Theories, theories, useless theories. Most theories in markets, when really researched, will show very little, or no, solid facts behind them. The gold market is full of absurd theories. For years people have been promoting the “stock market crash, then gold to the moon” theory. I have debunked that one over and over, like here.
Or another brilliant theory is how gold needs low interest rates. Here is that post. Yet the dumbest theory is that gold needs falling “real interest rates” to rally. The eggheads promoting “real” interest rates are clowns. In Dec 2015, I did a post when I said both of these things – it is time to buy gold AND interest rates, on the short-end, are going to soar. Did I care about “real” interest rates? Have short-term (and now long-term) rates soared? Is gold higher? Are increasing interest rates good or bad for gold? Are bonds the most bearish market, long-term, I’ve ever seen. That post is here. You make your own choices whom you respect in this business. You love the incompetents, that is your choice.
In the video below is the discussion of how gold always bottoms late in the year. Oh really?
Hi Scott. I love the longer accumulation views you share. Yesterday I read the Wyckoff method material again and that is what really stands out to me, the accumulation ’cause’. Going thru the charts last night and for the first time almost fell out of my chair looking at the IMMU accumulation period and current position. I know, I know, you’ve mentioned it many many times, but I didn’t quite get it until this last reading on Wyckoff. With IMMU close to a breakout from the accumulation zone do you think call options are a reasonable idea or could the actual breakout take a long time to happen? Thanks!
Dave are you doing the Wyckoff course? And yes, accumulation/distribution is the most powerful weapon I have ever seen. It takes a LONG time to be able to implement it, exactly why hardly anyone uses it. Hopefully I have sped up your learning curve. And you are starting to see how the learning happens, you hear me discussing over and over, you see it in Wyckoff, and I am doing this stuff in real time, and you will then begin to implement it yourself. You have to work, see it 1,000 times, and then you believe in it.
IMMU is already in the pure uptrend. I would not use calls now, if you are going to use calls, they need to be done into the big breaks, like when I discussed IMMU and the others on 2/8. You want to do options when the emotion (premium) is totally on your side – the turning points. Also, with IMMU, there is very little liquidity in their options. There aren’t a lot of stocks, to me, to use options with. Some ETFs are good tho. Look at the option snapshot in the reply.
Yes, I see the big bid/ask spreads and low volume. Thanks for the overview.
I am not in a formal Wyckoff class, just studying on my own, I am starting to feel the potential. 🙂
Got a few questions on the video.
Referring to 1:04 on the video.
A)What can we learn from the “initial breakout”? how can we use it to our advantage?
1:31 on the video.
B) What do you mean by “accumulation goes in phases”?
C) What is seasonal work?
A and B) Accum, like everything in markets, is a process, and almost always occurs in phases, which is a big part of doing the point counts for accum on the p&f charts. That is discussed on those videos. So we know accum is in phases, hence the breakouts are also going to be in phases. We should, ahead of time, anticipate that occuring. So we look at the lower level res areas, and we’ll see a staggered series of breakouts. And we should see the breakouts with SOSes, and it can be a bit tricky there because you often get the retest and a bit of reaccum. That retest can go below the breakout area, but often will strenthen the “upside of the accum area curve”. So this is not always that neat and clean, but we certainly should see the general process. And this whole thing adds to the overall probability structure.
Use to our advantage in numerous ways, for instance, the breakouts and the reaccum, are the areas to get involved. I’m not great on breakouts, but pretty good with the backups.
C) Seasonals are just the calendar tendencies of markets. That is what I was trying to convey in the article. You guys are very aware now, but almost everyone else is not even aware of what we constantly discuss – the diferent technical positions of markets. That is always the over-riding factor by far. If we want to bring something alse into our work, then that thing must fit in to our analysis. But rarely does anyone know this stuff, at least on a competent basis, so they just throw seasonals in there. And it “works” until it doesn’t. And that is a lousy way of doing this business.
What’s the drive behind seasonals, rebalancing of accounts?
Good question, but it is probably just beliefs, and assumptions. But it doesn’t stand up to facts. In gold, Diwali and Chinese New Year is around the same time every year, supposedly those are drivers of seasonality. Then why do the highs and lows vary so much. The tax loss selling season(ality) is certainly a winning approach. There you go with rebalancing.
Expect the new Fed chair will paint a rosy picture today and tarnish gold. Transcript should be out soon.
Good probability.
Same olé same lameo.
https://www.federalreserve.gov/newsevents/testimony/powell20180226a.htm
Thanks for the link. Same stuff of course.