1. From the lows around $1526, gold has moved more than
$200 higher. In the short term, both gold & silver are now technically
2. Please click
here now. You can see that many indicators are in “nosebleed”
territory on this daily chart.
3. Please note how far the gold price has moved above
the upper green Keltner line. Some profits need to
be booked, and the addition of some light strategic short positions is
recommended now, but gold could take
out the highs before correcting further.
4. Please click
here now. There is a head & shoulders pattern in play on this two-day
gold chart. It implies that gold could attack the recent highs in the $1745
5. I believe that when gold rose over $1680, it ushered
in a new era for traders. Price corrections could become very short in terms
of time, but very violent.
6. You got a “volatility
appetizer” on August 31, as gold plunged to HSR (horizontal support
& resistance) at $1648. By the end of the day, it was almost $50 higher,
trading near $1695!
7. When dealing with periods of extreme volatility,
it’s important for investors to be sure they have their orders entered
in the market.
8. In this “new
market era”, gold & silver prices may only trade at key price
areas for a few seconds of time.
9. Silver is even more overbought than gold is now,
which means that it could trade erratically, as highly leveraged momentum
traders do battle with equally leveraged top callers.
10. Please click
here now. The RSI indicator has a very big nosebleed, and CCI is offering
the first hint of a technical non-confirmation with price action.
11. Silver has also encountered some significant HSR on
the sell-side. Please click
here now. Note the enormous crash in silver that occurred in late
February of this year.
12. In just one day, silver plunged $4, as gold plunged
about $125. Given the technically overbought condition of the daily silver
chart at this critical juncture, it would seem reasonable to book some
profits and/or add some light short positions.
13. I don’t own as much silver as gold, so
I’m quite stingy in the amount of silver I’m willing to sell or
short-sell at these prices, which are very low in the biggest “super-crisis picture”.
14. Please note that I used term, “book profits”. Gold & silver
are two of the greatest assets in the world, and I don’t think
investors should book losses on them, in an attempt to avoid possible fiat
currency drawdowns. Drawdowns are part of the investing game, especially in a
15. In the very short term, silver could still go to new
highs, before experiencing a little bigger price correction. Please click
here now. As well as gold is
performing now, silver is performing even better.
16. The head & shoulders pattern on this short term
silver chart suggests the price could rise to $34.20 or higher before
17. Are gold stocks overbought, too? Please click
here now. A spurt higher in gold & silver could see GDXJ charge up
18. At that point, key technical divergences would
likely be apparent, and investors could engage in a little heavier profit
19. On the downside, there is buy-side HSR now at
$22.37. GDXJ could simply “tread
water” in that price area. Price corrections can alleviate
overbought conditions on charts, but so can sideways consolidation.
20. Please click
here now. Senior & intermediate gold stock investors may have good
reason to be nervous, when looking at the ominous overbought conditions on
this GDX daily chart.
21. The FOMC meeting begins tomorrow, with a policy
& guidelines announcement made on Thursday. If the announcement is
positive for gold stocks, it could become a case of “sell the news” for professional investors, but I
wouldn’t expect too much of a pullback.
22. Like GDXJ, I would expect GDX to consolidate, rather
than “fall apart”, on whatever Fed announcement is made.
23. QE3 could be announced, but even if it isn’t,
most professional investors are anticipating that it is coming soon.
24. Please click
here now. I would expect that any sell-off would likely be limited by HSR
near $48 and $44. I’ve drawn in a green triangle. I’d suggest you
place a pyramid of buy orders in that area. When the predicted consolidation
ends, I believe the next move is towards $60!
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