Jul 21, 2015
Update for readers interested in PM/miners... I think now it is the time to load quality gold miners for a furious bear market rally. - Gold - exhaustion bar, a lot of emotions and media coverage, everybody is expert now writing about gold. All this happens close to an important top/bottom not at the beginning of a trend. Everybody is very smart after the fact. - Silver - not really impressed... working on it's waves. - Gold miners - real massacre, trading at prices when gold was 300$. This is irrational behavior and qualify for me as "to shit your pants". What I see - EW patterns close to finishing the moves, cycles at 40 weeks cycles low, indicators and market breadth at extremes, sentiment and short position at extremes. Everything screams to me expect massive short squeeze. When the rubber band is stretched too much to one side expect snap back, extremes are followed by mean reversion. I expect a bottom in the next one week and rally - gold 20%-30% / silver 30%-40% / miners 50%-100% for different shares. Some guys argue that this is the bottom for the bear market in PM. I am not in this camp, I think this will be just a bear market rally which is worth trading and if I am wrong even better:) Now this does not mean go out and catch the falling knife. Sit down an think a little bit and make a plan. Choose what to trade single shares if you have something on your mind or ETF's. Plan your entry - for example 20% in gold miners speculating for a bottom, after a higher low or lower low with divergences another 20% and when we have confirmation the rest. Or wait for gold/silver to drift lower for a higher low or lower low with divergences and enter with 30% and after confirmation the rest. It depends on your personality as a trader. My target was 1090 +-10 points. It was hit... I suspect gold will start drifting lower to finish it's wave structure, higher low has lower probability at the moment.