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Trading Gold ultimate bubble would be there very soon?

Discussion in 'Shares' started by wdongli, 14th Jul, 2011.

  1. wdongli

    wdongli Well-Known Member

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    Warning: don't buy anything by any idea or analysis only. Check how much you could afford to lose! We could be wrong!

    All in XAO fear something at present time. All events bad or good, relative or not relative, and where they happen, here or thousands of miles away, could beaten it down!

    That is very interesting and could be great for learning what XAO is. A ball in the global market playing ground which could be kicked into the sink and hell by anyone in whim? It looks like that! So how long this ball would be in the hell or sink? A question you have to ask otherwise you would be in depression and your market life would be miserable!

    Do you see an strange thing that gold refuses to follow XAO and Australia dollars refuse to follow XAO even the resource sectors as a whole become its hostage!

    Don't know and don't be sure but do feel the Gold Ultimate Bubble is being inflated around the world. Inflation, debt crisis, confidence loss on the paper money, the duration of cycle, seem try to find a juncture to fire the gold into the sky.

    XAO never has its gut to shoot anything up first. What if the gold is shot up in China, US, EU, and Middle East. XAO has been in dumb for nearly two years. It is very abnormal and something has to happen to let the depressed people in XAO feel they are still alive!

    Don't say anything is sure but if the gold is shot up, is it possible we would have the feeling like the dot.com in 2000 about the gold.com.au? The losers in DMN and ORO have desperately curse the board of DMN but you could not say DMN is not a good speculator for the fade even this time it was absolutely not lucky!

    Theoretically the war of attrition would generate a lot of black swans since both of bull and bear could not sustain the pains and know the victory could cost too much and then no one is winner!

    Just hope and really hope that before I sell for my back up cash reserve, something just shoot up. I bet on Gold more than anything else! But please don't blame me if you lose your shirts. I am playing a concept game only even I have big betting on golden dirty-cheap fishes!

    Seriously saying I believe black swans and would like to stay in the place they would like to hover around where the price is low which is highly improbable in their probability distribution chart! Unfortunately I am not good!
     
    Last edited by a moderator: 14th Jul, 2011
  2. wdongli

    wdongli Well-Known Member

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    Don't say it is impossible but how you play!

    Something could excite, thrill, and make the market into mania and before that all would say it is impossible. Who could have said Gold would be priced at $1500 in 2000? In hindsight we all know what should happen. In looking forward we all fail to see what would happen.

    What is the cause for gold to move up?

    1. European sovereign-debt markets in chaos threatening the viability of the euro
    2. US budget deadlock in Congress
    3. China has high inflation rate
    4. Ben Bernanke implying yet more monetary ease
    5. Moody’s threatened a downgrade on U.S. debt, the biggest junk bond in human history?

    All around XAO are in trouble and all seem no tomorrow. What? Oh, it is my fault, not all! Gold goes to new high!

    With one crisis following another, it’s not surprising that XAO is in deep trouble and gold didn’t stay down. It again emerged as the world’s safe haven and the upside is wide open. What could make people feel safe if US debt are assumed to be junk?

    Seriously saying I don't trust chartists any more. They tend to oversimplify everything. However you could not ignore the bullish sign of the chart. "On the P&F chart … we see that GLD has broken out to a new record high, which, of course, corresponds to a new high in bullion. The P&F chart for actual gold bullion (charted one day behind) we see a triple-top breakout. The P&F upside target is 1760, meaning that the base is now technically strong to support a rise in gold to $1,760 … gold is in a most bullish position — out in the clear at a new high — with no overhead resistance above it.” Sometimes everyone could be right what will happen even most of time it is not true. I do wonder it is too low at $1760 if gold ultimate bubble would be there.

    Could the gold shares catch-up?

    Don't know but if gold become the saver of the world or people assume it is, anything could happen. No one could understand the herd when it is in mania otherwise we would not have so many people who lost the shirt in IT bust!

