Xmas Again

When you don't have a crystal ball and everything seems to be going to plan is it to good to be true?
That's the question I ask myself.
All stocks have been exited with the exception of LGL.
A combination of tighter stops and volatility saw me almost march most trades to the door.
I still hold LGL which has stood up well I thought some news on the sale of Ballarat might have come through and fired it up. Happy to hold.

Gold price might have reached some support at US$1075 after an illustrious run up through 2009 to an all time high of US$1226. It's looking like moving into a fifth wave in a major third wave up. I believe this should take us into the first three or so months of 2010 where I think the seasonal factors will once again come into play and where we may see a fall and some drifting in the price before the word inflation appears to grow after its dollar fertilisation. Then who knows where the price of gold may be.

Gold reaches all time highs

Gold is now at all time highs and has breached US$1150 still relatively low when compared to what you could purchase back in the early 80's with an ounce of gold.
How does one really value gold into today's terms? If we looked at US government CPI then gold is only trading currently circa US$1k today at what it was trading at average through the 80's if we adjusted for inflation. If we took the spike that occurred in 1980 then it would trading at US$2358. (as per chart from Bianco Research)

Now if official US CPI is doctored then gold should be even higher. Now governments don't doctor CPI do they?
As per my previous posts back in June and September I still see this leg taking us to possibly US$1250 to US$1300 and all is on track to get there, the decline in the US$, the fall to come in US and worldwide equities, the realisation of the uselessness of bonds.
No doubt gold will get there sometime soon but how high will it go I cant predict but some of calls and the rationale behind them of over US$2k seem to be quite plausible.
Now from a trading point of view some success on Aussie gold stocks LGL still held with positions also in AVO,AND,MDL and CNT.
Exit last Monday with a loss on IAU I had moved stop up to 30 cents it fell to 27.5 cents in trading Friday looks like this one won't run now at all.
ROL has disappointed but then again they are not a producer,any positive news will set this one off I believe, willing to hold for a while but its hard to resist having capital in a stock not going anywhere.

Grand Final Day - Poor Parra

Some gold stocks have been disappointing the last few weeks, I was actually expecting to see LGL around $3.30 at least. The POG seems to be consolidating again and US$990 appears to be holding, a confirmed step up from the previous consolidation around US$940 however the heavy weights LGL and NCM I thought should be doing better but if you bought at the lows last October on these two you would still be nicely in front.
So if we assume that gold and gold stocks will run again we will see some nice profits develop over our summertime.
It would appear that just patience is required.
Entries made now into ROL and DOM, I am prepared to hold on these into early 2010 unless gold totally collapses but I can't see that.
ROL I see as a stock that could go over a dollar the opportunity in this stock is immense. I think that some of the larger companies around will be looking at ROL to add to their portfolios of mines.
DOM has had a shocker of late but I think the bottom is in now and its a safer opportunity then some others around its one of those stocks that could accelerate quickly back to previous highs.
The previous chart on gold I posted I believe to be still valid at this stage so I don't see a need to update.

The break out

The POG looks to have said stuff the dollar, stuff oil and the DOW too, its going for a walk on its own.

How this breakout will develop will eventually rely on the direction of the DOW.
The equity market appears to be almost at the top of the "B" wave of the 3 wave ABC correction after our bull run early in the decade, the next stage is a fall in equities back to test the lows of March this year.
If we do see the markets falling back to those lows, this time with the threat of inflation to come the money coming of the markets could well transfer into gold.
Its the only thing that has not collapsed throughout this turmoil. US government manipulation and interference will not contain its progress as the FED can no longer deceive the world of its predicament.

Rainy Day In August

POG seems to be consolidating just below US$950, I believe this is a good sign as this will establish the base for the run up into four figures.
Trades in LGL and IAU exist.
LGL as I thought entry at $2.80 would hold, stop was in at $2.38 and LGL traded down to $2.41 and has now bounced back and closed at $2.72 yesterday still not a positive trade but my entry was on the interpretation it could go to $3.60 or higher dependent on POG, once it clears $2.80 the next stop is then likely $3.30.
IAU based on a gold stock that is probably undervalued by the market, its respected its 200 day ema throughout this year and was looking oversold, entry made at $0.31 with a stop at 23.5cents. Support at 24cents has held from mid February when it has been tested. My expectation here is 40cents at least.

