| Technical Analysis Update On GOLD GSS NFI $XAU |
|
| Wednesday, February 21, 2007 |
|
WNightly Update - GLD, Monthly XAU Charts Before and After, GSS Before and after Charts, NFI
Good evening, this is the nightly update. Today I spent the day in the chat room ranting and raving all day long about technical analysis and perceptions or misconceptions perceived by traders and everything else imaginable. On this update I want review some of the things that I discussed on Monday's weekend update regarding Gold and Commodities. As you know, I do not adhere to the gold manipulation theories circulating around. However, I did say that I would be renting that theory this week. On that update, I specifically stated that $Gold would drop sharply prior to the Bank of Japan's (BOJ) announcement on interest rates on Wednesday. I stated that $Gold and the $CRX were at key resistance levels and were stalling. I also said that you should be prepared for a sharp drop in commodities on Tuesday. I added that commodities would rally right back up in a positive reaction to the interest rate announcement made by the BOJ and the CPI numbers. I specifically stated that this would not occur until Wednesday. This is exactly what occurred and it was nothing short of shock and awe. On Tuesday, traders were shocked by the sharp plunge in commodities and subsequently awed by the sharp swift reversal surge on Wednesday. This was especially true for Crude Oil and $Gold. This occurs when "people we don't see, " such as banks and institutions, are unwinding a short position. The drop on Tuesday, (which was manipulated) enabled them to cover their short positions prior to the announcements. Normally I do not follow fundamentals because that is not what technical analysis is about, but in this case, I knew that the BOJ and CPI announcements (news) would affect how our stocks would act on Tuesday and Wednesday. It is also important to be aware that commodities and Gold in particular do trade on fundamentals and are their moves are often news driven. However, you do not need to trade every single news announcement. This is where technical analysis becomes important to your investing decisions. Charts can give you the Big Picture trend. The charts also foretell when they are going to react to news. It is in this manner that technical analysis can help you eliminate your emotions form your trading by alerting you in advance that something is going to happen. The charts keep you from reacting to news driven events thus enabling you to act rather then react. There is a huge difference between the two.
To give you a brief history, Japan has kept interest rates historically low for the past 10 years. Last year the BOJ raised interest their rates up to .25%, which was the first rate hike in 6 years. Prior to that , rates were at historical lows hovering around 0%. Today, the BOJ raised interest rates another .25% bringing the interest rates up to .50% which is the highest it has been in over a decade.
Today was an important day in the U.S. because the CPI numbers came out. The CPI rose 0.2 in January which was higher than forecasted by economists who were predicting a 0.1 increase. This increase in the CPI is a sign of inflationary pressures on the US economy. The commodities basket reacted favorably to the CPI increase as people bought them as means of hedging against inflation. Oil, Gold, Silver and Corn surged on the news and this pushed the $CRX up to new highs for this year as well as new 52 week highs. Crude Oil went up Gold sliced through resistance and to reach a high of $686.40 an ounce. Silver rose to $14.273 an ounce. Silver has climbed 10 percent so far this year alone and gold has lagged somewhat with a gain of 7 percent. These are solid gains considering that there have only been 8 weeks in the year so far. Gold climbed 23% in 2006 as consumer prices gained 2.5 percent. Corn hit a 10 year high and Crude oil traded above $60 a barrel.
On the weekend update I focused on $Gold and the $CRX. I usually don't update $Gold, the $XAU or HUI indexes. In the past, I used to focus excessively on specific commodity indexes. The rationale behind this is because an index will typically tell you how the basket of stocks in that sector is performing. The premise is that a rising tide will lifts all boats. Recently, I have been focusing on our stocks instead. After all isn't it that really more important? The reason for the focus on our stocks over the indexes is because sometimes the stocks don't follow the index. They are trading independently of an index, on their own patterns and their own merits. I wanted to be very specific about our stocks and to make sure that you are not trading the index rather than the stocks. On Monday, I wanted to give you advanced notice that our commodity stocks would drop on Tuesday, because emotions such as fear and greed are part of the trading process. This was my way of holding your hand so to speak. I do my best to give you advanced notice of what is going to happen so you can be psychologically prepared for the action that occurs during market hours. It is in this way, I try to make you comfortable.
