|
I didn’t get the chance to get to
the free weekend letter this weekend and I apologize, but in my defence it is summer and the sunny days have been few and
far between this year so with family and friends home I couldn’t resist
taking some rest.
On the bright side we’ve got much
more information today after having traded and seen some truly spectacular
moves.
It’s a rare day to see the S&P
500 or any other index down over 6%, and just as rare to see gold rise more
than 2% in a single day.
I’ve heard a lot of guff about
gold over the weekend even in my slightly removed state. Some are saying
gold cannot be viewed as a safe haven if it’s going to move 50 or 60
points in a day. That is the most ridiculous statement I’ve heard
in a week or less!
Right now a $50 move in gold today was
not even 3%. That’s really nothing and as long as the major trend
remains higher, then that’s the way we go. Simple.
Don’t try and confuse things, as
fiat paper is losing it’s allure worldwide
now at an accelerating rate, that much is clear, and gold will move into it’s true role as money as it has countless times
throughout the history of man.
This time is NOT different.
A superb interview was held with Jim Rickards this morning which brought up some great points
and is a must watch. The chap that was on with him interjected and said
that there is no intrinsic value for gold. He went on to say, it’s not
a producing asset and that it’s only advantage is that it takes away
the problem of printing or creating money.
BINGO!!!
That is it and he says it so
nonchalantly that it seems he doesn’t grasp what he just
said. That is the reason you need gold or another store of wealth behind
a currency.
Each and every time a currency has
evolved to lose it’s
backing, the politicians and bankers have lost control and ended up
destroying the currency with inflation.
It’s simple. It happens every
single time and that time is now for our generation.
It just goes to show how still today,
people don’t understand, or have been untaught, golds
role. Gold is money and is a store of wealth and accountability, more
importantly.
There is so much I need to get into this
week but I just don’t have that kind of time at all. The ratings
agencies are looking hard at major powers and their credit ratings but as
I’ve said in the past, these downgrades are far too late.
There is no way out.
That being said we still do enjoy swing
trading a portion of our wealth that is not in physical precious metals,
mining stocks or hefty paying dividend stocks.
I get so many questions and requests for
more details on swing trading but I simply cannot do it as it’s unfair
to subscribers.
We’ve been on an incredible role
this summer though, after having more than doubled the swing trading account
in late June and most of July we went to cash before deploying about 60% into
three short positions last Wednesday.
As you know the markets haven’t
done well since and we’ve been extremely lucky to have been in some
stocks that tanked hard and we took the last of our profits today during
waves of weakness.
I know it’s hard to believe but
using relatively safe option strategies we are up 56% since
Wednesday. Only four days in the markets.
We’re back to cash again and are waiting for the next setups. I’m
honestly in a bit of shock over our good fortune and subscribers are
fascinated, to put it mildly.
Now the real problem comes when we
simply can’t keep up these types of returns!
The bar has been set high and
expectations are through the roof, but I’ll try my best!
That’s all I can say about that in
this public forum so let’s move onto a few charts only this evening as
I’ve got lots of work to do for private subscribers, but I do feel
obliged to keep you free readers in the loop as well so I’ll put in a
few extra hours for you now.
Metals review
The S&P is one ugly duck but I
wouldn’t be shorting anything here. In fact we covered all our swing
trades today as I mentioned above. We’re very VERY
oversold here and we closed on support tonight on extremely heavy volume.
Quite often when a market or stock
closes on it’s low on heavy volume it is a
sign of a short-term bottom in my experience, especially after a prior large
drop, but time will tell on that front.
One thing I noticed on purely
non-technical terms was the percentage of the decline today. We closed
down 6.66%. Recall the low in 2008 was 666.
I know, I’m so devilish!
It wouldn’t be a surprise if
it’s a signal that a bottom is in for now.
I’m not really much for
conspiracies, but they are interesting and usually contain some grains of
truth but the fact is that signals are always there if you know what to look
for.
Last week I told subscribers something
had to be up behind the scenes. I had no idea really, but reading the
charts and watching the price action told me that something was brewing
somewhere.
In fact I was raving about our super
profits on Friday with people and saying we have to take some profits here
and not get greedy but as I watched the charts I told subscribers that I want
to take profits so badly, but I just couldn’t as the charts told me not
to in absolute terms.
Sure enough after the market closed the
US debt rating was downgraded.
Markets totally fascinate me and charts
even more-so. It always amazes me to look at charts and see the action
before an event. There are always signs beforehand if you are looking
for them with an open mind and not having already made up your mind.
Gold is moving higher on heavy volume as
investors want it. It’s trading in a steep uptrend channel and looks
about to break higher out of it.
Generally, when a channel is in place
and the price moves up and out of the channel it’s a sign of an
impending reversal. At the same time, your best guess is as good as mine
as to what happens in the stock markets around the world and if this crisis
continues to spread which would send gold higher still.
Gold can continue much much higher here as it’s not a stock, it’s money.
Trading it is tough but owning it is
easy.
Silver ad a false breakout last week and
we had a swing trading position on at the time and we got caught and had to
take a loss as happens in this business. When silver falls it falls
fast and because of that I prefer to just hold physical silver and not trade
it very often.
Now we’re building a symmetrical triangle
pattern here and it’s likely to be resolved higher in the next few
days. We’re really seeing a nice pattern build and a break above the
downtrend line would be a solid buy point.
I could easily see silver move up to
test the $50 in short order in the very near future.
Well, again, I apologize for skipping
the weekend letter and I hope this short recap does it for you this week.
I wish I could spend more time writing
this for you tonight but there is far too much else on my plate for tonight
so until next weekend, or tomorrow morning if join us and become a
subscriber, please be careful trying to trade this market, and buy physical
gold and silver while you still can!
Warren Bevan
www.preciousmetalstockreview.com
If you found this information useful, or informative please pass it on
to your friends or family. You can subscribe by visiting www.preciousmetalstockreview.com
and adding your email to the newsletter signup found on the left of every
page.
Free Service
The free weekly newsletter “Precious Metal
Stock Review” does not purport to be a financial recommendation
service, nor do we profess to be a professional advisement service. Any
action taken as a result of reading “Precious Metal Stock Review”
is solely the responsibility of the reader. We recommend seeking
professional financial advice and performing your own due diligence before
acting on any information received through “Precious Metal Stock Review”.
|
