A Simple, Workable, Time to Buy-->Time to Sell Gold or Silver stacker plan

[beefsteak]

It's easy to buy, tougher to sell. Figuring out the "when to sell" is the tough part. Even tougher than actually selling some. This Jack Bass' author's suggestion +1 graphic is offered as one historically profitable way to approach the "art/timing" of selling.
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Gold Break Out – Finally Above 200 Day Average (http://ampgoldportfolio.com/2012/09/14/gold-break-out-finally-above-200-day-average/)

Posted: September 14, 2012
Author: jackbassteam (http://ampgoldportfolio.com/author/jackbassteam/)

For the last 11 months, gold has been downright boring, drifting around $1,600 an ounce. But that has changed… the Fed (http://www.federalreserve.gov/) essentially told us that it’s willing to print more money when needed. This causes the price of gold (http://en.wikipedia.org/wiki/Gold_as_an_investment) to rise… You see, when there are more dollars out there, and the same amount of gold, it takes more dollars to buy an ounce of gold (http://en.wikipedia.org/wiki/Troy_ounce).

And gold is finally going up again! It’s in an uptrend.

The simplest, most common measure analysts use to gauge when an investment is in a new uptrend is the “200-day moving average (http://www.forexdictionary.com/definition/427/moving-average-ma).”

When a stock (or any other asset) is trading (http://en.wikipedia.org/wiki/Trade) above its average price for the last 200 days, it’s in an uptrend.

For the first time since March, gold has risen above its 200-day moving average. So gold is now “officially” in an uptrend. It has been in an uptrend for a couple weeks now, and it appears solid.

Why is an uptrend so significant?

Uptrends are where you make the big money…

Since late 1971, gold has increased at a compound annual rate of 9% a year. But when gold is in an uptrend (when it’s trading above the moving average), your wealth compounds at 18% a year.

Interestingly, there is nothing magical about the 200-day or 10-month period – the results were similar for eight-month, nine-month, and 11-month moving averages.

Generally, your wealth compounds at about 18% a year (or more) when you own gold when it’s above the moving average. That’s incredible.

The chart below shows what I mean…
http://www.stockhouse.com/getfile/3144b41f-84a7-4fea-8cd4-66e480758935/DW-1.aspx


You’re “in” the trade when it’s green and “out” when it’s red. By using this system, you are a little late to get in and a little late to get out. And you’ll get an occasional false signal. But generally, it’s a pretty darn profitable – and simple – system.

Today, gold is above its 200-day moving average for the first time since March. It has stayed above its moving average for weeks. In short, it appears the gold bull market (http://en.wikipedia.org/wiki/Market_trend) is back…

This is good news…

Going back over 40 years, your wealth compounded at about 18% a year when gold was in a bull market.

If you’ve been looking for the right time to get back into gold – or add to your position – now is that time.
=======================

FOOTNOTE:
A computer can calculate easily what I formerly had to create by hand and that was 200 Day EXPONENTIAL MOVING AVERAGES back in the day.

Using an EXPONENTIAL MOVING AVERAGE CALCULATION will snug up some of the "delay in timing" mentioned above. In a volatile market, THAT can mean more profit at the peak and a quicker re-entry on the valley/lows.

[mamboni]

Beef:

Is there an on line charting service that will do the 200 day exponential moving average?

[palani]

It has been said that a monkey with a buy and hold policy will outperform the smartest market timer on the planet.

[Katmandu]

3727
Beef:

Is there an on line charting service that will do the 200 day exponential moving average?

There may be others, but this is available at www.stockcharts.com, for example see image below with a 30 day EMA and 200 day EMA for gold. Use $GOLD as the symbol, and then set the other parameters as you wish. I think the free charts version is limited to the last three years, as shown.

[beefsteak]

Yes, Mamboni, there is. The best is the freebie of master market technician, John Murphy, often called the "Father of Technical Analysis." http://www.stockcharts.com

His freebie stuff has a series of customizations you can tick off and get any moving average of any duration you like, including the EMA.

