Well, oh-eternal-mystic-circle-of-life-through-death-to-live-again, <btw, I loved seeing that peek into your lit preferences>..., education assumes the one on the other end of the conversation, in this case, moi, is also educated. That is the subject of great debate around here, especially upon slow days.<vbg>
I'm glad to hear you peer into chart entrails, as that is a valuable skill.
And yes, we closed above a previous resistance, altho' to us chartist types, we'd like beary beary mucho to see 2 outta 3 closes above that previous resistance before we let our guard down any. And it needs to be on volume. And whatever spooked it needs to be genuine "wind change"...<--- that last one is my own algorithm.
It's allright to employ some transference from stocks to physicals, in my books. I know this because I came from the world of commodities and transfered and expanded my chart skills from that world to stox.<g> I've been a goldbug ever since I got bit by a Lincoln Cent on the return address corner of a Reader's Digest Solicitation back in the early 50's, and my coin collecting habit took on a golden hue. Then I left the world of coins for gold from recycling (costs me $20 per oz, after refining no less) and from recycling to actual placer mining and now a mini-land baron with a hardrock property (or 4) to be exact with my eye always open for more, either placer or hardrock, I'm not picky.
So transference is cool.
However, in my books there is one major difference between commodities and stocks, that affect the supply/demand picture reflected in the struggle between buyers and sellers. And that's this: that physical commodities being seasonal such as they are have a different renewability about them, where, theoretically at least, there is a finite number of pieces of paper in any given stock equity position.
Commodities must be bought AND sold. There is no such thing as buying a commodities contract and holding it forever and bequeathing it to some favorite grandchild. Yes, one CAN buy a physical commodity or take delivery of the physical by paying the balance of the commodity contract in full and picking it up at specific time, specific amount, specific price and specific quality, and bequeath THAT to the favorite grandchild.
But supply on the market altering fundamentals such as you have seen represented technically in that chart spike you are noting, with such a major shift as represented by the united we stand Euro CB moratorium on goldsales is quite normal. In soybeans it is a weather market, in wheat it could be a humongous series of new export orders, in OIL it can be an embargo for political reasons, or whatever.
All those kinds of supply altering fundy's result in sudden, swift, and severe spikes. Sure, there are demand failures that result in swift sudden retracements. But a dramatic change in a bullish fundy in a physical commodity is more often noted by chart spikes.
Frankly, it's been too damn long since I've seen one that has actually gotten some kind of umph behind it. Since I've been around longer than 10 years in the goldmarket, that's why I called you on it.
RE: the Man, you are full of it, was just a ploy designed to get you a rise out of you. However, to your credit, I did assume you were sincere and I checked your SI profile to see if I was talking to a greenhorn or to a pro-commodity trader, before I revved up.
Glad you answered, and let's keep it going.
Regards is fine<g>
O/49r |
