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Gold & Silver TriggersPeter Vogel Judging by the precious metals forums, its confirmed…everyone is bearish and short gold and silver, waiting for Goldman Sachs prediction to come true. But what if they’re wrong? More importantly, how will you know if those prognosticators are wrong and if they are wrong, won’t the precious metals take off due to the wrong-sided short covering? All very good questions and despite the majority of pundits being bearish and short, we just have a hard time joining them. If I recall, we already had an emotional washout of the longs in December 2013 and more recently this month. Also, the foreign currencies have been doing quite well and the dollar not so well, so doesn’t this bode well for precious metals? Also, commodities have been on a tear and even today appear to be on the run again. My preference is to watch the relative strength ratios and get an indication from them as to where the truth lies. Recently, the Silver/Gold ratio set lower lows, but without confirmation from the momentum of RSI or MACD. This would suggest, as it has in the past, that silver is about to outperform gold and that usually happens when both metals are moving up. Also, silver this week dropped to lower lows without gold doing the same, resulting in a non-confirmation. The ratio chart itself seems to have a bullish flag pattern that suggests a big move up is coming in this ratio. (Click on image to enlarge)
Many people have been talking about the bearish looking price charts of gold and silver, but the relative strength ratio charts look bullish and are telling a different story. It will be interesting to see how the markets pass judgment next week. ### Apr 17, 2014 About Peter Vogel: The Writer of this Blog began his investment career in 1981, first as a Floor Trader and then as an Investment Advisor for a major securities firm. During that time he acquired several securities and options licenses and became registered as a Commodity Trading Advisor (CTA). He also co-founded a venture capital organization that helped finance and commercialize a number of new technologies. Since the beginning of his 33+ years of investing, he developed his own style of technical analysis by focusing on ratio analysis and money management techniques, creating methods that often allow him to buy near precise turning points with confidence. His decision to publish this information stems from recognizing the abundance of misinformation and bad analysis that exists and the need to help investors understand how to understand and view the markets and invest properly. Some of his favorite trading mentors are Larry Williams, Martin Pring, Thomas DeMark and William O’Neil. When it comes to deciding whether or not to use an investment writer’s service, you should understand that their background or so-called “proprietary” gimmickry really does not matter. The evidence in this statement bears itself out by the simple fact that Michelle Williams at the age of 17 won the World Trading Championship in 1997 making a 1000% return, which has not been surpassed since. The only thing that matters is whether their service can help you make money. 321gold Ltd |
