Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
WESTERN DIGITAL WDC Stock Trend Analysis - CHIA! - Risk 1 - 23rd Jun 21
AMC Is the Best-Performing Stock in America: Don’t Buy It - 23rd Jun 21
Stock Market Calling the Fed‘s Bluff - 23rd Jun 21
Could Bitcoin Price CRASH Target A Bottom Below $7500? - 23rd Jun 21
Bitcoin and cryptos: Your 'long-term investment'? - 23rd Jun 21
Unlocking The Next Stage Of The Hydrogen Boom - 23rd Jun 21
USDT Ponzi Scheme FINAL WARNING To EXIT Before Tether Collapses Crypto Exchange Markets - 22nd Jun 21
Stock Market Correction Starting - 22nd Jun 21
This Green SuperFuel Could Change Everything For the $14 Trillion Shipping Industry - 22nd Jun 21
Virgin Media Fibre Broadband Installation - What to Expect, Quality of Wiring, Service etc. - 21st Jun 21
Feel the Inflationary Heartbeat - 21st Jun 21
The Green Superfuel That Could Disrupt Global Energy Markers - 21st Jun 21
How Binance SCAMs Crypto Traders with UP DOWN Coins, Futures, Options and Leverage - Don't Get Bogdanoffed! - 20th Jun 21
Smart Money Accumulating Physical Silver Ahead Of New Basel III Regulations And Price Explosion To $44 - 20th Jun 21
Rambling Fed Triggers Gold/Silver Correction: Are Investors Being Duped? - 20th Jun 21
Gold: The Fed Wreaked Havoc on the Precious Metals - 20th Jun 21
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Getting Positioned in Gold and Silver

Commodities / Gold and Silver 2014 Feb 13, 2014 - 09:29 AM GMT

By: Rambus_Chartology

Commodities

Before we get into tonight’s charts I would like to explain what my goal is right now for the precious metals complex. We never know 100% for sure when we have a bottom in place. All we can do is look at the charts and indicators and try to get the odds in our favor on when to make a move. For the short to intermediate term I think we have a decent bottom in place in which we can try to take advantage of a move higher.


The hardest part of getting on board for an intermediate move is in the very beginning stages. First you have to identify a bottom, in the case of the precious metals complex, and then you have to start buying. Think of these impulse moves as two steps forward and one step back. We have just had our two steps forward and today marks the point of a possible one step back. This is normal market behavior. Giving back some of your hard earned gains makes you feel uncomfortable and you get this feeling, in the pit of your stomach, that you must sell. If we are truly in an impulse move higher your mentality should be to buy weakness. When your in a trading range is the time to sell into strength not in an impulse move. These are two completely different techniques. Right now I think we have entered at least an intermediate term move in the precious metals stocks and that is how I’m going to play this move until something tells me different.

My experience has taught me to trade the intermediate term move and hang on for dear life when things start moving both going up and coming down. This is where the big money will be made IMHO. Those that try to trade in and out will get a few good trades off but will eventually get out of sync with the move and find themselves on the sideline when the heart of the move takes place. I know for a fact that this is already happening with some of our subscribers that decided to sit out the move in some of the 3 X long eft’s we’ve been buying for the intermediate term move.

This is the point where one has to decide on which type of trader they want to be. If you want to be a short term trader then you really need to be disciplined and follow your system to the letter. If you chose to be an intermediate term investor then you need to get positioned for the longer haul by buying your favorite precious metals stocks now. You need to have the mindset that there are going to be corrections along the way but you have the confidence in the trend to hang on. It takes a lot of discipline and courage to ride out these inevitable corrections but that is the only way I know to make the big bucks. With that said lets look at some charts and see what they maybe telling us.

