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

Posted: September 14, 2012
Author: jackbassteam

For the last 11 months, gold has been downright boring, drifting around $1,600 an ounce. But that has changed… the Fed essentially told us that it’s willing to print more money when needed. This causes the price of gold 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.

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.”

When a stock (or any other asset) is trading 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/31...8935/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 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.
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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]

Attachment 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/S...ver,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.