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Too easy.
I'd relax. I have little doubt that buying under 3 bucks will result in a nice trade. I'd work my way in kind of easy though. Not sure for how long GDX buyers will stay irrational before they take profits. Probably GDX profit takers come in today or tomorrow.
I began to re-enter. Started with 1/5 position at 2.96. Will accumulate and trade as I see fit.
As of right now if the market were open UWTI would be about $26.25 or so.
There are too many emotions that hit when a major central banker speaks. Like the ECB last week and the FED today. I liked everything about DUST and the chart was setting up really good but knowing the FED was going to speak had me so cautious I sold before hand.
Emotions should start to calm tomorrow and I see DUST recovering some in the next few days. I'm looking for a re-entry soon.
SKLN is looking like it wants to go beast mode.
I agree it is just getting started. DUST runs for a few weeks when it goes and it just started. I loaded the boat on late last week at 3.35 however and half were to be used for the real run and the other half for flipping. The flipping shares I felt it was time to sell them and try and get them back on a dip. My core shares though no way I'm selling them here.
Also I see you joined me on DUST. I don't think most realized it is pinched. It has a gap to fill at 10 bucks. I don't know if it ever will or not but miners also have gap ups to fill from a few weeks ago way lower down.
20sma on DUST I expected it to give big resistance but it will have to move past it to relieve the pinch eventually. I sold half of my DUST this morning. Holding other half for real run. If there is a good enough dip on DUST then I will buy back what I sold today.
SKLN, I joined you. They gave me 18 cents about half hour ago.
There is nothing on the chart at all that makes me want to sell. Day traders will sell and that is great for them. I'll hold, DUST likes to run for several weeks when it reverses or corrects from a downtrend. Miners like to drop for several weeks when they reverse or correct from an uptrend. This is day two, I'm holding. It could get some red candles here and there but I believe DUST is a lot higher then here in the next couple of weeks.
You guys don't sound so confident here. I'll try to help out. You may throw some of what I say out the window but at least some of these points you will be nodding your heads in agreement.
1) Many people know gaps (especially gap ups) like to fill. There are many theories why they do but the bottom line is for whatever reason/s they almost always do. Look at gold miners and look at GDX and GLD. Many of the miners have gap ups from a few weeks ago. They have not filled. GDX and GLD, same thing. If the gaps are to fill then these must come down quite a lot and JDST and DUST will do the opposite of coarse.
2) What is the primary reason to buy gold? Inflation is the main reason. There is no inflation. The US has some but the FED really desires to raise rates which is deflationary. The rest of the world has no inflation and in fact is fighting off deflation. Gold thrives in inflation and there is none.
3) What is the secondary reason to buy gold? If you think the market stinks. This was the reason for gold's massive rise so far in this short year. The fear trade had participants jump out of the market and into "safe havens". They ran from risk and put their money elsewhere. Gold was one of the things they bought. About a month ago people started to go back into the market and the "safe havens" started to sell off some. Except for one and that is gold. The people who bought gold have not gone back. Now unlike the TVIX or something that is "anti-market" that has corrected during this market rise recently gold kept going up. If the market were to turn south again who is going to be there to buy gold? The people that wanted it bought it earlier in the year and at much cheaper prices. There will be no return of people who left the market and went to gold and then went back to the market because to do so they would have had to leave gold to get back into the market to then re-enter gold. They didn't leave gold so they can't re-enter. I'd buy the argument people will rush back to gold IF gold had sold off or corrected this past month but it didn't.
4) You can see in gold minors and GLD and GDX and whatnot the Elliot wave. They all show a textbook impulse wave. I mean almost perfect. They all look to be in wave 5. Can wave 5 go a bit higher, yes it could but looks like the juice is all used up. What comes after the impulse wave? That would be a correction wave. In reference to #1, maybe a correction wave down to those gap ups that have not filled.
5) For gold to have gone up like this the main fundamental reason would have been inflation fears. Well there are actually deflation fears in the world. Central banks are pumping like mad and at this point it is just to push back deflation. Deflation takes everything down, including gold. 2008 the world went through deflation. You know what gold did? It tanked. Gold rising due to deflation worries is backwards. It is supposed to rise because of inflation worries.
