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It was really
another amazing week in a so far, great year. We had strong markets all around with
many of the leading stocks that we trade in our swing trading portfolio up
nicely and still looking for more and that has done wonder for our swing
trading portfolio where we focus on leading stocks and use options generally
to trade breakouts of solid chart patterns.
In
fact I think it’s our best start to a year ever being up 95.27% in the swing
trading portfolio as of Friday February 3rd!
It
blows my mind how quickly we can make massive gains in such a short amount of
time when the markets are ripe.
I’m
not trying to take anything away from the precious metals who’ve
been on fire so far in 2012 and their stocks who’ve done even better
and several in our mining portfolio are well more than doubled already.
To
be honest it’s a bit nuts, but when the going
is good you just have to roll with it and be relatively aggressive and not
fight the tape.
I’ve
been expecting and still am expecting a consolidation in the markets, but
until that comes I’m happy to ride this wave higher.
We
entered 2012 with gloom and doom prevailing but I didn’t really think
that would be the case with so many on that one side of the boat.
Having
said that I don’t really care where the markets go as long as they
move. There are still a ton of
people short or expecting things to worsen and that can push this rally much
higher.
I
learned long ago not to fight the markets and it was a hard lesson.
The
facts are that so far we’ve had a massive move higher in US markets and
leading stocks along with our beloved precious metals. This all makes my subscribers and I very happy!
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On
that note, let’s move into our precious metals charts whom are behaving themselves well lately in terms of
technical analysis.
Metals review
Gold
only rose 0.39% this past week after running into resistance Thursday and
then correcting a little Friday.
We may well need at least three days below the $1,770 level before we breakout higher towards the $1,800 level.
It’s
been an awesome 2012 for gold and a paused would do nothing but refresh
it’s stamina to power higher.
That being said it could well just shoot higher from here also, but
the chart does look to need a rest, especially considering the high volume
Friday in the futures chart.
The
GLD ETF concurred with the futures markets and showed high volume Friday
which is very indicative of a pullback here and now for a few days at least.
Silver
didn’t really do anything this past week and slid 0.56% as we ran into
strong resistance at the $34 level I’ve been noting here the past several
weeks.
Now
that we hit $34 a sweet, sweet base has formed and to me silver looks ready
to head higher at any time here.
I
nearly took a trade later on in the day on Thursdays attempt to breakout but
it just didn’t quite seem right yet and silver promptly fell Friday.
Markets,
stocks, commodities and especially silver love to shake people out by
flashing false buy signals forcing losses on traders and then perhaps they
will become frustrated and look elsewhere and then the real move will begin.
When
we do breakout from the $34 area with force and heavy volume there is only
slight resistance near $36 and really we should move to the $40 level in a
pretty fast and straight line.
2012
is going to be a super year for silver and in all likelihood it will break
into new all time highs and beyond.
Both
the futures and SLV ETF volume are about average with little variance from
day to day at this point and that is perfect during a base building session.
I
own lots of physical silver but when we get setups like this I like to trade
it in the swing trading portfolio and use leverage through certain
ETF’s along with option contracts.
It is truly amazing how quickly a position can appreciate in those
instances.
Some
may say this is a dangerous strategy but I think you have to take risks to
make the big buck and as long as you don't let the position fall below the
breakout point far then any losses will be minimal.
But
hey that’s me. How many
others do you know whose who trading portion of
their portfolio is up 95.27% year to date?
If
those types of gains are what you’re looking for then please look
elsewhere because I look for home-runs in everything I do from getting into
physical gold and silver early on, to swing trading to heavy paying dividend
stocks.
I
just don’t see the point in swinging for first base.
Platinum
rose 0.23% this past week after a quick $200 run since only breaking out in
early January. It looks set for
higher prices here now out of this nice little base which should take it to
$1,673 where the 200 day average lives.
Volume
was heavy in the futures as the lower end of this base was tested and held
strongly. It’s
great action to see volume come in near support as it tells you that traders
want this trade higher.
It
all may sound pretty simple, and it is, but at the same time there are always
so many variables and things to consider and then applying the knowledge
properly is the real key, and it only comes with lots of mistakes and experience,
but when it’s clicking it’s the best thing ever!
The
PPLT ETF volume concurred with the futures and decreased near the top of the
base after forcing the price higher off the lower levels.
I’d
not be chasing this trade here at all as we should expect some more
significant consolidation only about $20 above. If I was long this for a trade
I’d be looking to begin to take profits and definitely lock in many
more if we see a brief spike above the 200 day moving average area and then
take them all if we dip back below it.
Palladium
rose 1.94% this past week after breaking out of a decent little bull flag
pattern. Palladium broke out and
heavy volume followed on Thursday which is perfect.
On
Friday we saw a spike above the 200 day average which is great but by the
days end the price had retreated near that average and only closed about $1
above it and volume was pretty low for the day.
Monday
will tell the tale of whether palladium is yet ready to begin it’s next large move
higher or not.
I
always welcome corrections and consolidation periods as once they form if
they are the right pattern that is what I trade off of. I don’t make money every week
trading, in fact much of the time is waiting for bases and pattern to form
but when it’s good I go heavy.
Silver
has me drooling here for a move very, very soon more than any other chart
I’ve seen lately and I’ve seen and traded some great ones.
The
PALL ETF volume was very heavy on the breakout Wednesday and the follow
through day higher on Thursday.
Volume was quite light on Friday’s slight pullback which is
telling me that this move is for real but there is a bit of divergence
between the futures chart and the ETF chart so we’ll soon learn the
outcome.
Fundamental Review
You
may have noticed that this section has been rather sparse so far in 2012 and
that’s mainly due to the lack of news and that’s fine by me.
Markets
are doing well with no progress out of Europe and all things US focused on
the election. I could take it if
we just slowly slipped higher this year for the whole year and so could you I
imagine.
Huge
congrats goes out to Venezuela for being the first to repatriate their gold
and actually complete the task without a hitch. The country just completed
repatriating 160 tonnes of gold.
Now we wait and see if other nations follow suit.
Records were set this year in China as they
bought more gold than ever for the Chinese New Year festival. It’s amazing how much the
Chinese buy. I lived in China for
several years and I couldn’t believe the quality of the jewellery they
had and the prevalence of it, and it’s even more these days as
gold’s investment properties shine.
It’s
no wonder I’m reading more and more stories of burglars taking
advantage of the Indian and Chinese tradition of holding wealth in real money,
physical gold.
I
noticed a super story on cancer being treated effectively with silver
which has far fewer side effect than current
treatments. I’ve used
colloidal silver for years and have watched with invested interest as
silver’s uses have grown from clothing to water purification to medical
tools to dishwashers and washing machines and much more. I’ve often wondered to myself
when silver would be tried at curing more critical diseases such as cancer as
it’s sure to do something good.
It seems that time is coming.
I’ll
leave it here for the week and I wish you a super Superbowl
Sunday. I can’t wait.
I’ve
got some pheasants to cook up for the gang and we’ve also got a moose
roast and many other dishes will stroll through the door I’m sure.
It’s
one of the most fun Sunday’s of the year.
Have
a great relaxing weekend
Until
next week take care and thank you for reading.
Warren Bevan
www.preciousmetalstockreview.com
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