Best of the Week
Most Popular
1.China Crash, Greece Collapse, Harbingers of Stock Market Apocalypse Forecast 2015? - Nadeem_Walayat
2.Gold Price Awaiting Outcome of Greece Crisis - Clive_Maund
3.Gold Price Peculiar 6 Month Cycles - Rambus_Chartology
4.Gold Price Just a Little Bit More - Bob_Loukas
5.8 Unprecedented Extremes Indicate a Stock Market Bubble in Trouble - EWI
6.Gold And Silver – Without Either, You Will Be Greeced - Michael_Noonan
7.Lies, Damned Lies and Statistics - James_Quinn
8.China Crash, Greece Crisis Harbingers of Stocks Bear Market? Video - Nadeem_Walayat
9.Gold and Silver Record Shorting - Zeal_LLC
10.Markets Big Deflationary Downwave Quick Reference Guide... - Clive_Maund
Last 5 days
The Fed Can't Stop the Commodity Bear Market - 1st Aug 15
Meet the Leader Who Turned Google Into a “Buy” - 1st Aug 15
The Greek Coup: Liquidity as a Weapon of Coercion - 1st Aug 15
Gold’s Amazing Resiliency - 31st July 15
Silver – A Century of Prices - 31st July 15
Demand for Gold Bullion Surges – Perth Mint, and U.S. Mint Cannot Meet Demand - 31st July 15
Reasons Why the Greek Crisis Will Only Get Worse - 30th July 15
The War On Cash: Why Now? - 30th July 15
Greece - The IMF Experts Flunk, Again - 30th July 15
Threat Of Cyber Warfare the “Other Reason To Own Physical Gold” Warns Rickards - 30th July 15
The 5 Biggest Myths and Lies about the Middle East - 30th July 15
Greece, Diversion, and the New World Order - 30th July 15
Ibuprofen Warning - The Pain Killer that can Kill You! - 29th July 15
More Ritholtz on Gold, and Another Response - 29th July 15
Crude Oil Price Is Lower – and You’re Richer - 29th July 15
U.S. Home Sales Market Is Dead – This Chart Proves It - 29th July 15
Greece- What Happens When Economists Talk Politics - 29th July 15
The Gold - U.S. House Prices Ratio As A Valuation Indicator - 29th July 15
Will Crude Oil Price Decline Continue? -Video - 28th July 15
Gold & Silver Money Has Devolved Into Debt and Plastic - 28th July 15
Buy and "Own Gold Krugerrands" Says Money Expert Jim Grant, Very Bullish on Gold - 28th July 15
How to Protect Yourself from China's Crashing Stock Market - 28th July 15
Quantum Geopolitics - 28th July 15
Gold Mining Stocks to Weather the Storm - 28th July 15
Stock Market Bulls Beware! - 28th July 15
Will Chinese Stock Market Crash Affect the US? - 27th July 15
Crude Oil Price Under $48! - 27th July 15
Are We Seeing a Trend Reversal with U.S. Interest Rates? - 27th July 15
How to Know When the Gold Bear Market is Over - 27th July 15
Gold Bear Market Phase III - 27th July 15
Silver Bull Hammer Buy Signal - 27th July 15
Gold Cracks Support and Plunges to New Lows - How Low Will Price Go? - 27th July 15
Commodity Markets Breakdown Of 2015 Is Now A Fact - 26th July 15
Gold Price at a Five-Year Low: Here’s What to Do - 26th July 15
Stock Market Primary III Inflection Point - 26th July 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stock Market Bubble in Trouble

Silver is a Low Risk Buy Now!

Commodities / Gold and Silver 2013 Dec 27, 2012 - 04:08 AM GMT

By: Bob_Clark

Commodities

Is this a great time to be buying the metals?
The fundamental analysts have good reasons why it should go up. Then again, they have good reasons why it should go down as well. For example a financial regime change in Japan points up. The financial cliff and debt ceiling issues in the USA points down.  


I think this is a good time to buy the metals but it has nothing to do with fundamentals. Well, not unless you call manipulation a fundamental, which I suppose it is.  It is fundamental to how the world banking system is run.

There is profit for us in manipulation
To get a good yearly print on the charts, each year at this time the agents of the world bankers hammer down the price of the metals. This is because one of the primary inflation indicators is the price of gold and silver.  If the agents of the world banks, namely the Fat Boys, can sell short and then drive the price down at the end of the year, there is no inflation.  If while doing so, they make a large profit, there is no government official going to call that manipulation.

This manipulation creates a very simple trading opportunity that has a good chance of success.  On top of that, the risk reward ratio is favorable too.
 
This year is particularly interesting because this is the second year in a row that silver has closed at this price.  So there is no inflation. Not in silver anyway. Gold is a little higher but not enough to matter.

No Fundamental reason to buy
I am going to recommend a trade that has nothing to do with fundamentals.

It has to do with probabilities. When we look at the chart below we see that this decline has happened every year in the last four.  What a surprise. Now look what happens after this yearly decline.

There is another thing that we see on the chart. We should be making a 4 year cycle low. The metals have an 8 year cycle, low to low and we are halfway through it. There tends to be a low at halfway points like this.

Maybe I should not have put that in because it has nothing to do with this trade and may make us too bullish. Still it is a good reference because usually after making a low like the 4 year, the market goes to a new high to make the top of the larger cycle, which in this case is the 8 year cycle. 

Patience
There is one other thing that needs to be observed. This is not always the low time.  It has bottomed now in the past but we see that it has at times, made the low closer to the end of January.

How to do it
Ok, so we want to buy this sell off but how do we do it safely? If we buy it now, we may go down until the end of January, or worse.  Maybe we collapse. Never to rally again. Maybe, maybe not.

I have projections lower. Down to the 25 to 26 level and it can go there in the New Year, so we need a trading technique that keeps us safe.

I have a simple strategy that will let us buy this, using a relatively tight stop loss to protect our capital if it doesn’t work.
I will wait for a weekly bar to go above a previous weekly bar. Then I will buy. At the same time as I buy, I will put a sell order (called a stop loss) under the low of the decline to that point.  I have marked similar entries in previous years.

First time lucky
We see instances where we may have gotten in too high and too early.

We also see that even after a failed first attempt, the second entry yielded substantially higher returns than was lost on the first.  

We accept small losses as part of doing business.  This is a good, simple way to preserve capital, while capturing a great opportunity like this.

It is still a little high and if we are patient, we will be less likely to be a victim of a false start.  A smaller weekly range usually precedes a turn, that weekly bar is our risk, so a small bar is best.

Once in, when do we sell? That is your choice. Either stay in until we break to new highs for the 8 year cycle, or sell at the end of March, or April. That is the seasonal high time.

Change your life
I can teach you how to use the Fat Boy’s algorithms. (The algorithms are not cycles.)

I have taught fund managers, floor traders to be more profitable. I have taught pipe fitters and farmers to trade professionally.  It does not matter what your education, or background is.  When you learn way the Fat Boy’s computers control the markets,  you will be able to join them instead of being their victim.

I teach in a step by step, easy to understand way.  Get my videos, or better yet, take my full course. I have never had a failed student and I guarantee my training works.
You are either with them, or a victim.

Bob Clark is a professional trader with over twenty years experience, he also provides real time online trading instruction, publishes a daily email trading advisory and maintains a web blog at www.winningtradingtactics.blogspot.com  his email is linesbot@gmail.com.

© 2012 Copyright Bob Clark - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History