Ron Griess of the Chart Store suggests that the 200 day is the wrong technical indicator to focus on regarding Gold.Looking back to this run, he suggests the 300 day is the more supportive index:

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Category: Gold & Precious Metals, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

26 Responses to “Griess: Use Gold’s 300 Day Moving Average”

  1. JesseLivermore says:

    If one technical indicator doesn’t give you the answer you want, choose whichever one confirms your preconceived notions?

  2. Francisco Bandres de Abarca says:

    (with deference to Alex . . .)

    Greece is going to declare bankruptcy next week?

  3. louiswi says:

    Yes, the 300 day MA will work- at least until it doesn’t.

  4. icm63 says:

    Use the 200 SMA, no the EMA, no use the 250 SMA or EMA not sure, ,maybe the 400 SMA or EMA..hmmm

    NO use the Gann Angles…Never change! No dispute..

    Older chart but you should get the correct idea

    http://www.readtheticker.com/Pages/Blog1.aspx?65tf=173_gold-step-up-to-heaven-2011-03

  5. Non Sequor says:

    Whom the gods would destroy they first teach time series analysis.

    I’ve sworn to never touch this stuff. It’s far too easy to cherrypick methodologies that confirm your preconceptions. Time series analysis isn’t a science, or even an art as some claim; it’s a disease.

  6. Moopheus says:

    When the moon is in the seventh house, and Jupiter aligns with Mars, then peace will guide the planets, and love will steer the stars.

  7. bmoseley says:

    so do we search for a moving index that will support our view.

  8. snowflake says:

    Good grief BR! As a financial advisor and generally astute sage, surely you know about curve fitting and data mining.

  9. Woof says:

    Buy gold when it hits 1350.

  10. lburgler says:

    Isn’t the chart moving in the same direction whether it’s 300 days or 400 days?

    Also, I disagree with all of the technical nay-sayers here.

    There is no mathematical or scientific proof for any financial trend. The functions and their charts are always going to be derived from empirical nature, even if they are codified into what seem like laws of nature, evident in themselves.

    Thus technical analyses and fundamental analyses are inextricably tied. What fundamentals point to, depends on what they have pointed to in the past, which gives you your technical analysis.

    The idea that there is some manlier more rational way of doing this is itself magical thinking.

  11. gordo365 says:

    Figuring out how to draw lines on charts back over past is kind of interesting.

    Being able to draw lines on charts into the future is more interesting however.

  12. citizen_Kohn says:

    As if the 300 MA fixes Eurozone worries, macroeconomic uncertainties and an economical depression scenario. What is next Bollinger Bands?

  13. nofoulsontheplayground says:

    Generally speaking, folks who are drawn to the technical charts are more math oriented. If you hated math or did not thrive in logic based studies, you will likely despise technical analysis.

    For those who disparage technical analysis, few probably understand that it is basically graphical representations of price, time, volume, and momentum. Human decisions are what determine all of these elements, with the exception of time.

    Think of technical analysis as the market without the biased story narratives, and you will be closer to the truth. While there is some interpretive analysis involved, folks who utilize T/A are essentially using market patterns and rhythms featuring demonstrated historic mathematical probability to improve their likelyhood of investing success.

  14. nofoulsontheplayground says:

    If you despise technical analysis, ignore the following:

    Three straight red (negative) closes on a major index almost always leads to a lower low within several days.

  15. HowardA says:

    Historic Perspective!

    Been looking at economic changes over my 59 years. Found some interesting things: Gold, Dow, AND Nominal GDP all grew at almost exactly the same rate (6.6%). Median Household Income (MHI) didn’t keep pace. In 1952 MHI was equivalent to 72 ounces of gold; now it’s equivalent to 35 ounces. According to official Government statistics the inflation adjusted household income has doubled since 1952, but this is questionable, as many items have increased much more rapidly than household income. As a percent of MHI an Ivy league education has increased from 61% to 105%. Healthcare Costs increased from 10% to 45%. The cost of an average house increased from 270% to 350%. For reference purposes MHI is $49,000. (AVERAGE Household Consumption is $87,000, which is equivalent to the 75th percentile.)

