3SOF

Hopla!

Isn't that a positive chart?

Quote from: Melf Elf on November 20, 2006, 11:48:57 AM
Sold Short GG at 27.73.  Stop: 28.81  Risk: a loss of about 4%

Covered 25% of my short at 26.73.  Gain 3.6%

Covered remaining 75% of my short at 26.42.  Gain: 4.7%  Gain on the trade: 4.4%

My last trade in GG, in November, was a short, and I almost shorted it again on Thursday when I took profits in AUY, when GG gapped up to 28.25:

1. Back above the broken neckline of a H&S Top

2. Just about smack on the 200DMA, which is bearishly positioned above its 50DMA.

Stop would have been above the Right Shoulder high of 29.13.

I didn't take the trade because I felt that I was "betting against myself" since I still am 80% long AUY, but as it turns out, that short trade would have been a good play, as the chart stands, and that bugs me as far as near-term bullish prospects for AUY are concerned.

On Friday, GG gapped back down below the broken neckline of the H&S Top, and also gapped down below Thursday's low of 27.92, leaving an Abandoned Baby on the chart.

An Abandoned Baby is disconnected from the prior day's high (Wednesday) and from the following day's high (Friday) by gaps, leaving players who bought GG at any time on Thursday "abandoned" in that day's candle, at prices between 27.92 and 28.48.  Friday's high only was 27.81.

So, while AUY put in a new high on Thursday, at 13.94, all that GG managed to do was to "abandon" anyone who bought it, above the neckline of a broken H&S top!

GG now is back below that neckline.   

In addition to there being "disconnects" (they go in different directions) between stocks and their underlying commodities, there also can be "disconnects" between stocks in the same sector, like AUY and GG.

So, which one is "calling the dance?"   

I dunno.

I hate to abandon my AUY trade, but the last two candles on that chart don't look so hot either, suggesting a re-test of the top of the Bull Flag, at 12.84 on Monday.

In trying to assess the chances of a bullish outcome here for GG, it obviously needs to get back above the broken neckline of the H&S Top, and take out the Right Shoulder, at 29.13.

If it can do that, then knock out KEY RESISTANCE at 31.59...31.59...31.47, then we likely will have a breakout of a Bullish Ascending Triangle (that would be the pattern in blue), or a Bullish Inverse H&S (extend the flat blue line to the left, back thru the red Ascending Triangle).

But, meanwhile, with AUY scoring a new high on Thursday, what is GG doing, leaving a poor little Abandoned Baby on the chart, above the broken neckline of a H&S Top, then moving again to the downside, putting 21.84 back IN PLAY?

Since the May, 2006 high of 46.11, ALL of the targets that have been IN PLAY on both the downside and the upside have MADE, so it leaves us wondering about that 21.84 target.

 

That bugs me, if you see what I mean. 

Stocks can continue to be disconnected for quite awhile, but it kind of puts a drag on the sector, especially with NEM looking lousy, as well.

Hi, Melf.

As always enjoing your posts.

To add a little to your confusion, here are a few bits I've snapped up during this weekends surfing:

1) Last week's GGR noted a very large 29% spike up in the COMEX large commercial trader's (LCs) collective net short positions (LCNS) as gold metal approached implied resistance in the $650s.

http://www.resourceinvestor.com/pebble.asp?relid=28652

2) China aims to spend $200bn of reserves
China has begun taking specific steps to diversify US$1 trillion worth of foreign exchange reserves. It plans a 1.5 trillion yuan bond issue to raise funds to buy out $200 billion of its reserves, much of which will then be invested overseas. All of this entails a shake-up in China's foreign reserve management regime. Some fear a shake-up for the Chinese stock market too, as the massive bond issue mops up liquidity. - Zhou Jiangong

http://www.atimes.com/atimes/China_Business.html

(On the last one: Gold probably would be one place for China to get rid of ... ahem...whatever-it-is-they-want-to-get-rid-of.

I'm confused too...

Quote from: cumulina on February 04, 2007, 01:55:52 PM
1) Last week's GGR noted a very large 29% spike up in the COMEX large commercial trader's (LCs) collective net short positions (LCNS) as gold metal approached implied resistance in the $650s.

cumulina,

That's interesting.   

After Thursday morning's general "Gap To Crap" in the gold stocks, I remember feeling that it seemed "a concerted effort" to pull the stocks down, right at/near breakouts in the charts.

I'd like to know how much of that 29% spike up in short positions occurred on Thursday morning. 

For example, GOLD (chart below), had a false breakdown three weeks ago, then it gapped UP out of the pattern on Thursday morning, got to within three cents of the recent 24.00 high,  then reversed and closed back below the breakout, then continued down on Friday.

 

Quote
I'm confused too...

"When in doubt, get out."

Or, if we don't have a position...

"When in doubt, stay out."

No wonder we're confused and having doubts, with charts like GOLD having a false breakdown, followed by Thursday's failed breakout.

 

The high of 24.00 was the third hit to the top of the pattern, validating it as resistance.  When a validated trendline gets taken out (in this case, to the upside), that "should have" some significance on the upside.

But, we also wanted to see 24.00 get taken out to the upside, for additional confirmation of the breakout, but we didn't get it.  The high only was 23.97, a failure, and with the stock closing back below the pattern with downside follow-thru on Friday, at this point, we're looking at a breakout failure, no question, although that might only be temporary.

GOLD obviously needs to go up and knock out 24.00 - 23.97, and do it with a bit of conviction.  Keep going to the upside! 

The chart, in general, looks good.  The 50DMA (dotted green) is above the 200DMA (dotted red).   So, even if GOLD goes back and re-tests the 50DMA, or even if it goes back down and tags the bottom of the pattern to tell us, "Okay, this time the bottom of the pattern is support ," this still could work out fine, with an eventual upside takeout of 24.00 - 23.97.

Actually, that could be quite nice.  We then could head higher on a rally fueled by both breakout buying interest, and a squeeze on those commercial rascals who annoyed us last week on Thursday's "Gap To Crap" opening.

   

Looks here like a break out will come soon!

When the fed will put down on 0.25 or 0.5 Gold will raise!!!

here

http://www.thestreet.com/_yahoo/newsanalysis/investing/10398373_2.html

2) Goldcorp (GG - Cramer's Take - Stockpickr - Rating), a Vancouver-based miner, operates geographic zones similar to Newmont's. Record gold production for the company in 2007 is expected to be followed by another record in 2008, and the company just announced its first monthly dividend a few days ago. This well-managed company goes back and forth with Newmont for the title of second-largest gold miner by market cap.

Goldcorp to pay 1.5-cent dividend

2008-02-04 11:22 ET - News Release

Mr. Jeff Wilhoit reports

GOLDCORP DECLARES SECOND MONTHLY DIVIDEND PAYMENT FOR 2008

Goldcorp Inc. has declared its second monthly dividend payment for 2008 of 1.5 cents per share. Shareholders of record at the close of business on Thursday, Feb. 14, 2008, will be entitled to receive payment of this dividend on Friday, Feb. 22, 2008. Goldcorp has paid a monthly dividend to its shareholders since 2003.

Canadian resident individuals who receive dividends from Goldcorp, after 2005, are entitled to an enhanced gross-up and dividend tax credit on such dividends.