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What a whippy
week it was. Volatility spiked and then subsided into the end of the week
which meant it was a great day-trading environment but then that petered off
as ranges tightened for markets and stocks into the end of the week.
I’ve
been detailing how to day-trade profitably and quickly to subscribers quite a
bit lately. We’ve really only been trading one stock and doing very
well often pocketing 5 figures in the first 15 minutes of the day with
regularity!
It’s
a tough trading market out there these days unless you’re very quick
and agile and thinking against the heard.
Fading
off support and resistance levels has been working wonders for us who are
day-trading this market but it’s not for everyone certainly but some of
my largest gains have come in the first 15 to 30 minutes of the day fading
large gaps.
There
is always a way to make money but it’s not always easy.
Gold
was a prime example of that this week as it failed it’s
spectacular breakout in even more spectacular fashion.
If
you think trading is hard, try trading gold. It’s rarely easy so I
don’t do it, especially when it move far quicker that I can click a
mouse, with Friday’s drop of some $22 in under 1 minute being a prime
example of the speed it can move.
That
being said it’s been the best asset to buy and sit on and forget about
for over a decade now and by the looks of things it could well be for the
next decade or more.
The
mining stocks have put in a short-term high now which is giving us a little
pullback to get them cheaper. The major bottom is in so now is the time to
get them shares you’ve been patiently waiting to add to your portfolio.
There
are companies who are going to triple or so in pretty short order just to get
back to recent highs
This
is truly a major opportunity to make some very large money in the quality
mining companies in the months ahead.
Metals review
Gold
fell 1.89% this past week in spectacular failing form. I talk often about the
counterintuitive moves that gold makes and I rarely trade it as a result.
I
expected a couple rest days after the massive breakout move before moving
higher and that’s what we got. Then we broke-out and promptly moved
back into the little flag gold had created. This was a huge warning sign and I
alerted subscribers to it.
Sure
enough the next day we plunged hard back below the major trend-line. Friday
saw a nice move lower followed by a strong snapback but we’re far from
out of the woods here now.
I’m
looking for some base building here below the large descending trend-line and
below the 21 day moving average.
On
the bright side physical gold can still be bought cheaply with the knowledge
that huge buyers are lurking just below around $1,540.
Volume
was hefty on the move back lower in both the GLD ETF and futures market which
tells me gold is not yet ready for primetime unfortunately.
Summer
is often the beginning of a larger move up through the fall so we should see
that trend begin within the next couple weeks to a month.
Silver
slipped 0.14% on the week and also gave us a large breakout failure although
not nearly as spectacular as that of gold.
Now
silver is sitting at the upper end of this little wedge pattern and the 21
day moving average. It’s looking like we are going to be hanging around
under $29 for a little while still but if this pattern is true then we are
going to move one way or another very soon.
Often
markets breakout and then move back lower only to shake out potential traders
and investors before the big move, then again other times they continue lower
and confirm the failure.
There
is never a sure thing trading markets, stocks and commodities but a solid
technical analysis base can often get you in at the right times and out too
which is even more important.
We
should have our directional answer soon, that is
unless we morph into another pattern!
Volume
was heavy on the breakout failure as it should be in both the SLV ETF and the
futures market.
Silver
is not yet ready for the big show either.
Platinum moved
higher by 0.32% over the past week but is looking for lower prices as
it’s breaking down out of this bear flag pattern here now.
If
platinum has any chance of moving higher soon here it needs to get above the
$1,475 level soon.
The 21 day moving average is holding back platinum
as well as gold and silver.
Volume
Friday in the futures market and especially so in the PPLT ETF was not that
great as price tried to breakdown. This is a slightly positive sign as the
market doesn’t want to move lower yet, but it isn’t wanting
higher either for the time being.
Palladium
rose 0.41% this past week but also showed us a failed breakout. Tough going
these days and we have to play things against the herd until it changes.
Volume
in both the futures and PALL ETF was nothing special either way really and
tells me palladium need to build a longer base here before doing much.
