Thursday, 3 January 2008

Sorry, Gold Bugs! Improved Gold and HUI Setups Still Bearish

I've got new trading setups for gold and the HUI Gold Bugs Index based, like all my other setups, on the nifty little Commitments of Traders reports issued weekly by the U.S. Commodity Futures Trading Commission. These improved setups really blow me away, especially the one for HUI. (Thanks again to reader Dave for his invaluable input!) Take a look at the results on my Latest Signals page, where I've posted the setup numbers on the main table and the running results for the gold setup in a separate table lower down.

Sadly for you wacky gold bugs out there, both setups flipped to bearish on the same date as my old gold and HUI setups did - Sept. 25 - and remain bearish right now. Sorry, folks! Let the hate mail begin. You'll also notice from the updated Latest Signals table I've dropped my setup for the USERX U.S. Gold Fund, which had virtually the same signals as my old gold and HUI setups and was starting to feel a little redundant. Still holding onto my XGD Canadian Gold iUnits setup for the time being though, which has been on a bullish signal since May 22. (I'm personally long XGD too.) But I might trim some of my precious-metals position soon in accordance with new rules I'm developing to limit portfolio allocations in correlated markets like gold and silver. I've also been long silver since my setup flipped to bullish from the July 3 COTs report, and my total precious-metals position is nearly 30 percent of my total assets. My new rule will set a maximum allocation of 20 percent in any one highly correlated market.


Anonymous said...

New and Improved???...huh...let's see. Since Sept.25 the HUI is up nearly 100 is up nearly $200!!!!!!.....and USERX is with a hares breath of breaking to new highs....AM I MISSING SOMETHING?

I suggest you have talk with Mr Steven Kaplan who has been bearish on Gold and the HUI since July also.
Maybe the two of you can work it out together.

Fred said...

hi Alex

does that mean you are abandoning your previous Gold Setup (i.e. trading the same side as Commercials, with a 2 standard deviation and 18 week moving average)?

will you still show this old setup?


Alex Roslin said...

Hi Fred,

Yes, I'll be dropping the old setup parameter values and won't be showing those signals any more. I believe these ones are superior. Apologies! But you may easily reproduce the old setup using my S&P 500 spreadsheet as a model and substituting another setup's parameter values. Also, as I mentioned in my post, the new setup's bearish signal on Sept. 25 came on the same date as the old setup's bearish signal, so this doesn't affect any current trade.

Best regards,

Alex Roslin said...

Hi Anonymous,

Thanks for your comment. As I've mentioned elsewhere on this blog, the idea isn't to catch every single minor fluctuation, but to get good-probability, longer-term trades. It's not going to produce 100% winning results either. No trading system has done that. Do you know of one that has?


Lyu said...

Oh NO! Alex.

Let's not to mention the super bull run of Gold from the bearish signal.

Let's see sterling:
Since the signal of Bullish of Sterling, how much have it depreciated against yen or even the Dollar (Set Bullsh by your signal).

The only thing I can say that your signal about Gold and Sterling completely lose or even against the market......or maybe you traced the wrong side...

If you are really not sure about whom to trace, please set the signal for blank. It's not a bad idea.


Alex Roslin said...

Hi Lyu,

Thanks for your comment. See my previous response above.


Alex Roslin said...

As an addendum to Lyu's comment about the British pound, sterling is about flat with the U.S. dollar since the bullish signal of the Dec. 18 COTs report. The COTs data is for the pound/U.S. dollar cross. There isn't any COTs data for pound/yen.


Al said...


"the idea isn't to catch every single minor fluctuation"

I would hardly call a 30% rise in gold a "minor fluctuation" and nor has the run finished yet so it would seem.

Alex Roslin said...

Hi Al,

My gold setup caught part of that move with a bullish signal in June Since the bearish signal in September took effect, gold is up 15 percent (not 30% as you suggest).

Meanwhile, input on creating a magical system that catches every top and bottom and never loses money is highly appreciated!