Comments on: Tech Talk for Wednesday November 4th 2009

By: gary

gary — Sat, 07 Nov 2009 14:30:50 +0000

Hi Don,
Do you think XGD will go above the range it has been in for the last year? What ETF do I buy for gold bullion? Thanks,
Gary J.

By: Don Vialoux

Don Vialoux — Thu, 05 Nov 2009 19:44:27 +0000

Hi SKK. TRP has a mixed intermediate technical profile. Intermediate trend is flat with support at $30.19 and resistance at $34.40. Strength relative to the TSX Composite Index is negative. Short term momentum indicators currently are neutral. If looking for an entry point, try the stock’s 200 day moving average currently at $31.69

By: Don Vialoux

Don Vialoux — Thu, 05 Nov 2009 19:39:44 +0000

Hi Richard. Just some background on XGD. It consists of a basket of global gold stocks. Content and weights are available http://ca.ishares.com/product_info/fund_overview.do?ticker=XGD
Gold equity indices on both sides of the border have been underperforming gold bullion during the past two months and have yet to show signs of changing trend. The seasonal trade in gold is slightly different than gold stocks. A good example is the tendency for gold bullion to peak late in January and for gold equities, ETFs and indices to peak a week later. News from the annual Prospector’s Convention in Toronto in the first week in February prompts equity investors to hold slightly longer in anticipation of positive corporate news. In the short term the preferred strategy with gold stocks is to watch them closely for technical signs of a change in trend relative to gold. That could be an interesting technical signal for entry into the next period of seasonal strength.

By: Don Vialoux

Don Vialoux — Thu, 05 Nov 2009 19:26:50 +0000

Hi Fred and Ron. Yes, technicals for the TSX Composite Index and S&P 500 Index provided technical signals yesterday(Wednesday) that signaled the entry point for the current period of seasonal strength lasting until early next May.

By: Don Vialoux

Don Vialoux — Thu, 05 Nov 2009 19:24:26 +0000

Hi Richard. I like to use 50 day moving averages in as slightly different way than other technical analysts. Moving above or below the 50 day moving average by individual equities, ETFs and indices is not significant technical event unless the chart shows consistent support or resistance on multiple occassions. Your choice of XLK is a good example. Each time XLK has weakened to at or slightly lower than is 50 day moving average, a buying opportunity has appeared. Relevance becomes important when trading seasonal plays. Another good example of an index that tracks its 50 day moving average (but on the downside instead of the upside) is the U.S. Dollar. Earlier this week, it briefly moved higher than its 50 day moving average. Selling pressure quickly appeared.

By: Don Vialoux

Don Vialoux — Thu, 05 Nov 2009 19:16:58 +0000

Thanks, Shawn. Yes, http://www.Kitco.com is an excellent source for information on precious as well as base metals.

By: SKS

SKS — Wed, 04 Nov 2009 23:23:51 +0000

Don, can you chart Transcanada pipline.They reported today.

Thanks

By: Greg DS

Greg DS — Wed, 04 Nov 2009 17:59:10 +0000

DON,

The VIX is crossing the 200-day….what do we take from this??

GDS

By: Richard

Richard — Wed, 04 Nov 2009 17:03:14 +0000

Don,

Not sure if Agrium will be in tonight’s By the Numbers. If they missed earnings expectations today, why is the stock still up from yesterday’s close? Are MacD and Stoch turning around and is it about to break above the 200DMA (meaning thats its safe to buy again) ?

Richard

By: Richard

Richard — Wed, 04 Nov 2009 16:58:10 +0000

Stag : I just spoke with my broker. From what I hear XGD.to is a basket of Canadian gold equities and not does not track the commodity itself (http://ca.ishares.com/product_info/fund_overview.do?ticker=XGD). I may be wrong but the only real pure gold play ETFs are GLD and XAU (with silver). GLD is 1/10th the price of the commodity. The fact that XGD is equities and GLD is based on the real deal might explain the difference in movements.

Don : I’d love your comments on the above and my previous question about Gold. Sounds like GLD is the way to go for pure play or does XAU have more upside considering your comments on the combined bigger upside in Silver? When is China expected to buy the 203 tonnes ?

Little time, lots to think about.

Richard