Conclusion. Market forces are against gold. Gold seems impervious to this but it will correct. There is no inflation and yet gold ripped. The market the past month has bounced back and yet gold went higher. Since gold has not corrected like it should have who will be there to buy it should the market go down again? The buyers who bought have not sold. They didn't re-enter the market. They held their gold. New buyers are supposed to come in now and pay way higher prices? I doubt it. If they were not interested in gold back in January and early February they are not going to be interested now. There won't be new buyers and there won't be people to re-enter because they never sold in the first place so where goes gold find buyers in a world fighting off deflation after it has gone up over $200 in just a couple of months? The charts show all miners and gold and gold funds extremely over-bought. The fundamentals show gold miners with very high P/E ratios. Charts show DUST and JDST very oversold and down over 80% in just a few months. All of this works completely against market forces and gold and miners will correct. Only thing that is justifiable for gold and miners not to correct is if inflation jumps big all the sudden out of no where and the chances of that at practically zero. I say to you all hear. Get your confidence up because practically all market forces point to a solid gold correction.
I see gap ups in a lot of the gold miners that have not filled. I see the same in GDX and GLD. Gaps like to fill. A nice correction wave that hits gold and gold miners should fill those gaps.
Yes it looks good. I am seeing from the past that this does take a little time to bake in the oven I believe that it is doing that now. When it is ready it will be a beauty. There might be some more baking it needs overall for a bit longer but one thing I know is that this is money eventually.
I really like SKLN. It is one of my top prospects. Problem though is it has one of those unit/warrant deals beating the heck out of it. Similar to what GBSN and AEZS had. Probably have to wait for those units/warrants to dry up. I have SKLN on watch and when good to go I believe it will be a massive runner.
I like DUST right now. Good pinch. Will accumulate it.
For anyone wanting to play this I think they will have to be patient. It is carving bottom. It is a process and takes a bit of time. A very big run should begin within 1 to 4 weeks IMO. It needs to carve bottom, then divergence, and then gain momo. Once done it runs IMO.
Thanks and you too. I was thinking 6 bucks or so as a goal to get to and then go from there. I went back many years on gold miners. They are all very over bought right now. They are also very over-valued with extremely high P/E ratios. They all show they are in EW 5. They all show buying pressure drying up. They all show they need a correction bad. Most also have gap ups from a few weeks ago that need to be filled.
DUST on the other hand (naturally) is very oversold. Buying pressure is increasing. Some indicators for DUST are at all time lows (PPO is one). In past history this setup DUST has right now lead to 100-300% gains over several weeks/months. DUST chart has been in this similar condition many times before and it has ran every time.
Alright I'm in finally. Bought at 3.35 and I am not flipping. I will only accumulate. I know these velocity ETFs are for flipping but I have no interest in that with what I am seeing in charts and market forces. I believe DUST has a big run in front of it soon. To me this is too good of an opportunity and I will not flip it away.
Yes, I am mostly cash right now. My retirement plan I switched it to the government securities fund option last June, all of it. It will stay that way for awhile.
Take care and best wishes to you.
There are two posts from you for me to respond to so I will do so in this one response.
I completely agree with you. I see the move in gold playing out similar to what you describe. Only one thing I will add. After the FED tightens as you said and then they go back to loosening the explosion in gold can happen BUT there must be inflation. One would think that there will be but it would/should and will are different. Inflation is what drives gold up. Stimulus and money printing and easing is SUPPOSED to cause inflation. Inflation equals higher gold prices. The acts to cause inflation do not increase gold prices unless those actions actually do cause inflation. Central banks have been doing actions to cause inflation for years now and are failing.
I agree with you on the chart and about gold being its own animal. It really does not answer to anyone. Expect one thing, and that is deflation/inflation.
I believe that deflation in the short term is much more probably then inflation and that has me bearish on gold. In the long term I think there will be very big inflation and that will be bullish for gold.
Good points you made and I agree with your thinking and logic.
This is exactly what I mean
"The Bank has sought for three years to push inflation up to its target level, spending 700 billion euros on asset buys in the past year alone. But it has been to no avail amid weak investment, high unemployment, high debt and productive slack in the economy.
Draghi announced that ECB staff had slashed its inflation and growth expectations, predicting that even with fresh stimulus, price growth will not reach its target for years to come and growth will slow."
As I have been trying to say. Gold is a hedge against inflation not really a very good hedge against the market. Inflation is good for gold and deflation is bad for gold.
As everyone can see, no matter what the ECB tries they are stuck in mud and can not get any inflation going. Deflation is feared. In Asia it is the same. China is imploding. These are all deflationary stories playing out which is bad for gold. Gold needs inflation to thrive.
In the US data is not too bad and the FED desires to raise rates. Raising rates is a deflationary measure. The rest of the world is doing inflationary measures but it is not working and they are fighting like mad to fight off deflation. Only the US is having inflation but the FED desires to raise rates which will be a deflationary measure.
