Saturday, March 31, 2012

GLD Trading Volume


Click to enlarge.

I've zoomed in to show the detail in the 100 day moving average and how it relates to the exponential trend.

I'm not willing to call this an exponential trend failure quite yet. The data is noisy and it is possible that a new round of uncertainty would allow the trading volume in GLD to resume its former trend. That said, as a gold heretic (at these prices relative to the price of toilet paper) I am certainly tempted.

See Also:
George Soros vs. Jeremy Siegel

Source Data:
Yahoo: GLD Historical Prices
Kitco: Historical Gold Prices

12 comments:

Mr Slippery said...

How does this volume compare to overall stock market trading volume?

Fatboy said...

I'd say nearing a top in price. So three "sign spinners" yesterday advertising we buy gold.

Fatboy said...

Saw, not so.Fatboy stupic,dose knot prufreed

tj and the bear said...

In the prior post you say "still in crisis mode", but in this post you're conjecturing that gold may have topped. Make up your mind, because it can't be both.

Stagflationary Mark said...

Mr Slippery,

Probably similar. I'm not all that bullish on either, lol.

Stagflationary Mark said...

Fatboy,

Good things come in threes! ;)

Stagflationary Mark said...

tj and the bear,

Make up your mind, because it can't be both.

1. I believe we are still in crisis mode.
2. I believe that gold is overpriced relative to toilet paper.

It's just my opinion of course, but I think I'm being fairly consistent here.

tj and the bear said...

You are consistent about GLD vs. TP.

However,the statement "I am certainly tempted" suggests you'd like to short gold, which means you think it's heading down.

I'm simply saying that since gold is a crisis indicator then you can't simultaneously claim that there is *and* is not a crisis.

Stagflationary Mark said...

tj and the bear,

However,the statement "I am certainly tempted" suggests you'd like to short gold, which means you think it's heading down.

1. First of all, this is a volume chart. I am "certainly tempted" to say that volume may no longer be able to keep up with the exponential trend. It may require ever increasing levels of crisis for that to happen. Note that I did not call this an exponential trend failure yet though. There's a difference between being tempted and being sure.

2. I do think volume and asset euphoria tend to go hand in hand. Real estate volumes were high until they weren't. However, prices can rise on falling volume. I would not claim that they can't.

3. Short gold? I have no opinion on gold priced in dollars. I therefore have no desire to short gold.

I would certainly buy the argument that gold prices are high because we're in crisis mode. I believe that. Gold prices could stay high too.

What if gold prices have fully priced in the crisis but toilet paper prices haven't? Which would be the better value?

Picture gold trading sideways for years as toilet paper prices catch up. Gold investors certainly wouldn't enjoy that ride. Could it happen? I'm tempted to think that it could. It is just one outcome out of many though.

Stagflationary Mark said...

Speaking of prices rising on falling volume, Apple stock has certainly done that.

As the shares get more expensive, investors can afford to buy less of them.

Doesn't necessarily mean anything in the grand scheme of things, or alternatively, it could mean something very important. Time will tell.

Troy said...

I'm house-sitting in Santa Cruz this week again and bought a week's worth of food at trader joes like I did 4 months ago.

Comparing the two receipts, I was struck by how all the prices were exactly the same!

Somebody elsewhere pointed out that the 5 year SLV chart was a horrorshow, and while I don't do TA per se on a chart analysis there's a pretty obvious story being told.

Stagflationary Mark said...

Troy,

Comparing the two receipts, I was struck by how all the prices were exactly the same!

It would seem that the imminent hyperinflation shadowstats has predicted for years has been "poned" yet again! ;)

For what it is worth, I bought EE Savings bonds yet again this year (in January). They'll double in price in 20 years (3.53% annualized rate if held that long). Guess I'm still not a believer in imminent hyperinflation theories. Go figure.