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Posted 04/21/2013 7:18 pm
@Joe
Joe, I solely trade stocks based on trends, their patterns. I don't really analyze the companies per se on production cost etc.
HOWEVER, I would say the following-
Miners have for years struggled with getting a grasp on their costs. I remember trading and owning Barrick and Newmount a couple years ago. NEM at the time was THE market leader, they even owned tar sands so that they could get a better grasp on fuel costs. This all meant nothing in the long run, as they started to discuss how costs kept rising....
Management also is very sketchy on future prices of gold and silver because they have no idea where prices will go either. In fact, I have never been able to find any miner that can hold a long term trend and be a heavy weight of their industry.
If you go to Bloomberg, they had a great article couple months ago on why the markets were dumping gold and silver miners because they had been understating their costs, something clearly the markets have known for years.
Finally, if you folks have time, you can go to the SEC web site, and under their EDAGR system (might have misspelled that) you can pull out their reports and see each companies management discussion of costs and risks on their projects in regards to mines and production. ITs usually very insightful.. if anyone wishes to follow up I can take some time and guide your through the process, I would be more happy to show you so you can avail yourself of that info which is MORE current than any financial media because its the report directly from the company to its shareholders, many times in easy to understand language.
@Demarco- To answer your question- Yes, 6 months is enough to tell us. Here;s why, we are getting two big points that re-reinforce that downtrend in terms of technical readings-
1- Gold has made yearly lows, 52 lows. When any sort of asset, whether a bond, commodity, or equity, makes a yearly low, a 52 low as we say, it indicates and validates the STRENGTH of the downtrend. Nothing more is needed to know.. which btw yearly lows are a signal to sell short. Yearly lows indicate there are no buyers at all to support the asset.
2- VOLUME. I have mentioned this over and over. The volume is without a doubt indicating the sellers wanted out and left in a big way. Therefore, before gold and silver and run higher, they MUST exhibit similar heavy volume buying and accumulation. Anytime you see volume over the normal range, it is clear evidence that sellers are leaving.
I can further give proof how heavy volume foreshadows problems, when it is on the sell side. If you were to use GLD as a proxy, to keep things simple for everyone at home, please take a look at 8/24/11. notice the red volume bar, 77 million shares, I believe roughly the AVERAGE volume for GLD is only 11-13 million a day. that means on that day it was almost SIX TIMES its average volume!
THAT'S where the sellers started to sneak out,,, and GLD and gold prices, never reach beyond that, and instead prices kept slipping since then. Its been in the past 6 months where we started to get our confirmation and finally what sealed everything was gold making yearly lows.
NOTICE- from that date I mention, gold NEVER raced back and over that volume nor in price. instead what followed was drops in the price, follow by retracements, which are normal, followed by further lower highs and lower lows. Notice how the price retraced to GAPS and FAILED getting over them.
Remember, I have been saying we need to get over these gaps, fill them and then HOLD. It couldn't do that....
So again, yes 6 months is MORE Than enough to tell us gold is stuck in a major downtrend and we have more than enough evidence with price and volume to tell us gold is in a legitimate downtrend.
Astute traders who pay attention to price and volume would have noticed that after that heavy volume, gold NEVER recuperated. ... and that the retracements have failed and gold was just doing that, chopping around, as the market continued to resolve the direction, which has been down. Since the latter part of last year we have been getting our confirmation, our validation.
BTW, excellent question my friend.
Joe, I solely trade stocks based on trends, their patterns. I don't really analyze the companies per se on production cost etc.
HOWEVER, I would say the following-
Miners have for years struggled with getting a grasp on their costs. I remember trading and owning Barrick and Newmount a couple years ago. NEM at the time was THE market leader, they even owned tar sands so that they could get a better grasp on fuel costs. This all meant nothing in the long run, as they started to discuss how costs kept rising....
Management also is very sketchy on future prices of gold and silver because they have no idea where prices will go either. In fact, I have never been able to find any miner that can hold a long term trend and be a heavy weight of their industry.
If you go to Bloomberg, they had a great article couple months ago on why the markets were dumping gold and silver miners because they had been understating their costs, something clearly the markets have known for years.
Finally, if you folks have time, you can go to the SEC web site, and under their EDAGR system (might have misspelled that) you can pull out their reports and see each companies management discussion of costs and risks on their projects in regards to mines and production. ITs usually very insightful.. if anyone wishes to follow up I can take some time and guide your through the process, I would be more happy to show you so you can avail yourself of that info which is MORE current than any financial media because its the report directly from the company to its shareholders, many times in easy to understand language.
@Demarco- To answer your question- Yes, 6 months is enough to tell us. Here;s why, we are getting two big points that re-reinforce that downtrend in terms of technical readings-
1- Gold has made yearly lows, 52 lows. When any sort of asset, whether a bond, commodity, or equity, makes a yearly low, a 52 low as we say, it indicates and validates the STRENGTH of the downtrend. Nothing more is needed to know.. which btw yearly lows are a signal to sell short. Yearly lows indicate there are no buyers at all to support the asset.
2- VOLUME. I have mentioned this over and over. The volume is without a doubt indicating the sellers wanted out and left in a big way. Therefore, before gold and silver and run higher, they MUST exhibit similar heavy volume buying and accumulation. Anytime you see volume over the normal range, it is clear evidence that sellers are leaving.
I can further give proof how heavy volume foreshadows problems, when it is on the sell side. If you were to use GLD as a proxy, to keep things simple for everyone at home, please take a look at 8/24/11. notice the red volume bar, 77 million shares, I believe roughly the AVERAGE volume for GLD is only 11-13 million a day. that means on that day it was almost SIX TIMES its average volume!
THAT'S where the sellers started to sneak out,,, and GLD and gold prices, never reach beyond that, and instead prices kept slipping since then. Its been in the past 6 months where we started to get our confirmation and finally what sealed everything was gold making yearly lows.
NOTICE- from that date I mention, gold NEVER raced back and over that volume nor in price. instead what followed was drops in the price, follow by retracements, which are normal, followed by further lower highs and lower lows. Notice how the price retraced to GAPS and FAILED getting over them.
Remember, I have been saying we need to get over these gaps, fill them and then HOLD. It couldn't do that....
So again, yes 6 months is MORE Than enough to tell us gold is stuck in a major downtrend and we have more than enough evidence with price and volume to tell us gold is in a legitimate downtrend.
Astute traders who pay attention to price and volume would have noticed that after that heavy volume, gold NEVER recuperated. ... and that the retracements have failed and gold was just doing that, chopping around, as the market continued to resolve the direction, which has been down. Since the latter part of last year we have been getting our confirmation, our validation.
BTW, excellent question my friend.