I like "Free"...especially after it has been on as long as Murphy's site as been, and is still free and still reliable.

Murphy does one other thing, that he has proven mathematically is future price objective predictive besides channels sometimes called trading bands. That would be John's Point and Figure chart work also with customization boxes to tick off to your tastes.

Murphy stated on CNBC live many many years ago when he was still primo charting service analyst on that talking heads' channel, that there are ONLY 2 predictive mathematical models which were reliable. I've watched him and them and found out it's true.

The price prediction is printed right on the top of the P&F charts of John's on Stockcharts.com


Here's the current P&F one, based upon spot market. As you will see, it has achieved the $1780 predicted price objective. It is now waiting to make a new price projection based upon actual market activity.

http://stockcharts.com/def/servlet/SC.pnf?c=%24GOLD,P

Here's the one for your capsized silver laying at the bottom of that Lake Woebegone. You'll notice that P&F predicts the yet unfufilled Silver target of $58
http://stockcharts.com/def/servlet/SC.pnf?chart=$silver,PLTADANRBO

Enjoy.

[mamboni]

Yes, Mamboni, there is. The best is the freebie of master market technician, John Murphy, often called the "Father of Technical Analysis."

His freebie stuff has a series of customizations you can tick off and get any moving average of any duration you like, including the EMA.

I'll go dig it up for you and then come back and post it.

I like "Free"...especially after it has been on as long as Murphy's site as been, and is still free and still reliable.

Thanks! I'm reading Murphy's book on visual technical analysis now - it is superb.

[beefsteak]

You're welcome, mamboni. Glad to hear you are reading that. It's masterful. Hope you caught the edits I did immediately above your response.

[gunDriller]

if gold is your cash, you sell when you really, REALLY, really need to buy something - like silver ! :)

[Katmandu]

Beef,
I came across this graph with similar data presented in a slightly different way:

http://i45.tinypic.com/5frgph.png

[mamboni]

Beef,
I came across this graph with similar data presented in a slightly different way:

http://i45.tinypic.com/5frgph.png

This chart is sweet. The sell signals are sharp and followed by a buy signal, except at the end of 2009. If you sold gold there was no buy signal and you missed the run from $1100 to $1900. This is waht scares me about trying to trade gold at this time of extreme economic instability and central bank monetization: gold can bolt at any time and you can be left standing in the dust waiting for a buy signal that never comes.

[Katmandu]

This chart is sweet. The sell signals are sharp and followed by a buy signal, except at the end of 2009. If you sold gold there was no buy signal and you missed the run from $1100 to $1900. This is waht scares me about trying to trade gold at this time of extreme economic instability and central bank monetization: gold can bolt at any time and you can be left standing in the dust waiting for a buy signal that never comes.

Yes like in Dec 09 if you sold at around $1100, the buy signal never came immediately after that.

[mamboni]

Yes like in Dec 09 if you sold at around $1100, the buy signal never came immediately after that.

Ha ha ha - there's an echo in here!\uu\

[beefsteak]

Kat,
yours truly would respectfully disagree with that 'never came immediately after that" assessment you just posted. I see a very specific "W" pattern, powerful and reliable buy set-up, signal generated around June 2010 that would have personally gotten me back into the market were I still an Au trader, which I'm not now. And "Immediately" is a relative term, quite frankly.

As Sinclair just recently stated when responding to obvious email deluge by the "Martin Armstrong says" crowd about cyclical lows and how to spot them, when a "cycle doesn't appear in a specific time frame" as dictated to by a specific cyclical analysis, that doesn't mean the cycle work is wrong, but that the underlying strength of the market under examination is quite resilient."

To Murphy's most excellent tome, one needs to add another TA book (or two?)

