Vil wrote: ↑Fri May 01, 2020 3:28 am
pmward wrote: ↑Thu Apr 30, 2020 8:33 pm
but someone I follow who does (and has made some really good calls in the past) said a week or so ago that the cycle timing has metals seeing some light selling pressure and mostly being stuck around the current prices until about mid-May and then they will take off like a rocket. We will see if that plays out.
Is it possible that you share the name of that guy (PM accepted too) ? Thanks.
By the way, yesterday silver had unusually high volume here, almost comparable to the big-drop days in the Mid of March. There was some entity selling
a lot, and at some point the price went disturbed. I was thinking to jump on for a quick gain, but finally decided to not play that game and still focus on my daily job (
). Can see SLV also had slightly increased volume, but as you say nothing unusual. Since couple of weeks, indeed both GLD and SLV appear to have some spinning tops, and appears consolidating... I am still too heavy on the silver I bought, days ago I sold 25% of it (and bought gold on the lower consolidation range, think its 1.7K or a bit less..), but still have way many kilos and not really sure which way to take with it - that's yet another point that I am bit sensitive on - the 'take profit' moment and weighting on what can be more profitable in the future ..
Here's the video I'm referring to of the cycle analyst:
https://www.youtube.com/watch?v=R2KxaQ5tAXI I'm going to do my own analysis of the GLD chart here since there are so many questions on it.
First thing to note is the clearly defined uptrend that we have been in going back a full year. Obviously, on the long term perspective gold is in an uptrend. If anyone has a timeframe greater than a couple months, there's no reason to sell until we break below that trendline. BUT since that trend line has held, anyone who is a long term investor, *if* we tag the bottom line again would be an exceptional low risk high reward time to buy and throw like a 2% stop loss on in case we do break down. HOWEVER, the current pattern is basing to break out of the top of the channel line so odds are currently not looking likely that we go down to the bottom.
For a swing trader, that pennant pattern that is forming is of importance. You can see the green line at 157.04 that has held the line firmly, and the downward sloping dark blue line we are forming (this is not fully qualified yet as it has only been tested twice, you need 3 tests to fully establish). A pennant with a flat bottom usually breaks to the upside, I've heard a flat bottom pennant referred to as a "launching pad" for that reason. Now can it break down? Absolutely. So for a short term swing trader who's target is a couple days to a couple months at most, what does that mean? That means you put a stop loss below that flat line. At least $156.90, $155 if you want to be safe and avoid a whipsaw from a fake out stop loss check and run. At that point if you get stopped out, you watch over the coming days to either buy if was a fake out and instead breaks above the triangle, or you look to buy at the 50 day moving average, or the bottom of the trend line. SLV is showing the same exact forming pennant formation. You can play it the same way, only with rebuy either as the breakout of the pennant or in a breakdown, ideally after a bounce around the lows in March. SLV was a mean reversion play of mine, and so it's on a short leash for me not just on whether it breaks out or not, but whether it starts outperforming gold again or not. If not, that will be rotated into GLD or GDX depending on which shows more strength.
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As of the moment, with the VIX back up to 38+ this morning, it is possible that my trend following allocation goes risk off into the close today. We will see how the day goes. As of the moment if we close where futures are and I get the risk off signal, that puts me with a very small gain on the small cap allocation and about a 1% loss on my large cap growth allocations that comprise my trend model. So it's an obnoxious whipsaw, but that would equate to about a 15 bp loss via quick napkin math in my portfolio as a whole from where that allocation started the week. No big deal. Definitely not going to cry over spilled milk if this happens. It was worth a shot, and loss is minimal. I will update how we look later on closer to the close.
You guys at least are seeing what active trading is really like here. It's about the 80/20 rule. 20% of your trades make up 80% of your gains. Most trades are duds, but eventually you catch that rocket ship that makes it all worth while. On the social media sphere you see the screenshots of everyones big rocket rides, but you don't see all the trades they took that went nowhere or logged as small losses to find that one. It only takes one good trade to make your entire month, or even in some cases your entire year. This is why I've said here that risk management is the most important part. It is not full of excitement every day. It is a game of patience and persistence. Living to fight another day is always the most important thing.
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