Lets start by looking at a daily chart for gold that is showing us a potential inverse H&S bottom that is the second bottom of a possible much bigger double bottom that goes back to the June low. This is exactly where one wants to see one of these reversal patterns form. If you recall gold made that very small double bottom, in December, that is now the head portion of the bigger inverse H&S bottom. Note the little unbalanced double bottom that was made back in June of last year that started the bottoming process and the small H&S top that was made at the 1430 top which I’m labeling, for the time being, as the double bottom hump. You can see how important the 1430 area is going to be for our intermediate term move. Note the last two bars on the far right hand side of the chart that shows the price action for gold doing a ping pong move between the 150 dma and the neckline. This is a big deal folks. Its showing us two very hot lines right now, one that is resistance and the other support. As I’ve shown you many times in the past when a stock is trading up against an important trendline, that is acting as resistance, you often see a smaller pattern form just below that important line of resistance. A moving average is no different than a trendline as they both can act as support or resistance. What makes me think that gold will break above the 150 moving average is the inverse H&S bottom that is forming just below it. If gold does in fact break above the 150 dma that will be a very big clue that gold has some legs to run higher.

Lets look at the long term monthly chart for gold that shows our possible double bottom that is forming at the bottom of the big blue expanding falling wedge. The first bottom was made in June and the second was made in December. If you ever looked at a chart and said to yourself, ” man I wish I would have bought at that bottom.” Well folks this is how you do it. You never know 100% for sure if the bottom is in place until you can look back in hindsight. A year from now will we look back at this chart and say, yep that was the bottom. Only time will tell. It takes guts, some luck and a whole lot of discipline to buy into any important bottom because the news is always the worst. Risk is always part of the equation also.

Lets now take a look at silver that is slowly grinding its way ever so slowly higher. As you can see it has broken above the top rail of the blue downtrend channel with a clean backtest. It’s again testing the top rail of the red 2 and 1/2 month old rectangle. It’s also trading above the 50 dma. Is it to forming a double bottom just like gold? We’ll know in hindsight.

Lets look at a long term weekly look at silver that shows it finding support at the brown shaded support and resistance zone. As you can see it has held support twice so far which is possibly forming a double bottom. Until silver and gold for that matter, can trade back above the bottom rails of their 22 month old rectangles, the downtrend will remain in tact. For the intermediate term move, I’m looking for the old high that was made back in August of last year, to be our first price objective. At that point we’ll have to reassess the situation and take it from there.

Below is the gold and silver combo chart I’ve shown you several times in the past that shows the trading action since they both topped out in 2011. I want to focus your attention to the two red horizontal trading ranges at the bottom of each chart. As you can see gold has been stronger than silver as it’s testing its mid line while silver still hasn’t broken above its thin black dashed horizontal S&R rail yet. The red horizontal trading ranges clearly shows you what my goal is for this intermediate move which is the top red rail. Again we’ll have to see what happens if we get there.

Below is a daily chart for JNUG that shows our three buy points so far. When we took our third buy on Monday I put an order in to but 1000 shares on the backtest to what I hope will be the neckline of a very large inverse H&S bottom. Notice the smaller inverse H&S bottom that now makes up the head portion of the potential very large inverse H&S bottom. So far this move is going as expected.

This next chart for the JNUG is a “What would you have done chart” that shows the last 7 buy points on our last trade setup. The green rectangles shows where we bought . As you can see there were 7 green rectangles that show the buy points and the one brown rectangle that shows where we sold. There were 6 positive trades below the brown rectangle and one losing trade above the brown rectangle. My question is, what would you have done in this situation? It’s easy to see in hindsight what to do but in real time it’s a much different story. At any rate I just wanted to show you this can be a game of inches sometimes where you can be so close but so yet far away. As you know we have taken on three new positions so far, purple rectangles, to try and get back in sync and if we get a complete backtest to the neckline we’ll have our fourth.

Lets look at one more chart as it’s getting late. The last chart I would like to show you is a weekly look at DUST which is a 3 X short the big cap PM stocks etf. If the blue bearish rising wedge plays out as a halfway pattern to the downside we should see a price objective down to the 12.32 area.

So far nothing is broken for our long positions in the precious metals complex. As long as the support rails do their job we just have to hang on for the ride. Remember two steps forward and one step back.

All the best

Gary (for Rambus Chartology)

http://rambus1.com

FREE TRIAL - http://rambus1.com/?page_id=10

© 2013 Copyright Rambus- 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.

Rambus Chartology Archive

© 2005-2019 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