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Well it’s the second day without the D.V. How are you all holding up? Good? If this were a Toronto garbage strike there would already be a tonne of trash outside of my front door…please no rioting. No, the big guy is not on strike, however he is arguing with the wifey for cumulative vacation and sick days, allowing for a lump sum payment at retirement. Negotiations are ongoing.
If you are just joining us, Don is on vacation for the next six weeks or so, but will be checking in intermittently over the summer, probably just to make sure I haven’t torn down the empire he’s created. He’ll most likely check in with comments approximately once a week to give you that Tech Talk fix you so desperately crave.
So what can we do in the meantime together? Wanna see my stamp collection? Maybe we better just move on to today’s publication.
Since I opened with preparing for the seasonal trade in gold, yesterday, why not turn back the clocks and finish off the week with publications on the seasonal gold play from 2007, and how it eventually turned out. Much of the content is still relevant, and it has never been published to the site before…I checked.
Today’s Post: Preparing for a seasonal entry point in the gold sector
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Discussions from the Tech Talk Forum:
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July 8th, 2009 at 4:53 am
FP reported a seasonal trade for silver and gold some for time in august – around the time Don returns? So far the two metals haven’t really dropped sufficiently to reach a more “value” price.
It sounds like Don’s taking time off at the right time!
July 8th, 2009 at 6:25 am
Is it possible to setup a user forum so that viewers can interact rather than posting comments here?
July 8th, 2009 at 6:33 am
Does anyone know the seasonal trade for uranium?
thanks,
Andrea
July 8th, 2009 at 7:05 am
Andrea, According to Jake Bernstein (of seasonaltrader.com fame)there is no seasonal play in uranium. Jim Dines of The Dines Letter is a good one to read on uranium. He called the bull market in uranium back in 2001 or 2002, well before the big spike in 2006. He is still bullish.
July 8th, 2009 at 9:10 am
Ken – There is a forum, but seems like hardly anyone uses it. I’ve asked question there and saw many that read my messages but only ever got 2 replies.
I’m really anxious about getting into Gold and Agri close to hitting the bottom. I hope I can get some guidance from you Pros about the right time to get in, keeping in mind that no one has a crystal ball.
I’m hearing a lot about S&P 500 support at around 888/880, can Jon V. or others please comment comment on what can happen if it breaks support and goes lower? Appreciate your insight, thanks.
Richard
July 8th, 2009 at 9:28 am
In a past post, Don V. indicated support for Agrium at around $38. If that is still the case, does one just set a buy on stop at around $38 ? Secondly, has Agrium been successful at acquiring CF industries and how will it effect their financial position ?
Thanks again.
Richard
July 8th, 2009 at 9:30 am
the HGD (gold down) play worked extremely well, especially today! taking some profits to spin into XGD a bit later in the month. anyone else use that strategy?
July 8th, 2009 at 9:51 am
I have had good luck trading uranium stocks as they participate in rallys in tandem with energy and solar stocks. As energy prices increase, so does the speculation on alternetive energys.
July 8th, 2009 at 11:37 am
Hi Richard.
I have been itching to get back into Agrium as well. The offer for CF has been extended to July 17, since I believe that Agrium wants significantly more shares tendered I’m not sure about how the takeover will affect the financial position, but I think most analysts like the deal. According to Recognia, it’s in a head & shoulders top, and headed towards $30, which is around their November/December lows.
July 8th, 2009 at 12:59 pm
My reading of the charts for Agrium suggests it completed the head and shoulders pattern on about June 15th and has lost almost 25% of its value since then. The head and shoulders was right in spades! The RSI, at 32.6 suggests it is oversold but Stockastics and MACD are not yet flashing a buy. As Don would say, please be patient.
Further, if you believe Agrium is going to #38, why would you buy at today’s closing of $42.82 with a stop at $38? Am I missing something?
The most recent news realease (June 29th) says that the offer to buy CF has been extended to July 22nd and that there are poison pill provisions in place to prevent a hostile takeover. Stay tuned.
July 8th, 2009 at 1:18 pm
Don had said support was about 44 Canadian. So I think the 38 was US
CF offer is good until July 22nd. It seemed to recover a bit at the close. I am thinking we are very close.
