Your trading instincts are improving. You know the invisible hand can’t resist "pushing" the paper markets around official policy meetings and other bigwig powwows. Experienced position traders always reduce their position into strength; Jim often recommended releasing 1/3 of the original position to manage risk and ego. Gunslingers which include yours truly at times tend to flip their positions more aggressive, but this tactic takes discipline, skill, and experience. Position trading a secular bull market is the path to big profits.
Three weeks ago, most gold and silver investors were heard chanting “gold and silver are dead” while they positioned themselves above their trading swords. Many are out of the game for good as a result. Those remaining will grapple with greed and fear as the invisible hand pushes them at the wrong, or depending on your prespective, right time.
The invisible hand is damn good at creating doubt during the A-wave advances. This time will be no different.
Do I expect a correction? Just as ebb is paired with flo in nature, so is fear paired with greed in trading. If you're feeling a bit greedy, it usually means the trade is crowded and it’s time stand away from the trading crowd (chart 1). With that said, the technical damage in the U.S. dollar is obvious to anyone with eyes (chart 2). This means the downside will be limited in both time and price.
The actions of the invisible hand will help time a reacceleration of the trend. The fisherman in the community will recognize the setups below as fish hooks in the trend (chart 3). That when the gunslingers patiently lounging at the bar pull their guns to reenter the fight.
Chart 1: US Dollar Index (UUP)Daily
Chart 2: US Dollar Index (UUP) Monthly
Chart 3: Silver London P.M Fixed and the Silver Diffusion Index (DI)
Sincerely,
Eric
Eric,
As always, thank you for your tireless contributions to the rest of us. I have over the years read an immensurable number of authors.
For what little it is worth, JS Mineset and yours are my frequent, and increasingly only, daily sources.
Regarding the post titled as above; do you anticipate therefore a correction (of magnitude, if not duration?) in the PMs and PM stock, therefore? From a lay perspective, I understand the COTs are at levels previously associated with “takedowns”.
Best regards
Roham
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