The Lawrence Chan Blog

GLD’s net asset value in ounces has been dropping non-stop. As of October 30th 2013, it just made another new low print for the year. Notice that the surge in NAV in ounces has happened before every major rally in GLD and gold. Until we see evidence that GLD has its NAV settle down, it will be very difficult for gold to run much higher. The last leg up in gold price from $1600 to $1900 did not happen with increase in NAV in ounce. We all know what happened since – it turned out to be the finally top for the mega gold rally.

Classic market crashes take down all those who bought their papers with the others at speculative price levels. From the chart, we can see that the NAV in ounces surged the most after crossing the 25 million ounces level back in end of 2008 / the beginning of 2009. I think we have to wait until the NAV in ounces dropping down to the 25 million level again before gold price will find a decent bottom.

Remember that gold price itself may not need to drop as much as the NAV. It is all about cleaning out the ones who speculate beyond their means.

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Earlier this year NASA warned that solar flares and CME (coronal mass ejection) could be a problem starting summer. It turned out to be a quiet non-event summer with not much activities recorded. Well, our Sun obvious is a trickster and has just gear up to blast Earth with its solar flares this week.

The main sunspot causing all the latest very strong solar flares is going to turn away from Earth in about a week or two. If some of our satellite equipment on the sky are hit by strong solar flares they may be disabled for good. It has happened before so it can happen again.

Main issue with very strong solar flares (X class) is that they can also affect our communication on the ground indirectly due to its disruptive nature on magnetic fields. Most noticeable some internet connections depending on wireless cellphone network will be troubled. If you trade with wireless networks, be ready to switch to direct connections should this happens to your area.

Earthquakes and sunspots relationship has been a controversy subject for a long time. I am not saying there is a causation relationship between the two here (as I am no expert in those fields). I am just saying that there could be a coincidental relationship due to similar cycle length in solar activities (well known 11-year sunspot activity cycle) and Earth’s own seismic movement / pressure cycle (there may not be one). So far there are 10 earthquakes at 6.0 and above in Richter scale happening during this spike up in solar activity. That is way beyond normal, seasonally speaking.

Hopeful the earthquakes will stop soon.

Stay safe and good luck.

Notes: Feature image comes from Wikipedia. You can find it in the page on solar flare. It is a beautiful picture capturing a CME happened in August 2012 by NASA.

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Here is an update to my post on GE back in Jun 2013.

GE is now challenging its long term channel top.

Unlike the major indices keep pushing higher, GE is still struggling at the bottom of its range.

GE is telling us that the US stock market is facing its biggest fight for survival right now.

We will find out which side is going to win very soon.

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Following is the chart of S&P 500 Emini future 15-minute chart, regular trading session only since Oct 23, 2013.

Many traders are scratching their heads wondering what is going on.

An 8 points only channel for 4 days?!

Well, it is not something new. Whenever S&P has to be carried to certain print level for a purpose, this happens.

This is what happened back in end of Jan 2013

Jan 30th was FOMC Meeting announcement day.

Notice the compression really starts from 5 trading days before the meeting day.

Oct 30th is the upcoming announcement day and we have this compression / up channel setup in place.

S&P 500 is just playing the same script again.

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Free index and index future data for all members are now ready.

https://www.daytradingbias.com/?page_id=105159

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