How about Silver crowns?
We trade prices: SLW is in the mid 20's daily RSI. Not a minor, but isn't it weak enough?

Good call Bill! I was lucky enought to get onto the gold pullback at 705, but I don't see any support for it around these levels.

The only support (from what I see) is $572, and then the 200 day ma at around $530. I am looking to get in long but wouldn't want to do so before at least 575.

I see a multi year trend line support at $452, if it goes down there I will be re-mortgaging my house to go long...

Thanks for the great tips!

MarkM-

Have the stars aligned?

XAU RSI <30
XAU:GLD @.2036
Rydex P Mtls assets say the 'heat' is off
CEF down to 1% premium to NAV
Simmons Indicator activated last night

Cramer. I didn't hear the whole thing but while I was in the car I heard worried callers on: EZM, KRY, GG, ATI, CBOT. To me this is like a brokers clients all calling in for hand holding- the same day.

I said this morning at 6am that the set-up was right for gold to be taken down today.....

Back later.

Okay, I've re-entered the gold trade and will watch carefully to see whether I need to put the pedal to the metal.

Bill, Good timing – again…

Gold is completing a retracement to the 38% Fibonacci lines of the 200$ move since the march bottom. Wave 1 0f 3 was completed (~730$). What are your thought about buying gold coins just in case something go wrong with futures contracts?
Can you elaborate more about "The end game for central banker"s ?

Regarding gold miners – I think the political risk will be increasing as the price will go up.

see FCX story - http://goldandsilverstocks.blogspot.com

All the best!

Guys-

I am sorry I was not able to post during all that. I had NO INTERNET CONNECTION and was about to drive to a hot spot to check on news as this morning I thought today might be the day. (Check my post at 6:02am). Right now they are testing that first support again that g034 and I have talked about. If they pierce it decisively in my opinion next support is 640. After that it's all the way back at 575-580.

Plan your trade. Trade your plan!

MarkM- OT

If fear continues to rise expect PG to outperform. When long only managers do a search for BIG CAP; HIGH CREDIT QUALITY (S&P A); HIGH PREDICTABILITY; and LOW BETA (.1!)... PG will be high on that list. (They gotta hide someplace.)

Note that PG outperformed nicely 1Q2000 to 4Q2002.

long: PG

Nibbling. BGO, IVN, KBX, SU. Just dipping the toes, so to speak. If GLD support doesn't hold, will look to nibble some more...

stockman-

Agreed. I partially hedged at 62. :)

Same as the BRK analysis. I have BRK up on my screen as a "tell". I thought The Boys were taking down BRK and healthcare at the same time so that they could rebuy at low prices when the sh#t hit the fan. At least that's what I suspected....

Last hour before the weekend along with expiration---could be interesting fireworks!

Bill should just about be coming out of his original medication then.

Someone asked me (elsewhere) whether I saw the positive divergences this time from the miners and that's why I entered today (like I did in March). The answer is "No". Gold got pounded; the miners got pounded. SOME of the names were holding up b/c they were ALREADY pounded. However I saw RSIs (as did stockman) that were ridiculously low and went long some names that were 30 and under. I am fully prepared that this entry goes under water. If it does, it won't be by much.

Two days ago we were "debating" catching falling knives. Bill had to step in. Since that "discussion" some of those names fell 8-10%. That is why you listen to Bill. If you want to listen to my musings, fine, but the expert here is Bill. g034 has some great takes too and so does stockman. (If I am leaving out a name or two I apologize)

Maybe gold holds up here. It may test 640. I don't think it's retracing to 575 area. Too much going on in its favor. Stagflation is coming. That was yesterday's news from the bond market. Gold should do very well.

I think chasing gold here is a greater fools game. And one expensive trip to the dentist. I'd recommend a composite for the dental work, btw.

muckdog-

That's what makes a trade. I'll copy this post and yours at The Big Picture since you are out today running contra to both host's opinions and analysis. I'll check it in a few months to see how it comes out. How far did you say this bull is gonna run?