This is the one which would have gotten you back into the gold market if one sold at the end of 2009 signal to which you referred. That buy signal is explaned in the turtle trades pattern recognition writings of Linda Bradford-Raschke and Larry Conner, titled STREET SMARTS.
http://www.amazon.com/Street-Smarts-Probability-Short-Term-Strategies/dp/0965046109

While Ms. Bradford-Raschke is legendary and also vetted prior to my purchase, as well as post book publishing authenticated, moi purchased this (yes for $175) back when it was first released, based upon a positive mention (I believe it was John Murphy) verbalized on CNBC of old.

Well-written, concise, and magnificently illustrated, Linda herself stated that of the 20 strategies identified in that must-have hardback, anyone who applied themselves could MAKE A LIVING from just disciplining themselves to apply any 3 on a consistent basis. She had her favorites, and I had mine. She spoke to the probability percentage of successful trading signal generation per pattern. It was only printed 1x to the best of my knowledge, and I'm glad to see that it is still available for folks such as yourself.

The "W" set-up, was hands down, the most reliable and profit making timed buy set up for me, personally as a trader, and probably the one, therefore which I liked the best. Undoubtedly, that's probably why I spotted it in your colorful posted charts above.;D Yes, it jumped right out at me.

If all the above was confusing, let me rephrase it this way. The person who stated they say a "signal failure immediately after the 2009 sell signal," only appears to have a 1-metric buy standard. Linda taught me 20 and I picked 3 and your chart shows it.

So, rely on 1 buy set-up? Or chose 1 buy set up from 3 rav favs buy set ups, or 1 buy set-up from 20 equally good buy set-ups as set forth by a couple of veterans?

I'm going with the 1 outta 3 rav favs out of 20 high percentage probability buy set-ups taught and illustrated by LB-R and LC

[Sparky]

Beef, the difference from the 200 DMA and relativeGold strategies, compared to W patterns and other technical analysis, is that they don't require interpretation, so they're sort of idiot-proof. No sentiment involved, no trying to decide when you can actually see the "W", or some candlestick pattern. I look at all of them, but 200DMA and rGold are beautiful in there unambiguous simplicity.

[Sparky]

One other thing regarding missing the move from $1100 to $1900. I hope any gold traders out there are holding a core position that is at least as large as the portion that they are trading. If so, you didn't really "miss" that move.

[beefsteak]

Beef, the difference from the 200 DMA and relativeGold strategies, compared to W patterns and other technical analysis, is that they don't require interpretation, so they're sort of idiot-proof. No sentiment involved, no trying to decide when you can actually see the "W", or some candlestick pattern. I look at all of them, but 200DMA and rGold are beautiful in there unambiguous simplicity.

Don't know if you're trying to insult me or idiots, Sparky.

I DO know that Raschke's Turtle -setups should NOT be knocked by someone who hasn't tried them, nor read STREET SMARTS!

Last I looked 200DMA's were still 200 days in length on the "X - axis" which creates those longitudinal plot points.

And idiot is NOT the first word that comes to mind for the Richard Dennis' hand-picked, personally trained Turtle traders.

You always surprise me when you pounce. Can't share the spotlight on TA?

TOUGH!

As I recall, I'm the one that posted the 200MA as a "simple & workable approach." I never stated it was 100% infallible. Not in the slightest.

Now, I'm posting a response to an "advanced beyond beginner" commentary and pointing out what he missed. And I'm doing so, politely on the friggin' thread I initiated.

You have a problem with that continuing ed modality between me and Kat? Why again is that?

Here's an idea.

Don't crap on my thread and I'll continue to refrain from crapping on yours, as I've pretty consistently refrained from doing on your frequent opines upon which I could easily expand and expound. Truly, however, I haven't seen the need to make an jealous, arrogant ass out of myself by doing so....

I'm aware many on this forum seek and find solace or guidance in your in cathedra TA entrails' devinations and I have no problem with that. You see, free choice is a treasured concept which I espouse.

