The train is leaving the station
If you are unable to buy when all the negative bells are ringing in your head, you’ll have a hard time trying to make money in this business. Now we have the first positive signs at hand and so the question remains, will you be able to buy? I’ve been packing the truck for over a month now and so I’m well prepared for the next two months. One doesn’t need to hit the exact bottom, but you need to buy low and sell high in order to make profits. Today is the 4th of July which is a low volume day all in all as major markets in the US are closed and so this is a prime day for the banks to let the metals race higher so that US traders returning on Thursday will be scrambling to cover their shorts.
The mining stocks were the first to show up relative strength by diverging from the metals starting on Thursday.
As of today, GDX is forming a weekly swing low which is very bullish considering the volatility contraction and the maturity of the current cycle. Gold formed an engulfing candle yesterday and is currently trading above the 10 day moving average.
As much as I do respect Peter L. Brandt for spending his lifetime analyzing and trading various markets, and I would encourage traders to follow him on Twitter, we do not live in the 80s anymore. The markets evolve and banks control certain markets with heavy volume, of which the precious metals market is one of the most heavily manipulated of them all due to relatively low average volumes. As one could expect, the banks painted a negative picture on the charts on Monday in order to get the last longs out of their positions and to create liquidity from which the banks can easily scoop up shares and contracts.
Indeed it was Mr. Brandt.
A healthy reminder from my army service: Adapt or die.
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