Things are turning a bit... Some miners now positive on the day.

Boy did I learn a lesson the past couple weeks!!! Got burned badly after chasing energy and Teck C. after watching ROB Entertainment TV.

Before coming here, I would have been holding my knees, rocking myself in a corner. To share a couple of novice lessons I learned:
- Watch the RSI. They don't lie.
- Plan your trade and trade your plans!
- Level the emotions - my biggest drawback (sadly fear and greed.)

Just thinking out loud...

As Dave has observed, we're experiencing a very strong ratio change in GLD:XAU. Now at 2.13. All occured since 11am. That is a very positive sign. A 'free and clear" would be a daily retest and hold of this area and the miners acting well as it happens, IMO.

BTW, the same happened in the oils. Recovery started at 11am or so.

Afternoon all,

I've lurked for some time and done a lot of studying of the education portions of Bill's site as well as his links elsewhere. Thank you again Bill. I just wanted to extend a thank you to everyone who has taken that extra step to put their discussion in simple terms. Especially when you show how to make practical use of you commentary with clearly defined accumulation points and targets. I'm a student and reading the thought process that you all are going through goes a long way to further my edcuation.

Thanks again to all.

I believe the miners just finished wave A down of an expected ABC correction. Am long GG, ABX, and RGLD (purchased today on the opening-a little early). GLD looks like it needs to trade towards 60-61; miners did not confirm new high in GLD, but should now outperform GLD. If GLD goes down as anticipated will purchase calls options on select miners for expected rally. Does anybody else think TLT looks good for contra trend long? Sentiment lousy and price action has recently improved. Could see a "flight to quality trade" as long SPX traders switch to the safer and now higher yielding bonds. Looking for a two to three point bounce before the bear reasserts himself. Longer term, 4 year cycle looks to have turned down and shorting equity rallies should be very profitable til the end of the year. Despite what the talking heads lead you to believe there is no fear in the air- VIX reading will have to at least double before the risk premium even comes close to capitulation levels.

This question is for anyone who has some experience with the junior gold miners:

How do you pick between these companies if you don't have cash enough to trade them as a basket of stocks? GSS, HL, KRY, MNG, MRB, NSU, NTO, NXG, OZN, SA, TGB, and TRE have been mentioned here in the past few months. Bill has also suggested to dip our toes into the water now that we're 20-30% pulled back in many of the miners.

Technically, they all look very similar on RSI 7, 14, MACD 12,26,9, CCI 20, and relative to their 50 day SMA. Most of their mines are in developing countries, many of them in stable areas. I'm just trying to learn how to differentiate between them if I want to trade maybe 3 or 4 of them.

Has this been discussed in the past? If so, I can go find the article, but nothing came up in a preliminary search. Any suggestions or guidance would be appreciated.

Hi Fazeli,

This is only my opinion, and I've been losing my shirt on energy, :) so take it with a grain of salt.

Many juniors are real dogs, and have no real production. Since I'm an not an expert, I only look at a handful with actual proven reserve and/or are in production in relatively safe areas.

So not in any order, I watch AGI.to, USGL, IVN, and HRG.to. These 4, and more have been mentioned by Bill.

Putting the energy/metals complex aside for the moment, the DJ Transports (TRAN) have also led the market higher for the last year or so. Didn't hear much talk about it this week, but the TRAN is now off 9% from its all-time peak in just a matter of a couple of weeks. I never did understand the rationale for the TRAN powering up (no pun intended) with fuel cost rising and now it's falling with energy and everything else...certainly counter-intuitive. In any event, the DJ Industrials (INDU) did not confirm the all-time peak move by the trannies and doesn't look like it will. I believe this means, that by Dow Theory, we have now entered a bear market. Does anyone know if Richard Russell called a new bear this week?....I let my subscription to his newsletter lapse. Comments anyone? I'd like to get some of your thoughts.

optionoracle-

If this is A leg of ABC, did you buy to trade or hold? Why ABX if it is still unwinding hedge book? Pop once unwound?