With
all the above being said about the precious metals we have to consider that
most things are moving one way or the other and making what could be termed a
breakout only too see them rip the other way right
away.
We
have to always be ready to adjust our views and thoughts as the markets
dictate. I have yet to meet anyone who has wins the game consistently when
arguing with the market.
Fundamental Review
Once
again this week I really don’t have much else for you.
Nothing
has really changed in Europe has it?
Sure,
a few details have emerged, more debt has been accumulated and rhetoric of
bailouts and Euro exit strategies abound, but when it comes down to it,
nothing has changed this past week.
I
really don’t see much changing other than the faces in charge or the
names of programs. There is no way out but default for Greece, Spain and
Portugal at the very least, and at worst, many other European nations all the
way to the good old U.S. of A.
I
don’t worry myself with details too much although I do pay attention,
but I try to keep it simple for my sanity.
You
can’t run your household perpetually running up more and more debt for
very long. Chances are your banker will come knocking before the debt spirals
large enough that the problem is his now, not yours.
Unfortunately
when it comes to these and other nations defaulting, the problem is on the
shoulders of the unprepared citizen.
I
feel strongly that you must have a sense of a start over number.
That
is, how much money do you need to get by and start over if everything else is
destroyed. And by money, I mean a store of wealth.
Once
you come up with this number, and being more generous than tight is advisable
when coming up with it, then finding sheltered assets to store that number in
is the next goal.
Of
course it depends on the size of your number but safe assets could include
land, real-estate, even a business or collectible cars, wines or art. And yes
of course the easiest and most concealable store of value, physical gold.
Silver is good too if you’ve got more space and I think silver has much
more upside to come than gold.
I
strongly believe that every individual needs to have a plan in place today in
case of a major hyper-inflationary event or some other sort of wealth
confiscation.
You
have to protect yourself and not rely on anyone else to do it for you,
especially not the government.
It
may sound harsh but it’s life and it’s
real and it happens all the time on smaller scales. Zimbabwe is the most
recent example and Argentina would be the one most could relate to or
understand best.
Debt
cannot allow you nor your country to survive for
long. It’s all an illusion.
As
Jim Rickards once said, your credit card should be
called a debt card because it is what it truly is.
A
credit card should be your debit card and your bank balance.
This
play on words tricks most people and most people don’t have the luxury
of paying off their debts in a timely manner and then end up paying more and
more interest.
It’s
all a vicious circle and the same as is playing out on a larger scale around
the world.
Here
is the link to the wikipedia Sovereign Default page which lays it all
out pretty clearly. I especially like the “Consequences for the
citizen” section.
I
also get a kick out of the “List of sovereign debt defaults or debt
restructuring” section. Debt restriction basically means a partial default.
In
that sections there are no less than 86 countries on the list and most have
multiple occurrences which means there are well over
500 relatively recent cases of default.
Note
that there are some 190 or so countries in the world today so about half have
defaulted, but many use another countries currency, such as the US dollar,
and are small and quite uncreditworthy which means
they aren’t allowed the rope to hang themselves with, I mean debt.
Small
countries who aren’t allowed to really borrow much will come out much
better and have to actually run the country as if they were a household.
The
point is that debt has always been an issue and once you get into it,
it’s mighty hard to get out of that lifestyle.
Protect
yourself today with physical gold and silver near or in your possession. I
know for a fact that many nations, especially China are buying physical gold
hand over fist during this price correction.
They
are preparing for the worst and building their cushion to any catastrophe
scenario that will occur.
Don’t
talk about it, just do it quietly and purposefully.
It’s
going to get much worse before it gets better I can guarantee you that.
Speaking
of default, we had 4 banks fail Friday evening to join this years
list of biggest losers. These are the first banks to default since
May 18th.
With
that, have a great weekend. I hope it’s not raining where you are as it
is here, that does give me lots of time for chart-work, review and study over
the weekend though so not all is lost.
Enjoy
the week ahead and take a step back sometime and look at the big pictures.
Warren Bevan
www.preciousmetalstockreview.com
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