YeOldGoldNugget's Blog Spot: Crisis

Showing posts with label Crisis. Show all posts

Saturday, November 7, 2009

Gold Breaking Out of Upper Trend Channel

By 79Atoms on Saturday, November 07, 2009

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

Lets start by taking a look at the daily chart of gold. As you'll notice I've marked some important highlights on the chart. The bigger, the upper and the lower trend channel are of importance. I've only ever seen others using the lower channel and that is something that I do not get? Why limit yourself, why limit gold in such a narrow space while the last couple of months have shown and proven that gold is ready and has been ready since 2008 to get into a higher trend channel. The lower and center one just...

DO NOT QUALIFY ANYMORE!

I think we have passed that time frame. When I wrote my article at the beginning of October 2009 I was not kidding with the Neon signs.

You can see from the chart why I started using the bigger trend channel. If you take a look at December 2008 you'll see gold made 2 runs for the upper trend line. After the first rally gold consolidated to the 10 MA line and after the second rally gold consolidated to the lowest trend line. From that point which is around January 15, 2009 gold starts to move to the upper trend line and hitting the upper trend line the 23th of January. If you look closer you'll see from that moment that gold keeps trading on or around that upper trend line and does so till we reach February the 10th, 2009.

Johnson Matthey 1-Kilo Gold Bars - Copyright © 2009 Northwest Territorial Mint

Gold then again rallies further above the upper trend line before hitting a high of about 1006 on February the 20th, 2009. It then drops to...AGAIN...the upper trend line and keeps trading at that level for several days until we hit March the 19th, 2009 and reach a point where gold makes a drop towards the lowest trend line. It then plays a bit with the lower trend channel and reaches a low at April the 19th, 2009. Gold starts to rise again and this time back to the upper trend line. It does so, not in a straight line up but with a lot of trading around the center or rather the upper trend line of the lower trend channel.

Gold reaches the upper trend line around the start of June 2009. It then drops again with as target the lowest trend line but only drops after maintaining a 15 day close contact with the center trend line before saying goodbye to it and at the start of July 2009 we see gold moving away and dropping towards the lowest trend line and hitting that, July the 12th, 2009.

From this moment, July the 12th, 2009 could very well be the last time gold is trading in this lower trend channel and thus the lower prices. As you will see from the start of September 2009 there is a break from the lowest trend line, keeping tight contact with the center line before reaching October 2009 and making a break for the upper trend line, consolidating only once in the process. That happened just last week and now we're already firmly back at the upper trend line and as of November 3, 2009 we have broken the upper trend line and have kept above it for 3 days now.

MACD looks good. You'll see that MACD keeps making higher and higher bottoms which is very bullish to put it mildly. RSI only just reached overbought but as you can see and as I've explained before, gold can stay in overbought zone for days and weeks on end. When fundamentals are strong then forget about looking at RSI, better then to look at Stochastics. To each their own of course. Whatever works for you.

Let me continue with the weekly chart.

Gold Spot Weekly Chart

Gold Spot Weekly Chart November 06, 2009

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

OK, the weekly chart, this is where we establish and confirm the trend AND direction. Read the highlights and then tell me what you think what all that means and where you reckon gold will go to next? Up or down? 1500 or 750? Who's with me on the 1500? You'll see from the start that September 2007 gold started rallying and didn't stop until it gained...

A WHOPPING 350 POINTS

That brings us to the big consolidation starting around mid March 2008 and bottoming out at the height of our crisis in October 2008. You will remember remember, the 5th of November 2008 or rather the months when all the stimulus package were announced and in fact the very same months that the printing presses were doing overtime.

Sure, it has been a bumpy ride but if you look from the weekly chart, gold not only broke out of our weird Elephant man's right shoulder at the beginning of October 2009 but gold also remained firmly held between the trend lines of the greater trend channel and has since this week broken the upper trend line and is holding above it.

Now, does YeOldGoldNugget dare to say that we are now again at a possible breaking point?

YOU BET YA

Maybe something like what happened at the start of October 2009, maybe a bigger move? Will that rally start right now or will we first make a consolidation? Who knows? One thing I do know, time to go short or bet against rising prices,...probably not THE smartest of things to do right now. If not something you take from this article then maybe this would be a good one to remember.

Also, one of the things most people throw around as argument, or basically because they really don't get it, anyway, it goes like this, 'Gold is just another bubble'...is what they say.

You know what YeOldGoldNugget says about that?

I'd say we are about this far in our bubble (See image for visual representation). Oh, Oh, Oh, but but...is how it goes when I counter argument them...before they slam another totally idiotic remark my way.

You really have to be sitting down before you read this, better yet, secure yourself firmly to your seat before reading their next moronic argument. Ready for it?

Just see what happened to oil when it reached $147!

