He Who Hesitates Is Lost
Sep 18, 2012
- Markets rarely provide “total satisfaction” to investors, and when they do, it’s usually not for long. The gold and silver markets are overbought on short term charts, but they refuse to sell-off very much.
- This situation is frustrating, especially for people who want to enter the market on the buy side after a “decent correction”.
- Please click here now.
- You are looking at the daily chart of the CRB index. Note the big down day yesterday that filled a price gap. There are significant sell signals now, on both the Stochastics and RSI indicators.
- I have highlighted decent support. It starts at about 308.25, and extends down to the 294.82 area.
- A sell-off in the CRB could negatively affect gold and silver. Please click here now. This is the daily chart for gold. Note the highlighted area. As the RSI indicator became overbought and rolled over in the 70 area, gold fell from about $1680 to $1648.
- Gold then advanced about $130 higher, and has become even more overbought, basis the RSI indicator. At this point, gold has steadily climbed about $250 from the lows near $1526.70, which has shocked many market observers.
- Overbought conditions can persist for a long time. They can also be alleviated by a sideways consolidation in price, rather than a sharp sell-off.
- It’s probably impossible to know whether gold will continue to surge higher, consolidate sideways, or experience a sharp sell-off. Investors should hold core positions to deal with the possibility of continued strength, and place buy orders to deal with a potential correction. Patience is also required, to professionally manage the possibility of a sideways drift.
- Where should buy orders be placed? Please click here now. Note the blue horizontal lines.
- There is HSR (horizontal support & resistance) near $1748, $1718, $1680, and $1643. Aggressive gamblers could place buy orders at $1748 and $1718.
- More conservative investors should probably await a move that takes gold down to the $1680 and $1643 price areas.
- In the big picture, the arrival of QE3 is bullish for gold, but it also creates nervousness amongst some investors.
- They wonder if all the news is already “baked into the gold price cake”, and are nervous that a big correction could happen soon.
- Others feel that QE3 is creating a situation where gold can’t sell off very much, so even the tiniest corrections need to be bought aggressively.
- This “stewing pot of emotions” is probably setting up a situation where sell-offs will become very large, but only last for a short amount of time.
- Please click here now. You are looking at the daily chart for silver. There is a technical non-confirmation in play now. The silver price made a new minor high, while the RSI indicator has turned lower.
- I view silver in the $35 price range as representing good value, but this is still a seller’s market, because the price has rallied from $26.
- As with gold, it’s important for silver investors to hold core positions, so you can benefit if the price keeps rising. Place buy orders under the market, so you can accumulate more if the price falls.
- Because silver tends to track gold very closely, you could simply buy silver when gold arrives at any of my key HSR buy points. Unfortunately, as market volatility grows, you may not have time to place any orders by operating like that.
- To view my key buy prices for silver, please click here now. Gamblers should focus on buying the $34 and $32.50 price areas. Investors could wait for $31.25 and $28.44.
- QE3 has ushered in a new era for investors, and I believe the name of that era should be, “He who hesitates is lost.”
- I don’t mean that you need to rush in and buy gold & gold stocks at any price, “before they get away”. I’m referring to the importance of boldly placing buy orders below current prices, with strictly limited risk capital!
- It’s critical to set key limits on the amount of your positions that you “offload” into strength like we are currently experiencing in the metals markets. Don’t just wildly unload your core positions as the market becomes more overbought, because the price could still go a lot higher before correcting at all. If you’ve booked profits, be happy!
Sep 18, 2012
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