Thursday, August 27, 2009

Quick Look at Gold: Compressed Trading Range


Gold (GLD; daily chart above) has shown quite the compressed trading range since the early 2009 stock lows, frustrating bulls and bears alike. It's on my longer-term watchlist as a breakout candidate, particularly if we continue to sustain weakness in USD. As a surrogate currency and possible beneficiary of a reflationary/inflationary outlook, gold could become quite a story on a break above $1000/oz.
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4 comments:

meques said...

can somebody tell me what's matter with $TRIN ((Advancing issues/declining issues) / (advancing volume/declining volume))today?
all the session he was < 1 - bullish.

JimRI said...

mques,

I share your question about $TRIN. Some speculation: $TRINQ looks different from $TRIN. I have read that the % of stocks traded on the NYSE has declined to perhpas 20% while those on Nasdaq have increased. So, the overall market may be better represented by $TRINQ.

Another thought, I read where "TRIN no longer works." Some of what we see in the market is driven by what people like us do in response to the indicators they watch. The feedback from traders in what they trade is in part to keep the indicators where they think they should. If traders are not watching TRIN that feedback may be missing.

Brett Steenbarger, Ph.D. said...

Hi Meques and Jim,

I don't use TRIN in my trading, but it seems to me that if you have a high proportion of volume concentrated in a few stocks or ETFs, that potentially skews TRIN.

Brett

meques said...

Brett,
thanks for your advice. do share your opinion.

JimRI,
thanks for comment. btw, looks like we are not alone wondering whats happening with $TRIN (http://www.stocktwits.com/t/TRIN).

Unfortunately, today was the same picture. $TRIN was always below 0.6

I have founded very interesting video by Karl Denninger exactly about $TRIN.
http://market-ticker.org/archives/1274-VIDEO-Ticker-TRIN-Data-Dislocation-Spikes-Market.html
(the plot goes after 2nd minute from the beginning)

In the video he bring an incident, occurred not far ago in july 30 current year, when $TRIN was also posting illogical and inadequate numbers. As Karl concludes, it's all about manipulating.