  16. machinehead says:

    Forty years of data is available for the freely-traded price of gold. Why cherry pick a dozen years to match a particular moving average length, when you could test it on the whole forty years?

    Well, I’ve done that exercise. And a standard 200-day MA works slightly better than a 300-day MA, being more sensitive.

    Ron Griess is too talented a chartist to engage in amateurish, self-deceptive curve fitting. If you want to sell to professionals, better act the part!

  17. machinehead says:

    Forty years of data is available for the freely-traded price of gold. Why cherry pick a dozen years to match a particular moving average length, when you could test it on the whole forty years?

    Well, I’ve done that exercise. And a standard 200-day MA works slightly better than a 300-day MA, being more sensitive.

    Ron Griess is too talented a chartist to engage in amateurish, self-deceptive curve fitting. If you want to sell to professionals, better act the part!

  18. HowardA says:

    One more factoid. Total government expenditures as a percent of MHI has increased from 90% to 102%. Can we say we’ve been living beyond our means?

  19. Dylan says:

    ”Do we search a moving index that will support our view?”
    I wish I could find those kind of comments on Zero Hedge, I mean just the other week they had this video talking about mining yeilds for silver are falling as an argument to buy silver, as if the USA was the whole wide world.
    If you mention ‘Goldbug’ and they be screaming at you, it is scary hearing people with twice my education knowlage, and expirience being defensive and talking like some religous cult.
    In fairness to BR, he included ‘Death of Gold Bull Market Seen by Gartman..’ on his midweek morning reads.
    The kind of thing that makes BR a credible fund manager,
    1- he does not always have an opinion about everything
    2- he is one of the few not afraid to admit being wrong, or to change minds
    …Those kind of attributes seem too rare within the financial bogesfear

  20. MayorQuimby says:

    Moving averages are among the most useless and misunderstood technical indicators. You can almost always find SOME moving average to support any thesis. In a steady uptrend, it is guaranteed that there will be one that fits like a glove.

  21. Petey Wheatstraw says:

    The most empty truism:

    it is what it is.

  22. BigBlueCrab says:

    The last week, all the usual supsects: Gartman, Kass etc etc said Gold is done…Boom, the next day.
    Oh well, you keep making piles of paper, I’ll stack my shiny metal. Thanks for letting me buy a bit more..
    Good luck with your strategies…

  23. EIB says:

    This is called “curve fitting” …amateur.

  24. Mike C says:

    Many of the comments on this thread reveal their ignorance about what the purpose of tools like this are. It isn’t about curve-fitting or not curve-fitting or drawing magical lines. It is about using some price level as a defined low-risk entry point and/or having a price level that is a “stop-out I’m wrong point”. I’d highly recommend Peter Brandt’s blog and book to understand the difference between technical analysis and “magic lines” as some sort of predictive forecasting tool versus defining risk/reward parameters on the entry and exit. Is 300 on gold a curve fit to the past 10+ years? Sure, maybe, who cares? It simply gives you one price level that is a potential entry and or stop out point.

    For my money, the 200 DMA/10-month has proven robust across many asset classes across many time periods (see Mebane Faber study) so depending on the exact rule one should have exited as a risk control measure. You can always get back in later. Successful investing/trading isn’t about finding magic indicators that predict the future without mistakes. It is about setting up favorable reward to risk ratios. Most people seem to never quite grasp that.

    Brand’ts blog:

    http://peterlbrandt.com/

  25. philipat says:

    Whatever, but when TSHTF, Gold will be the only currency worth holding, unless you believe that the strength of the US Dollar is because the US is in such great shape.

  26. RealReturn says:

    Here is the link for the simulation result of the Gold’s 300 day moving average.

    http://www.indexresult.com/MovingAverage/Simple/300/GOLD