The Winter Blues

Only in one significant trade and thats LGL again when it fell to support. There are some factors that have caused this stock to fall whilst the POG has been consolidating and they were the failure of the Ballarat mine to provide scale with economy and now its sale at a heavy cost. I must be addicted to this stock as I entered again looking for a 10% to 20% profit this time. I have missed a lot of opportunities in the general market because of I guess an obsession with gold and gold stocks, I still believe however that the price of gold will soar and soar immensely.
The general market I think has almost ran its day, its rally to run out of steam as it follows the way of all bear markets. The rule of recovering 50% of the crash is just about to be realised. There seem to be some calling the bear completed, I feel there may be more down to come before we see another bull market. What we just had was a rally in a bear market nothing more. No amount of spin and financial trickery by the Fed is going to stop the next tsunami, in fact the Fed will be the cause.

I updated the file I had been putting together with Friday's close and I am not sure if I have identified anything or not. In the end I took the last three runs in the POG and tried to tie it back to movement in gold equity stocks(some stocks were not 100% gold plays though). It goes to show especially with the first period that gold equity stocks do not blindly follow the spot gold price, in all we know however that there is correlation there most of the time. In the first period the market big boys NCM,LGL,DOM and SGX did perform better then the majority.

I was going to separate out categories into hedged and unhedged producers and a third category, explorers. In the end I thought it was pointless as I was really looking for the greatest opportunities to be had in price movement regardless of how a company had developed.
Must stocks did pretty well over the second and third periods and there were some stellar performers ROL and OGC in particular. IGR has also been a consistent performer.
Whilst there are many opportunities to trade all these stocks and make money from short term charts my circumstances do not allow me that opportunity so my object was some medium term trades rather then daily or short term.
There is no guarantee that past performance will be reflected in future performance but I have certainly narrowed my gold watchlist down to a more manageable amount from my point of view.
Where to from here I don't really know but maybe a few top performers there is a good chance again.

Bigger then Ben Hur

Well the work I started on gold stocks has not been completed. I will have to knuckle down over the next few days. The past week was quite busy not that I was trading just got diverted into other things.
Of all the gold stocks I have looked at Integra (IGR),Dominion (DOM) and of late Oceana (OGC) which cropped up look to be the best performers against what I am requiring to make future trades but I am bringing to many factors in the equation, I will have to go back and reassess what I am trying to achieve.
Its back to the whiteboard tonight.
Hopefully gold doesn't run before I finish.

A Nervous Night Ahead

The gold chart still looks like challenging US$1000 again.

Last night was an absolute horror, the DOW lost 200 points and gold tumbled just over US$11.
My trade in IAU is probably a lesson.
When the most important market in the world, one that influences everything else has topped and appears to be heading down its time to bale and what did I do, I bought.
The next lesson always have a stop in place. I did not have a stop against my better judgement and a few minutes after the open IAU dropped to 32cents, during the day they worked their way back and leading into the last hour had clawed back to 34.5cents.
Happy as I was to a degree with this recovery I was shocked when I returned to my computer some hours later to find that 500,000 shares had gone through at the close auction at 32cents.
This trade is down $3k in a day or 15.8%, I still hold, maybe for not much longer.

The Bowen general meeting was totally disappointing with all resolutions failing to carry. In fact the meeting was farcical, I have never come across such incompetent directors who have no idea or concern of the interests about the shareholders whose company they run.

Just took a trade again this morning in IAU at .38cents.
I had previously exited with a 40% gain and have now taken another 50,000 shares, looking for it to test 40cents.
Resistance last year, May 08 was 40 cents and it failed at this point and fell back to below 10 cents. This year the company is in a far better position with no debt, no hedging, its divested itself of dodgy south american high cost tenements, production at the Paulsen mine continues to be on track with possibly even further extension of mining life to come.
Its Tujuh Bukit project in East Java I feel is not reflected in the current share price, the full potential of this project is yet to be confirmed, we know its multi million ounces of gold but how big still needs to be confirmed.
My intention was to hang back and see how the POG developed but the more I delve into this company the more assured I am if it breaking through 40 cents and moving towards a dollar.
Lets see how we travel.

