Sunday pre-game, 7/15/2012

Hello friends. 
The monthly gold chart didn't fail me again. Once again, brown dotted line signalled buy…



 ... and the 40-day EMA signalled sell:




Gold in euros (weekly) held nicely:



I'm thinking August will be the month to open up more aggressive long positions in the metals, including silver for the first time in a long time. Look at the linear long term daily silver chart. Note we didn't go down all the way to the black line at ~$26 during the latest sell-off. If the ~$22 level isn't hit in the next few weeks, I don't think it will be. Especially since the top of the red dotted descending wedge is now well under $30 and shouldn't be too hard to clear. Of course events will always trump mere charts, but since we can't predict events, going by charts is the best we can do.




Also, the linear gold-silver ratio has hit resistance and is still near 60, a level which I don't think is sustainable.


The "10 yr yields in silver" chart still looks primed for a fall to the bottom of the purple channel, if you ask me. 


Note the new support trend lines on the $GOLD:$$CRB and $GOLD:$CCI charts:




4 comments:

Jeanne d'Arc said...

Nice chart porn as always, GM. On the GSR chart, though, I wonder if you might be jumping the gun a bit. If one were to redraw the top line so that it were parallel with the lower line, then there'd still be some way to go before swapping gold ottomans for silver ottomans would look like a good trade...

For the gold:CCI chart - if gold is going to appreciate against other commodities, then what does that mean for gold miners? Do they benefit from a rise in the spot gold price, or are they punished by a general sell off in mining equities? And if not, what about miners that do a bit of both, such as Rio Tinto?

Just a few thoughts on a Saturday evening. JdA

GM Jenkins said...

Hmm... you could be right about the HST, JdA - I drew parallel lines to the bottom line and you get an interesting pattern which I'll save for next week. Still, the line I drew connects two double taps (for lack of a better word), one in 2008, one now, so it's worth keeping an eye on. . .

Re: miners. I don't even think of fundamentals with the miners. I've heard 10 different fundamentals-based arguments for why they're gonna tank (e.g. Victor's nationalization argument) to why they're gonna massively outperform gold (e.g. easy entry for those who missed the smart money bullion accumulation stage), that I have no clue. Maybe this is a reason why charts might actually work. Unfortunately, the charts are pretty ambiguous too.

GM Jenkins said...

GSR not HST ... wtf?

Funky Tape said...

Awfully quiet here. It's almost like there's a wedge within a wedge within a wedge, both literally and metaphorically. Maybe something's about to happen? ;)