Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
BoJ, FOMC and Where To Now? - 26th Sept 16
Stock Market New All Time Highs Next - 26th Sept 16
Why Trump Will Win US General Election 2016 Prediction Forecast - 26th Sept 16
Martial Law Rolls Out Across the US As Jubilee Nears - 26th Sept 16
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16
The Implications of the Italian Banking Crisis Could Be Disastrous - 22nd Sept 16
TwinLakes Theme Park Summer Super 6 FREE Return Entry for Real? - 21st Sept 16
Has the Silver Bullet Run Out of Fire Power? - 21st Sept 16
Frack Sand: The Unsung Hero Of The OPEC Oil War - 21st Sept 16
What’s Happening With Gold? - 21st Sept 16
Gold vs. Stocks and Commodities, Pre-FOMC - 20th Sept 16
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 - 20th Sept 16
European banks may be more important than the Fed this week - 20th Sept 16
Gold, Silver, Stocks and Bonds Grand Ascension or Great Collapse? - 20th Sept 16
Mass Psychology in Action; Instead of Selling Gilead it is Time to Take a Closer Look - 20th Sept 16
Hillary - Finally Well Deserved Recognition for Deplorables - 20th Sept 16
Fascist Business Model: Reich Economics - 19th Sept 16
Multiweek Correction in Gold and Silver Markets Continues - 19th Sept 16
Stock Market May Turn Ugly This Week - 19th Sept 16
China Is Digging Itself into a Deeper Hole - 19th Sept 16
Yellen’s Footnote 8 Would Put Interest Rates on Autopilot - 19th Sept 16
Central Bank Digital Currencies: A Revolution in Banking? - 19th Sept 16
UK Government Surrenders to China / France to Build Nuclear Fukushima Plant At Hinkley Point C - 19th Sept 16
Stock Market Correction Already Over? - 18th Sept 16
American Economics - 18th Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

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.


© 2005-2016 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

Catching a Falling Financial Knife