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Monday, September 17, 2012

Gold and Silver Require Patience

Roham,

My advice is let the market talk, then react. Jim and I recommended staying the course (Stay Course!) on August 24th as an increasing number within the gold community had given up on gold. Gold trading over $100 higher today has proven the doubters wrong once again.

Try not to "over thinking" or over trade this trend. The magenta 'fishing hooks' are nothing more than dips in the A-wave trend. Smart money is consistently profitable because it knows how to fish the dips.

The large green hooks are a little more meaningful than A-wave dips. These hooks represent the invisible hand's B-wave accumulation before the highly profitable C-wave advance. Gunslingers and position traders build reputations buying these setups.

Eric

Gunslinger traders reduce their exposure into fishing poles from a high dock (big drops) and buy the hooks when the fish (retail money) are biting at headline fear. Position traders after buying the D-wave decline are patiently waiting for the "big green hook." I wear both trading hats.”
Hey Eric

I suspect it may just be for illustrative purposes, but your “big green hook” drawn on the chart would suggest the big move (C-wave?) doesn’t commence for over a year from now?? The pink mini-hook I presume being a potential B-wave retracement from current over-bought position. However, noting how fast the DI has dropped from 60 to -60, might this suggest that – unlike the corresponding 2008/09/10 period - the coming A-B-C could be compacted into a much shorter time frame?

Personally, I’ve been very weary of selling out of physical holdings (and equities) given a horrible track record of timing(!)......although counter-intuitively, my reluctance to do so now is probably a good contra-indicator that it’s the right time to do it and sit out on the sidelines…

Best

Roham


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