Well its a week I won't complain about, the IAU trade realised a 40% gain when I sold and DOM hit my stop for still a 5% profit.
Gold is still trading above the 50 day MA line and the last few days has seen some support at US$930. This time two years ago gold set of after falling off a high in April 2007 of US$691.40 to US$642.10 to break US$1000 in March 2008. If we see some consolidation at US$930 I might venture back in.
Buying LGL at $2.80's and DOM at $4.50 and then selling in $3.30's and $5.40's does appeal.
June 2007 was however certainly not a recessionary period and we saw some remarkable gains in the POG and they continued even after the stockmarket bull run came to an end.
There has been some data published which shows that gold does better in expansionary periods rather then recessionary periods. We may therefore be seeing the last time of gold under US$1000.
I am tying with 25 gold stocks to work out the stocks that consistently respond with the largest gains in share price value when the price of gold increases. I am looking over the past 13 months and periods where gold has had it recoveries after retracement. I have identified four periods. I am also splitting the stocks into different groups.(producers and explorers, hedged and unhedged.)
I am also identifying when news both positive and negative is influencing the price, so when this occurs I only look at the period upto the news point and then again from the start of the next recovery.
I hope this works to my advantage for the next recovery.
I still retain some shares in BWN (Bowen Energy)which I have held for a long while now. I am off to the emergency general meeting on Monday where we will attempt to remove the current directors from the board, I saw distinct value in this little explorer the board seem to share those thoughts but are intent in removing it away from the shareholders and into the hands of Indian steel moguls Bhushan at a knock down price.

Well gold is certainly bouncing around, nobody seems sure of anything at the moment, no doubt its on its way to surpass US$1000 plus but on the way it will provide some angst for all goldbugs. The US$ has always had some correlation with gold and the dollar down usually means gold up, the US dollar index has however strengthened after falling from a year long high in early March, this recovery may be short lived as it tests the 50day MA. In the meantime we might see some decline in the POG.
The US$ Index which had been trending up for approx 12 months has clearly broken down away from that trendline within the last couple of months. The 50 day MA is the test we may now need to wait for.

I exited LGL today just after the open and managed a 15cent profit, a 5% gain.
The IAU and DOM trades still remain with stops in place now somewhat tighter.

It was shaping up to be a good week for gold and then came Friday and then overnight gold slumped to $954.60 much to my surprise when I woke up on Saturday morning. The challenge on US$1000 did not eventuate, if gold follows its previous seasonal paths it may well again fall to US$875's.
My thoughts were that this year would be different, that the runaway printing presses and gradual devaluation of the US$ against major currencies would push gold through US$1000. We have seen some swings in gold lately and this could well be another one but one should never discount seasonal patterns.
This chart on the gold eagle website illustrates gold falling away in June.
http://www.gold-eagle.com/goldcorner/seagold.html

LGL trade finished down 14cents on the previous week
IAU was up 1 cent
DOM was up 12 cents
ROL was up a 24.5 cents a massive 44%
Our markets don't open to Tuesday morning so we can see how our cousins travel overnight Monday but I think its time to go again and come back in September unless of course some geopolitical event comes into play.
Its quite possible we will have some bargins again with possibly a sub $2.50 LGL.
If there is no challenge of US$1000 within the next two weeks then gold will meander down to 875's and trade sidewards for the next few months.

Winter Is Upon Us

When I started this blog it was my intention to post every day, now I find a month has gone by and I have not even posted once.
I have again made some trades and hold IAU, DOM and LGL.
It appears that gold may be challenging US$1,000 oz again, the US$ index looks bearish and future inflation worries would be foremost in the minds of certain governments rich in US$. The grab for gold may well now be starting in earnest.
Prior charts have shown the completion of the first wave and the development of the second wave down which finished at around previously indicated support.

I have illustrated my thoughts in the chart, the third wave has commenced, the clearing of US1k and the former high will confirm this and at this point I expect we may well see a sudden acceleration in the gold price as we pass the top of the first wave.

There are quite a few gold companies showing promising charts. I prefer to trade where stocks have some degree of volume but this one interests me, its ROL who could be sitting on a significant mine comparable to Lihir.

