Just a quick note that even with gold lower today, as expected, and the mining stocks all breaking their 52 week lows, we have had a nice bounce off those lows. Many times market makers will like to break 52 week lows and those who are technical traders will then jump on the short side, only to be whipsawed out of their position with a sharp turnaround.
You can see from the charts below for GDX, JNUG and NUGT just such action after all 3 broke their 52 week lows earlier in the day. They all went green and are now about flat for the day. JDST was having another great day and naturally also reversed with the upswing in the miners.
Gold, while being down about $15 earlier is still down just over $6 while silver has been bucking the trend flat most of the day and now up on the day but only 3 cents.
From the Trading Desk
The Dow Jones is up 260 points and is trading decisively above its 200 day moving average for the first time since October 10th. This, combined with a stronger USD, has gold and silver on the defensive today and off their recent highs. Gold faked out day traders by closing above its 50 day moving average and the double top of resistance at $1,250 two days ago. Normally a technical buy signal, gold instead is trading lower for the second day in a row with the steady pressure from equities and the USD. Renewed confidence in stocks has resulted in 29,000 ounces of global ETF liquidation, bringing total holdings to lows (53.303 million ounces) not seen since 2009.
US Jobless Claims data today showed that fewer Americans filed for unemployment benefits over the past month than at any time in the last 14 years. The four week average of jobless claims dropped to 281,000, the lowest since May of 2000. Even with prospects of slower economic growth ahead, sustained demand of goods and services has prompted companies to retain workers.
I expect the miners to keep breaking to lower lows but bounces always come. When profit is handed, take it. When a trade goes against you, keep a stop. Simple trading rules you have to follow.
For buying physical gold and silver, the advice is still to dollar cost average into your allocation and practice a little patience till we bottom out. Timing the exact bottom won’t be easy, but I’ll do the best I can and I already have many waiting for my “all in” article.
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.