    I expect the Gold Ultimate Bubble in! Why not? The debt owned by this financial system have to be reckoned and the problems are who would like to pay! I don't want to pay but profit if Gold Ultimate Bubble moves in! What I should warn me? Enough is enough. Don't hold for the dream to get all in one bubble. We have a lot of bubbles ahead!
     
  3. wdongli

    wdongli Well-Known Member

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    Gold: how high is it enough to hold a party?

    It is cool and actually it is so cool that we would wonder this time herd would be wise and intelligent this time without matter how high the gold price is since gold moved away from $250.

    No too many ones would believe US would be default. I wonder this too.

    However republic and democratic in US has uncompromisable views about debt ceiling and how to reduce the debt to durable level. They would fight for their beliefs in the years ahead. After the money spreading to fight GFC, Labor has got the minority government but it has promised too much to its coalition for the power. You knew each people with so called low income got $1,000 just for spending. All of governments around the world did similar things too. They should be necessary to avoid the system crashed in days but the root problems of GFC still needs to be fixed.

    So time by time, the root problems would be raised up as the balls for the politicians to play and once the balls on the play ground the people in the market would cry or cheer for them even most of market players don't really know the underlying context. This may could not push gold price into the sky or the ultimate bubble, which needs the people to be crazy and wonder the gold would be some thing for the new world good or bad. But it should not push gold price down too much.

    Aussie gold sector in mining has been beaten for years even before GFC actually it started in 2006 when nearly all of gold hopeful producers failed to produce the gold economically. It still could not move out of the darkness of the extremely disappointment of Aussie market players. Aussie market players could be excited very quick and disappointed very quick. Once it is disappointed it could be in depressed for quite long time.

    However I do believe they would be crazy if the conditions are sufficient. Don't expect the gold ultimate bubbles any more but if when I hold the margin of safety and then my gold fishes jump when a threshold gold price is reached I would not no happy.

    Wonder how high the inflation around world would affect the market sentiment about the gold enough and a grand party would be insight. Are there black swans there? Plenty lurk in the corners? I do hope I have a very good positions for the best black swans. Gold price if explodes, would be very interesting.
     
  4. wdongli

    wdongli Well-Known Member

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    Gold hopeful and Ultimate Bubble!

    Work very hard to identify the features of bubbles in the market and economy. Do happy to know gold is hot but still a little bit far away from the stage, the so-called ultimate bubble.

    Gold was up to $1,800 last week rather than dropped down as it did in GFC. It seems the market sentiment has changed about what is the safety heaven. In GFC all of people took the dollar safety flight but this time people have less opportunities.

    One thing is sure if we have the gold ultimate bubble, moms and dads should be not so cool. Have you been in IT bubble or Resource decoupling red hot spot? Gold ultimate bubble could not leave the gold hopeful as the deserted orphans in the market.

    What price of gold could make moms and dads feel the hot to buy all of things with the glossy gold name? In IT bubble, all of things with dot com were hot and red hot. No moms and dads with the gold hopeful, no gold ultimate bubbles.

    Someone said the star would give the brightest light at its end! The problem is not gold ultimate bubble but when you are in the bubble. Too early you would be bored to die. Too late you would be one of the moms and dads!

    I have been hope the gold ultimate bubbles too long. Not a good speculator even I realize the value of gold since 2000! All of market players need some lucks. It is my belief even I don't trust any system if I could not be a good operator!
     
  5. wdongli

    wdongli Well-Known Member

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    Is it bubble if everyone identifies it as bubble?

    Have you been in IT bubble? When you were in it, did you think it was bubble even your company had nothing but just some ideas re-written with C++ or some computer languages?

    Somebody said if gold is like the Nasdaq, it could go up 60% from here!

    [​IMG]

    Did you know Jim Glassman and Kevin Hassett made from publishing “Dow 36,000” near the peak of the 1990s boom!

    But this gold bubble seems different and now nearly everyone in the market could tell you it is a bubble. The gold mania is ready for its close-up now! Your friends tell you so one after another.

    ***
    Gold touched $1900, which is a milestone but it seems far away as the bubbles defined or seen in history.

    “Is gold about to go vertical?”

