21 replies to this topic

[Kimston]

I see the latest sentiment survey for gold is up to 97% bulls. Are there any reasons for caution based on geometric analysis of the gold price action? The charts are annotated with my comments. I think there is a reasonably good chance for a significant reversal at the 1151 area.

I bought a moderate position in April calls on GLL (double short gold) on the close 11/20/09. Even if the current blow-off continues, history shows that parabolas are fully retraced. We'll see if it's different this time.

Kimston

[dougie]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson your view is refreshing: and we all remember how your last major short foray was a home run

[Lysis]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson
your view is refreshing: and we all remember how your last major short foray was a home run

Gold looks massively overbought and sentiment is overwhelmingly positive. Will we see sub 1000 gold in the next month? No. However, I think there's a good chance we'll hit 106 on GLD before we start
the next leg up. I like gold and I think economic conditions are ripe for it to continue to run, but it's current price is so far above the 50 and 200 day MAs that the odds of a pullback are high.

[JGUITARSLIM]

A quick pullback would do wonders to wipe out that bullish sentiment.
I still think we have the best part of the rally in front of us.
Just looking for a small pullback into Dec timeframe, prior to continued rally.
Similar to Nov-Dec 2007, pullback to 50DMA probably will do the trick.
I have a target around 1500 first half of 2010.

Edited by JGUITARSLIM, 22 November 2009 - 11:10 AM.

[Kimston]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson
your view is refreshing: and we all remember how your last major short foray was a home run

Dougie,
When I shorted the 2008 top in gold, I recall getting stopped out twice for fairly small losses before catching the move down. Picking the top of a blow-off move is very difficult but also very profitable once the market peaks and collapses. One has to plan on it taking several tries when dealing with a lot of leverage. I think I got stopped out three times in the crude oil blow-off before that market collapsed. So far on the current gold rally I've been stopped once and wouldn't be surprised at all if I get stopped out several more times. The 1151 area is just a projection point where a turn may occur. I also have projections in the 1210 area, 1350 area, and Jguitarslim has a projection to 1500 that may or may not get hit.

I think I agree with J that this may just be a pullback into Dec with potential top next year. Mid Jan to early Feb of 2010 shows up as very important timing for a potential top (which may be higher, lower, or a double top) in my work.

Lastly, 97% bulls is the highest reading ever recorded in the Daily Sentiment Index for gold. However, the top in the bond blow-off last December registered 99% bulls for 2 weeks before that market ultimately peaked and collapsed. So the sentiment can get more extreme, but it is dangerously high right now.

Kimston

[dharma]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson
your view is refreshing: and we all remember how your last major short foray was a home run

Dougie,
When I shorted the 2008 top in gold, I recall getting stopped out twice for fairly small losses before catching the move down. Picking the top of a blow-off move is very difficult but also very profitable once the market peaks and collapses. One has to plan on it taking several tries when dealing with a lot of leverage. I think I got stopped out three times in the crude oil blow-off before that market collapsed. So far on the current gold rally I've been stopped once and wouldn't be surprised at all if I get stopped out several more times. The 1151 area is just a projection point where a turn may occur. I also have projections in the 1210 area, 1350 area, and Jguitarslim has a projection to 1500 that may or may not get hit.

I think I agree with J that this may just be a pullback into Dec with potential top next year. Mid Jan to early Feb of 2010 shows up as very important timing for a potential top (which may be higher, lower, or a double top) in my work.

Lastly, 97% bulls is the highest reading ever recorded in the Daily Sentiment Index for gold. However, the top in the bond blow-off last December registered 99% bulls for 2 weeks before that market ultimately peaked and collapsed. So the sentiment can get more extreme, but it is dangerously high right now.

Kimston

go ahead trade on sentiment!
while i agree we are in resistance
selling short the prevailing trend is no way to get rich
take a look @the forbes 400
1300 by the 1st quarter, your #s are very imaginative.
when the broads top, there will be a correction and i suspect that happens next year
all the best
dharma

[Kimston]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson
your view is refreshing: and we all remember how your last major short foray was a home run

Dougie,
When I shorted the 2008 top in gold, I recall getting stopped out twice for fairly small losses before catching the move down. Picking the top of a blow-off move is very difficult but also very profitable once the market peaks and collapses. One has to plan on it taking several tries when dealing with a lot of leverage. I think I got stopped out three times in the crude oil blow-off before that market collapsed. So far on the current gold rally I've been stopped once and wouldn't be surprised at all if I get stopped out several more times. The 1151 area is just a projection point where a turn may occur. I also have projections in the 1210 area, 1350 area, and Jguitarslim has a projection to 1500 that may or may not get hit.

I think I agree with J that this may just be a pullback into Dec with potential top next year. Mid Jan to early Feb of 2010 shows up as very important timing for a potential top (which may be higher, lower, or a double top) in my work.

Lastly, 97% bulls is the highest reading ever recorded in the Daily Sentiment Index for gold. However, the top in the bond blow-off last December registered 99% bulls for 2 weeks before that market ultimately peaked and collapsed. So the sentiment can get more extreme, but it is dangerously high right now.

