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Do we not need to account for the fact that the average price for the year is ~$35 and it has dropped to ~$15 during the period of high volume? Halfing the price therefore resulting in the volume doubling and the same amount of money being exchanged overall? Just curious as I have seen similar arguments made in other situations and always wondered about the increase in volume after a substantial price drop. Thanks
Wouldn’t the reason for the VoL difference just be because shares as 5x cheaper? we would need to see 50M just to match the average vol from beginning of year. Am i missing something ?
Probably why a mere swiss poll and then a russian comment were able to complicate the standard minutes shakedown?
Gary AS USUAL you are “spot on” and perhaps one of the best premiere “market timers” in modern times IMHO……. bought some JNUG during Monday morning’s open AND today near the intraday lows……. AND put in some limit orders on “panic selling” intervals hoping to capture some orders tomorrow.
Thanks a million Gary!
I think your analysis of volume using 3x Direxion products is flawed. The main reason that volume is up in this instrument (from around 5m shares/day to around 20) is that price is down (from about 40 to a range of 10-15). Dollar-wise, volume is barely higher than usual. So the increase might as well be explained by the very same short-term traders being slightly more active intraday due to the currently elevated volatility, rather than big institutions building up multi-billion dollar positions.
The real institutional volume increase is best observed in the unlevered ETFs (GDX, GDXJ) or the miners themselves (take a look at NEM, ABX, AU… you will see that volume is barely up). This shows a quite different picture than the levered ETFs, and a more realistic one I believe. Especially when it comes to market activity of institutions, who would buy baskets of stocks rather than costly levered ETFs.
Based on that information, I still believe your original hypothesis of Gold bottoming next year is the one to go with for now.
No, I was spot on 😛 Gary changed his mind about the summer low after my post in October ! That is not important, I enjoy Gary’s website very much.
It doesn’t matter that the shares are cheaper. what matters is the sudden volume explosion. btw the volume explosion is also occurring in gdx and gdxj.
Weren’t you just calling for ‘the bankruptcy phase’ of the gold bear market?
Yes I was. If we have another leg down next summer then that’s when we will get it. If gold has formed a final bear market bottom then a bunch of juniors just dodged a really big bullet.
If “something big” is about to happen to gold, then do you think that means an equally big (negative) reaction in the conventional markets?
Not really. I think stocks still have to give us a bubble phase.
Do you have any thoughts on sugar Gary? Brazil, the world’s biggest sugar producer is suffering the worst drought in 80 years.
I don’t know anything at all about the fundamentals in sugar.
I hate to be blunt but.. half the people arguing Gary’s study of the Markets haven’t got a clue on how to read a chart and it’s really frustrating! Don’t misunderstand.. I don’t mind those of us asking questions ’cause that is indeed the best way to learn but some of you need to go back to the drawing board and learn the basics, so that you may understand one of two things:
First, Gary doesn’t have a crystal ball so stop busting his chops! His analyses has to adapt to whatever mother nature (in this case, Mother Market) throws at us. The study of ‘Charts’ is all about increasing the probability of getting into a position at the best opportune time therefore giving you and your money a better risk to reward ratio. That’s it!
And second, the sudden jump in volume in NUGT (and friends) has got nothing to do with volatility! It’s money and lots of it pouring into the trade! And no, it doesn’t mean that Gold is gonna blow up tomorrow.. It just means that the probability is in our favour and all you need to do now is exercise a little discipline (I recommend a tight Stop-Loss). Get it people?! Lol!
Great — class dismissed :o)
“Any fool can criticize, condemn and complain – and most fools do.” – Attributed to Benjamin Franklin
Gary is correct when volume increases it can be either bearish OR bullish and in THIS case it’s bullish……. it has NOTHING to do with the share price being relative to the volume. Just take a look here at junctures of turnarounds and opportunities: http://stockcharts.com/freecharts/gallery.html?s=sqqq
My forte too is technical analysis of charting and I can tell you one thing the amount of work and effort displayed in his website is absolutely stupendous and I for one can appreciate ALL of it. Technical analysis has ALWAYS kept me “ahead of the curve” MORE times than not and has made me a successful investor to say the least.
Not sure why too so many here tend to critique and want to play “armchair quarterback” against Gary. Back during the “dot com” days I was in the same boat as Gary and decided to “abandon ship” due to all the haters out in YHOOland and to be honest find solitude ALOT more comfortable.