Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Is A Healthy Correction Overdue in Gold And Silver?

Commodities / Gold and Silver 2011 May 03, 2011 - 07:21 AM GMT

By: Jeb_Handwerger

Commodities Best Financial Markets Analysis Article           When one begins trading it is important to realize that it is like any other business and your goods are your stocks.  There is a basic rule that one must learn and never forget when buying and selling merchandise.  You must be prepared to accumulate your products when there is a panic and sell them when there is euphoria. One has to sell when the product is in demand and the investment public becomes aggressive and buy when it is out of favor and the public shows little to no interest.  In August of 2010 and January of 2011 precious metals both gold and silver presented excellent buying opportunities.


           Please note as silver surpasses our late January target and continues its parabolic move since our buy signal, that my goal is to make significant profits and not get greedy for the extra 5-10%.  Do not get me wrong.  I believe silver and gold’s long term trend could push gold to $3000 and silver to $100 by 2013, but I am welcoming a short term healthy correction of at least 20% in silver before I will consider buying again.  I will wait for pullbacks and not chase silver at these elevated levels.  The key to selling correctly is buying at the right time when the commodity is oversold and out of favor.  Parabolic moves end with significant corrections and I would like to see a healthy pullback.  This current blow off move means that a correction could be quite painful for the investor who has overextended themselves accumulating at euphoric levels.  A healthy correction will improve the chance of an orderly and healthy uptrend and provide my readers with a secondary buypoint.

           My basic objective of this service is to help readers secure profits and realized gains.  You must sell and take partial profits as targets are reached.  Selling at overhead resistance or while it is still advancing is reminiscent of the great investors such as the Rothschild’s and Bernard Baruch who stated that no one gets the top or bottom.  The goal is catching the majority of the move.

           Once my technical targets begin getting hit, I begin to reduce my exposure as the price continues to advance past that target.  One has to remember that the reason we are in this position of sitting with hefty gains is because we bought right in late January as gold and silver were oversold and reaching long term support.  Now in late April three months later silver has reversed reaching overhead resistance and gold is still in the process of reaching the $1600 target.  I would use gold’s upper resistance line as a more valid place to look for profit taking opportunities on both metals. 

          It is important to learn to sell when others are too optimistic and buy when others are scared to death.  Silver (SLV) is close to 70% above the 200 day moving average, moving parabolically and surpassing overhead resistance, while gold (GLD) is only 12% above the 200 day moving average.  This is extremely divergent from the historical mean.  We may see silver stalling while gold plays catch up.  We are in a buying hysteria and short squeeze in silver.  During these times it has historically been wise to sell into euphoria.  When the herd begins exiting it may be painful...the pigs wanting the top may get slaughtered. 

Stay to my daily intelligence report tuned as these parabolic moves must be monitored. By Jeb Handwerger

http://goldstocktrades.com

© 2011 Copyright Jeb Handwerger- 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.


© 2005-2022 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