    Yes gold price has risen for 10 years but it looked much like Nasdaq in the 1990s and US home building stocks from 1995 - 2006. Actually the brightest time of gold in 1980 were the results of stagflation between 1962 - 1980 which last for about 18 years.

    Gold has surged from around $1,500 an ounce to nearly $1,900, while the investing world has finally started to wake up to the inconvenient facts that (a) the U.S. government is broke, (b) the U.S. political system is broken, (c) Greece is bust, (d) Portugal and Ireland may well be bust, (e) Ditto Spain, (f) Maybe ditto Italy, and (g) the European political system is broken as well.

    We should not wonder that gold bulls have been pushing at an open door. Gold is a gigantic bet against paper currencies, especially the dollar and the euro. Yes, you could not deny gold is an absolutely ridiculous investment — apart from all the others.

    Which dare to be up while DOW and US debt both in trouble?

    ***
    $1900 was more than 7 times of $250! It is too much, people feel so! But do you know bubble needs wide euphoric cheers but if you are skepticism could you find a lot are not? People have called “Gold is over,” “It’s too late to get into gold,” “Don’t buy gold at these levels,” and so on for a decade, right?

    Who really own gold? I didn't find anyone around me and include me who have big enough gold. Do you find any funds hold a lot of gold? Not at all for general investment funds! Most “precious metals” funds only touch mining stocks, not the metal, as what I do.

    If any individual wants 5% of his portfolio in precious metals he needs to add it himself!

    ***
    The only problem: all of us have been saying "gold is over" almost every month for years.

    Is gold about to go vertical? and Is gold the next bubble?

    I do want to know if gold is in a bubble, is it over?

    Both times the chart was uncanny. It showed gold tracking the previous two booms closely. And by that measure it still had a long way to go.

    It seems it goes in vertical to $1900. Is it coincidence gold follows the similar tracks of IT and house bubbles? If so, it seems it could go much higher than now!

    If gold keeps following the tech and home building manias — and that’s a big “if” — that would take it up another 60% from here, to $3,000 an ounce. The biggest price gains in a bubble happens right at the end.

    The star sheds the bright light at its end, which I read in 2002.

    Could gold be so bright(at $3000)? I don't know since I really have no idea how much gold should be. Yes it scares me to hold gold so I choose to hold some gold hopeful! I do believe bubbles are the results that most of people are mad for something! If no madness no bubble!

    For my gold hopeful, I hope gold could be the greatest bubble! For my other ordinary fishes I hope no gold bubble and the bearish market could have a break at least before I get my paper profit back and then crash and than gold bubble!

    However hope is about hope not reality. I want to be balanced for no bubble or having bubble! No excuse if I was hit down by bubble or no bubble!
     
    Last edited by a moderator: 24th Aug, 2011
  6. wdongli

    wdongli Well-Known Member

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    Gold price down: that is good?

    Don't know in short term but seemly gold needs more time and more events to get its red hot position.

    Market always tries its best to fool the herd, moms and dads, or so called professionals or experts and usually the tricks always work otherwise you could not explain the IT bubble and Resource crash in GFC.

    We always have problems to see the half bottle matters as full. We just could not stop that.

    There are some big options for gold:

    1. it comes back to the price below $1800. Anyway it went up too quickly and the sky seems be there for sometimes.

    2. it stays above $1800, which means there are a lot of troubles around the world and some bad events just happen along the way to alert the people US dollar and all of paper money are not risk-free.

    3. it goes down but quickly comes back but in much lower upward rate.

    4. gold shoot up dramatically and stagflation is reality. So US down, XAO hold its foot, gold up and up with more moms and dads in, and then something as 1980 happen, which someone called the gold ultimate bubble.

    Gold needs more bad things happened in US, EURO, emerging economies, and China. It seems we don't have less chances to get the bad cards on the table sooner or later.

    We tend to be hurry to declare the victory or failure but often than not we are wrong. I am happy to get some gold hopeful and with the feeling gold could not be crashed down as some experts predicted.

    I do think if my feeling is wrong how I could make profit, protect profit, and allocate the capital to lower the cost of my portfolio.