However, you'll not find me on your "sign in sheet" of your breathless market explanation groupies. This topic is big enough for both. Let the readers decide for themselves instead of "critiquing my Raschke' STREET SMARTS buy-set up" suggestion.

Hell, you won't ever acknowledge my existence in Sunday evening chat when specifically and civilly extending greetings to you due to your anti-social jealously being so green and thick.


beefsteak

[Sparky]

Yikes!

Beef, I went back and re-read my post but I can't seem to find the insult. I thought I was agreeing with you. I was just commenting on the difference between the two approaches, and that each is good for a different reason.

"Idiot-proof" simply means difficult to mess up. The 200 DMA and rGold are difficult to mess up because they use a straightforward numerical trigger, and I was saying that's one of the nice things about them. There's no anguishing decision to make. Did you think I was mocking them? I said they were beautiful because of their clarity and simplicity. I mean that.

Other more sophisticated technical patterns require interpretation on when to pull the trigger, which make them more difficult to master. In my post I state "I look at all of them." I support just about every one that you pointed out.

So where's the insult? I'm actually kinda shocked at the hostility. I think you offer a lot of thoughtful insight on a lot of subjects, and I enjoy reading your posts. If I missed a greeting in chat, it wasn't intentional. I miss a lot of things on chat. I'll try to look for you next time.

[Mouse]

Wow, I thought we were all here to help eachother. Let's thicken up the skin some, gentleman. Nobody is crapping on anyone and alternative views of TA vs. whatever the hell are relevant, given that the market is fake anyway. I have been blessed with great returns from just holding long fiz over the last 5-6 years. I appreciate all points of view on charting. I think Magnes has some pretty damn insightful stuff on this matter as well.

Peace

[Katmandu]

Kat,
yours truly would respectfully disagree with that 'never came immediately after that" assessment you just posted. I see a very specific "W" pattern, powerful and reliable buy set-up, signal generated around June 2010 that would have personally gotten me back into the market were I still an Au trader, which I'm not now. And "Immediately" is a relative term, quite frankly.

As Sinclair just recently stated when responding to obvious email deluge by the "Martin Armstrong says" crowd about cyclical lows and how to spot them, when a "cycle doesn't appear in a specific time frame" as dictated to by a specific cyclical analysis, that doesn't mean the cycle work is wrong, but that the underlying strength of the market under examination is quite resilient."

To Murphy's most excellent tome, one needs to add another TA book (or two?)

This is the one which would have gotten you back into the gold market if one sold at the end of 2009 signal to which you referred. That buy signal is explaned in the turtle trades pattern recognition writings of Linda Bradford-Raschke and Larry Conner, titled STREET SMARTS.
http://www.amazon.com/Street-Smarts-Probability-Short-Term-Strategies/dp/0965046109

While Ms. Bradford-Raschke is legendary and also vetted prior to my purchase, as well as post book publishing authenticated, moi purchased this (yes for $175) back when it was first released, based upon a positive mention (I believe it was John Murphy) verbalized on CNBC of old.

Well-written, concise, and magnificently illustrated, Linda herself stated that of the 20 strategies identified in that must-have hardback, anyone who applied themselves could MAKE A LIVING from just disciplining themselves to apply any 3 on a consistent basis. She had her favorites, and I had mine. She spoke to the probability percentage of successful trading signal generation per pattern. It was only printed 1x to the best of my knowledge, and I'm glad to see that it is still available for folks such as yourself.

The "W" set-up, was hands down, the most reliable and profit making timed buy set up for me, personally as a trader, and probably the one, therefore which I liked the best. Undoubtedly, that's probably why I spotted it in your colorful posted charts above.;D Yes, it jumped right out at me.

If all the above was confusing, let me rephrase it this way. The person who stated they say a "signal failure immediately after the 2009 sell signal," only appears to have a 1-metric buy standard. Linda taught me 20 and I picked 3 and your chart shows it.

