- Original plan to buy Gold into dips, starting from around 1576. Changed my mind after looking at Silver chart, even though Gold and Silver fundamentals are different (eg Silver has industrial uses).
- The key - crowd psychology is invariant across markets. Both have reversed parabolic rises. Subsequent behavior should be similar.
- Silver : after making high of 49.50, large black candle the next month confirms trend reversal. A = (49.50 - 32.30). B = (32.30 - 44.10). C = (44.10 - ?). Thus far, 29.80 low. The easy play is on the short side, as that is the trend side.
- Gold : is now where silver was the month after the 49.50 high was made. Having missed the short trade, I am not inclined to join in in the middle now. Will stay dis-engaged until I see the B wave, even if it means a wait of 3-4 months. Given how much everyone still wants to own Gold, a deep meaningful rally once this current cash raising to meet margin calls phase is completed, is definitely possible. But the long term trend has changed. And I only want to trade with the long term trend, not the intermediate.
- This squares with my view of a multi-month USD rally.
- If one simply has to buy, 1447 looks a more sensible level.
- It is very possible that Gold @ 1920 = lower degree of Nikkei @ 38947 or Nasdaq @ 5132.
2 comments:
Hi TS,
Do you base your 'trend has changed' decision on the big black monthly candles? What about the long term trendlines? Both gold and silver still look in long term bull-trends based on trendlines. Or do you mean the intermediate trend has changed, and that is what you trade?
All the best!
Pandu
zenfxtrader.wordpress.com
You want to buy into the bubble. Not after the bubble has burst. Parabolic snapback = bubble burst.
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