Silver Update: 1980s Vs. The 2010s

Silver surprised us with a strong Santa Claus Rally. It woke up like an ancient volcano and with a booming eruption. Before that, we proclaimed silver to be dormant compared to a vigorous rival, gold.

Everything changed at the end of 2018 as gold gained 10% from the lows and a weak silver tried to catch up to make the same profit at the very end. Bargain hunters couldn’t pass by this clear market distortion and took their chance to book a nice profit of around 4%.

In my earlier post I updated the medium term gold chart for you. Last time I updated the big chart of silver in October, which was titled dramatically “Fly Or Die” as submissive behavior of silver was leaving less and less hope for investors.

This time I am going to update the silver chart, but using a different approach. You are already familiar with it as I used historical clones with gold and silver before. The latter one was successful. This time it will be extended as I will use two clones instead of one from different historical periods so you can choose.

Let’s start with the distant one.

Chart 1. Silver Futures Monthly: Echo Of the 80s

Silver Update
Chart courtesy of tradingview.com

This chart was built in a high resolution, and I recommend you to click on it to open in a new window to see a larger image in details, especially in the right clone (orange box). Continue reading "Silver Update: 1980s Vs. The 2010s"

Gold & Silver: US Dollar Could Spoil Santa Claus Rally

Here we are on the final track of the year, and investors hope for the traditional Santa Claus rally in the precious metals sector. This euphoria of the anticipated strength based on the current move up could be spoiled if this pattern would emerge in the US dollar index (DXY).

Chart 1. US Dollar Index Daily: Triangle

US Dollar
Chart courtesy of tradingview.com

The disappointing data of US non-farm payrolls released last Friday couldn’t damage the US dollar as it kept above the former trough established on the 4th of December at 96.30. The first reaction in the market was a USD sell-off against all major currencies, but it was short-lived, and none of the former extremes were breached. This made me focus on the Dollar Index chart to see if there is some pattern or trading setup has been shaping amid this unusual market behavior. Continue reading "Gold & Silver: US Dollar Could Spoil Santa Claus Rally"

Is Now The Time To Buy Stocks?

That is the million-dollar question right now given the market action in the equity markets in the last few days. Is this a buying opportunity or has the market reached an important top? It's a very valid question and one I hope to address in today's video.

As I've said before, this is an aging bull market that has been supported in part by quantitative easing (QE) and a very accommodating stance by the Federal Reserve. The Federal Reserve has been thinking of raising interest rates for some time and the last time the Fed raised rates was in June 2006. Continue reading "Is Now The Time To Buy Stocks?"

Has The Market Made A U-Turn?

Hello traders and MarketClub members everywhere! If you look back at my very first post for December, titled "December Can Be A Dangerous Month For Traders", you'll understand why these markets are becoming so volatile. Yesterday's announcement, or lack of announcement by the Fed, was all the market needed to reverse course and rally sharply creating the best one day rally for the year for the indices. Not only was it a sharp rally with new buying, but it was a sharp rally fueled by a great deal of short covering.

The questions on every investor's mind has to be, "Is this the Santa Claus rally? Have I missed it and is the rally for real?" In order to answer that question you have to delve deep into the makeup of the market. As many of you know, the Trade Triangles have been neutral and out of the market for intermediate term traders. What that means is that you have no position in the market at the present time. As traders and investors, there are three opportunities to make money in the markets, you can be long the markets and profit when they go up, you can be short the markets and profit when they go down or you can just be out of the market. Staying out of the markets is often times a very smart choice, particularly when the markets are irrational and thinly traded.

Here's an interesting question from Kathy on the Members Blog today: Continue reading "Has The Market Made A U-Turn?"

There Will Be No Santa Claus Rally This Year

Hello traders and MarketClub members everywhere! Every December it's the same tune, the "Santa Claus Rally." That happens when the market rallies and closes close to or at its best levels for the year. I for one am not sure that is going to take place this year, and here's the reason why.

Late last night, I think it was about 12:30AM, I posted on our member blog that Friday could turn real ugly! I came to that conclusion based on yesterday's market action which had to disappoint the bulls with the weak market close. Couple yesterday's market action with the action we saw on Wednesday and you can put together a composite picture of just how this market is beginning to fall on its own weight. Should the S&P 500 close lower today, it will be the biggest weekly loss in over two months, not a good sign.

One of the key areas I'm are watching today on the NASDAQ is 4,653. Should this level be broken and I expect it will be, that will put all three of the indices in a trading range indicating that intermediate-term traders should be on the sidelines. This analysis dovetails very well with my December view of the markets. Continue reading "There Will Be No Santa Claus Rally This Year"