So, rely on 1 buy set-up? Or chose 1 buy set up from 3 rav favs buy set ups, or 1 buy set-up from 20 equally good buy set-ups as set forth by a couple of veterans?

I'm going with the 1 outta 3 rav favs out of 20 high percentage probability buy set-ups taught and illustrated by LB-R and LC

In the overall picture you are absolutely right Beef, my bad. I should have been more clear that I was referring only to the chart immediately above.

[beefsteak]

Thanks, Kat.

[beefsteak]

Wow, I thought we were all here to help eachother.

Naw, some are here to convert ya' to mormonism or cop haters or whatever.... LOL

[mamboni]

mamboni comments: timing is everything.

Dow:Gold ratio makes $12,400-an-ounce gold look a realistic target

Posted on 23 October 2012 with no comments (http://www.arabianmoney.net/gold-silver/2012/10/23/dowgold-ratio-makes-12400-an-ounce-gold-look-a-realistic-target/#respond) from readers

http://www.arabianmoney.net/wp-content/uploads/2012/10/gold121111.jpg

It was fascinating to read the comments of ‘Mr Gold’ Jim Sinclair this week about gold heading for $3,500 to $12,400-an-ounce as a result of a shift in spread management by the bullion banks (click here (http://www.arabianmoney.net/gold-silver/2012/10/21/change-in-spread-management-by-bullion-banks-will-send-gold-prices-to-3500-12400-says-jim-sinclair/)). He used to run one so knows exactly when and why these banks are likely to slash their short positions and go fully long in the precious metal.

However, a consideration of the famous Dow:Gold ratio is also relevant here as a confirmation of where this price swing will go. Historically the ratio of the Dow Jones Index to the price of gold has in extremis swung to parity with one ounce of gold equal in value to the dollar-value of this index (see graph below, it is an unmistakeable trend).
1980 Dow:Gold ratio

In 1980, for example, $850 an ounce gold approximately matched 850 on the Dow Jones Index. With the Dow around 13,000 today it would require a gold price of $13,000 to deliver the same Dow:Gold ratio of one.

Of course if the USA moved into a deep recession in 2013-14 then you might anticipate a Dow Jones Index some 30-50 per cent lower. In that case gold prices would only have to move to $6,200-$8,680 to achieve the magic parity in the Gold:Dow ratio.

Mr. Sinclair’s lowest estimate for the top gold price of $3,500 an ounce would have the Dow plunging by 75 per cent in a massive sell-off. Therefore, those who are optimistic about the ability of Fed to support high stock market prices by printing money also ought to be very confident about a massive hike in the gold price.

The next issue of the ArabianMoney investment newsletter will return to the theme of precious metals and how to extract the maximum investment upside from this historic price shift and the sort of additional risks that you have to take to achieve this (subscribe here (http://www.arabianmoney.net/home/paid_subscription/)).

Physical metal

Mr Gold himself always advises a core position of physical metals held in a secure location. Both gold shares and playing with derivatives have additional risk but arguably superior rewards for the expert or fleet of foot. The ArabianMoney investment newsletter has a simpler approach to achieving the same thing, though we concur with the idea of the junior gold companies as likely to deliver the highest total return in the long-run.

But as the Dow:Gold equation suggests it is far more likely that gold will outperform shares than vice-versa. Still if the Dow headed up to 17,000 then the Dow:Gold ratio would imply $17,000-an-ounce gold, although we note Mr. Sinclair does not even consider this possibility.
http://www.arabianmoney.net/wp-content/uploads/2012/10/dow-gold-ratio-1900-to-2009.jpg (http://www.arabianmoney.net/wp-content/uploads/2012/10/dow-gold-ratio-1900-to-2009.jpg)
Posted on 23 October 2012


http://www.arabianmoney.net/gold-silver/2012/10/23/dowgold-ratio-makes-12400-an-ounce-gold-look-a-realistic-target/