    I do feel if not boiled gold hopeful, no gold ultimate bubble. I do feel if more paper money printed, where this new money would go? If some new bubbles but not gold are generated by these new money, could the world get another Great Something to let most of market players lose the shirts again and then gold hit out to get its ultimate bubble.

    It is a time when you could find crises much easier than the bubbles! How long would it take? What if Israel starts a war with Iran? What N. Korea wants to add some trouble to the capitalism? It is a time with a lot of good or bad black swans. Which is next? I don't know! Just hope I could get my cash reserve back to normal and make my portfolio in extremely excellent balance.
     
  7. wdongli

    wdongli Well-Known Member

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    Good, gold goes to south...!

    Market is not ready to see gold is in red hot including me. So it is good to see it retreats from a historical height. If no gold red hot is in near horizon, that means I could get chances and times to correct my mistakes.

    We buy insurance but few really want to get car accidents and the damage compensation. However the backdrops for gold to roar into $1900 are still there.

    If policy makers could not eradicate the causes for gold to shoot up, the debt and fiscal unbalance, the risks of stagflation, somethings would trigger gold run up again.

    The 10 worst days for gold, according to data compiled from FactSet Research:
    -7.30% 6/13/2006
    -5.83% 3/19/2008
    -5.51% 8/05/1993
    -5.37% 5/24/2006
    -5.15% 12/01/2008
    -4.85% 10/02/2008
    -4.83% 10/24/1997
    -4.41% 2/04/2010
    -4.27% 10/22/2008
    -4.23% 8/11/2008

    It seems two happened in gold historical downward trend and eight of them in gold historical upward trend.

    If the gold goes up without pauses and breathing, it could really dangerous to hold. In 2000, IT stock shot up about 60% in a few months, which inevitably put a stop mark for IT booming.

    It seems the risks are really to the traders who play the momentum or play based on the feeling as I did since April in the stock market. Yes, it is very important to get some chips away from the table(if the chips are too much to lose) when things are bullish. We could buy back at lower price if we want and reduce the cost!

    What about the gold hopeful? They have not got the benefit and the damage for gold correction is little I believe. Actually if XAO recovers they should get better chances to get price up!

    No red hot gold no benefit from gold hopeful! They are insurance!
     
  8. wdongli

    wdongli Well-Known Member

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    Insight and risk management

    Gold paid back nearly all of its up in August, which stir the market sentiment. Yes it was another big loss in price in days and anyone who played for quick money and jumped onto the board too late, would pay the cost for the winners! It is a zero sum for this up/down. Experts tend to tell the stupid that "gold is over!"

    [​IMG]

    Gold’s 25% surge over the past two months reflected the market’s concerns about fiscal finances, the outlook for the global economy and inflation, but most importantly the belief that the U.S. dollar was headed lower.

    The problem is when the things turn to be bad the positive force would try all to drive the economy up. When the market goes too far, thing is not worse in the market, the wise speculators who were the early birds before this little bullish cycle would lock the chips away. This is a typical matter when to hold and unfold, and when to run and go away as in any Casinos.

    These so called experts are stupid to claim a end of little market sentiment cycle as the arguments for "gold is over." In long term, if the economy causes for the gold up could not be removed, the gold is far away to be over.

    The key is whether or not you are speculators or value investors, when the market reward you in profit big enough, you have to lock the profit without matter the fundamental is strong or weak. Too good to be true and too high to get any margin of safety for no loss!

    I acted as a dirty-cheap fish collector for a long time. What I bought in last October had the margin of safety but the bullish sunny days between Dec - April has get the price far more than the value. I just failed to lock the profit which was big enough.

    How about gold? Gold has moved up for a decade. It could not go up in straight line. The correction is necessary if gold really want to go up much higher. Too many use volatility of gold in short term to deny its value, which is stupid and very risky!

    I like to see gold could not be in ultimate bubble and believe it has not been in this bubble. What if I am a governor of China banks and could decide thing by myself? I would try to allocate the reserves into the gold slowly while gold dips enough every time. It is currency which could not circulate in public but it could be paid for national emergency! I could not put my life in the hands of US treasuries and dollars which could be default due to human stupidity!