There are different stages of comprehension that our subscribers go through. Oftentimes, a subscriber will not believe what I am telling them in advance until it actually occurs. This is because they adhere to a seeing is believing system. This causes them to react emotionally to the market rather than acting logically. This is normal, and I am aware of the emotional aspects of investing and trading. It is for this reason, that I do my best to tell you what is going to happen beforehand, so that you can be emotionally prepared and steel yourself against sharp/ swift moves in the market. Now, I don't expect you to be a technician overnight. I am aware that learning technical analysis can be tougher to understand for some than others, and that it takes time and study. This does not mean that you can not be successful. You can take comfort in the fact that I am also aware of this. It is for this reason why I send you the updates. I try to keep the updates as simple as possible and give you the key points to stay in a stock so that you do not over analyze things and get whipsawed out of the stock.
What I want you to leave with is this: Our stocks our rocking JOYG was great and traded over 6.5 million shares today. I am also issuing sell alerts/ profit alerts right now because the majority of subscribers requested that I tell them when turning / reversal points are. Consequently this is what am doing for you because you asked for it. Ask and you shall receive. I issued sell alerts on EPIQ, and OSTK, so we can get back in them a month or less, this will add 10% or 15% to your our overall gains/ bottom line.
My Main point is this: I want you to be sure that you know that I am listening to you. I want you guys to make as much money as possible! I think you are all worth it and you have earned the right to make money. You are a winner! Moreover, you deserve the best analysis that allows your money to work for you and to make money for you. As a human being you deserve this, and you have a right to make money! Just know that I am taking care of you and have your best interests at heart.
Wishing you the best! John Lansing
Edited by :Andrea Victoria Friend aka Daisy
Editorial Assistant for Trending123.com
daisy@trending123.com
Mon Feb 19th 2007 @ 12:22:18 (2 days and 7 hours ago) $CRX, $GOLD, GSS, GG, HMY Now while I don’t subscribe to the “Gold Theory Manipulation Camp” I am renting it this week and in this update I talk about why. And it has everything to do with the BOJ (Bank of Japan) and rate decisions this week from what I see on why some sectors within the commodity sector have started stalling. But that should soon be resolved.
Street Track Gold Trust Shares - GLD - Daily Chart - Bullish Ascending Triangle Pattern
Key Points: 1) GLD has the same chart pattern as the $CRX and $Gold. 2) GLD is stalling at resistance at the Fibonacci retracement 72% level last week to form a bull flag. 3) GLD at key resistance at $66.42 at drops sharply to the 13 EMA on low volume Tuesday to shock and scare retail traders out of positions 4) GLD reverses sharply and slices through resistance and the Fibonacci 72% retracement level on heavy volume ( probably by institutions) on Wednesday after the BOJ and CPI announcements. 5) the 72% level is very significant because it means that the previous impulse 3 to 4 waves were corrective waves, it is a technical indicator that means that GLD and Gold will continue to move up in am impulse 5 wave to make multi year highs. 5) On Wednesday gold hits highs not seen since May 2006. 5)GLD is in a 123 bullish trend reversal on all chart time frames. 6) Indicators and oscillators are bullish. 7) Gold and the precious metal stocks are in a secular Bull market. 8) Gold and the stocks trade on fundamental and technical analysis. 8) the rise in the price of Gold has everything to do with inflationary pressures.
 Gold & Silver Index-Philadelphia - XAU - Weekly Chart - Bullish Continuation Wedge
Key Points: 1) XAU has completed an impulse wave 3 to wave 4 containing corrective ABC waves that form the geometric pattern called a Bullish Continuation wedge. 2) Wave 4 does not overlap wave 1 indicating that the is XAU now trading in a bullish impulse wave 5 up move. 3) The XAU may now be in trading in a wave (1) or (3) of the larger, meaning that there is a lot more room for it to move up to make future multi year highs 4) price trading above the exponential moving averages (EMA's) 5) indicators and oscillators are in a 123 bullish trend reversal.
 Gold & Silver Index-Philadelphia - XAU - Monthly Chart - The Big Picture - Bullish Continuation Wedge
Key Points: 1) The XAU secular Bull market is in it's infancy it now 2) It is now in wave 1 of the larger 3) XAU has completed an impulse wave 1 to wave 2, containing the corrective ABC waves that form an irregular flat 2) The XAU on the Monthly is now in a Wave 3 out of the 5 waves. 4) wave 3 is which is the fastest and most profitable out of all the impulse waves. 5) XAU and its stocks are in a secular bull market. 6) Precious metal stocks are leveraged to the price of Gold and Silver, and out perform the metal. 7) price is trading above the EMA's 8) the EMA's are trading in a bullish fan. 9) indicators and oscillators are in a 123 bullish trend reversal, but waiting on a cross of the PPO and Stochastics. 10) Please look at the Essential design chart at the bottom of the page - scroll down.