In my opinion this is bad for gold. Gold like anything else loses value during deflationary times. During 2008 deflation was hitting and what did gold do? It spiked down. What did gold miners do? They spiked down. Deflation takes everything with it. Cash is king during deflation and everything else bows to it, including gold.
Why gold would be up like this so far this year really makes little sense to me. It is the hedge against inflation (not markets) but there is no inflation and none is really expected. Fears of deflation are growing though.
I am going to wait a bit longer but I will be owning DUST pretty soon. The market will fix this bogus rise in gold soon as there was not the inflation in economies this year to justify such a rise.
This is why there had been a big rise in gold for a few years since 2009. In 2009 all the central banks started stimulus. The thought was that over time this would lead to big inflation. Gold went on a tear for a few years.
The past several years however gold has been coming down. It has been going down because again, it is the hedge against inflation and as time went on people started to see that even with all this stimulus from central banks inflation never really took off. This is why gold has struggled the past few years.
Now, has this story of lacking inflation changed today? No it has not, matter of fact it is getting worse. Therefore gold, in a world lacking inflation and fighting off deflation, should be heading down.
That's cool and reasonable. I do have to say though that China data has been terrible and now the ECB is doing a desperation move. Some would say EXACTLY! That is why I am buying gold and gold miners because the economy and markets are going to tank. And I say not so fast.
Reason - yes economies and markets might tank but that does not mean gold won't tank and miners too. Deflation is what is feared. Deflation is not good for gold. When there are tough times for economies and markets deflation kicks in. The value of everything including gold goes down.
If one would pull up a chart of gold and miners they should look at the period of 2007-2009. They would see that as deflation came about gold tanked as well as miners. When things get tough people have to survive. They can not afford to buy gold. If there is no buying then there is no demand so prices drop. Gold is no savior during times of deflation.
Gold should go up when there are fears of too much inflation. For gold to go up do to fears of deflation is backwards and it will not last. If one believes that gold is the thing to be in because they think a global recession is coming then that means deflation is coming and gold will go down with everything else as it always has during deflation. What are the fears right now? That growth is slowing, and there isn't enough inflation and there are threats of deflation. Gold should be headed down if this plays out. It will not go up during a period of deflation.
I had a fund I was in back in 2007 and I held it through the great recession. It was a precious metals fund from USAA. From 2007 to 2009 it tanked. I added to it in early 2009 and by 2011 had made some nice money but during the recession gold and miners were hit hard and so was that fund. Deflation lowers prices of everything. People need to understand this.
That is true but the problem of someone using that logic is that they are betting that US does not tighten further even while the rest of the currencies are flooding the market further. They are hoping for something and betting on that instead of actually following what is actually happening. The FED desires to raise rates and they will. They have no wiggle room so rates have to go up so they then have some wiggle room. US rates will go up. The rest of the world will continue to de-value. They will continue to flood the market and meanwhile the US will tighten slowly. There is only one result that will end up happening. The US dollar will increase in value. People can hope for what ever they want and rationalize but it is in complete contradiction to what is actually happening.
As of right now the EU is stimulating and the US is either staying put or might tighten a little. Either way there is no way the dollar should be down. Rest of the world is flooding their currency and US is not.
I have a feeling fat cats are propping up gold to dump their over-valued mining stocks to retail at 52 week highs and while severely overbought. When they finish that down goes gold and mining stocks.
Exactly, I see a 15% correction on avg for miners coming, putting them back to what was wave 4. 15% times 3 is 45% for DUST which would put it a little over 5 bucks. That's pretty good money. I think bottom takes another 4 to 5 days maybe to grind through though first. DUST might hit new 52 week low or revisit it but it might not. I'm not so sure about that part. I'm very confident about the mining sector having a 15% to 20% correction though and DUST going on a little run.
Been going back looking at the chart of this thing. It has a very similar setup now to previous times just before it had big runs. I see most gold miners look to have completed wave 5 also. I have a good feeling this will be a good money maker.
I have my eyes on this now. EU is stimulating causing more euros in the market. US is in a tightening phase. EU ramping up stimulus is supposed to mean weaker euro and stronger dollar. Stronger dollar hits gold. The backwards happened this morning. Dollar went down and gold surged. A complete opposite reaction to supply and demand fundamentals. Gold is tied to the dollar, not the euro. Some kind of game is being played and I'm going to get in on DUST I think in coming days.
I agree with you and think the same but I thought it was risky buying yesterday. My only point was at the level it was at yesterday why not just wait a bit and see if there would be further pullback or not or if oil would continue and break $38 in coming days.