    Gold up/down in so short time reflects the market worries and hopes. It is good to see it could not vertically go up any more. Today my portfolio went up more than 10% and the price of portfolio as a whole come back to the level before last October.

    Is gold down telling the market, especially XAO, it has being gone too far in the bearish mood? To make the profit you have to buy low and sell high. It is true to traders, investors, and speculators. The traders and speculators tend to lose the sight in long term; The investors tend to lose the necessary sense for the system risks from the market sentiment.

    Anyone who could buy gold at $250, would be winners if they could sell before the gold market into systematic anxiety and denial in the coming gold ultimate bubbles. What about the traders or speculators? They just win or lose in a zero sum games and 80% of them would be losers!

    Traders and speculators without insight would be losers. Investors without the senses of environment changes would be losers too! By the way from the momentum and volume, most of gold holders are still there. It is too early to say gold is over!
     
  9. wdongli

    wdongli Well-Known Member

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    Gold bubble and Stagnation?

    What cause gold price up? Is gold forming its ultimate bubble? What do you do with the risks of stagnation and gold bubble?

    GFC was caused by the credit bubbles which triggered the house bubbles in US. Deficit crises are caused by the stimulus when the governments around the world tried all to save the sky.

    The sky looks safe but governments have printed too much money if they could(some could not such as those in Euro). If they could not they have to tighten the expenses while businesses are reluctant to spend. It looks we get into another self-reinforcing circle to move the economies down from its normal track even GFCII looks unlikely!

    All of the people in the market try to predict what happen in future at least for 6 months. One thing is sure if the global economies move into stagnation(sky is there but everyone struggle for low income and high expenses), gold would move up and more and more moms and dads would jump in for gold! Some predict it impossible but I never think the crowd could be rational in crises and euphoric party. Something would happen if the conditions are sufficient!

    There are too much money around the world. The stagnation is highly likely to push inflation higher and higher until it reaches to a alarming level. No body want to find the problem before the tap just start leakage! Before the fixing, the money needs to find some place for yields, which is the nature of money.

    Where does money move into? Cash deposit account, deflated IT darlings, hopeless resource sectors with gloomy economy prospect, look-tipping off emerging economies, and so on? No too many places for the money for good enough yields. People would shop around and find gold is only a place for some yields quite likely! Crowd never could be rational in panic and euphoria. Once a euphoria could start it would needs months or years to build up!

    I am happy to see my insurances, some of my golden fishes started to move up! I would warn me to lock the profit if they turn to be significant for my portfolio! I would put my bottom line goals at first. I would be fearful when the media would cheer for the golden age for gold!

    I know I am greedy but fortunately it is cold time in the market. Everything is down but insurance should compensate some of, all of, or more than what I lose. Don't expect insurance would work if no some great damages around world. I don't like to declare my insurance for a broken window but rather than for a house burning fire!

    What if market miscalculate the risks in future and pay some excellent premiums of my insurance in near future? It is possible and highly likely! We are all myopic. That is the reasons we tend to burn the money on fire and see the train leaving without us!

    Why don't prepare for some good black swans to you not anyone else? I do finish my preparation for a few black swans I feel they could appear! What if they don't come in? No worries since I just pay the fees for insurances!

    By the way if everything would crash down Aussie dollar would crash too. It would shoot gold price in local currency which is great for local golden fishes!

    High Aussie dollar is good for tourists to Euro and American but bad for Aussie new economies. Low Aussie dollar is good for export but bad for import. Where you stay would decide you would get benefit or damages. At any giving time some would be the losers and some would be the winners. We all could select our options even most of time we are wrong!

    What if nothing seriously wrong? It is great! My portfolio have been rebalanced and the cost for my business has been greatly reduced. So it would be welcome heartily if we would get another V-shape recovery such as XAO comes back to the position to challenge 5000 again and again!
     
    Last edited by a moderator: 5th Sep, 2011