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It was another
incredibly strong week for the US markets up until Friday when more confusion
emerged out of Greece and US markets took a hit but still remain strong as
many leading stocks were still up nicely for the day and that includes our
swing trading positions.
I
did decide to go to a cash position and book all our swing trading profits
late Friday though, just because you never know what will happen over the
weekend and the Greek mess seems to be once again able to move our markets so
better safe than sorry.
You
can never go broke taking profits and that’s what we did and we can
always buy back Monday if thing are unaffected.
After
this last week it puts our swing trading portfolio up a solid 110.92% to date
in 2012.
And
that’s with missing a chunk of the iCompanies
move this past week.
We
had a nice position in it but took about a 50% profit in it in only one
day. We would have done much
better having held the position as it ended the week up about 450%. This would have done wonders to our
swing trading gains in 2012 and made us up closer to 200%, but there is no
point in crying over spilt milk, we’ll just be on the lookout for the
next great trade.
As
for the metals they didn’t do too much this past week but are getting
some nice work done in the charts which will power them higher soon enough.
Let’s
take a look.
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Metals review
Gold
slid a tiny 0.29% on the week but is building a perfect pattern to power much
higher from here. Some could call
it a cup and now we are building the handle or you could simply call it a
bull flag pattern.
Either
way doesn’t really matter but what is most impressive is the fact that
Friday’s large move lower to the low end of the channel and the 21 day
moving average was bought heavily.
The technical support area held and saw heavy volume push the price
higher by the days end.
This
tells me one thing only. Traders
want gold much higher.
Once
we breakout of this flag, and it should be in the next couple days,
it’s likely to push gold at least $200 higher over the next six weeks
or so.
The
odd thing is that the GLD ETF did not see huge volume Friday as it is
becoming more obvious that players don’t trust the ETF and want futures
contracts which can in theory be redeemed for physical gold.
The
futures market is more of what matters in my view so I am quite confident
we’ll see a break higher any day as the futures indicate.
Silver
slid only 0.31% this past week and continues to trade in this tight flat base
which will soon propel silver much, much higher.
This
move is going to be a rocket ship and I have a first class ticket! Do you?
It’s
far from to late to acquire as much physical silver
as you possibly can and if that’s not enough then you can try swing
trading it as I am going to do when it moves.
Futures
volume has been strong and steady as traders see this big move coming and are
accumulating positions in anticipation.
Seeing
the CME reduce margins on most commodities this
past week will only add fuel to this fire, but once we do move higher we have
to be ready for the CME to pull the old margin increase trick out of the bag
as it will instantly move prices lower.
The
SLV ETF saw volume taper off as the week progressed as there is really no
point in owning an ETF when it’s basing and volume told that tale to a
tee. When we move though, we need
increasing high volume.
Platinum gained
2.59% for the week as expected and ran into both horizontal resistance and
the 200 day moving average where we’d have to expect a pause.
I’d
normally say we need a few weeks of rest here to build a nice base before
moving higher once again after such a large fast move and with such strong
overhead resistance here.
Friday
though, was impressive as support was briefly tested before the price moved
sharply higher to the upper end of the weeks
trading range. That is quite
bullish.
Futures
volume was pretty steady for the week and it didn’t seem as if there
was too much selling going on. We
could well power straight up from here but it’s really quite an
unlikely move in terms of technical analysis.
The
PPLT ETF saw a telltale volume spike Wednesday as
resistance was hit and trading positions were sold. It looks like a temporary top on the
PPLT chart to me.
Palladium
slipped lower by 0.06% on the week after breaking out of it’s
little bull flag pattern and running past the 200 day moving average
resistance level only to fall back later in the week.
The
chart has the look of rolling over now to me with high volume but the price
going nowhere. I’m looking
for a consolidation period here for now.
The
PALL ETF volume isn’t really saying much to me as it was decent on the
top days then fell off precipitously Thursday and Friday as price dropped.
Fundamental Review
The
big news on the week was that there wasn’t much news!
Greece
is back in the headlines and not wanting to make the required cuts in order
to receive a bailout. This
shouldn't really effect us
or our markets much, but it does.
I’m really hoping this doesn’t bring back the market of
the second half of 2011 as that was one of the worst trading environments
I’ve ever seen.
The
Bank of England announced a cash injection
of 50 billion pounds into government bonds. The only problem is they don’t
have any money so they have to print it.
Sheese, that was easy. I saw a new porsche
that would fill a vacant spot in my garage perfectly,
unfortunately my printing press is still in the shop. Life truly isn’t fair!
Maybe
if they and other central banks increased interest rates they’d
actually have some interest in their bonds, but until that day I guess
they’ll just have to buy their own with freshly printed money.
I
really need that printing press back so I can subscribe to my service 10,000 times
with newly printed money. Then
I’d be getting that porsche!
We
had two banks fail and join the short list of 2012’s biggest losers. Banks are being downgraded around
Europe at an astounding rate but not many have yet failed. This is likely to change.
Some
US banks are basically settling for $25 billion
while admitting no wrong doing in the mortgage fiasco that screwed America
royally. It just blows my mind
that these criminals aren’t seeing any jail-time. They know full well what they did and
would not agree to pay a cent otherwise, but the broken justice system
won’t do a thing about it.
Try
stealing a pack of gum from your local store and see how that goes for
you. Then screw America and all
will be fine.
It’s
sick and disgusting and something must be done.
Iran
is now trying to pay for grain with gold and oil or really,
anything! Tensions are
high there and it’s not being reported up to spec. I hope not, but fear serious conflict
will arise in the region this year.
I
see that gold futures are set to be launched on the Nasdaq in the not too distant future. Unfortunately these will be cash
settled so there is zero chance of ever actually seeing any gold. This is useless and not at all needed
but it does speak volumes to the demand for gold trading instruments.
We
all know that gold is attracting more and more attention and money and will
only continue to do so and this trading vehicle will allow investors to think
they are trading gold when trading it isn’t the best way to go about it.
It’s
nothing but a distraction and attempt to keep gold prices down by minimizing
investments in physical gold.
Owning
physical gold and silver is the foundation a responsible portfolio must be
built upon in my opinion in this period in history. Trading the metals is fine but it’s not owning it.
Owning
physical precious metals is your insurance.
Do
not fall for the ETF or cash settled futures trick. Unless you can touch your coins in a
short amount of time you likely don’t own it.
I
hope you’re week was great and your year is going as well as ours is
but if not perhaps I can try and help.
Until
next week take care and thank you for reading.
Warren Bevan
www.preciousmetalstockreview.com
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