I'm pretty sure the banks are behind the rally just for the reasons you stated. It isn't that I don't think oil will go up, I just thought it was best to be cautious at that time.
I have to be honest with you and ask why not just wait a bit? Unless there are fundamental changes in the inventory reports or something crazy that happens in the world the next couple of days oil will probably head lower.
Roll also happens this week. I don't understand why people can't just sit on the sidelines for a couple of days. Momo was what was running oil and momo has left the building for now. Strong buying probably will not happen until oil has pulled back more. This "pullback" is only taking 1 days gains away so far. That really isn't much of a pullback yet, not what it could end up doing.
I think relaxing and sitting it out for a bit longer is the wiser move.
U looking for DWTI 200 to sell at? I think that is a good target. I was thinking oil at about $35 is the sot to sell DWTI. Still deciding.
Yes I agree, I think best thing to do is sit back and watch for now. I believe 1.90 would be a good UWTI buy again. That is an utter guess though because oil is crazy lol.
You are correct about that trend line. I watch it close. It is so far out ahead of the trend line that oil could fall to $34.50 or so and still be in the trend line. I don't think it will fall that low but you just never know. Again, to me right here I think caution is wise.
Everyone be alert and careful right here. Not saying what to do, just saying be careful.
Good call Kam and just a second ago I saw oil $38. What a run, oil up close to 10% in just two days and up 46% in just a couple of weeks. A lot of us knew it was coming though.
From here I really don't have a clue in the short term. If the banks want it higher then it is going higher. In the long term oil goes higher obviously. As I had said before I'd like to see a pullback because that would actually give it more strength but it kind of looks that it might not be needed so...It cut through that $36-$38 resistance like it didn't even exist.
Anyway, great play, great day and a great few weeks.
Good call Kam and just a second ago I saw oil $38. What a run, oil up close to 10% in just two days and up 46% in just a couple of weeks. A lot of us knew it was coming though.
From here I really don't have a clue in the short term. If the banks want it higher then it is going higher. In the long term oil goes higher obviously. As I had said before I'd like to see a pullback because that would actually give it more strength but it kind of looks that it might not be needed so...
Anyway, great play, great day and a great few weeks.
Oil was a pinch play. Fundamentals go out the window on a pinch play. They just don't matter. All things that trade can get pinched including commodities. WTIC was a classic pinch and it is playing out like a textbook version. It is not uncommon though for a pinch play to find very heavy resistance at the 100 day moving average. For crude that is right about $37.40. Watch that level very closely. It is very important. Eventually it will crack it but it would not be un-common at all for a fall back first to reset to then gather the strength to bust through the 100 day moving average. The 100 sma is always a tough booger.
FYI, nat gas is pinched right now, just like oil was a few weeks ago. Same setup and I wouldn't be surprised to see the same result.
It is clear the big banks decided to buy up oil contracts starting a couple of weeks ago which rallied oil and then the energy sector. The banks didn't want to have a ton of defaults to have to deal with from that sector. Fundamentals mean nothing. I see no reason why the banks stop here. Oil goes higher from here. They won't even let oil take a decent dip or pullback. They have their plans and will get what they want.
Nat gas looks like a good buy now IMO. Same story will give same results IMO.
Good post, thank you Tony.
A couple of things:
1) I'm pretty sure that the buying/selling of UWTI doesn't make UWTI go up or down. The movement of oil only makes UWTI go up or down.
2) No contracts (which is what actually move oil) are tied to UWTI. UWTI is an electronic traded note. There are no assets backing it. An oil contract would be an asset. Read this
"Exchange-traded notes ("ETNs") are unsecured, unsubordinated debt obligations of the company that issues them and have no principal protection. Although an ETN's performance is contractually tied to the market index it is designed to track, ETNs do not hold any assets. Therefore, unlike investors in exchange-traded funds ("ETFs"), which hold assets that could be liquidated in the event of a failure of the ETF issuer, ETN investors would only have an unsecured claim for payment against the ETN issuer in the event of issuer's failure. Before investing, please carefully consider the credit worthiness of the ETN issuer and the ETNs investment objectives, risks, fees and charges."
3) If so UWTI can not move the price of oil. Oil moves the price of UWTI though.
4) Trying to get others to either buy or sell UWTI actually does nothing. People have to buy or sell actual oil contracts to have an effect on UWTI I believe. In other words bashing or pumping of UWTI is a waste of time and this message board doesn't need either.
5) Credit Suisse who is this ETN's issuer may be buying and selling oil contracts and that would move oil which in turn moves UWTI but UWTI itself does not move oil and UWTI does not move on its own. It only moves by the movement of oil.