Kimston

go ahead trade on sentiment!
while i agree we are in resistance
selling short the prevailing trend is no way to get rich
take a look @the forbes 400
1300 by the 1st quarter, your #s are very imaginative.
when the broads top, there will be a correction and i suspect that happens next year
all the best
dharma

Ignorance of sentiment will not be bliss when a prevailing trend turns into a blow-off followed by a full retracement. In my 30 years of trading stocks and commodities, some of my biggest windfalls have been from identifying blow-off patterns and the sentiment that inevitably comes them, and then shorting via options. The prevailing trend was up for gold into Mar 2008. I stopped out of a few attempts at shorting futures, but started accumulating puts in Feb and made over 400% on that trade. I may be early on this one as well, but I think the April puts will probably be enough time. Targets of 1210, 1350, 1500 and probably higher are fair game if we match the crude oil blow-off. As I mentioned it's a moderate size trade. I'm more focused on getting short the broad market with Sep and Dec 2010 puts for a position trade.

party on....

Kimston

[swanstkdh]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson
your view is refreshing: and we all remember how your last major short foray was a home run

Dougie,
When I shorted the 2008 top in gold, I recall getting stopped out twice for fairly small losses before catching the move down. Picking the top of a blow-off move is very difficult but also very profitable once the market peaks and collapses. One has to plan on it taking several tries when dealing with a lot of leverage. I think I got stopped out three times in the crude oil blow-off before that market collapsed. So far on the current gold rally I've been stopped once and wouldn't be surprised at all if I get stopped out several more times. The 1151 area is just a projection point where a turn may occur. I also have projections in the 1210 area, 1350 area, and Jguitarslim has a projection to 1500 that may or may not get hit.

I think I agree with J that this may just be a pullback into Dec with potential top next year. Mid Jan to early Feb of 2010 shows up as very important timing for a potential top (which may be higher, lower, or a double top) in my work.

Lastly, 97% bulls is the highest reading ever recorded in the Daily Sentiment Index for gold. However, the top in the bond blow-off last December registered 99% bulls for 2 weeks before that market ultimately peaked and collapsed. So the sentiment can get more extreme, but it is dangerously high right now.

Kimston

go ahead trade on sentiment!
while i agree we are in resistance
selling short the prevailing trend is no way to get rich
take a look @the forbes 400
1300 by the 1st quarter, your #s are very imaginative.
when the broads top, there will be a correction and i suspect that happens next year
all the best
dharma

[swanstkdh]

runaway market is all I can say

[dharma]

thanks Kimston: as far as i can tell very few are prediciting such a stepp pullback: most thinking that 1000 is the proven floor in here, with chinese and indian buying plus the large hedgies like paulson
your view is refreshing: and we all remember how your last major short foray was a home run

Dougie,
When I shorted the 2008 top in gold, I recall getting stopped out twice for fairly small losses before catching the move down. Picking the top of a blow-off move is very difficult but also very profitable once the market peaks and collapses. One has to plan on it taking several tries when dealing with a lot of leverage. I think I got stopped out three times in the crude oil blow-off before that market collapsed. So far on the current gold rally I've been stopped once and wouldn't be surprised at all if I get stopped out several more times. The 1151 area is just a projection point where a turn may occur. I also have projections in the 1210 area, 1350 area, and Jguitarslim has a projection to 1500 that may or may not get hit.

I think I agree with J that this may just be a pullback into Dec with potential top next year. Mid Jan to early Feb of 2010 shows up as very important timing for a potential top (which may be higher, lower, or a double top) in my work.

Lastly, 97% bulls is the highest reading ever recorded in the Daily Sentiment Index for gold. However, the top in the bond blow-off last December registered 99% bulls for 2 weeks before that market ultimately peaked and collapsed. So the sentiment can get more extreme, but it is dangerously high right now.

Kimston

go ahead trade on sentiment!
while i agree we are in resistance
selling short the prevailing trend is no way to get rich
take a look @the forbes 400
1300 by the 1st quarter, your #s are very imaginative.
when the broads top, there will be a correction and i suspect that happens next year
all the best
dharma

Ignorance of sentiment will not be bliss when a prevailing trend turns into a blow-off followed by a full retracement. In my 30 years of trading stocks and commodities, some of my biggest windfalls have been from identifying blow-off patterns and the sentiment that inevitably comes them, and then shorting via options. The prevailing trend was up for gold into Mar 2008. I stopped out of a few attempts at shorting futures, but started accumulating puts in Feb and made over 400% on that trade. I may be early on this one as well, but I think the April puts will probably be enough time. Targets of 1210, 1350, 1500 and probably higher are fair game if we match the crude oil blow-off. As I mentioned it's a moderate size trade. I'm more focused on getting short the broad market with Sep and Dec 2010 puts for a position trade.

party on....

Kimston

i thought you were experienced! and you are.
you live dangerously
and if you are correct, then you hit it outta the park
i have no doubt that we will put in a top in the 1st quarter, and maybe even out to april. and then a larger correction.
this market has much expression left. not even a limit up day yet.
i believe this is about lack of trust in government. and it will take on a life of its own
all the best
dharma