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Gary Tanashian is proprietor of and Actionable, hype-free technical, macro economic and sentiment analysis is provided in the premium market report 'Notes From the Rabbit Hole' ( Complimentary analysis and commentary is available at the... More
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  • Gold 'Channel Buster' Up, Now Going Parabolic Up 3 comments
    Aug 22, 2011 4:19 PM | about stocks: GLD, SLV

    Gold proxy GLD is in the top panel, silver proxy SLV is in the bottom one.  A tale of two parabolas.  Mark at IKN informs readers this week that yes, gold is in a bubble (I agree) and no, he does not know where it will end (me neither).

    If silver is any guide, gold can take a hit at any time now (remember the sentiment chart shown last week?) but it is not likely to be terminal.  Yet, being a bottom feeder, I am uncomfortable with upside turbo momentum, but I will try to deal with it. ;-)

    Actually, inflation adjusted targets for gold remain well higher in the mid 2000's.  But anyone in their right mind is not buying bullion today with all the other knee jerks and thinking they are setting themselves up for grand profits in some kind of play.  Anyone chasing this thing here is setting up for heartbreak if they are falling victim to the shear momo that is in effect.

    But again, as to the comparison with silver, gold looks to have only just begun what promises to be an exiting ride filled with jaw dropping ups and neck snapping downs.  To think, NFTRH had been managing a nice comfy journey through the nice comfy up channel until a weekly MACD signal (not shown on this chart) we had been watching triggered the hysterics currently in play.

    It was another of those 'if/then' statements as in "if gold does not correct at the upper line of the channel... then the 1.5 year long MACD 'platform' will have proven to be a launch pad to a channel buster up and much higher levels."

    Stocks: GLD, SLV
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Comments (3)
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  • winningtrader
    , contributor
    Comments (2459) | Send Message
    Wrong analysis. The reason gold is going up is because of QE. This is now being done in Japan, Europe and Switzerland. There is a chance that the UK will do another one as well. The chance that the US is going to be far behind is really slim. Of course, if they print another 1-2 trillion dollars, the price of gold is going to go up. This is pure inflation and has nothing to do with gold itself. Gold is a currency that cannot be printed and is likely to perform well in this scenario.
    22 Aug 2011, 07:02 PM Reply Like
  • Gary Tanashian
    , contributor
    Comments (99) | Send Message
    Author’s reply » Well, how wrong is the analysis now sir? The 'knee jerks' are washed out of gold and the risk vs. reward proposition is pristine once again (see public opinion & CoT structures). "QE" this... "if they print another 1-2 trillion" that... this kind of justification for momentum always gets punished.
    6 Oct 2011, 06:51 AM Reply Like
  • winningtrader
    , contributor
    Comments (2459) | Send Message
    Hello, your timing was good - no doubt about that. I do stand by my statement that QE (aka money printing) moves gold higher over time. The FED decided not to announce QE3 and gold (as well as other assets) dropped. I would say that some of the rally in gold was due to expectation of a new large QE program and as that didn't happen, gold sold off. You were correct that the sharp rally had left it exposed to a correction.
    6 Oct 2011, 09:29 AM Reply Like
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