TLT view is reasonable to me. Perhaps stockman can weigh in on that.

Agree on shortable bounce scenario too. Short market and long gold will be good "pair".

What about overseas here? If you look at recent charts the correlation is stronger than everyone is saying.

Hard to get a rally going on options expiry day because of the chop but I think the bulls have to be worried that every bump gets sold in an hour.

Fazeli-

I would go through the index under juniors for what Bill has written. I'd also study their relative strength against $GOLD or GLD. You can do this at a charting site.

Regarding the recent mega-drop post. Should a mom&pop long term investor consider moving a 401k investment into a stable value option for a couple days until things cool off due to the enhanced risk profile off the broad market in general. Or is this the bad type of market timing thinking that will get mom & pop in trouble.

TLT

I mentioned yesterday (and added exposure, having sold off a form 4 utility to fund). I am at maximum bond exposure, although I still have room to roll 1/2 out to TLT from IEF. I'll try and post this weekend on bonds... sentiment. Today was pretty busy here.

I could also explain some of my items mentioned earlier as a reason to buy metals today. I bought at open and added later in the day as things firmed up.

Simmons indicator ;-) it works til it doesn't.

Bill mentions that we are in a bear phase and I believe he is correct. That being said, why take positions now? Even in a year like 2002 (which I consider worse case for 2006) the rallies from these oversold levels were trading opportunities... but this assumes one is very liquid and paying attention. So unless one is very nimble I would agree with those that suggest cash is a safe alternative given the risk in the markets here.

stockman-

Was that directed at the Mom & Pop investment queries? (rusticuf etc)

On that point, if everyone hasn't looked at that thread who is a M&P investor, that's a good place to start. (Bill's Mom & Pop Portfolio) Some other portfolios were mentioned aslo, by me, with links in the comments. I believe all these can be passive/active managed, that is entries and exits can be timed and positions can be managed with hedging, options etc. Buy and hold for the next several years is a LOSER in my opinion especially on a real return basis. You need exposure outside the USA, you need gold, you need energy. Other interests of mine are alternative energy & water.

glenn-

Russell, with the assistance of P. Desmond of Lowry's I assume, has called a top. Confirmation was Wednesday's 90% down day.

And the silver crowns? SLW up 10% since noon. My order didn't go through :-(

Does anyone here have an opinion on the relation ship between Silver and Gold?

I didn't mean to get that far off-topic. I'm not very confident that your typical M&P has the skill required to time the cycles as recommended. I completely agree in terms of an educated investor looking for a hands off approach. In fact, the portion of the ETF section you mentioned is a great tool I've already directed several ("hands off") people to.

"Plan you dive, dive your plan" A diver's motto for trading, MarkM? Actually, the saying is relevant to many walks of life. It just reminds me of a dive boat.

On a personal level, regarding my plan, I've been a bit gunshy with my accumulation. I've admittedly been almost too anxious for the pull-back and signs of weakness that I'm doubting my buy-signals and fixating on the prospect of catching knives. Embarassingly enough, a poorly placed stop loss on IVN caused me a rather insignificant loss, but contributed further to putting me "on tilt". Granted, IVN at this point, to me, is more of a political risk play, than it is gold speculation.

ALOHA !!

I bought junior mining shares all week long, mostly on Thursday. My main picks are ECU Silver(ECUXF) and Samex(SMXMF) and Excellon(EXLLF)and Liberty Star(LBTS) ... all Canadian companies except LBTS. ECU Silver is my main holding which went up over 15% today.

I was also a buyer of silver rounds in the mid $12s ...

Just a reminder ... the point of dips is to buy them not time them.

I see the downside drying up to done ...

Rusticuf-

If you are just going to diversify among asset classes and buy and hold, expecting returns to be average and that is okay with you, then the kind of mix that advisors like academic research-oriented Dimensional Funds would be attractive to you I would think. Read his stuff (www.fundsadvice.com). It is probably better than most portfolios that have WAY too much exposure to the U.S.
You are paying fees for that and someone else is making decisions, an approach Bill doesn't agree with. He believes that most can and should construct and manage their own. That's why all the tools are here and that's why Bill does what he does.

