The above ADX and DI signals are a nice and timely illustration of the uncertainties that always lurk in the world of profitable trend trading - ready to gut the unwary in what is the last bastion of red in tooth and claw capitalism (as distinct from crony capitalism systems in which the weak and dead wood are protected from free market forces by top-down tax-financed patronage systems) - against a background of other warning signals to the effect that although gold is in a long-term upward trend (and gold miners' indices will follow), maybe tripling during the next 4 to 5 years, there will be volatility en route and there are signs that we may soon get a temporary pullback to 400 or even 380 ish for the metal. Let it be a warning never to rely on one signal indication only (in the above chart, signal rise above 50 MA). Watch this space and we'll see how the signals develop in real time and in the real market. If (no, *when*, because the market is telling us that it will happen sooner or later - as first one, metal or index, outperforms the other and then roles are reversed, during a gold related upward  trend) we get confirmation from DI and ADX of still positive relationship to MAs (effectively still positive short term trend within the longer term trend), *then* you can bet the farm on a gold miners' index and 'play' that trend with possibly more commitment than the metal trend.

Those who are experienced and appropriately equipped and skilled, may meantime have taken the more risky plunge earlier (because this within trend upturn was such a beaut in terms of spotting it beforehand) and will also 'play' the volatility when the pullback happens too (by 'selling short') but that's another story, for a future segment of this Dot Net paper on trading Asante natural resources over the heads of "owners" and quislings.

While we're waiting for confirmation signals outlined above, the charts at this page deserve attention as a good example of how calmer and 'noise' free, the charts can be when you take the longer view - without forgetting that the long term chart can hide some vicious volatility and related draw-down - draw-down is something that you have to plan for in order to survive let alone profit - draw down and resource management, especially when you're working with limited reserves, is another topic for a future paper.

Update 02-03-05: We're still waiting for ADX and DI corroboration of entry point to the gold miners trend - but we trend traders are a patient lot. Clever clogs have been trading volatility during the past week, but not us. The trend context (and incidentally an alternative view of entry timing) can be seen in this nice XAU charts series (XAU is an index of gold and silver miners) charts.

Meantime, while waiting for the charts to indicate that according to our adopted timing method, the time has come to take a long position in gold miners stocks - in illustration of the point that tradable global gold markets exist both in the metal and in miners' stocks (and a range of alternative instruments including miners' indices like XAU & HUI, and what are called 'futures' & 'options', use of which will be covered at a later date) -  with the metal currently pulled back to 430 ish resistance (support) level, we took an additional (to that taken at 414 near 'rebound' from major gold 'bottom' illustrated above) position at 429 today 02-03-05.

This pullback position to 'support' level, following 'rebound' from bottom trend line (charted above), is usually an excellent entry point. We can also see from the following metal price chart that metal is at 'support' level.

Getting back to 18-03-05  tuition - GLD is rising nicely now that it's relieved of pressure from MT's , that's a good indication of a positive week in metals and miners stocks. However, if markets were that easily predicted you wouldn't need developmental tuition/training, so wait for the right signals set for the markets segment we are watching - gold/silverminers index, XAU

Update 21-03-05 : Here we are at the beginning of a new week, watching gold metal plunge $10 before recovering a little. This is a nice and timely illustration of the kind of volatility and drawdown you have to be able to survive as a trader. If we were in the market (like the TT Club), we *might* have foreseen this outcome of the combined result of large Asian currency players being out of the markets (and the knock-on $ effect on metal), and have foreseen the beginning of extended Easter vacation when many traders and money managers are out of the market because starting their Easter break - or we might not. In either event we would have to have ability to survive this kind of draw-down built in to our trading strategies. If we were in, and watertight in the face of draw-down, then we should take a day or two off for a fishing break until things stabilise. because we aren't yet in (miners' index), we just watching for optimal (miners' index) entry point signals. We need not worry about the long metal position we entered at $414 on rebound from uptrendline and max shorts position, because the uptrend is still intact - and if  we hadn't taken that metal position when we did, then now is another pretty good entry point.

Update 23-03-05: Post bloodbath see this day lesson and PLAN for the unwary. We clever clogs don't need such measures because we're still waiting for entry point - about that matter the chart shown at this day lesson and PLAN, should, without any more assistance, give you a good indication of when it's going to happen, as two alternative entry points (see the wave patterns and judge which is the best wave to 'surf'), now that 'A' has unexpectedly topped out early before we got a chance to ride it (it did appear until Friday last that it was going to carry on to XAU 110 - let that be another lesson in the risk element of markets behaviour, that makes money management and avoidance of over-trading, vital ingredients of any trading strategy).

As you see from the chart for 24-03-05, XAU is on uptrend line at pre-Easter markets close. (refresh Finance topics)

The post Easter short week will be interesting! This market is what is called 'manipulated'.

Manipulation happens for reasons ranging from the political (Greenspan support for the Bush regime) to ruthless finance oligopolies squeezing unwary aggressive overtraders out of the market, poorer than at entry. But we, who are training as patient trendtraders, are fairly fire proof - that's the strength of what we do.

If we had plunged in with the metal traders - lets see what would have happened... serious metal traders are now not watching nervously for a break of the uptrend line, because aware that there was a recent 'gap' down in the POG (Price of Gold) and that gaps always get filled, which means that even if there was a break of the uptrend line, then recovery to fill that gap would follow, sooner or later... it seems that *if* our metal traders were worried, then the worry quotient would be a product of the value of 'sooner or later' - without corroborating support from other signals (we used ADX and DI above), then we'd be almost back to where we started having risked capital, for little gain, and the reward of facing Easter with the possibility of trendline breakdown... that's acceptable to the aggressive scalper, but not for us patient intelligent and canny trainee trend traders.

Update 29-03-05: There have been couple of positive signs during the first two days of the shortened post Easter week, like the short term Euro & Swiss Franc / US Dollar pairs have turned up unconvincingly and gold miners ETF, HUI's MACD is exhibiting what's called (often reliable) " bullish (positive) divergence", but the fat cat populations of finance oligopolies (your opponents) haven't yet finished their extended Easter hols so volume is very light and frankly signals under such circumstances simply aren't to be trusted unless powerfully supported by lots of other sigs too - and they're not, so we're waiting...

Update 01-04-05: After the bloodbath, see here for an up to date snapshot of XAU and the metal.

Update 08-04-05

8 weeks from this chart we have the same metal chart updated to show wave 'A' in and metal pullback (our probable XAU entry point as trend traders) nearly complete. Our metal entry is still OK (though we're keeping the usual wary eye open for possible $ driven metal trend reversal) and it should be apparent from the next chart, how we have benefited from waiting for the right signals combination for XAU. Aggressive index traders will have traded the volatility but we're sticking to the pre-planned strategy and tactics. OK, so there's been no stock index trade, but by waiting for the correct signals set (which is probably going to give us leg 'B' to 'C', see metal entry chart) we've also avoided the recent XAU bloodbath when it crashed through the trendline and approached 200 MA support shown above in the Easter chart.

We like like ADX in the following chart

Continued in this space