"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET
Gold closes in on $1,500
Gold experienced a strong move higher today as news filtered out over S&P's downgrade to the US credit outlook.
As mentioned in my last Friday radio interview with Eric King on the Weekly Metals Wrap, I did not expect it to breach this level on its first approach. This level has as much significance as $1,000 in the sense that it is psychologically significant. There are traders who had $1500 as an initial target for this leg and it is normal to see them booking profits on the first approach. A setback therefore would not be expected. There are several levels on the chart that should provide some downside technical support should this occur.
If, on the other hand, gold goes right through $1500 without so much as pausing, it will indicate that its price is about to accelerate sharply higher.
Dan, is it prudent to buy Silver when we are in a parabolic move since all past parabolic moves ended on the 8th day at which time the prices retreated down. Currently, silver is approx 68% above the 200 day moving average. From listening to you on the King World weekly its apparent Asia/India are now influencing the demand resulting in not seeing much of a pullback when the prices does retreat. i assume the rules in the past on parabolic moves just dont apply today based on the worldwide demand. let me know.. i picked up gold and silver last week and plan to keep it for the long run but wanted to know your take on picking up more silver since it is parabolic presently.
ReplyDeleteDan, you mean 'should expect a setback'.
ReplyDeleteI remember Jim Sinclair writing that 1500 while a round number shouldn't be much of a problem. Aren't there buys sitting above 1500 that the bulls could get triggered?
Definitely correct about a quick spike much higher should gold take out $1500 on the first try. No one is anticipating that scenario.
ReplyDeleteWatcher;
ReplyDeleteSome guys are goign to be watching it to see how it handles $1,500. If it gives an indication that it wants to stall out a bit and cannot punch through, they will book profits on their longs which will result in a bit of a setback or pause in the current rally. If however the market keeps moving steadily higher and just blows easily through $1500, they will have no reason to book profits but will go with the flow.
Let's see how it fares...
Jim - Personally I never buy the metals during bouts of strength; however, a lot depends on what percentage of one's income they have in the metals. If someone has less than 5% of their net worth in metals that is a different story from someone who already might have, say, 40% or higher. That is why answering a question like this is really difficult. It all depends on the allocation of the funds of the individual, what their investment or trading horizon might be, what kind of risk they are willing to accept, etc.
ReplyDelete