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I really don’t have much to bring
your way this week beyond charts.
Fundamentally
Europe is still in serious trouble but in no real worse shape than most other
developed economies, but for the moment Europe remains in the spotlight.
Markets
took a tumble this week as I mentioned was likely last weekend and gold and
silver are holding up very well as I also mentioned was likely last weekend,
in fact, gold is breaking out nicely now to the chagrin of recent gold
deserters!
With
that being said, the tremendous volatility we’re seeing is presenting
numerous great trading opportunities and we are still trying to double the
swing trading account so my offer is still valid.
Subscribe today and your subscription duration
won’t actually begin until the swing account is doubled from the May 1st print.
Volatility
in sexy. Whether markets move up or down you can make money. As long as they
move there is a trade, but there are times when there is no trend. That time
is not now as the trend is solidly lower and the trend is definitely your
friend!
Embrace
it!
Metals review
Gold
roared out of nowhere at a key time to end the week up some 3.12%. This was
done in a short 4 day trading week with all the gains coming Friday with gold
up nearly $60. We don’t see moves like this in gold often and this one
seemingly came out of the blue.
Friday's
move higher was essential.
Thursday
was the last day of May and I always spend time going over monthly long-term
charts at month ends.
I posted the monthly gold chart for subscribers
Friday morning and said it needed to regain it’s footing above the $1,600 area as that is a
major level on the monthly chart with an uptrend line and downtrend line converging
there now.
I
often talk about how gold trades the opposite of how it should on a technical
basis many times and this big move lower below support on a monthly chart was
a large sell signal.
I
said gold needed to get back above the trend-line and soon. I meant a few
days to a week not a day, but a day was all it took.
We
barely got out of that one in one piece as major sellers were on the brink of
emerging!
Let’s
look back to the daily chart posted above.
The
little triangle was resolved nicely to the upside Friday in a large way. Now
we are dealing with the large downtrend line at $1,640 ad
the 50 day moving average at $1,625.
It
wouldn’t surprise me to see gold rest here for a coupe
days before showing us a nice follow through day higher with strong volume.
However, if this is a major breakout then Monday morning we should see a
follow through right away and another decently large day higher.
I
am pretty sure that gold has definitely put in a low now. I was talking to subscribers Wednesday after gold was down heavy to
support at recent lows before rebounding hard later
in the day.
That
was a bullish sign that buyers were there waiting to buy and I wondered aloud
if they were to just sit there and defend that level around $1,540 or if they
would step up and continue to buy higher.
We
got our answer Friday in a big way!
We
are on our way to new all-time highs now as far as I can see but it will take
some time.
The
correction in gold and gold shares did what it was designed to do, shake out as
many people as possible.
How
many people do you know who couldn’t stand the heat?
The
market is a big game and you just have to learn the rules and understand how
it’s played. Then you can prosper and not worry during large
corrections as we’ve just seen.
Volume
in both the gold futures and GLD ETF were perfect. Strong volume on the push
off support Wednesday followed by a massive volume day Friday is very bullish
action. We need to see large volume continue at major levels and I’m
watching and covering it daily for subscribers.
Silver
only rose 0.43% this past week. I thought last week that silver looked ready
to lead gold, that is obviously not the case as silver is not even breaking
out of its little wedge pattern here while gold is on fire!
Silver’s
next major level is right here at the $28.71 area where the 21 day moving
average and the upper level in this wedge are converging.
I’m
surprised we’re not moving more along with gold here but I’ll
take it.
Volume
in the SLV ETF and futures was good and solid on Friday’s move higher
which is what I like to see. Chances are silver will continue higher behind
gold now but the gold chart is in much more bullish shape for the time being.
Platinum
fell 0.03% this past week even in the face of a strong move Friday riding the
coattails of gold.
We
saw a solid move off lows Friday and it broke the downtrend line as well as
the horizontal resistance now turned support at $1,430.
Platinum
looks great for higher prices here as long as it remains above $1,430.
As
to be expected Friday’s large move higher saw massive volume in the
futures market and strong, but not overwhelming volume in the PPLT ETF
markets. I’d liked to have seen very heavy volume on both charts and
the fact that I didn’t has me a little
cautious here.
Palladium
rose 4.16% this week in what was the largest gain of all the precious metals
for the week.
The
chart itself though is not all that bullish for the time being. In order for
me to turn bullish here we’d need to see a move out of this flat base
here above the $620 level with conviction/volume.
For
now we are basically rangebound between $620 and
$590 or so.
Volume
is a little sloppy on both the PALL ETF and futures. For now it doesn’t
really matter but when we move one way or another, volume will be key.
I’m
going to cut this letter off here and get out and enjoy the sunshine!
I
suggest you do the same if the gods are blessing you with the sun today!
Have
a great weekend and even better week ahead.
There
is money to me made when markets fall, and definitely money to be made in
gold and silver and the shares whom are doing
splendidly after a long dark winter.
It
was indeed darkest before the dawn.
Warren Bevan
www.preciousmetalstockreview.com
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