Gold and Silver Outlook 11-17-14

Gold and silver fell a little today but have recouped some of the loss since the close. But it was the miners that took the show today with GDX, JNUG and NUGT leading the way. I had said of late that I am leaning bullish from a short term perspective and I am close to becoming more bullish on the miners. If gold and silver can gain some momentum this can be a good trade in the miners. I would prefer to have weekly green triangles for gold, silver and the miners together to have more confidence. But if one trades long before that occurs, just accept the risk associated with it.

Trading Leveraged Stocks

Anytime a triple leveraged ETF takes out the prior days high, and continues to trade beyond that level after at least two attempts to move beyond that high, then it’s worth a trade long. In this case we saw JNUG for example take out the 4.30 high of Friday, trade to only 4.32 and then decline sharply before recovering and testing the high again. This time it broke through that 4.32 level and kept on going closing near the high of the day at $4.94.  GDX and NUGT finished near their highs as well. JDST got slammed and is finally breaking down. Once it goes below $17.59, then the monthly green triangle will turn red and there is no reason to be long JDST.

Taking out the prior days low can also be a reason to take some profit. One has to decide BEFORE they trade if they are a Day trader or Swing trader. Day traders can take profit many times on larger shares and go home flat. Swing traders can be stopped out, but also let their winners ride for the potential of larger profits.

What’s On My Mind

In trying to decipher the minutes that led up to the Fed’s ending of tapering, there are a couple points to ponder. There were two Fed board members that came out before the meeting and said that they shouldn’t end QE too soon. But neither of them voted against that when it came time to the final vote. They must have been convinced by the others that the economy is doing just fine. I take exception to this but “perception” by the financial media is all is well.

I just look at it like this kind of “all is well.” CNBC sure as heck didn’t see the last crisis coming. Neither did the Fed.

All is well














We of course aren’t anywhere near a panic level yet but we are still mired in a deflationary contraction. I will be writing more about this on my blog tomorrow. The Fed reacts after the fact and I think they sit in their little room and talk about the economy picking up but I simply don’t see it that way. The stock market can go higher and higher but it does not represent the economy. Japan and Europe are having issues as they are dealing with recessions and deflation now.  This will spread to the U.S. The dollar is still approaching 88 again. Lots of things to watch. Look for the article tomorrow here: Gold and Silver Blog.

UGAZ had some good news with the cold front that was predicted a week ago coming into play. UGAZ has been quite volatile as I mentioned yesterday, but the way to play it is just like with any 3x leveraged ETF. If it breaks to a higher high from the last trading session, the risk vs. reward is on your side, but I would still wait for the second confirmation of the higher high. There is typically a move by market makers to break a new high and then break down like JNUG today. They love playing those games.

USO still falling closing at 28.54 with the 52 week low at 28.10. Where will oil fall too? Not sure but this $75 area is somewhat attractive for longer term holders. USO 52 week high was 6/20/14 @ $39.43. Oil like many other commodities I’ll be writing about tomorrow are mired in deflation.

TZA had a bounce with the negative data coming in from Japan and Europe closing near it’s high at $13.80 on a day the Dow and S&P finished higher and the Nasdaq lower. Still a tough one to get behind.

11-17-2014 GLD CHART

11-17-2014 GLD CHART

11-17-2014 SLV CHART

11-17-2014 SLV CHART

11-17-2014 GDX CHART

11-17-2014 GDX CHART

11-17-2014 JDST CHART

11-17-2014 JDST CHART

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About Doug Eberhardt

Doug 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


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.