Loading ...And Now I Understand WHY!
Having followed the precious metals markets for almost 50 years, I have learned that they usually correct in the fall and seem to always be a buy right around Thanksgiving. I have stated this in a number of posts and comments over the last couple of months. What I didn’t know, and never really did any significant research into, is why that was so. I just read the following article by someone I don’t remember if I have read anything from before. He does a fantastic job of explaining why this seasonality seems to work out most years. Once again showing that the charts and history can offer patterns that work, even though you don’t know why. This just reinforces my analysis that the bottom may be in(I think there is still some downside left) but the real upside in gold and silver is unlikely to begin before Thanksgiving. https://www.zerohedge.com/news/2020-10-26/golds-buy-season-coming
I guess anyone taking a careful look at the chart over several years can see it, just like you also did. I never noticed this at all, actually. But his explanation does make sense: reduction of risk for customers + make sure you keep your profits this year = the seasonal cycle. You must have know then, pretty much at least, that the early August high of this year was likely to be a peak and a reversal/correction? That could have been a decent trade or at least a good time to sell off in either the metals or miners.
Thanks for the tip.
Yes, as many of my posts indicated I said I beleived early August was a short term top and lightened up then and again after the first bounce. I let the charts of the specific stocks dictate which I sold more of. Such as the post where I said I blew out my entire position in BKRRF when it failed to take out it’s previous high after releasing a second round of drilling results. The gap underneath siad it was likely to get filled before making new highs and that seems to be the case even more so now.
I’ve watched an awful lot of gold stocks in the last 4 years do what I thought were predictable short term movements but I never traded any. I think there’s a lot of money to be made in such movements if one takes the time to carefully analyze them and accept the fact that you can never get them all right on, but you can limit the losses enough to be profitable over all. Of course a lot of traders here have regretted such short term counter trading in the past, but I still feel there is a way to do it if. Someone who once posted some great charts here and some very successful trades shocked me when he said that buying support and selling resistance was the one strategy that worked that was always reliable. Some trading methods just require a different attitude and mind set to be successful. But if you can consistently make money following whatever method, that’s the only proof that matters. It’s more like a sport than a science in my mind. Trading, that is.
Totally agree. Nothing wrong with trading. I believe the point many have made and I agree with is that in a bull market the big money is made in finding strong stocks(either technically, fundamentally or better yet both) and riding them throughout the bull run. I like both. I take long term investing positions but also like to trade. I am surprised that you said you were shocked by the advice about buying support and selling resistance. Was the shock that he said it almost always worked? What else would a true technician do but buy support and sell resistance? Maybe I am missing something?
What shocked me was that it was so simple. This guy worked a lot with Fibonacci projections and was amazingly good at it. So when he spoke so highly of support and resistance I came to realize that maybe I myself don’t have to be some talented expert but just put together two or three principles and study how they work together. Like moving averages + channel lines + support and resistance. All I need to do is define a reversal with those three parameters and learn to spot sideways movement earlier and “when in doubt stay out.” AXU on the TSX is a good example of the sort of “stair climbing” movement I’ve been watching. It’s funny how often one can see a reversal coming if they merely mark off the s/r levels, add in a channel or trend line and then a ma that in the past usually cuts the market in half in the upward/above and downward/below. Fully posted a chart a while back that showed that if one merely followed I think it was the 20 month ma in the last gold bull they could stay on the up side of the market almost all the time. Also, one needs to know themself a bit and stick to what they understand because the psychological side of trading I think makes us shortsighted and do stupid things and makes all our careful study and strategy worthless. Or actually less than worthless!
yes thanks master