GOLD AND SILVER TRADE ALERT and BROAD STOCK MARKET UPDATE (2:55 pm EDT)
Several markets are behaving oddly right now (giving mixed technical signals and showing little movement during a potentially strong reversal period), and this could mean that something is up. The dramatic crashing of Greece's stock market yesterday and the continuing weakness of China's stock market despite major intervention by the Chinese government (which is essentially now controlling this county's "free" market) may be frightening investors into immobility which could potentially lead to panic selling. Based on all this, I am going to revise some of my current trading strategies.
As I've pointed out in recent blogs, there are a lot of cycle, timing and technical reasons to expect a rally in the precious metals right now. This should be happening now, but gold and silver prices seem to be "holding back" (or are being held back by market manipulators), and there are some very bearish short-term signals arising now that could lead to a pullback instead of a rally. Directional momentum also continues to be quite bearish in precious metal charts as well as the charts of gold and silver stocks. Gold and silver prices are now back up to where we bought them last week so I am going to unload my long positions in gold and silver today with no (or very little) loss. Our original trade was only supposed to be short-term anyway with gold prices perhaps rising to $1140 before reversing and falling again. Should that rally take place, we will now look to short sell it at the top, but there is a good chance we could see these metals turn down now with gold prices getting close to $1000 before another rally. Selling my long positions in gold and silver today.
The broad stock market has been falling this week which is jeopardizing the idea of a new cycle and rally to challenge the all-time DOW high of 18,351 on May 19 (or even the recent high of 18,137 on July 20). There is support this week a little below 17,500 in the DOW, but the level we don't want to see breached is 17,399. From a cycles perspective, that would be a bearish signal and could mean a severe correction is underway that could take prices a lot lower. For now, I am going to hold my long position in the broad stock market and maintain my original stop loss at 17,399
Several markets are behaving oddly right now (giving mixed technical signals and showing little movement during a potentially strong reversal period), and this could mean that something is up. The dramatic crashing of Greece's stock market yesterday and the continuing weakness of China's stock market despite major intervention by the Chinese government (which is essentially now controlling this county's "free" market) may be frightening investors into immobility which could potentially lead to panic selling. Based on all this, I am going to revise some of my current trading strategies.
As I've pointed out in recent blogs, there are a lot of cycle, timing and technical reasons to expect a rally in the precious metals right now. This should be happening now, but gold and silver prices seem to be "holding back" (or are being held back by market manipulators), and there are some very bearish short-term signals arising now that could lead to a pullback instead of a rally. Directional momentum also continues to be quite bearish in precious metal charts as well as the charts of gold and silver stocks. Gold and silver prices are now back up to where we bought them last week so I am going to unload my long positions in gold and silver today with no (or very little) loss. Our original trade was only supposed to be short-term anyway with gold prices perhaps rising to $1140 before reversing and falling again. Should that rally take place, we will now look to short sell it at the top, but there is a good chance we could see these metals turn down now with gold prices getting close to $1000 before another rally. Selling my long positions in gold and silver today.
The broad stock market has been falling this week which is jeopardizing the idea of a new cycle and rally to challenge the all-time DOW high of 18,351 on May 19 (or even the recent high of 18,137 on July 20). There is support this week a little below 17,500 in the DOW, but the level we don't want to see breached is 17,399. From a cycles perspective, that would be a bearish signal and could mean a severe correction is underway that could take prices a lot lower. For now, I am going to hold my long position in the broad stock market and maintain my original stop loss at 17,399
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