Gyroscopic Investing

So, what is going on here? I'm good with it, but this head fake has happened so many times before...

Cortopassi wrote: ↑Wed Jun 05, 2019 7:43 am So, what is going on here? I'm good with it, but this head fake has happened so many times before...

Fed is hinting at easing and the DXY is dropping. The sellers have indeed been ruthless at the $1350-1375 range. So I expect them to come out again as that short sell has been easy money for 8 years straight now. But if the market keeps faltering the bulls could overpower the bears, and cause a short squeeze that finally breaks that strong resistance level. We will have to see. It really just depends on who has the most steam, the bulls or bears. I will say that momentum is very strong right now, so that at least gives a small edge to the bulls. But that momentum could also fade as we get into testing that supply range.

And that lasted about 3 hours...

Gold is up over 4% in the last 5 trading sessions. I wouldn't complain too much that we are only up about ten bp today.

I'm going to channel budd here -- were were up $19 earlier, and it totally turned around and lost it all quickly.

I guess is it concurrent with the dollar doing the exact opposite, but still feels ominous, yet again.

Not a time to buy

How is contemplating a rate cut even possible in this screwed up world?

Cortopassi wrote: ↑Wed Jun 05, 2019 11:40 am I'm going to channel budd here -- were were up $19 earlier, and it totally turned around and lost it all quickly.

I guess is it concurrent with the dollar doing the exact opposite, but still feels ominous, yet again.

Have patience, it's a couple hours of one day. We are still positive on the day, and it's shot up like a rocket over the last 5 sessions. A day of consolidation and a bit of selling is to be expected, and probably even healthy. It's not going to go up in a straight line, and if that's your expectation then you will always be disappointed. I personally see nothing to complain about with a 4%+ gain in one week and bullish signals being thrown left and right. Gold is still above the light resistance/support level it broke above yesterday. It's quite common to retest support before moving higher after breaking above a resistance level. It's above it's 50 day, 200 day, 20 day, and 8 day moving averages. It has set a series of two higher lows and higher highs on both the daily and weekly chart. Momentum is positive and increasing. Macd just had a bullish cross today. 50 day moving average is above the 200 day moving average. 8 day moving average is above the 20 day moving average (and bullishly spreading). There is not a single bearish signal right now aside from a morning reversal (which is probably due more to the positive stock reversal leading to risk on from some more dovish Fed comments that came out than anything). Have patience. A couple hours is not enough data to pass judgements on.

Cortopassi wrote: ↑Wed Jun 05, 2019 11:56 am How is contemplating a rate cut even possible in this screwed up world?

It is simple. Someone is lying. But with PP we should not care. Maybe :-)

pmward wrote: ↑Wed Jun 05, 2019 12:01 pm

Cortopassi wrote: ↑Wed Jun 05, 2019 11:40 am I'm going to channel budd here -- were were up $19 earlier, and it totally turned around and lost it all quickly.

I guess is it concurrent with the dollar doing the exact opposite, but still feels ominous, yet again.

Have patience, it's a couple hours of one day. We are still positive on the day, and it's shot up like a rocket over the last 5 sessions. A day of consolidation and a bit of selling is to be expected, and probably even healthy. It's not going to go up in a straight line, and if that's your expectation then you will always be disappointed. I personally see nothing to complain about with a 4%+ gain in one week and bullish signals being thrown left and right. Gold is still above the light resistance/support level it broke above yesterday. It's quite common to retest support before moving higher after breaking above a resistance level. It's above it's 50 day, 200 day, 20 day, and 8 day moving averages. It has set a series of two higher lows and higher highs on both the daily and weekly chart. Momentum is positive and increasing. Macd just had a bullish cross today. 50 day moving average is above the 200 day moving average. 8 day moving average is above the 20 day moving average (and bullishly spreading). There is not a single bearish signal right now aside from a morning reversal (which is probably due more to the positive stock reversal leading to risk on from some more dovish Fed comments that came out than anything). Have patience. A couple hours is not enough data to pass judgements on.