Yeah yeah, that might very well be about oil being a bubble, but comparing gold to oil? Comparing gold, a substance which is so rare, which has been used throughout ages and centuries as a precious commodity and a means of preserving wealth. A substance which not only is rare but is rare for a very specific and just meaning. Gold is not formed on this planet, it is formed in our universe. Also, when I say universe I'm actually undervaluing the rarity.

Gold is not just created in the universe, for gold to come into existence, enormous forces are required. Not even the forces of nuclear fusion working frantically in the center of stars suffice for gold's needed reaction to happen. No! For that to happen we need our stars to go SUPERNOVA!

Only then are circumstances at an ideal for gold to be formed. And no, YeOldGoldNugget is not sucking this one from his thumb. There are some great study's which have been done about the necessary requirements to create gold.

Well, don't know whether you heard the story about turning lead into gold? Turns out those alchemists or transmutationists of back in the days might have not been that stupid at all...at least not in their thinking pattern. Turns out they started with the wrong compound - and a tad short on the required energy - but were right about the process being a possibility. It is thus actually possible to create gold on this planet. Not by using lead mind you but by using an isotope like mercury.

And that is just the start of your efforts, that was the cheapest part by the way, the mercury. However, mercury or Hg as its known from the periodic table has 80 protons. Gold or Au has 79 protons. So, mercury seems to have one proton to many! But since it is the closest family to gold, a prime candidate for our experiment. Sadly, to get mercury to ditch its 80th proton we need a process called electron capture which is performed in a nuclear accelerator. Bombarding our mercury with enough high-energy neutrons will do just that...leaving us with pure gold!

So yes, those alchemists were quite right, however, turns out if they were looking to create a penny's worth of gold from mercury it would take them and are you ready for this... 1,000,000,000,000,000,000,000,000 years. I do not take credit for the calculation, for that you need to contact Barry L. Berman who is a physicist at George Washington University.

Oh oh oh, I hear, and what about gold's other closest family in the periodic table. 'Left' next to gold so to speak. Who is Mr. Proton 78 looking to trans mutate into Mr. Proton 79? Well, turns out its quite a familiar presence.

Meet Mr. Platinum! Trading at or about $1340. Hm? Using something which is valued at $1340 to create something which is -now- valued at $1090? Well, it is scientifically possible but needless to say...even costlier than using mercury.

This following calculation was found on the Cosmic Conservative website.

The best estimates I’ve seen put the total weight of gold ever mined to be about 160,000 tonnes. A tonne is 1,000 kilograms, so that’s 160,000,000 kilograms. Gold weighs 19.3 grams per mililiter. A mililiter is one cubic centimeter. 160,000,000 kilograms is 160,000,000,000 grams. Which comes to roughly 8,300,000,000 cubic centimeters. There are 1,000,000 cubic centimeters in a cubic meter, so that means the volume of all the gold ever mined is about 8,300 cubic meters of gold. That’s roughly a cube of solid gold 20 meters on a side, or about 65 feet on a side.

In other words, all of the gold ever mined in the history of the earth would fit in a moderately sized house.

So, whenever you hear someone mentioning those two ridiculous claims towards gold then you'll know what to tell them! Comparing oil, a mix of naturally occurring organic compounds from within our earth and which are basically made up of nothing more than hydrogen, carbon and oxygen...TO GOLD? Heretics! The nerve of some people! Any reason is reason enough to drag gold down I suppose. Good luck with that trading strategy in the coming years ROLF :-)

YeOldGoldNugget's links of interest

Saturday, October 31, 2009

G for Gold and back with a Vengeance

By 79Atoms on Saturday, October 31, 2009

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

Lots and lots of comments on this chart today. BelieVe you me, I could haVe gone on and on with this chart. HoweVer, I got tired of doing so and I preferred the lazy way of adding an 'and on and on...' comment on the chart. I'm sure you get the picture, our Earth has many countries, take your pick and put it on the chart. Oh, and also, please don't feel left out if I'Ve not included your own countries debt on the chart. Trust me howeVer on this, those debts are there as the chart aboVe should haVe anywhere from 193 to 250 comments on it depending on who's doing the counting, country-wise that is.

I'Ve added my own trend lines on there, at least how I think they should be drawn. Well anyway, it paints a pretty clear picture between a downtrend and an uptrend wouldn't you say? On the chart you can clearly see that since late February 2008 gold began on its downward trending moVe. It broke out through the upper trend line in early July 2008 but the fundamentals were not there at that time for it to go higher and we fell down back into our trend pattern and from there on it went all the way down to the lower trend line.

Then September 2008 came, already known to be one of the better months for gold and like times before, gold made another break for it and made a massiVe rally and on that September the 17th, gold increased by oVer $100 in a single day of trading. All was looking well for gold until the crisis happened in October 2008. MassiVe panic across all the boards and heaVy selling ensued. Gold was also heaVy hit and fell in a matter of a few trading days from a high of about 927 to about 698.

