Loading ...Important Update – Silver & Gold
Remember, after a significant breakout, the first pullback(backtest or whatever you want to label it) IS the one you want to BUY, or add, if you didn’t already do so.
Since Silver is the one that only just broke out, you want to aggressively buy on a pullback towards $26. It could play out in two possible scenarios.
If we get some sort of economic and or geopolitical catalyst, we might see a sharp drop in the stock market and everything else. If that doesn’t develop by Friday(jobs report), then a two stage decline may last until say next Tues.
That would likely entail a smaller drop, followed by a bounce and then a second drop towards the expected $26 area. Gold is a bit trickier. Having reached my called for target of $2300, it might not see that much of a pullback.
It could go into a sideways correction between $2200+ and $2300 for a significant period of time, digesting it’s recent gains before a new leg higher develops.
That doesn’t mean that gold miners and especially royalty and streamers won’t continue to make higher highs as their future earnings reports will be outstanding going forward, just as Wall Street is looking for new places to rotate capital into.
The bottom line is this. Be aggressive, in buying silver on this first pullback, while being a bit more disciplined with adding to gold and the miners.
Thanks for that assessment, Chartsmaster.
Your welcome Silverboom. Let’s hope things play out so that we can all take advantage.
Thanks Chartmaster – I’ve been way underinvested this past run up but plan to be much more aggressive soon
mistakes are our best teachers
Nothing wrong with being cautious, good luck going forward.
Gold has closed 4 days above the 20 day bollinger band as of yesterday. 5+ days would be a statistical extreme. So in the very short term, at least for gold, there will likely be a pause or correction for a day or two.
In the larger scheme of things, I would like to see silver get well above $28 (maybe $34) if a backtest of $26 is going to happen in the future.
The bottom line is silver typically moves in straight lines up and down (so parabolic on a linear chart) on pretty much every time frame, so extreme moves are the norm. Silver is rarely if ever going to ramp up or down smoothly and give you clear entries. The key in a true bull market will be how quickly prior peaks are recovered.
Key daily moving averages to tell me if this is a true bull market will be gold and silver’s reactions at the 50 dma and 100 dma. I personally don’t want to ever see the 100 dma broken below unless we are coming off of a very large and sustained rally (at least 4-6 months).