Neural Market Trends

Well would you? Or would you wait till $1021ish?  What's everyone's long term outlook on Gold?

Yeah, the Gold upward trend got busted in my system around December 8, 2009.  My stop would've been hit at $1150.53 and since I own some physical gold too, I started debating my exit strategy from that.  I'll go long in Gold again when it hits another all time high but for now I'll just sit on my hands.

In the early part of this year, I had a discussion with a coin dealer who was selling American Eagle Gold Proof coins. He quoted me a price with a large "over the spot" spread fee. I asked him why and he said that the US mint had suspended making them and are no longer in stock.

Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. [via US Mint]

Just the other week I had a chance to talk with the same coin dealer again and he said that the spreads have come down and people are buying as much gold as they can get their hands on. I wonder what all this means? ;)

I got stopped out in GOLD this past week, right after Benny started jawboning about the economy and how wonderful it is.  I’m not sad, I got in at $65.45 and stopped out at $70.78 for a gross profit of about 8%.  If this mining stock makes another all-time high next week, then the trend remains intact and I’ll go long again.

I’ve been busy rebuilding my Gold neural net model over the past few days with new data and inputs using the new version of Rapidminer.  It’s the same model I used to write my published Futures Magazine article and tinkering with it should give me new insight into the current Gold trend.  This is particularly important to me because I want to know if any future pull backs in Gold is a buying opportunity or something else.  I predominately use my trend models to find buying opportunities and this works great in Forex and Metals.

Many people I correspond with thought the Gold market was crashing when the price broke through $750 recently.  I seem to remember a lot option acitivity around the $600 level as well.  My old Gold model told me otherwise and I paid a visit to my Gold dealer earlier this month.  I’m curious to see if it will tell me to visit my Gold dealear again in October.

It figures that the Gold and Oil markets start to collapse just as I go on hiatus. My guess is that hedge funds are selling their winners to cover their losers (financials, banks, etc). This has had a nasty consequence in the currency markets with the AUDUSD collapsing from its near parity with the USD to around 0.80. Next stop for Gold could be $600 and Oil maybe $80 (wishful thinking?).

My timing models are going wild and pointing to a lot of market crosscurrents. This shouldn’t surprise me because we are in September after all and I can’t wait for October. We are at a very heavy volatility area in the S&P500 market and we could be making a low or preparing for the next leg down. If we are to go lower from here, it’ll be at least a 100 point drop in the S&P500 down to the 1100 level. How’s that for optimism? The upside potential for the S&P is around 1350 right now.

I’m still on hiatus but had to pop in to make a few comments. I should post my last video tutorial sometime but I don’t know when I’ll get to that.

You have to love Jim Rogers and the interviews he gives Bloomberg. He’s a wise man that comes across as a cranky at times but we should listen carefully to what he has to say.

“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.” [via Bloomberg]

Commenter and blogger Kevin H posted this reply to my $5 Trillion Dollars of Debt post yesterday, “How in the world is the U.S. going to bail Fannie and Freddie out of 5 trillion? We are already in debt 9.5 trillion dollars.”

Yes, the question is “how” and “can we?” Stay long Euros, Gold, and Oil for now.