Any opinions.
Andrea
July 8th, 2009 at 2:14 pm
Richard, Marc, Fred, Andrea, et al
May I suggest the dispelling of any compunction to be long AGU at this time. It made a very weak move out of a bullish triangle; contorted into a small, very quickly formed, H&S breaking through the neck line with determination. H&S target min. is 37.25. Support can be configured between 37-39 +/-. There is also support in the 28.00 range. S&R ranges should not be automatically assumed to craved into stone meanings, they are simply guides indicating where “something” may happen. Agu could stop a 37.25 or never pause until it hits 28 or below!
The only involvement one should have with this equity at this point is to write calls against it and buy puts. View Agu as a falling chain saw let gravity take its course. Traders/Investors become interested in long positions when the charts and their indicators tell you it has hit bottom. Emotion has no place in trading.
July 8th, 2009 at 2:25 pm
It looks to me like support is in the $38 Canadian range for Agrium.
July 8th, 2009 at 2:29 pm
Marc,
I’m using the same strategy. I’ve been in and out of the HGD a few times in the past few weeks. I’m not much of a technical analyst (still lots to learn) but I’m thinking a sell price of around $7.50 seems reasonable based on recent activity. What are your thoughts?
July 8th, 2009 at 7:28 pm
All.. THANKS to Hunter for his analysis! To many of the other posters commenting on this… if you are trying to look at Res and Sup or any of the technicals, please read about them and understand them. This web site has educational sections and there are many others as well.
As to AGU… I use the RSI, MACD and Stoch. to a certain extent. However, one must remember that these are price generated indicators and are only part of the story. So, lets take a look at the wave movements. First the long term. AGU peaked at 116.15 and dropped to 28.70 then rebounded to 61.30… a 37.2% retrace of the decline. Fibonacci ratios are used… the main ones for retraces are 38.2%, 50% and 61.8%. These ratios come from number series and are a whole study in themselves!! Thus, this 31.7% retr. was weak… ideally one wants >61.8% to hopefully see a change in direction later.
Moving to the medium term, we see the rise from 28.70 to 61.30 and 31.8%, 50% and 61.8% retr. to 48.85, 45.00 and 41.15. Today’s low of 42 puts us close to the 61.8%. A drop below 41.15 puts us into weaker territory.
In the shorter term, we have zig zags from 61.30: 61.3-49.9( -11.40); 49.9 up to 56.49( 57.8% of the drop); 56.49-44.81 ( -11.68 both a larger absolute and % drop than the first one) ; 44.81 up to 48.10( 28.2% of the last drop). This last retr. is very weak… just 28.2% with the retr. level not even reaching the old 49.90 low which should have been resistance.
Future… from the 48.10 last high a target of 36.42 would occur by just using the last drop amount. This would be a first guess. If the next drop is less( both in absolute and % terms) then this would be positive. If the double low of 38-39 in early March is near the next low this would be positive. I would NOT blindly put in a buy there!! This support hold would be a first step… after i would like to see a rally preferably more than 61.8% of the last drop maybe to an old suppt. now resistance area. Then a drop to above this last low. A breakout of the previous peak could be a buy level finally. This could be confirmed by MACD, RSI, Stoch. and perhaps OBV divergences and of course by fundamentals and seasonals.It will likely take a few weeks.
This whole process sounds messy but is not bad when plotted on a chart. I certainly dont make any claims for it but it gives me an idea of whats going on in the price patterns. Bottom line… I would not want to get into AGU yet!! Remember seasonal moves are statistical and may only give an approx. timing. Other factors could interfere!!
John
July 8th, 2009 at 8:24 pm
Matt H,
As Don mentioned, put HGD and XGD on your watch list. Watch them both in tangent. With double leveraged ETFs, it’s hard to use technical analysis because they rebalance daily. So, what I’m doing is watching XGD fall to around the 16-17 dollar range. That’s when i pull the trigger on HGD and start watching to buy XGD for the seasonal play. I took some off the top yesterday on HGD after the 0.50 cent increase but still hold it for possibly a better result tomorrow.