"The tick volume indicates that the market is sensitive to the upside"
No it doesn't, tick analysis is no more a TA then any other form. If in the prior days before expiration, to which Barrick gold had large open interest at near the money options, a nature hedging occurs where people will lay they position off between shorting, and long. In cases like this the steady state variables mean little, as trends are broken into expiration hours and minutes. Market makers must cover their positions, and tick analysis breaksdown. You also have spread hedging occur between say NEM and ABX, where they will short one against the long of the other. Then there are the hedges between gold and ABX as well; transformation of none yielding assets into yielding asset.
Japan is in all counts a recession.
"You might even have a panic of conversion of yen to gold. That is improbable, but what is probable is that the BOJ would be forced to print yen to cover the margin call. When one of the world's most efficient economies which has been in pseudo-deflation, suddenly reverses direction you will see a monetary effect. In light of FED fear driven money pumping you then have world money growth having a tangible monetary effect."
And the growth of a deflationary economy will demise gold further, as the growth of the economy is what kills the POG. One need only look at the eighties when growth of the economy was small, while M2 was rampid. M2 in the USA is really subdued, compared to then {on a percentage basis} But growth of the economy in USA is much higher.
"We are in a transition to an intermediate reflation up to the major structural intrinsic deflationary down trend which will be in position until most of the nations achieve labor rate parity."
Double talk? We are in reflation, YES. But not at a rate yet that would justify increases in commodity prices increases, here or anywhere. The structureal deflationary trends are islolated to only certain commodities, and should continue to acclerate in the coming months. Yes, many will buy gold products well in advance, but why over pay? I do agree that the FED should stop pumping, and actually form a tightening basis. {I believe they will}
"It's even hard to find anyone who understands how the specialist mechanism works. Tick volume analysis on ABX is not causally connected to any economic time series data."
Well if you don't post your formula, then we can't hack it to death, that's your choice. But by not looking at economic time series, then you are basically ignoring the bigger clearer picture. And that says GOLD IS OVER VALUED.
"TA has nothing to do with what I do. I try to measure supply/demand relations. Traditional TA purports to do this in some unknown way, but I've never encountered anyone doing TA that can even define the terms demand or supply."
Tick data can't account for supply demand either. You are trading off what people would call fund trading. You are at the whim of other fund buyers, by believing that they create the demand, and the supply, when they themselfs are only speculating off the same information that others can achieve. I have access to tick data, and market depth, and I find both to be the parlour games of the day traders {mostly brokerages} if you use this information you are in esscense a gambler. Economics sets the trend, gold is the follower, and ABX follow GOLD {loosly, but affirmatively}, and options follow ABX.
"State dynamics is the only scientific way to assess potential transitions from equilibrium."
State vestor analysis says that although you can create an equation for most events, their are those events that can drive the vectors to points beyond the formulas. Steady state vectors are only as good as the dimensions you take them too. And I suspect, that you do not consider enough dimension. But if it works for you, all the more power.
"In comparison traditional TA is entirely useless since it is only an attempt to measure one random process against another. The correlation is, random."
This is bull, since if others in the market place use traditional TA to derive their investment analysis, than the analysis itself becomes important, although the returns diminish. But TA is only a subset of fundamental analysis, and economics analysis. And together they make the intelegent investor {day trader, speculator}.
"You have been trained by price to believe that price predicts price. Thus in a downtrend, the only indication that you have that the trend is changing is that some moment of price is changing sign. In random processes sign changes are randomly distributed, so the correlation coefficient is zero. No information in TA. You have to build a model on the random processes thesis, since that is how the world works. Everything else is just epicycles."
WOW I smelled an attack there... You are wrong of course. Price does predict price... Price of GOLD predicts PRICE OF BARRICK. {with certain ranges of trading based on preceptions of future price of gold}. TA of prices, and data give coherent results when applied with other compounding data. Such as fundamentals. This allows future predictions of price. You just choose to dis-agree... I'm sure you know enough of elctrical filters, and discrete filters to see that there is a positive correlation. As no flow of data is ever discountinous. {but you could use complex variable to moot them} In this world there are no random events... ever thing is predictable, although to some it is unexpected. Many know well in advance, cause they cultivate informed people to divuldge information.
You can't get GOLD demand/supply from tick data.... and that's what controls ABX! |
