racetrack: Gold (GLD) vs Stocks (SPY) ... update :RACE2 : GLD-hourly : SPY-hourly : GLD/SPY-Ratio




The Fed's money-printing has maintained confidence in markets - but the money has gone not only into stocks, but also into other areas. Obviously, money has also flowed into commodities like Gold, pushing prices higher even faster than stocks, as the chart above shows.


GLD might soon "kiss" or "cross" SPY


GLD: 155.18 -0.58

SPY: 152.96 +0.85



What ever happened to that "String China Bid" in the Gold market ??

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Gold and Silver Nearing MAJOR Long Term Support

SOURCE: [Chris Vermeulen] - Gold and silver along with their related miners have been under a lot of selling pressure the last few months. Prices have fallen far enough to make most traders and investors start to panic and close out their long term positions which is a bullish signal in my opinion. My trading tactic for both swing trading and day trading thrive on entering and exiting positions when panic trading hits an investment. General rule of thumb is to buy when others are extremely fearful and cannot hold on to a losing position any longer. When they are selling I am usually slowly accumulating a long position.

Full Article

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Backing away from the "Kiss" on Ben's racetrack


GLD : 152.62 +1.18 / +0.78%

Open:152.00 / High:153.41 / Low:151.899

Volume: 17,823,518


SPY : 150.42 -0.92 / -0.61%

Open:150.96 / High:151.42 / Low:149.94

Volume: 165,281,018


Yesterday: GLD : $151.44 / SPY : $151.34 = There was a KISS


In focus: Has a correction begun?

Plus: SPY, RRGB, and another potential sell signal

By Lawrence G. McMillan


We were all set to write another boring article about how the overbought stock market continued to rise in a narrow and boring range, day after day. However, there was nothing boring about today’s action, as some traders took the Fed minutes as a sign to do some selling..

Today’s selling has raised alarm bells.

The Standard & Poor’s 500 Index SPX -0.63% had been contained within a range of 1,495 to 1,515 for about two weeks. Then last week, it broke out to new highs, above that 1515 level. These prices were last seen in late 2007.

== ==


Is gold finally a contrarian buy?

Commentary: Contrarians looking for the bulls to throw in the towel

By Mark Hulbert, MarketWatch


CHAPEL HILL, N.C. (MarketWatch) — Gold’s fall from grace accelerated this past week, including hitting a $30 air pocket in Wednesday’s trading alone.

In fact, gold bullion is now more than $100 an ounce lower than where it stood a month ago, when the contrast between the best and worst gold timers flashed an intermediate-term warning signal. ( Read the Jan. 16 issue of Hulbert On Markets.. )

Has this carnage over the last month been enough to generate a contrarian buy signal? And has there been any improvement in the best-versus-worst indicator?


/see: http://www.marketwat...ippet_latestHOM

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I am still fascinated by the 480d MA and its echoes


UPDATE on the "once-great" 480d-MA


Still great? But in its fibonacci echoes


480 x 1.382= 663d-MA

480 / 1.382 = 347d-MA ... update-1yr : 5-years

347 / 1.382 = 251d-MA = 252d

251 / 1.382 = 182d





5 years


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Gold’s Death Cross is a buy signal for China


Posted on February 21, 2013 by Jean


By Ambrose Evans-Pritchard, The Telegraph, UK

Last updated: February 21st, 2013


Gold price has dropped below $1,600 for first time in six months


It is a treacherous moment for gold bugs.

The first whiff of future tightening from the US Federal Reserve has sent bullion into a nose-dive, triggering a much-feared “Death’s Cross” sell signal on gold futures.

Gold has dropped by over $100 an ounce in ten days, touching $1556 this morning. The HUI index of gold mining stocks broke down weeks ago – as so often leading gold itself by a few weeks – and has already crashed to levels last seen in 2009.

Goldman Sachs has cut its long-term forecast to $1,200. Credit Suisse and UBS are bearish.


Citigroup says the great bull market of the last 12 years is over. The “long cycle” has peaked. Economic recovery has yanked away the key support. So long as there are no big “street riots” this year, investors will stop buying precious metals as Armaggedon insurance and rotate instead into stocks that generate income. Such at least is the argument.


This is more of less what the market would look like and feel like if the gold rally really were to fizzle out, leaving behind an army of small investors who joined the party late and face deepening losses for twenty years – as they did from 1981 to 1999.

If it were true that the Fed is preparing to unwind QE, I would agree – up to a point – that gold faces a nasty squall. But all we had from the minutes was a comment that an undisclosed number of FOMC voters fear inflation and financial bubbles and think the Fed should stand ready to cut back on bond purchases earlier than thought.

How many times before have we heard “exit talk” from Fed hawks?


/more: http://jhaines6.wordpress.com/2013/02/21/golds-death-cross-is-a-buy-signal-for-china/

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Looks similar to me ! (so far)



GLD opened below that support at $154, suggesting that at minimum, the Low may be tested.


This is not a necessity, but I think it is likely.

Below is the chart showing the IMPORTANT LOW in late 2008:




Maybe we will see something like that within March.

Recent GLD ... update




A similar pattern so far !

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News that billionaire investor George Soros sold gold late last year tempered the allure of the yellow metal.

. . .


And for those concerned about what Soros says or does openly, they would do well to remember that he called gold the ultimate bubble in 2010 - just before massively buying the metal for his fund, records later showed.


So for all we know, he may already be buying the metal again, taking advantage of the negative view on gold, that his action helped to create. Either way one should probably be well advised not to pay too much attention to Soros.




Martin Heineke : http://finance.thest...day.asp?aid=277

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Update - to a chart on this historic thread


I said then: "Looks like GLD will touch the (unrecogised, but important) 480d MA today"... update



GLD / Gold-- GLD-chart : LT-chart



If GLD closes above $122 (x 10.4= $1,269, it will have made it through several important Resistance levels


Here's a longer term version of the chart ;


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I've put all the family's portfolio's in gold and silver (but my partner's into National Savings and deposits in building societies chasing that extra 0.01% yield to balance out the risk :) )


I've put our money into silver bullion with Goldmoney, PSLV, CEF, TAHO, HGM, FNV, AG, PAAS, FRES and some others I can't remember.


Sold nearly all our SLW after seeing some dirt thrown by Bix Weir in his subscriber pages

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