Rambus has put out a few charts showing that SIL and the gold indexes are at a critical juncture with its present testing of the lower trend line. I would agree, its right at the critical point. Virtually all the analysis I read around here is trend line and pattern based mostly off of the price action only. I have tried to draw in market internals attempting to discern additional clues. Let’s take a look at silver. Its not over until its over and may resume its advance soon after completing this pullback phase. Here is some of the reasoning for this. First is the 2 hour which has put in a nice back test to its triangle. Beyond the easy to see price action what I like here is the volume characteristics. Note the strong volume on the two advances that is about 3X times the declining volume. That’s very positive action, then it proceeded to dry up on the pull back. This is pretty classic knights. Next notice the stochastic basing out on this pullback.
Now lets look at Plunger’s 30 Week EMA “tool”. This has come to be my most important chart as it enables one to filter out the non-players immediately. This is not a full blown bullish chart as we want the price to be over the 30 EMA and the EMA should ALWAYS be flat to rising. So we have the flat part, but the price does rest underneath, so it is on thin ice partially broken through. The OBV, however allows us to possibly make an exception if next week the price can quickly get back over the 30 EMA…I also like the volume as one can see it was cut in half on the pullback.
An initial rally in the gold sector should have silver leading gold at first. That is what we have had and the pullback over the past week was just that, a retracement (so far). Note the 30 EMA still configured upward and price is above
Now onto some of my favorites. First THE favorite is MAG Silver. Note the weekly and daily chart and its characteristics. Remember our rules… price over the 30 EMA and the EMA is flat to trending up. Also note the volume characteristics of at least double the volume going up & half the volume going down. The weekly has nice stochastics and decent OBV. Also 30 EMA is trending up with price over.
And some of the other runner ups
Not quite trusting this uptrend in GDX. Gap down almost guarantees a 3-PushDown pattern. Pts 1, 2, 3 complete with Pt 4 forming for a nice Wolf Wave… EWO suggesting one more down (need price divergence). Trend on Daily chart is dying a slow and painful death!!! Note however, that we could bounce off the trend line into an abc corrective before total death… This is what I expect to happen (at least the abc corrective up)!!!!
(Note, numbers on chart are EW counts NOT WW counts…. not the same thing)
Good Evening all !
I wanted to share a tool I have been using with success and hopefully provide a bit of wisdom I’ve learned over the past two years trading. First, in real life I’m not an investment banker, not a withered trader with decades of training, I’m a Field Artillery Officer. My job is to provide safe and accurate artillery support to Soldiers and Marines. Now, the only reason I bring up my background is to give a small bit of insight into my thought process and how I trade. I’ve fired thousands upon thousands of artillery rounds, and can tell you within a certain probability where each and every projectile will land, baring some sort of catastrophic failure. Based on my background I realized I would never fire an artillery round based on data which was purely “Subjective”. I want “Evidence Based Technical Analysis” not “Subjective” analysis. This bled into the trading style I’ve been using. I don’t want to spend my time figuring out what pattern I’m looking at in the charts, I want the chart to give me a signal and I respond. If the signal is correct, more times than not, and I allocate my resources, my money, correctly I’ll come out ahead. Give me an edge and I’ll make nice money. It is all about stacking probabilities in your favor and repeating the process again, and again to come out ahead. It is rather boring, but I’m here to make money, to add to my bank account, nothing more.
Okay, next I want to talk just a minute about volatility. You hear discussions about the “VIX” which is just a formula calculated on options for the S&P 500. I was always confused what the VIX was and how to trade it. The answer is simple. You are not trading the VIX. Ignore the VIX, pretend it doesn’t exist. I removed it from all my bookmarked charts. The only value in the VIX I have thus far found is that when the VIX is under $12, I stat thinking of shorting the S&P 500 and close my longs, and when it is over $22, I start to watch my shorts closely and get ready to go long. What you are really trading with volatility is the E-mini S&P 500 Futures. XIV and SVXY are the “Bull” stocks for the futures market. If the futures market is going up, they go up. VXX is the “Bear” or short for the futures market (and TVIX / UVXY x 2 leveraged versions) so if the S&P futures are going down, these go up. I hope I explained it well enough.