Golden Star Resources Ltd. - (GSS) - Monthly Chart - Counter Trend Pullback Channel Breakout - Gold - Optionable
GSS is a medium risk Gold play. We sold AUY to get into GSS. Back in early 2000, when I first started talking about GSS and suggesting it, I never thought the $Gold bull market would officially take off until GSS started cooking. Back in 2006, when the $XAU and $HUI made new highs, GSS never did. The fact that GSS was under performing, made me doubt the gold stock rally because GSS was led the Gold stocks rally in the first place. GSS has always been a front runner in the Gold sector. In January 2007, GSS went up 11%, and this month it is up 17.68%, and on good volume. GSS trades on its own merits. The monthly chart of GSS illustrates that it has just broke out of a counter trend impulse wave (3) to (4) channel. GSS is now trading above it's exponential moving averages on the monthly chart. The EMA's are also converging now and attempting a bullish triple moving average crossover. You can also see that the Aroon indicator has recently had a bullish cross. GSS is now in 123 bullish trend reversal on the monthly since 2002 ( take a sticky note and write that down). I think we will back test 38.2% level and then move up to double top at 100% at around 22.00. I don't not know when we will hit that price target. Please be prepared for sharp and swift dips in this stock. GSS is now in a parabolic up move. This stock is a BUY and HOLD for 12 months or longer. It is now back in a bullish uptrending move. It does not trade along side the $XAU. It has it's own chart pattern and is trading in accordance with that. Furthermore, if you look at the WM%, the PPO, and stochastics you can see bullish divergence appearing. This is the beginning of a impulse wave 5 up move. GSS is outperforming the $Gold by leaps and bounds. The buy alert for GSS was triggered at $3.23. It is an investor trade, meaning that it is meant to be held for 6 to 12 months, or until price target is reached at $10.00 or higher. You do not need to watch every tick on this stock, just buy and hold it as an investment until price target is reached at $10.00 or higher. I DON'T THINK THAT 1 OR 3 OF THE LARGER WAVES HAVE EVEN STARTED YET FOR GSS. BUY AND HOLD ONLY DURING A PARABOLIC UPMOVE LIKE THIS. GSS IS A FRONTRUNNER.
 GSS IN 2003 (WEEKLY CHART)
Golden Star Resources Ltd. - (GSS) -Daily Chart - Gap Down then reverse upwards - Gold - Optionable
1) the daily chart illustrates how GSS was smacked down the day before the BOJ and FED announcements on light volume to form a bull flag. Then reversed sharply upwards the next day on heavy volume. 2) the gap down held the 34 EMA which acts as a constant magnet for price on pullbacks/ dips. 3) you can see that the charts never lie and it forecast the drop 4) I further stated that this was a good buying opportunity 5) I want to point out that if you don't see what I see, you have to know what I see is correct more often than not 6) Only you can pull trigger to enter a trade - therefor you should be applauded!
 Novastar Financial (NFI) - Monthly Chart When does analysis turn into something that is correct, but we are not able to stay the course for one reason or another? We first bought NFI in 2002 and 2003 and we rode NFI up to the top with an incredible gain of 80 points. This was a buy and hold trade for the year. It was my best point gainer in 2003. The day before NFI came out with earnings in 2004, and this is pre-split, I issued a sell alert and I then issued a sell short alert. I said back up the truck on this short position as well as buy puts. We completed this trade with gains, although the puts did not work out. Then, later on as the months go by, in their 10 Q, something odd comes out, they realize that they found an office. This was supposed to mean something bullish , but I knew it was a warning. Then I issued another sell short alert, because I know that the stock is now in a bearish trend. When a stock is in a bearish trend you trade it. This in contrast to a bullish trend where you buy and hold. I also recommended buying puts at the second bear flag. My target was zero. We just were not able to stay in it because it traded sideways for another year and half until this year. It is now down 50% this year alone. MY POINT IS: SHORTING IS NOT AN INVESTMENT> IT IS ONLY A TRADE> TRADE THE BEAR RIDE THE BULL. IF you short a stock the most you can make is 100% this is in contrast to a long term investment which can go up 100% or higher. Therefore, the gains going long a buy a hold will always be greater than a short. Furthermore, if a trade does not make gains right a way there is no point of being in it. The only thing we trade a Trending123 is a stock that makes you money right away otherwise it is dead money. We want our money to be working for us. Everyone is wrong from time to time. That is why I DO NOT TRADE MY ANALYSIS, I TRADE THE SET UP. (Memorize that!)
 ESSENTIAL DESIGN
|