Did you read the entries for the Cara Mom & Pop Portfolio (should be on side bar) along with the ETF section? If after reading everything there you are still unsure, here's what I would do. Park your money in something safe for the year. If you believe as I do that we are headed down, park it in T bills and GLD in an 80/20 mixor whatever you are comfortable with. Or if you really aren't sure about GLD, park it in T Bills earning about 5%. Don't make any entries. Then, set up a few portfolios that you think you may like. Use all the tools to set them up that Bill has been talking about. Stockcharts, Investertech, Yahoo Finance, Excel Spreadsheets, etc Then go to Ritholtz' Apprenticed Investor series and look for his word document on "Writing It Down". It's the reasoning behind trades spelled out in a good format. Set up a trading diary. Now you are equipped for a very instructive year. Now paper trade the portfolios writing down your thinking and tracking them. Be honest! Don't erase or delete! Do it for a FULL year.And keep reading Bill's site. At the end of the year see how your tarding stacks up against your "Totally Safe" portfolio and against benchmarks such as the SP500.

It's work, I know! But it's also what you HAVE to do if you are going to manage money successfully. You then have a year of data to assess whther you think you can do it. Much better than guessing or Gee I'm not sure. You also have received a very valuable year of investing knowledge from Bill and others and you have the context (trading) in which to think about it all.

Hope this helps. Ask questions and I will try to answer. I am trying (unsuccessfully) to step back from this as I am VERY busy on some things but I happened to have picked the biggest inflexion point in the markets in the last 6 years to do so! So my "retirement" from this blog has been a disaster! And I like helping people and that's what Bill and his blog is all about.

Heard on Friday may 17 CFRA an Ottawa talk radio station that is really coming along with there financial shows, ( some really great interviews to be found here ) Gold could test 654. if it should not support 654 the next target could be 600. Remember, this would be an extreme low, the worst case scenario for this dip, after that they see only one direction for gold that being up. to where god only knows... good luck to us all this could be one wild ride.

MarkM - First off, thankyou.

I agree with your comments on how to take a passive approach if that is desired. Indeed I have read the M&P stuff and your comments below on the ETF page and passed it on to many others who lack the desire to follow their investments closely. As you know, it's a big step for some, just to get them to save at all. The next step I feel, is to convince them that leaving it in retail mutual funds suggested by a biased investment advisor isn't exactly the best approach. In most cases, I see people directed to inhouse products with outrageous fees with no thought towards considering who's best-in-class or why they are allcoated a certain way. I personally know better than to attempt to advise them personally (I don't have the expertise nor do I wish to take on that task for them) but it's times like these that makes me wonder if I should ever say something like "Hey guys, you might want to take your money off the table" until the risk profile of the broad markets cools down. That was gist of my M&P question basically.

On a personal level, since actively managing a portfolio I've treated it like a full time job. As a novice, mistakes are expected, but also worth it the cost if I can learn something from it. Accordingly, in this market, my inability to indentify proper entry has been highlighted. With the market the way it is I think I was too tight in identifying support levels and setting up stop losses in the names I was accumulating.

Recently, as I said above a normal fluctuation knocked me out of a position at a momentary low point, that ended up not being a break through support at all. No harm done really in the greater scheme of things, but I need to recall that strict risk controls and properly placed stop losses have saved me money lots of other times. And it's possible that the EV of the move was right after all, and I just caught the worst of it. But still, I want to take every chance to learn from these things.

All of this highlights another big mistake of mine: I feel that I'm way too conservative although my appetite for risk at my age is very great.

Kaimu made a great point above though, and maybe I'm trying to time something too precisely when the broader decision about whether or not I should be accumulating and which names I should be looking at is more important than timing the trade perfectly. (Bill's comment that we trade prices not stocks echos in my mind though).