Anzac Day

It was my intention this morning to walk down to the local rsl club for the dawn service unfortunately I didn't make it, a week of hard work caught up with me.
I ventured out at 6.00am and walked past the local rsl at 6.25am old folk stood around the area reminiscing or maybe they were talking about the weather probably neither. Whilst there a mother and two young children ran hurriedly towards the club carpark they would soon be disappointed, like me they were 25 minutes late if they wanted to participate in the dawn service.
It felt quite solemn walking past some of those old people. Inside people were eating eggs and bacon and swilling down rum, I kept walking it didn't feel right walking in when I didn't participate.
The rum would have certainly have been appreciated as the morning was quite brisk.

The week went by without any direct involvement in the share market, my motivation is not quite there maybe a few hours spent interpreting the last few weeks actions may inspire me.
The stock (the risky trade)I held a million shares off did sell, so a nice little 33% profit was made. I was completely unaware till I noticed late last night I had not given it any thought during the week. I had bought at .003cents and put in to sell at .004cents.
There seemed be some to some good volume in it yesterday and it finished off the day at .005cents. I am happy with my $1,000 profit (less of course buy and sell costs) so I will move on to something else, just wish I could find it.
All weekend to look so I will see what I can turn up.

Risky Trade

I still hold this one which I bought at 0.003cents, yes less then a third of a cent. I bought a million of them when I saw a jump in the volume the week before last, in fact on that day 100million were traded followed by 127mil the next day. I would not recommend this company though as their market capitalisation is only $25mil and they have over 6 billion shares on issue. It's been in decline for years even to a point where its price could not get any lower.
By now you must be waiting for the name. It's Newsat, short code NWT.
It's been a stock because of it low price and amount of shares on issue that has been one of the ASX's most notorious pump and dump stocks.
I have always watched this stock and have traded it many years ago.
What makes it different this time to the usual pump and dump that has previously occurred, I don't know it’s just a hunch.
I never ever buy anything on hunch, I have always previously traded based on a buy signal generated by the system that I am using at the time.
Is this the result of this protracted bear market I asked myself after I bought resorting to hunches.
Well it’s only a $3000 cost trade looking at 33% gain prepared to give it a go against my better judgement.
Know what you can afford to lose before you trade.

Happy Easter

I decided to bale out of virtually everything as things do point to a short term retracement in the POG. This time of year has seen some rises in the past of gold towards the beginning of the northern summer, this year I fear IMF announcement of its selling 403 tons of gold and the selling of scrap gold in Asia will dispel any rise in the POG for time being.
Till there is a realisation wholesale that the IMF sales will proceed in an orderly fashion and quite possibly to central banks of countries with large reserves of US dollars who no longer want to hold US dollars we will see some short term decline.
The US$'s from this sale will then it seems be dispersed into those third world countries that the IMF decide. Look like the G20 or was it the US stall gold from going up and prevent some dumping of their precious dollar in this exchange. The whole amount is not huge but it will have the desired effect.
The northern summer is traditionally the weakest time for the POG, so as gold has shown in its 21st century bull run that its quite seasonal, the next leg up again could be at the conclusion of the northern summer. The US printing presses that are hurrying out the dollar will also aid gold's run but inflation will not reveal its face for a time yet. So its still bide our time.

Uncertain Times

My AQP trade was a loss, hit my stop, it closed yesterday at $3.24 almost another 5% below my stop. I can't say I can see any great looking trades out there maybe I am not looking hard enough.
I am holding just LGL again got in at the open on Wednesday at $3.02 closed yesterday at $3.38, held it over the weekend as POG looks like it might be entering a major leg up especially with the Americans announcing they are going to crank up the printing presses to avoid deflation.
This introduction of green backs will obviously be very inflationary in due course and that's the intention of the US Fed, what they may not have counted on is the Chinese dumping their holdings of US dollars, to what volume we don't know. I can't see the Chinese observing their reserves of foreign currency devalue so we could see a drip feed of dollars and the dollar gradually devaluing or we may see a dramatic drop as the Chinese dump. I think the former will be the likely scenario.
The Chinese have already warned the US of their concerns and it seems the US have chosen to ignore those concerns. Whatever happens will see gold spectacularly rise through US$1000 towards US$1200 and quite possibly beyond.
Gold has traditionally been a inflation hedge and the US will be heading towards a inflationary period. The reasons to hold gold are becoming compelling and the gold mining companies will benefit substantially particularly the unhedged producers.
I will continue to trade the gold miners as opportunities occur.
I am now looking forward to a $5.00 LGL.