I know. Except... it's not a couple hours. It's been years. My average price in my gold holdings is $1349. Started buying in 2008. Beating my chest in 2011. Been 8 years of false hope since. Gold's resistance happens to match my average.

In the PP for 5 years, I have only been able to very minimally sell down gold in early 2019 to buy other assets for rebalancing.

But I care less and less.

Cortopassi wrote: ↑Wed Jun 05, 2019 1:16 pm
I know. Except... it's not a couple hours. It's been years. My average price in my gold holdings is $1349. Started buying in 2008. Beating my chest in 2011. Been 8 years of false hope since. Gold's resistance happens to match my average.

In the PP for 5 years, I have only been able to very minimally sell down gold in early 2019 to buy other assets for rebalancing.

But I care less and less.

Assets go on multi year, sometimes multi decade, cyclical trends. You bought at the tail end of the last cyclical uptrend in gold. That sucks, and I feel for you. But, you are already lumped in and you're doing the right thing by being patient and waiting to rebalance. Gold will break out eventually. When it does, it will likely go on one of the multi year bull market uptrends that it's known for. When that time comes you'll be able to rebalance and take profits. On the long term trend, it's been consolidating in a bullish wedge formation since 2013 and that wedge does not come to a point until around the 2022-2023 time frame. So, in all reality, it could continue to keep consolidating for quite a few years. But eventually it will break, and the longer the consolidation the stronger the break. So, both the short term, and the long term look bullish. I personally am about as bullish gold as I can get. I think that in 2029 when we look back we will see that gold was the asset of the decade vs stocks and bonds (I'm curious to see what crypto does as well). We may not break out this time, the sellers may win again. We will have to see. I think a lot is resting on both stocks and the Fed. If stocks sell and the Fed lowers rates (bringing the dollar down) then that should be enough. Hell, even just the Fed cutting the predicted 50bp and stopping QT might even be enough in itself to do it regardless of what the stock market does.

Either way, all signs are positive in the gold market right now. So this should not be a day to be upset.

DXY and gold rallying hard today. Interesting...

Yes. Good to see. PP at high for year for me, up 7.93% No complaints, does its thing on autopilot.

pmward wrote: ↑Thu Jun 06, 2019 9:16 am DXY and gold rallying hard today. Interesting...

Too bad Budd selfdestructed out of here. Would be interesting to see his reaction

Ugly_Bird wrote: ↑Thu Jun 06, 2019 9:30 am

pmward wrote: ↑Thu Jun 06, 2019 9:16 am DXY and gold rallying hard today. Interesting...

Too bad Budd selfdestructed out of here. Would be interesting to see his reaction

Budd was the epitome of capitulation. He was selling out of "bad" long bonds and gold just before they started to pick up steam. We have yet to see how this turns out, but if stocks continue to sell and bonds and gold continue to go up then it would definitely be a good case study in what happens when you start selling the losers low to buy the winners high.

pmward wrote: ↑Thu Jun 06, 2019 11:21 am

Ugly_Bird wrote: ↑Thu Jun 06, 2019 9:30 am

pmward wrote: ↑Thu Jun 06, 2019 9:16 am DXY and gold rallying hard today. Interesting...

Too bad Budd selfdestructed out of here. Would be interesting to see his reaction

Budd was the epitome of capitulation.
...

He complained a lot, but Budd actually held on for something like ten years. We had a user, catacombs, who bought gold and sold it at a loss. I don't think he'd even held it for a year. One year at most.

dualstow wrote: ↑Thu Jun 06, 2019 12:34 pm We had a user, catacombs, who bought gold and sold it at a loss. I don't think he'd even held it for a year. One year at most.

Well remembered dualstow, there were indeed some intense moments (and members ) on this forum. The level of drama for such a conservative portfolio was quite eye opening.

gizmo_rat wrote: ↑Thu Jun 06, 2019 1:21 pm

dualstow wrote: ↑Thu Jun 06, 2019 12:34 pm We had a user, catacombs, who bought gold and sold it at a loss. I don't think he'd even held it for a year. One year at most.

