Gold

[Sniper]

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Just so we're clear, are you saying you'd prefer to buy this stock for $50 as opposed to $49?

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Considering that it hit a high of 52 (actually 51.98) today, this question seems moot at the moment!

[Evan]

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Just so we're clear, are you saying you'd prefer to buy this stock for $50 as opposed to $49?

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Considering that it hit a high of 52 (actually 51.98) today, this question seems moot at the moment!

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Would you rather buy stock in any company, ever for $x as opposed to $x-1? That is not only relevant, but pretty critical.

[Sniper]

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Would you rather buy stock in any company, ever for $x as opposed to $x-1? That is not only relevant, but pretty critical.

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There are times when buying at X provides a better risk/reward opportunity than buying at x-1.. so, yes!

(Note: I spun off the chart branch into its own thread)

[Evan]

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Would you rather buy stock in any company, ever for $x as opposed to $x-1? That is not only relevant, but pretty critical.

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There are times when buying at X provides a better risk/reward opportunity than buying at x-1.. so, yes!


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Okay, I'm pretty sure we will never agree on anything related to finance, stocks or money.

[Dan Mezick]

Yes.
49 is much riskier than 50. The basic premise is that all the miserable holders who bought at the previous high ($50) may still be around to exert selling pressure at $49. Once it closes above, they are likely gone. What's left are existing and new holders who bought expecting higher prices.

Now the shares can run.


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1. 49 does not represent a breakout above 50, it is merely potential. Below 50, more selling has and can continue to take place coming from old frustrated holders of this stock. All of them might not have cleared out yet. The 100% natural, human thing to do is hold your losers "until you get even". Your opponents are human and they do the easy thing. They hold. And sell at $49 if it ever comes.

The main problem with 49 is the protective stop problem....defining risk. Buying on a close above 50 solves this problem-- simply set your stop slightly below 50, (3% below is a good rule of thumb) This is the level at which you are 90% sure you are wrong. Risk is defined.

2. Buying on close above 50 provides potentially unlimited upside (if you can let it run) and a clearly defined level of risk. Risk is

Purchase Price - ($50 -($50 * .03))- any slippage - commissions

For example if you buy on close today and close is 51.50 risk is

51.50 - 48.50 - slippage - commissions

Risk is basically 3 points plus costs. It's under 6% risk.

At 49, you are setting a subjective stop with reasons supported by your level of fear or greed. These are poor premises for choosing a stop.

At 50, you are setting an objective stop with reasons supported by the chart. These are a excellent premises for setting a stop.

The chart reflects the collective actions (and emotions) of all the players.

After it breaks out it is 100% normal for price to test $50 before it runs.

The 50-51 area is a pivot point for NEM. The difference between 49 and 50 is very large. Alot of emotion is focused on the 50-51 area.

[Evan]

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Your opponents are human

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Opponents? What the hell are you talking about?

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simply set your stop slightly below 50, (3% below is a good rule of thumb)

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Please stop making up numbers and telling me they're "good" or even hinting that they're reasonable. They are neither.

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Buying on close above 50 provides potentially unlimited upside

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Hahahahahahahahahahahahahahahahahahahahahahaha.

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At 49, you are setting a subjective stop with reasons supported by your level of fear or greed. These are poor premises for choosing a stop.

At 50, you are setting an objective stop with reasons supported by the chart. These are a excellent premises for setting a stop.

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Man, this is great stuff. I wonder how many people will actually believe all this.

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After it breaks out it is 100% normal for price to test $50 before it runs.

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And you still think it's a good idea to ditch your shares at $48.whatever?

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The 50-51 area is a pivot point for NEM. The difference between 49 and 50 is very large. Alot of emotion is focused on the 50-51 area.

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I wish you'd stop making things up. NEM has a historical correlation to the price of gold of about 90%. Gold prices will move this stock, not whatever the fck you're talking about. Here's a short economics lesson for those of you that think any of what Dan is saying is true:

1) The price of NEM moves when the price of gold moves. Here is a graph of NEM compared to the CBOE Gold Index:


2) Gold is priced in USD/Troy Ounce.

3) It is reasonable to assume that the intrinsic value of gold remains constant.

4) Gold is traded worldwide.

For those of you that can't piece all of this together, I'll help. When the US Dollar depreciates against foreign currencies, the price of gold (which is USD denominated) increases. Here's an example:

Let's say ther are 2 currencies in the world, Dollars and Euros. At time 0, 2 USD = 1 Euro and gold is 400 USD/ounce (or 200 Euros/ounce). At time 1, 3 USD = 1 Euro. This means that the price of gold is now 600 USD/ounce (still 200 Euros/ounce).

Note that this example is very much simplified, but it gets the point across. NEM moves with the price of god and the US Dollar, not whatever Dan is talking about. End of story.

[Dan Mezick]

It is often 100% correct to WAIT and buy at X as opposed to X-1.

The reasons are related to the focused emotion of most players at pivotal price points.

Emotion of players are not distributed evenly across all prices. Thus pivotal points are created, setting up low-risk opportunities.

The chart of NEM illustrates how the $50 area was hit twice in 01/04 and 10/04. $50 is now a pivotal point where emotion is focused. Historical buyers in these areas are grateful to "get out even", now, selling at $49 and higher.

Most of these historical buyers are likely gone, now.

The strong evidence is any close over $50.

[Evan]

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It is often 100% correct to WAIT and buy at X as opposed to X-1.

The reasons are related to the focused emotion of most players at pivotal price points.

Emotion of players are not distributed evenly across all prices. Thus pivotal points are created, setting up low-risk opportunities.

The chart of NEM illustrates how the $50 area was hit twice in 01/04 and 10/04. $50 is now a pivotal point where emotion is focused. Historical buyers in these areas are grateful to "get out even", now, selling at $49 and higher.

Most of these historical buyers are likely gone, now.

The strong evidence is any close over $50.

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Homie, NEM moves with the price of gold. Gold moves inversely to the value of the USD. None of this has ANYTHING to do with pivotal points or emotional players or ANYTHING you're talking about.

[Dan Mezick]

Yes.

90% of what is said about NEM applies to gold.

Gold is a better buy at $501 then $480.
Just like NEM is better at $51 than $48.
For about 90% the same reasons.

I respect all contrary opinions regarding same.

Sniper, thanks for the supporting cover.

[Evan]

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Gold is a better buy at $501 then $480.


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Awesome! I love that your "analyis" doesn't include anything pertaining to the USD. Let me guess, is the USD a better buy at .5 Euros than .33 Euros?