Wednesday, December 3, 2014

TWO INTERESTING THINGS IN THE GOLD CHART: you won't believe what happens next!

Well, I said these were interesting, so we have to address them today:

Gold closed above the SMA(50) on Monday, backed off just to the short EMA yesterday, and is back at the SMA(50) this morning trying to figure out where to go next.

TAs seem to think that a line crossing above the SMA(50) is bullish. So does that mean they decide to buy gold? Sounds crazy, no? Why would you do that?

I said a few days ago that I'd be interested if GLD:UDN (gold ex-US dollar) broke above 4.75. Well, it did on Monday, backed off Tuesday, and has now moved above again.

That means that ex-USD, gold is out of its bottoming range on the weekly chart, and is moving up ex-USD:

Wait! why does it make any sense at all to go long gold right now?

Well, maybe it's because everyone's short gold right now?

But the damn US dollar is still going up! So why is gold going up?!? What the hell?!?!? This isn't supposed to happen!

I agree with all you people out there who are long-USD-short-gold! Gold should not be going up right now! That pair should not be losing money! Why does GLD:UDN say that the long-USD-short-gold pair has started losing money?

I mean, what can we do now? Double down? Yes! Yes, maybe we should double down on our long-USD-short-gold trade! It'll definitely work out well! What could possibly go wrong? Gold is supposed to go down if the US dollar goes up, after all! And hell, look at copper and oil! This will definitely work out! Let's just short gold some more!

And one final chart, just to be fair:

Indeed I did say, just a few days ago, that I felt B2's chart was borkened, because every single person who bought BTO since September 2010 is now 0-60% underwater.

Nevertheless, while all the other golds were drifting lower this week, B2 has moved up on high volume.

I respect volume and chart movements more than I respect my own opinions, so I just took a starter position in B2. Otjikoto is coming on line, they are mining at a profit (aren't they?), and Clive did build a large major miner once before.

It'll probably all end badly. Maybe instead I should be shorting gold like everyone else.

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