But then NoVember came, remember remember the 5th of NoVember! In our case, remembering just the NoVember part of it would suffice. Time wise we are then at a moment were the crisis has just happened and countries are slowly beginning to reVeal their stimulus packages. To me that is indeed our V-moment in time.

Before I continue, take a moment to watch this small clip of what is in my opinion one of the greatest moVies eVer made, V for Vendetta.

In the moVie, the script goes like this.

V:People should not be afraid of their goVernments. GoVernments should be afraid of their people.

E:And you're going to make that happen by blowing up a building?

V: The building is a symbol. As is the act of destroying it. Alone a symbol is meaningless. But with enough people, blowing up a building can change the world.

Until only a little while ago most could only eVer dream of gold prices reaching this far and mind you, not only reaching, but holding. Beginning October 2008, V was finishing of his last final preparations for his big day. Last NoVember 2008, In the wake of the announcements of the stimulus packages by countries around the world the gold cap was finally blasted to obliVion. This was indeed through a single eVent, like blowing up parliament was in V for Vendetta, this also goes for the mental gold cap at 1000 and no more. That has now gone and changed to

a 1000 and oh my God...how much more?

Well, lots more, sure I can do a complete roundup of each and eVery country and how much they, through their actions, might haVe added to the price of gold but that would take me for ages and would result in guesstimates.

All in all, what this says and I will make it Very clear, before October 2008 bullion banks had a free to act, wild west attitude, thinking they could get away with eVerything in shorting gold and keeping it tightly beneath a 1000. It didn't really matter whether they could deliVer the gold they were short coVering or not, they just added to the shorts and scared the other side into taking losses.

Now howeVer, they stand to loose so much more when they get caught in the act, I'd say in the current climate going short as big bullion banks do, we are bound to see the emperor without clothes sooner rather than later. When we do, picture equals not Very pretty!

YeOldGoldNugget's links of interest

Sunday, October 25, 2009

Orko Silver Chart October 23, 2009

By 79Atoms on Sunday, October 25, 2009

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

Last Friday was another great day for Orko Silver. Sure we closed lower at 0.960 +0.010 (1.05%) after opening higher at 0.98 but that doesn't really matter that much considering the increased volume we had on Friday. A lot of buying at 0.95 and 0.96 adding more weight to the bottom Orko Silver is building around the 0.90 area.

We still need more confirmation and thus preferably another day in the green. Will we get one, based on today's trading I'd say yes.

Next weeks trading will be the last week of October and we are getting nearer to a possible news release from Orko Silver. Rumors go that the release will be good but until I see it verified I will have to treat them as such, mere rumors.

We are still trading at or above the 10 Moving Average. The volume is good, RSI looks good, MACD could turn up any time, still trading above the center line so trend is still up. Gold and silver look ready to start moving again, possible news coming in the week or weeks ahead, continued drilling,...anyone please clue me in on where the downside is from here??

S&P/TSX Venture Composite Index Daily Chart

Chart is courtesy of marketclub.
Marketclub - S&P/TSX Venture Composite Index Trend Analysis.

I thought today why not post a chart from the index in which Orko Silver is included. I will try from time to time to include this chart if and when I feel their is a need to. Doing charts is very time consuming so I expect those reviews to be mostly on a weekly basis.

The S&P/TSX Venture Composite Index as it is called is as you can see from the chart only half way up from its earlier high of 2600.

The Venture index was already dropping since July 2008 and if you compare to the gold chart I post below you'll see that gold since mid July 2008 tried for another attempt at the 1000 but fell short and started trading downwards and fell about 200 dollars until we hit September 2008.

Then the crisis 'officially' happened October 2008, by that moment the Venture index had already fallen from 2600 to about 1400. Couple months further in early December 2008, the 5th to be more specific, we put our low of 978.62 on the boards. At the moment October 2009 we are back around 1330 and looking at other indexes I'd say our precious Venture index still has a long way to go.

What was the saying again, buy low, sell high?

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

As most everyone here knows, March 17, 2008 we hit our then all time high for gold of about 1033. Since the fundamentals then were not that strong as they are now, golds hold above 1000 was over in just a few days. The second attempt in July 2008 didn't manage to get over a 1000 and saw us heading further down from there. The real second attempt to break and hold above 1000 came in February 2009. The breaking part was successful, the holding part however wasn't!

So, to summarize, that gives us :

March 2008, one attempt and successful in holding for a few days
July 2008, one attempt and failure to reach 1000
February 2009, one attempt and successful in holding for a mere day

Now, looking back at where we are now and looking back at what is on the books I'd say a MAJOR change has happened. Fundamentally and psychologically.

Psychologically, the longer gold stays above 1000 and higher, the more the mindset changes. What once was deemed expensive now turns to being considered as cheap. Now mind you, in my opinion that moment has not yet been reached but things are looking very promising. That goes for gold, silver, and the commodities markets!