Anyway, I can't thank Bill for all the free learning tools and constant mentoring, and the posters who "think out loud".

rusticuf-

I think I was addressing your question a level below your sophistication. Let me answer more directly. See if this is any better. Entries in this market are made more difficult by the market's choppiness. It's no shame being stopped out of a name. It happens all the time. Your stops are your personal risk management decisions. You can set them by %, $ amount or volatility band or any number of systems. You just have to have a rationale for setting them as you do. But I hear a tension between what you are tring to accomplish and what your results have been and that may indicate that your stops are ill-designed for your TIMEFRAME. If you are a longer term investor you neeed to give them more "play". You don't care that IMO for example is down $5 in two weeks if that is a core holding for you. It will cycle back up. You don't want to find that you are stopped out and have lost your position just because it is going through its normal cycle. But if I , for example, am ST trading that name, my stop is going to be much tighter. I may be looking for 5% in a week on the name and I can't let it drop $4 or I'll never get my target. Does that make sense? Or let's take a look at your name IVN. Well that's a name that could double by February 2007 under the right conditions. So buying at 6.95 and setting a stop of 6.75 makes no sense if I am planning to hold it that long come hell or high water. But say I was thinking gold floors and rises here until the B wave of an ABC correction comes then I have a much shorter timeframe and that tight stop makes sense.

But most people spend WAY too much time on entries and exits and far too little time on things that are more important. Risk management is the biggie. Don't lose capital! First is aligning yourself with the trend. (Warning! I think we have trend change here) Also, what sectors to be in. That's shown to be more important than stock names. The individual name gives you a little more oomph but the correct sectors are much much more important. Bill's explanations of the GICS classification system and the normalized rotation through the economic cycle is great at explaining this.

Hope this is a little more on point.

Not below my sophistication, I just asked two different questions at once.

I've been trying to process what what you've said.

With gold for instance. I believe you've expressed the opinion that long term it'll hit 750 and higher. But short term, if it pierces the 640 support level it could fall to its next support at the 585 range.

I may be off base but from this I deduct:

635 --> 575 is much more likely than
655 --> 595

Thus if I start accumulating gold now at 655 because it is, of course, at a bargain to my long term expectation of 750-1000. But in the short term I feel my downside is 20 to 635. If it pierces 640, I feel that risk of another 10% retrace to 585 is much more likely and don't want to be on the ride anymore until that retracement plays out.

Does this setup place entirely too much importance on recognizing 640 as a valid support level and the likelihood of further retracement to 585 if 640 is indeed pierced?

rusticuf-

I think you'll appreciate the fact that I can't give advice. Every trade is your own. But to answer your question, yes, it does. You have to have a system and faith in the system or else you really are guessing or throwing darts.

In this case, the system is technical analysis. The little lines I am reading are traders decisions. Buying and selling. Volumes. Momentum.

Resistance at a level means some heavy thinking was going on and quite a few decisions were made pro and con before one side capitulated. Also, since a lot of gold is traded in eastern markets I know that Fibonnacci levels are important. Why? Because that's the way a lot of those markets trade. So if I see the intersection of chart resistance and Fib levels well that may be important to me. Here I believe the GLD 64-65 area is such an area. I am not alone in this. Psychologically the 600 area is important but I don't see any chart support there (traders decisions)so I have little faith in it. I see a lot of congestion at the 575-585 level (trading) so when that point is reached I believe a lot of people will take that trade again (support).

So yes I am placing a lot of importance on that area but that's my system for trading it and I have to stick with it. When I have violated my system I have ended up getting burned or "running in between the cars" as I put high risk entries. It is NOT fun. Very tiring.

Thanks again. We use specific examples for simplicity, but your focus (and Bill's) is on the how and why and not the what. Specifically what to do in a singular situation has some use, but the real value is the thought that goes in to the how and why.

If I wanted stock picks, I'd be somewhere else and I'd start all my questions with "Booyah".