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Gold and silver both took significant hits today as stronger than expected US GDP numbers of 3.1% after the market had expected 2.8% to be the number. As will all accelerated selling, stop loss orders were clearly triggered when prices broke through technical support. What had been support for silver for example around the $30.80 area quickly turned into an area of accelerated selling when that level was taken out.
I’ve personally been warning that another round of selling was imminent for the metals and that I was really treating the bounce off the recent November correction was just that… a counter-trend bounce and it looks like silver may actually be on course to the lower targets that I had envisioned for it, but that it is just taking longer for it to get there.
The bank of Japan also announced another round of stimulus today (so much for the arguments that further stimulus would send the metals to the moon). If this correction gathers steam, expect prices to go much lower before making an attempt to turn higher.
Currently, I am not actively trading the metals because I am quite busy with work and because I don’t want to get caught up in end of the year tax selling that makes markets less predictable. If I were I would be providing charts. Suffice to say, I would not be buying until there is clear evidence that this selling has ended. We needed greater chart consolidation and I believe, and hope, we are finally getting it.
Hey Dan,
ReplyDeleteMerry Xmas to you from downunder buddy!
Remember I said to you to keep an eye on GDX due to he sell off and a potential market collapse similar to 08 when GDX led the way down?
Well here is another leading indicator. Copper reversed hard Wednesday and is danger of breaking he large triangle lower.
I am astounded the broader markets have run so hard but they appear exhausted and negative divergance abounds across all US indices.
I guess it has been a case of no other game in town due to The Bernank killing the bond market. The danger comes when support levels give way and we get arush for he exits. I think it begins no later than Jan 2nd.
All the best to you and your loved ones.
http://stockcharts.com/h-sc/ui?s=$COPPER&p=W&b=5&g=0&id=p52812876147
Thank you! All the best to you and yours as well.
DeleteDefinitely, anxiety about the US "fiscal cliff" has slowed buying over the last month and this in itself could lead prices lower - even without the other factors mentioned above.
ReplyDeleteDan,
ReplyDeleteI have been using you as a contrary indicator, since I questioned your call last summer.
Once again it is working to buy on your sells, this one to the exact day.
Thank You
LSR
That's great! But I've been flat silver for a while now. Perhaps post your "moves" before, not after they happen. Cheers and good luck.
Delete