Trade of the month

I thought I would put up this chart as I have a small trade in this precious metal company now.

My rationale was based on this company trending up since the end of October, its bounced of the bottom line in the channel four times since then. The trade is hoping to see $5.00. maybe more if it breaks out upwards out of the channel.
The Williams R showing in the chart looked to be very oversold indicating a trade too.
AQP closed at $3.95 Friday I have a stop at $3.40.
Its hard work making any money in this market so if I can profit 30% in this trade it will definitely be my trade of the month.

Summer is over

Well summer is now over from a meteorological point of view, its not quite time for hibernation as I believe the astrologers wait for the autumn equinox.
The fruits of summer are still to be reaped with my positions in the markets still present.
I am near selling as the gains have been good, my stops are still holding, just.
My updated gold chart indicates that wave 1 has completed and that we now testing support indicated by the solid red line, if this support does not hold there is further support at the 50 day moving average line which previously held in mid January. There is always the danger of a further retracement of even more with a protracted extended wave down to approximately $845 (50% fib line not shown on chart) or below before we see further gains mid year.

On the up side is the suggested lines of support hold and the recent high of $1007 gets taken out.
I am looking forward to a wonderful night of cricket as our team restates itself as number one in the Test world. A wonderful performance from Mitchell Johnson has put us in an unbeatable position.

Gold goes past US$1000

I watched the gold market last market till about 1.00am but that was it, the week caught up with me so I missed the time gold went through US$1000 again.
I expect a good day on Monday with gold shares the gains given up on Friday should be recovered.
How high gold goes in US$ in this leg is concerning, I have posted my wave count so I am preparing for some tighter stops next week, there is the possibility that gold hits resistance at the previous high and this in fact then completes the current fifth wave. There is strong possibility that this current wave five completes Wave 1 of 5 waves that take us past US$1500. If that is the case we should expect some pullback hence my tightening of stops. There is also a chance that the current wave 5 extends through the previous highs, I would think we would see some profit taking there though. Much depends next week on market deliberation with regard to the possible failure of even more American banks, its not all over with the Bank of America and Citigroup needing another injection of aid.

Quiet Friday Night

Well two trades still doing well with LGL closing today at $3.40 and NGF at 15cents, I am still holding despite the pull back today. I think it was expected with these stocks having run quite hard and gold not advancing overnight. I feel we will now see over US$1000 per oz gold before the end of the month, its already made a record high in $A exceeding $1500.
The only thing I had that was up today was DOM which is a small holding.
Some other holdings in NCM,IAU and SGX were all down but not what you would call worrying, normal market movement is the term I would use.
I have never seen so many spruikers on the price of gold, when everybody is starting to jump on the bandwagon you know it's going to go on a journey upward, the worry will be when you walk in the supermarket and the checkout chick can give you the price. It has still a long way to go though.
My foray into nickel shares did not occur, good thing as nickel dived below $10,000 a ton and PAN which I like is now substantially cheaper so I think nickel is now at a bottom and I might make the trade Monday.
Prediction POG over US$990 tonight.
This run is probably the best I have done in 12 months so hoping it goes for a while longer.

Xmas coming early

Well today has started out to be a great day its stopped raining at long last and the POG has flown to US$966 up $25 in 24 hours. All my gold trades are making ground as I type.
LGL up to $3.56 and NGF at 17 cents.
The All Ords is down to 3350 gold stocks are up though, at long last us "goldbugs" are going to make some money.
It does look like the trillions of dollars that the yanks are printing is going to devalue their dollar to benefit of gold as investors, funds and governments look for some safe haven.

Valentines Day

Well it's Valentine's Day and no love notes for me.
Anyway my focus are these current trades I am in and the search for more.
LGL reached a high of $3.48 yesterday and closed at $3.35 still continuing its upwards move, have a stop in place hopefully no volatility will take it out.
Will be reviewing stop daily.
Its very important to me to make some profits so if by chance gold pulls back then I will take a profit rather then see the trade go down and then have the hope it will recover and then left holding it for a recovery that might not happen for a while.
The NGF trade is also doing well and closed at 14.5 cents
Some other trades are doing well too.
The POG (price of gold) closed at US$941.60, down almost US$6 on the previous day but still trending up from the November lows. I still see the POG possibly taking out the highs of March last year and the possibility of reaching US$1200.

