Pailin's Trading Corner

Redwood.  I cant always choose the right stocks,

but ok with music most of the time. I was actually

engaged to a girl in Montreal while working in New York ;

I think about those times a lot  : ) 

x2

cant quite decide if thats John Lennon in that Booker T vid ?

Montreal hmm,

Vibrant, very French with great food and a certain joie de vivre that is somewhat lacking in English Canada. Apologies to all my non French compatriots. Booker T.  Talk about memories.

Ok. Back to the metals.

It really isn't that odd to think gold is going up since Aug. is gold month.  Until I looked at the charts above, it again confirmed for me that there is an underlying mechanism not privy to us that is  perpetually at play.  It is not incompatible with manipulation because manipulation is part of the cyclicity of the market.  It has its own rhythm and events like FOMC or the ECB, while exerting their own effect, are eventually woven into a more predetermined pattern imo.  Its equivalent on a smaller scale to watching out for Borg times.   They are part of the rhythmicity of the daily pattern.

OK.  I finally got around to doing this.  It just seems like it is important.

Here's my COT graph for silver.  Sorry it is not very clear.  I can't seem to figure out how to compress and resize and upload a clear picture.  But I can make my point.

The important things about the graph are:

1) Silver is in a wedge and there is not much room left before it breaks up or down.  The rising trend line dates back to 2008 while the falling trend dates back to our favorite Sunday night back in May 2011.  Both trend lines have been tested, but not violated, which is going to end within a week or two at the most.

2) The commercial position in the COT is very bullish.  Not since 2001 has the net commercial position been so high.  (This is the middle part of the chart with shades of red and green.)

The problem with COT analysis is that it is not very precise.  This is especially true about timing.  It is difficult at best to use the COT to time the market -- I don't even try anymore.

But the great thing about this wedge pattern is that there is no time left!  It will almost certainly either break up or down.  And with this bullish COT, I do not expect it to break down.  (Or rather, break down and stay down.)

We definitely could get a drop in price which would certainly be accompanied by a rising (more bullish) commercial net position.  This is definitely possible -- especially with the FOMC on Wednesday.

I'm actually not sure what is going to happen.  I have my physical stash, but I don't hold trades for more than a day anymore -- so I'm not planning on trading this.

If we do get a drop, it should be a great buying opportunity.  (No guarantees!)

The data, if charted in the frequency domain (instead of the traditional time domain) should reveal several prominent periodicities, i.e. spikes on the graph corresponding to variation that happens on short-term (high frequency) and long-term (low frequency) repeating patterns. The highest amplitude spikes account for the largest variations in the data set. Consequently, the highest amplitude spikes are the most predictable and indicate when one can make the highest probability bets as the pattern repeats in future. If only I weren't so lazy...a graph is long overdue.

First push through 28.50 I lighten up but do not come completely out. Then, on the ensuing pullback to 27.70 area, I reload.

I don't see any serious intervention until we approach 30. Just take the FOMC in stride and use it to your advantage.

GLTA

IMO, the QE question is not if but is it enough. Deflation; I think that is not going to be a problem for the pms with or without QE in whatever form.

Ben will not allow deflation and food prices will be rising regardless.

The fear in the pms is the ever present intervention raids. History shows were and when they are mostly to occur. Try to be in a position to use them to your advantage rather than be pillaged by them. It is hard because the manipulators are playing with a marked deck. But it is not impossible. PM prices are headed higher over the long term regardless of interventions. 

GLTA

Hi all. ..so its time to stop lurking and join in, I've been around since the previous site on and off, but lurking here (this thread) quite a lot, so I do feel like I know you all already. :)  

I'm an amateur day and swing trader, past beginner now I suppose (9 months) but only a relatively small account until I'm confident I can be consistently profitable. 

Fx - I trade EURUSD & Cable primarily,  futures, mainly gold, oil (Brent & WTI) and the E-minis and although I do dabble in Silver when it comes alive. I also have a core of physical 65/35 Au/Ag since 2009. 

so its probably a good time to thank everyone who's contributed here thus far for everything helpful I've ever read, and Pailin for taking the time to start and keep up with such a useful ongoing resource.

..greatly looking forward to intercourse with you all  ; )

kevsta

lol.  I'm English and aware of the implications to potty minds :)  actually, it just means 

unless you add "sexual" to the front of it.. ;)