Now, why I like this form of trading ? I want a method that is signal based, short time-frame, higher probability. One of the things I’d recommend is finding a trading style which works for your personality. This method is about scalping a % or two at a time. Over a month it adds up. If you are looking for a “grand slam” each outing this isn’t for you.
Okay, if you are still with me, below is a 1 month, 2 HR chart of XIV, the “Bull” for the S&P Futures. The “Green” arrows show “Buy” points, the “Red, “Sell”. Presently the “Bull” stocks are much easier to trade in this market, and I weigh my buys in recognition of this. When / If the bear appears, I would do the opposite. Honestly, you would be fine just avoiding the “Bear” versions and just use the “Bulls”, much more forgiving in this market, but it is all based on your risk tolerance. You can knock out big gains with the “bears” but if you are wrong they are far less forgiving.
What I’m doing —-> Watch the MACD. Oh, another note, I changed the MACD from the standard. Normally it is (12,26,9), mine is (5,35,5). Play with this. I like this one, gives a bit of an “edge” I think. When the MACD is below the median line, or 0.0, start looking for a “Buy”. Your buy signal is when the bars stop moving down and begin to move up. Momentum is swinging and you get a signal. When the bars stop moving up and head down, you “sell”. Best case is when the MACD is below 2.0 to buy. I might get more in-depth later. I have a 1 HR, a 2 HR, daily, and a 5 minute chart going. The 5 minute is used after I have confirmed a “buy” with the hour charts.
Also, Candles. It is a whole another post. I really have come to respect long tails on candles. Watch for these on a down move. The bulls are buying into the selling and taking over. I don’t trade 100% off of them, but they are a tool to watch. Doji’s / shooting stars too, watch for them on tops. I’m slowly adding them to my tool basket.
Take a look at the chart, let me know what questions you have. I used this for DUST last week and it turned out nicely, made about 7%. The issue though, is I expect more failures trading NUGT / DUST, their volatility is much greater and an overnight gap up or down in gold can wreck you. I’m presently backtesting NUGT / DUST to see how they work with this. Will post my results. SO far two trades, one NUGT one DUST both good, but that is far too small a sample size. Will keep looking at charts and see how viable in the future, but should work.
Okay, good trading all !
Looking for gap fill reaction to go long DWTI…
The futures spent Wednesday tracing out yet another gratuitous hump that would have enriched few, whether bulls or bears. The rally portion of the hump was inconsequential because it failed to exceed the previous day’s high. It was prompted by “news” of the latest drivel from the Fed, and although the initial, upward frenzy gave way to an equally demented plunge, bears shouldn’t get their hopes too high that this could be the beginning of a significant selloff. As DaBoyz have proven time and again, they can hold stocks at least buoyant on days when there are practically no buyers around.
However, lest bears despair of the possibility that the bull market — 74 months old and driven by smoke, mirrors and brazen hoax — will ever end, feast your eyes on the accompanying chart. It shows a still unachieved rally target at 2138.00 that would represent a marginal gain above Tuesday’s high. Because that important Hidden Pivot coincides with an even more important midpoint resistance at 2138.50 from a far larger pattern, I am recommending that you get short up there as aggressively as your nature will allow. If the opportunity pans out, look for me in the chat room for more-detailed guidance.
I want this guy to Play Marty
GDX 2 HR Chart: Trend looks down but then this IS the 2HR chart… EWO Price Divergence achieved (last high of 21.25 was actually a failed 3-PushUp!!!)…. Near term EW suggests small wave 4 corrective with wave 5 down to come (Note that the wave 3 from yesterday may not yet be finished e.g., a little more downside before we correct back up in 4 then down again to complete a 5)…. may find support at channel bottom… Right now, this moment, the Bull is still alive until we break through the channel support
GDX Daily Chart: no surprises but trend is worrisome….
I’ve heard talk of crude dropping to $55 (it’s at $58 right now) but that MACD cross to me is suggesting a bottom has been reached as well as a run back up to $61 in what has become a nice trading range three times already. The inverse fund, DWTI, made 10% today. Maybe tomorrow UWTI will do the same; it’s fallen from $4.08 to 3.21 in the last 5 days (-21%).