Have not moved on acquiring PAN closed at 81cents no hurry on this, need to read more on nickel fundamentals to make sure this is a worthwhile trade.
Well off to the shops before they close.
Got my super statement yesterday its down 16% over 6 months and 25% over 12 months I ask myself why have I managed a return on capital used in the market of 55% over the last months 6 months and the fund managers can't. They get paid big money and use other peoples monies and can't get it right, maybe they salaries should decrease by the amount their fund goes down.

Pretty pleased with today's results seeing the All Ords had a down day, NGF consolidating at 12 cents, hope this forms some support now for a run up. LGL made more ground up another two cents to close at $3.19. The US$ gold price has been trading between $890 and $900 for the past 24 hours any upward movement will see LGL clear $3.20 which is resistance at the moment, once it clears $3.20, the next stop is around $3.60.
The is a distinct possibility that this trade could be far more profitable and well exceed $3.60, lets see how it pans out.(click the above chart for a larger look, clearly trading up within a channel along with a familiar elliot wave pattern in place)
Watched the cricket tonight not a great game but we managed to beat those Kiwis again.
I am looking at putting some money into PAN, if and when commodities recover I do believe nickel will lead, nickel inventories on the LME seem to be stable and the nickel price is slowly moving up, a risky trade but PAN has not been this low for years its up 10% in almost a week so today's close at 82.5 cents could be a good opportunity will check the nickel price in the morning.

Marc Faber is probably known by most of you so he needs no introduction, the man has had an uncanny of calling major economic events and investment strategies to protect your capital.
He is very bullish on gold currently, its interesting to hear his comments on the US stimulus package and the government intervention into various markets and the economy.
At the end of the interview there is his opinion on gold, there is no timing but he sees the possibly of a 4000 dow and US$4000 POG.
My trading is currently around gold companies I am not not dipping in and out like I used to I currently do not have the energy or motivation to do so, so I am taking a longer term strategy on gold companies and identifying the best opportunities.

Four Day Week

Well this week went fast, the four day working week was great.
The week was distracting however for me as my buy of LGL shares was not making any headway.
The mine was closed due to issues with traditional land owners, however announcement Friday that all had agreed to sit around the table, combined with the jump in gold prices this saw the stock surge Friday and it closed at $3.13
My 41,300 shares were looking good as the purchase price averages $2.82.
I hold NGF too this was a real speculative buy they looked oversold and have a hedging agreement in place through a convertible note issued to Lehman Bros which they may be able to get out of and gain exposure to higher gold prices I bought 105,000 of these currently 9 cents, I cant recall why the odd 5,000. This was trading above 50cents a year ago but has been stuck rangebound between 8 and 10 cents for the last two months has some resistance at 9.7 cents. its seems there is always a big seller there as if someone wants to keep it below 10 cents.
Social life has been disastrous this week with a few beers on Tuesday and Wednesday, have been watching a bit of tennis during the nights too.
The rest of the week has seen me watching TV or on this computer.

Another day in paradise

Oh well it looks like back up the club watch the rest of the cricket there, bloody south africans how did they suddenly get so good or is it we are right of the pace. Think I will have to spend a bit of time putting this blog together much better then my old one.
Right off to the club, listen to bad jokes, perv on the ladies and sink a few ales watching the cricket better make them "pure blondes" tonight don't want that beer belly so it's low carb beer tonight.

Australia Day

Well Australia Day and still not up just lazing on the bed although I did go and wash a bunch of clothes, that's it so far, read about 80 emails (deleted most).
Recovered well from too many schooners of Hahn swear I will never drink that stuff again.
Suppose I should do some research on stock markets and dump my coal shares and buy something more in gold, trouble is I seem to get burnt on the speccies maybe I should stick with the likes of LGL and NCM.
TAM and SBM could be value, I will have to make my mind up today but then if the price of gold collapses tonight then what a waste of time that will have been.
Somehow I don't think so, think the game players might take it up to US$1200 an oz this time before they take their profits.
Now if the above happens I think I might be made for life as I hold quite a bit in gold shares already, hmmm all the eggs in one basket I hear you say, well I willing to take the risk.
Almost lunchtime and no food in the cupboard, trouble is if I go to the club for lunch I will probably end up having a few schooners with a few of the boys.
Looks like I will walk up there.