The two trend reversals everyone has been waiting a year for are about to
take place, but they have not yet started.
While I do think 2014 is the year we see gold, silver, miners and many other
commodities rally, it is important to follow the trend and wait for a reversal
to form before getting overly excited and long commodities.
Each time we see the daily chart form some type of bullish pattern gold market
traders become instantly bullish. And each time this happens they get another
reality check about their trading technique of trying to pick a bottom.
I just published a book in December which teaches readers how to identify
trends and stages in the market - "Technical
Trading Mastery - 7 Steps to Win With Logic". Buying into a bear market
rally is not a high probability winning position. Odds favor that sellers will
pull the price down and likely to new lows.
This January is one of these times and gold market traders are getting excited
and long positions. While the bottom may in for precious metals, buying a bounce
in a bear market is tricky and you better have some trading discipline to exit
if price starts to sell back down.
Eventually we will see the stock market rollover and breakdown below its support
trendline and gold will rally. But keep in mind, some of the largest percentage
based moves take place just before a reversal. What does this mean? It means
that the stock market could easily go parabolic and rally for a few more weeks,
then reverse down sharply. And precious metals would do the opposite, sell
off, make new lows, then reverse back up and start a new bull market.
Stock Market VS. Gold - Gold Market Traders Be Aware!
Below are a few more charts showing my big picture trend analysis for silver
and gold miners.
Gold Market Traders Conclusion;
In short, the precious metals sector is still in a bear market and has not
yet reversed to the upside. As you know I don't pick bottoms or tops which
go against the longer term trend. In this case the trend is down for precious
metals so I am not trying to pick a bottom.
While I am starting to get excited about the eventual bottom in gold, I am
still sitting on the fence with my cash.
If you would like to get my analysis every day and my gold trades
be sure to join me at www.TheGoldAndOilGuy.com