Well remembered dualstow, there were indeed some intense moments (and members ) on this forum. The level of drama for such a conservative portfolio was quite eye opening.

Lots of drama. Actually, catacombs was one I felt bad for. He wasn't brusque in any way. He just said, in so many words, I can't take this, guys. (Falling gold prices). People tried to tell him to keep his eye on the whole package, but he bailed, and gold went back up. In the long run, though I guess it isn't much higher than when he bailed. U.S. Treasuries have certainly done well, but as an Israeli he probably had a subsitution.

dualstow wrote: ↑Thu Jun 06, 2019 2:46 pm

gizmo_rat wrote: ↑Thu Jun 06, 2019 1:21 pm

dualstow wrote: ↑Thu Jun 06, 2019 12:34 pm We had a user, catacombs, who bought gold and sold it at a loss. I don't think he'd even held it for a year. One year at most.

Well remembered dualstow, there were indeed some intense moments (and members ) on this forum. The level of drama for such a conservative portfolio was quite eye opening.

Lots of drama. Actually, catacombs was one I felt bad for. He wasn't brusque in any way. He just said, in so many words, I can't take this, guys. (Falling gold prices). People tried to tell him to keep his eye on the whole package, but he bailed, and gold went back up. In the long run, though I guess it isn't much higher than when he bailed. U.S. Treasuries have certainly done well, but as an Israeli he probably had a subsitution.

Just me perhaps, I get bailing on a portfolio if you stick with it for a while and it just doesn't perform like you thought it would. What I don't get is the fixation on performance at the asset level. I'm sure I check performance too much, but I rarely pay any attention to the puzzle pieces.

Kbg wrote: ↑Thu Jun 06, 2019 10:58 pm Just me perhaps, I get bailing on a portfolio if you stick with it for a while and it just doesn't perform like you thought it would. What I don't get is the fixation on performance at the asset level. I'm sure I check performance too much, but I rarely pay any attention to the puzzle pieces.

I think that gold is the physiological Achilles heel of the PP. Looking back at catacombs posts I do remember not feeling that clever in my asset choice at that time.

It's quite hard to view gold as a neutral puzzle piece when it carries so much emotional baggage and opinion that everyone and his dog wants to tell you about. So you end up with this nasty miss-match between your expectations at the portfolio level and the performance of that "crazy asset that all the sane commentators hate and only the loons love and why did I talk myself in to this" .

Easy to get yourself into a spiral of self doubt, recrimination and blame as we've seen played out many times. I tend to think if you've got sufficient rationally to ignore the noise from gold then it's not that much of a leap to tune out the volatility from a stock heavy portfolio.

I think it was Moda who said a few years ago, "if there was a 4% ibond" ...

Gold is like US$1345/oz now. Thanks, oil tankers?

Gold is officially breaking out this morning. Currently $1359. I'm not going to get too excited until we break above $1375 and/or get a successful pullback retest and bounce back up off of $1350 (preferably both). But it definitely does have some serious strength right now. I think it's prospects of holding this breakout are all entirely up to the Fed next week. They are either going to strengthen the rally or cause it to prairie dog back down.

I assume you’re not too excited...

pmward wrote: ↑Fri Jun 14, 2019 7:45 am Gold
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... or cause it to prairie dog back down.

Obligatory prairie dog
https://www.youtube.com/watch?v=jHjFxJVeCQs

Haha. Well it is not surprising that the sellers came out today. Shorting gold at $1350 has been the easiest money in the world for damn near a decade now. But we still closed the day even, so they sellers couldn't actually drop the price. If the buyers keep pounding on the ceiling and don't give up, they will break through. The sellers showed a bit of weakness today, they couldn't get the job done and bring it down. I really think a lot rides on the Fed next week, not just in gold but in all markets. With the market expecting a 50bp drop in the next month, I mean just Powell saying the wrong adjunctive once could cause massive commotion. I wouldn't be surprised if it was a volatile week all around. Buckle up those seatbelts!