DON'T MISS MY BIG PICTURE COMMENTARY AT THE END OF THIS POST
Here are the results of the Silver trade I suggested the other day, how I did it. We are now having a bounce up today, which should setup another short entry any day now, perhaps tomorrow.
My entry was right where I indicated it should be at 16.82 below the low of that day on the chart I posted the day before it. I work with exit targets, so when we got down close to it and started to bounce without my number being hit, I went to the market to take profits. It wound up right at 4K per contract as I have indicated on the chart.
This is a perfect example of a fundamentally setup market combined with a valid short term entry and exit. It is the correct way to trade in my view, and I have tried just about every approach that has ever been thought up or written about over the years.
One big picture thought for the time at hand. The markets always have a way of trapping the most people looking the wrong way at the wrong time. This is not necessarily true of just regular every day activity, but more so at critical junctures.
It is my opinion now that the move that would trap the most people looking the wrong way is a huge dollar rally and huge stock decline, accompanied by a big rally in bonds and drop in Gold. Of course they are all linked so if any one of them happens so will the others. The danger now is that I don't feel from just the general vibe of things, that very many people now are worried about a stock market drop anymore.
The other anecdotal evidence, is the ads in the paper to buy your gold items for cash, urgently. That is akin to a front page wall street journal article about how you can't lose buying real estate for an investment in 2005. Certain things just jump out at you as very odd and signs of a top. This for me is one of them, especially when I combine it with the fundamental setup at hand for Gold. We also do have that sell signal from Friday in stocks based on commercial selling in the indexes. There is also a lunar/astological cycle in play here. I am far from an expert in this area, but I cannot dispute how accurate some of these darn things have been historically. Larry Pesavento who is one of the kings of this approach stated on a radio show I heard the other day that he thought Monday was the high based on this.
I would not usually pay attention to that, but when it comes at a time when all the other things I watch are in place, I think we got some trouble here. Time to exit longs or be short depending on how aggressive you are. I shorted the SP futures this am.
Just in case anyone is not sure what to do here is the summary