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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • Gold And Silver - All Fundamentals/Opinios Are Useless 0 comments
    Jan 26, 2013 5:36 PM

    Saturday 26 January 2013

    All general statements are untrue, [including the one above and this one]. There are exceptions to every general rule, so they cannot
    always be true.

    There is truth to the consideration that all fundamentals/opinions
    are useless in the markets, as they pertain to timing, and timing
    plays a huge role when investing/trading. What fundamentals or opinions do is put one's belief system into a context with regard to
    the market[s]. If one wants to profit from any belief, he/she is then
    pitted against the forces of the marketplace in their exercise.

    If you know about the fundamentals, to whatever degree you
    believe, and/or if you have an opinion, from whatever source and
    however reliable or not, the question then becomes, "What are you
    going to do about it?" Our premise topic, fundamentals and opinions
    are useless, goes back to what we have stated before:

    It does not matter what others say about the market; what
    matters is what the market says about
    others.

    People are drawn to articles/information that reinforces their beliefs. Markets force people to put aside their bias and deal with what is,
    or else deal with the consequences if the bias/belief is in conflict.
    The market is, and always will be, the final arbiter of all "facts" and
    "opinions."

    The market is composed of all the known [and not so well-known]
    facts that affect supply and demand. "The gold held in New York
    and London is/may be gone." Fact or fiction? The Fed and London
    ain't telling, or what they are telling is that "belief" is untrue. Fiat currencies are being created at unprecedented levels. We all know
    that is a fact, and many believe gold and silver will/should recognize that fact and be priced accordingly, [but are not]. The supply and
    demand fundamentals for silver are incredibly bullish. Few can deny
    that, the few being the Fed and JPM, et al.

    The market knows all of this! Yet, the price of both gold and silver are languishing in protracted trading ranges. So how valuable are
    the fundamentals or opinions about gold going to $5,000, or silver to $400, [pick your own number, as most undoubtedly have one]?

    For right now, and for the pat 18 months or so, the best information in the world, the strongest opinions held have been "useless." The
    charts, [the market translated into a visual format], reflect the
    trading ranges, and current prices are just about dead center within them. The middle of a trading range is where the level of knowledge
    is at its lowest. It is a coin toss. Price can rally to the top of the
    range and still fail, or it can decline to the bottom of the range and
    fail to go lower. Flip a coin!

    Whatever your opinion of where the price of gold and/or silver
    should be, this is what the market is saying about your "belief/opinion:"

    [Monthly charts are not included as the month ends next week, and those charts will be included next week. The discussion for gold is
    more general, and a little more detail is given in the silver charts, as
    both are similar.]

    The market is showing price to be in the middle of a lengthy trading
    range, [TR], and until the TR is broken, up or down, one is spinning
    wheels in between. Last week, we showed how the clustering of
    closes could signify support and a rally, or a pause before
    continuing lower. The gold "rally" fizzled and has retraced back to
    the clustering. Will it continue to act as support, or fail?

    Not only is gold in the middle of the TR, it is also in the middle of a
    down channel. It is anyone's guess for now.

    Let us add that the fundamentals are incredibly bullish, and within
    that context, we continue to advocate buying the physical at any
    price, and buy consistently. Our analysis pertains to trading/buying
    the futures. Regardless of the bullish context of the fundamentals,
    the market is saying, "Not right now." Until price rallies above
    $1,800, it is not going reach whatever future expectation one may
    have, which is all we are saying. For timing, any/all fundamental
    considerations are useless. For positioning one's self in the physical,
    now is the time. When gold/silver take off, [even we have a bias], it will be fast and furious [opinion], with no looking back, but that can
    be months, Quarters, possibly year[s] away.

    GCG W 26 Jan 13

    The daily chart comments pretty much speak for themselves.

    Last week, we noted a long position on the strength of the wide
    range, strong close bar, 6th bar from the end. The recommendation
    did not lead to much profit, but profits were taken prior to the
    decline, based on developing market activity at the time.

    GCG D 26 Jan 13

    While silver is weaker, relatively to gold, it is behaving relatively
    stronger of late. Note how the weekly close is higher/above the
    clustering of closes, where gold is right at the clustering location,
    [both still in the middle!].

    As with gold, now is the time to continue accumulating [stacking, as it were] silver at any price. Sales of the American Eagle are going
    through the roof and were recently halted until 28 January. Why the government continues to sell them at all is beyond us in comprehension, given it is part of the forces [of evil] endeavoring to suppress the market's alternative to the insidious issue of fiat.

    SIH W 26 Jan 13

    For as much as an argument can be made that price is holding
    reasonably well within the ongoing TR, the "fact" that silver failed to reach the upper channel line is a sign of weakness. Yet, unlike gold,
    the decline in silver held above the wide range, strong close bar
    where a long position was recommended. You can see the small
    range high at 32.50, 3rd bar from the end. It was the market's
    message telling us that demand was weak. The long position was
    liquidated profitably, before the decline set in. Love those
    messages!

    Where will the decline stop? We have no clue, nor do we [or you]
    need to guess. Instead, simply wait for developing market activity
    to indicate demand is overcoming supply. Why guess when the best
    source of information will make some kind of factual declaration?!

    Maybe price will hold potential support at the clustering of closes,
    maybe not. What is more important is that the existing TR is telling
    everyone to wait, for those inclined to heed the market's message.
    Even on a shorter time frame, within the TR, the market is STILL
    saying, price is not strong. Buy the physical, but not the futures.

    Fundamental context matters for what side one chooses. The
    message from the market matters the most for timing and
    implementing one's belief. That is a fact that has never changed and one that never will. Count on it!

    [Just don't take it to the bank. Banks cannot be trusted.]

    SIH D 26 Jan 13

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