If Kam or someone else very knowledgeable about this ETN could add this this or correct what I am saying I would appreciate it. That way we have the info out there for others to see and we could trade happily in peace without folks "pumping to the moon" or "bashing for cheapies". This is a good and knowledgeable board. Lets keep it this way.
It isn't funny and oil effects many people. Oil needs a recovery that is real and sustainable. My brother is an electrician. The majority at his job have been laid off. He lives in a city that is highly dependent on oil. He still has his job but he already has to take a non-paid day off every week. If he did get laid off I guess some would say "well he can be an electrician anywhere". True but his son has some challenges (special needs) and he would have to change schools and a new environment and all that other stuff. Not the easiest thing if already challenged.
It would be best if oil recovered and my brother didn't have to constantly worry if his job was safe, if he was next to not have employment. He has been going through this for a couple of years now. It isn't funny and it is real.
I said what I said before because I don't want a repeat of last year. What good does that really do anyone? You know what happened last year? Oil did a W bottom and in March began to run after hitting bottom at $42. It completed the W and stabilized at about $62. Which was a 46% increase total, right now this year this run is now at 40%. That only lasted a very short period of time. By August last year oil hit new lows and fell to $38. The fundamentals are worse now then they were last year. Nothing was done last year. The run was false and it was off of short covering and momo players/speculators and pumping campaigns. Sound familiar? All the same silly stuff being said last year too. Holding for a year, to the moon, oil to $120, buy buy buy. The funny part is that people don't even realize this ETN holds no assets. There was actually nothing fundamental last year and that is why it failed.
If oil producing countries don't actually do something and fundamentals don't actually begin to change and yet oil goes back to $40 what do you think is going to happen? Repeat of last year is my guess. It is dangerous for oil not to stay low enough before the meetings so that these leaders actually have some sense of urgency.
I've been here, you can ask others. You can see my posts. Many of my buys were posted and I was actually lucky enough to get 1.18s. I want oil to go up. I just want something real this time and sustainable. Making money with this is great and I'm very happy about it but at the same time I care about my brother too, not to mention the tons of other families that are or could be negatively impacted if oil doesn't truly recover. Therefore yes I'd rather this go up as something sustainable and not something similar to last year. As I said it can go up all right and it will go up but it can do it for the wrong reasons and crash or for the right reasons and sustain.
Look, UWTI will not go to $25 dollars. Oil would have to get back to $130 something by Summer. Come on, not happening, zero chance. Knock it off.
Enough with this. I want oil to go up as much as anyone else. Matter of fact not just because I personally make money but also for the sake of my brother who could get laid off if oil doesn't recover. Ridiculous price targets will not help and neither will cheerleading. These things will only hurt.
Oil running up without pullbacks hurts the run, it doesn't help it. Oil going to up close to $40 makes these world leaders have less of a sense of urgency and that is bad because they really really need to cooperate and compromise if they are to get anything done. Oil going up to where it is now almost allows for the US to ramp back up. Nothing has been solved on the supply/demand equation yet.
Massive short covering only lasts for so long, momo players only last for so long, defying the supply/demand equation only lasts for so long, oil ministers tweeting but not enacting anything only lasts for so long. This is getting set up just like a pump and dump with nothing backing it up. The house is built on sand. I would prefer for the house to be built on solid ground. I would like to see a solid steady rise up. Justifiable by fundamentals to at least some degree that came about because world leaders felt the urgency to do something.
There are tons of people who have lost their jobs or are in danger of loosing their jobs. A flash in the pan rally does no good for them. The run in oil can be done the right way or the wrong way. I guarantee if it is done the wrong way it will crash back down just like a penny stock. Right here and now what oil has risen to is ok without being justified by the fundamentals or anyone actually doing anything yet because the price got so low in the first place, however from here I think tweets from oil ministers, pumping campaigns, momo players, and ludicrous price predictions and no actual changes to fundamentals are not going to cut it for much longer. One good thing that did happen when oil was under $30. It gave the urgency needed for leaders to start talking and it made US production cut back. This is what we really need. Not a pump and dump.
I hope oil from here goes up for the right reasons. If it does not it will crash. Many people are hoping/counting on it to go back up. The only way it goes up and can sustain it is that it doesn't go up for the wrong reasons in the first place. Oil effects people lives. There are many in the US that it really effects. They need an oil recovery, not a pump and dump. The "regulars" on this board like Kam are solid and knowledgeable people. If you want to follow some people follow Kam, toomuchmoney, YWC and the like.
I figured March would be good to oil and the sector and it is.