Buying Opportunity?

[MJ DeMarco]

Anyone using this market dip to buy? Gold, commodities, and some currencies have pulled back.

 

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[max momo]

Gold and Silver should correct quite a bit more IMO. If not, the next move up could be very impressive indeed!

Gold has next decent support at $1,325. Gold outperformed most all the other metals today, showing relative strength.

Silver can fall all the way to 23ish and still be in the powertrend up.

Same for both the DJIA and SPY, both are re-testing the very long term trendline, from below. IF it turns down, turns down hard, if it breaks through – potentially very impressive gains.

Sentiment and internals have turned down, though:
http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=0&mn=8&dy=0&id=p92524559360

Copper is at a triple top.

XAU is at the top of a trendline going all the way back to 1990! Quite bearish. Similar to the hard metals, if it breaks through Katy bar the door.

Note the weekly XAU printed ANOTHER higher high. Stokes and candlecharts point down whereas macd and aroon in the positive.

My guess is momentum fades and XAU falls to 195ish, maybe lower BUT if it breaks up through the trendline ANOTHER major buy signal.

IAG has that gap that will set resistance.
Hecla INSIDERS selling the crap out of it, just one example of many:
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7241017

The preferred/common arbitrage looks good until Jan 4, however.

GSS (tanked this week on earnings) and CORN (not even close to the run that Sugar and others have had) look the best here from a risk/reward perspective, if you have cash to deploy IMO.

I have begun to sell a little more than usual for the short term, but the long term should be up for hards, softs, equities due to QEII…

 

[GlobalWealth]

I have been selling put spreads on GDX and GDXJ on the pullback.

I have also been selling put spreads on VXX right before the decline.

Monday I will be looking at selling put spreads on CSCO, S and TBT.

 

[max momo]

CORN up 4.3% today.

So now just comes down to your decision rules:

a) Enough profit on the trade to exit (after all, plenty of folks happy with a money market that pays 1.0% FOR AN ENTIRE YEAR, right?)

b) Trend in place, put in rolling stops

c) sector rotate

d) average up/in positions

Whole lot easier to BUY then to sell b.c. the decision rules to sell are often more emotion/philosophy based than the buy decision.

In other words, never buy unless you have a sell strategy/position in place.

Since I gave to very different reasons for buying GSS and CORN, the decision rules to sell should also be quite different.

 

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[MJ DeMarco]

Municipal bonds are selling off pretty harshly ...

Muni bond sell-off deepens after last week's losses | Money & Company | Los Angeles Times

 

[max momo]

The metals and stocks kept selling off Monday and Tuesday, as I mentioned they should. Silver is still the more bullish of the metals, did not have the bearish divergence that gold did.

Still see silver going down to 23 (convergence of the 50 day EMA and the middle rail of the current trendlines); or $22.10 (bottom rail) or $19.25 (200 DEMA and bottom band support).

Still see gold to $1,325; maybe more, with today as a sucker buy

But you never know, staying in cash instead of metals has been a very poor strategy for the past decade…

My sells had much better margins of safety than the two spec buys; the buy volume has been anemic.

fwiw

 

[AJGlobal]

I been keeping my eye on both silver and gold. Anyone pulled the trigger yet or is everyone waiting for the pull backs before jumping in ?

 

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[max momo]

Sold Corn for a nice profit. Had estimated (hoped?) that gold would go back down to $1340-$1325. Doesn't look like it in the short term. Amazing relative strength in the gold stocks. Bought on Friday positions in SLV and GDXJ.

 

[max momo]

Well, as originally forecast - gold did make the wave low to $1,325 (and also the strong support levels at $1,310/$1,307). Take a look at the three month chart.

GDXJ up just a bit from my buy point.

SLV up 12.5% since my buy point in January(what a nice annual rate of return THAT would be, eh?). IF you pull up a 3 month chart you can see why that position was a low risk entry, compared to November. And even that entry/buy was two weeks early. Patience is a virtue.

Silver now at 30 year highs, but moreover – a CRITICAL point. I expect it will fail here (60% confidence) and have a significant pullback, at least 20%, but probably a full fib retracement.

However, a sustained breakout from here (40% confidence) portends much higher prices, no real resistance until next trend rail (weak resistance) fib projection (moderate resistance) and the 1980 highs (extremely strong resistance).

If this was a new position for you – and you have no other silver positions - at a minimum you can’t go wrong booking the 12.5% profit.

For me, this is just one position out of dozens I have established over the past years, so my risk tolerance and position management would be quite different than yours.

For what it’s worth...

 

[Rickson9]

You guys know way more than I do! I've done jack all in the last year!

Best regards.

 

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[Jeremiah]

I think gold had done more and those who had invested in gold last year . earned heavy profits. I have heard that silver is also making progress and and investors with not much finance are interested in silver rather to invest in gold as it has become out of reach at least for me.

 

[max momo]

Rickson9,

Sorry to hear you did jack-all last year, may 2011 be even better.

Do you have any entry and exit scenarios for the OP query?

Jerimiah,
Now you know why the call silver 'the poor man's gold'. Historically, it had actually been very rare for the middle classes to own gold, was just too expensive. Kings paid gold for political deals. The abnormally cheap gold since the 1860s allowed US citizens of even modest means the ability to save gold. Of course, in other parts of the world, such as India, Gold was THE means of keeping and transferring wealth.

On a technical basis, silver kept the 32.50, easily. Next stop is $40, but a pullback between here and then very feasible. I read something by a trader who stated: "I never give probabilites for my trades, as then I am married to the position."

That guy never learned how to adjust his probabilities!

 

[oddball]

On a technical basis, silver kept the 32.50, easily. Next stop is $40, but a pullback between here and then very feasible. I read something by a trader who stated: "I never give probabilites for my trades, as then I am married to the position."

That guy never learned how to adjust his probabilities!

There are some predictions of silver hitting $50 within the year. I sure hope it does.

 

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[SKM430]

any of you guys looking at selling off your gold investments in the near-future or getting into SHORT positions in gold? I was looking at historical gold prices and trends from 1906-today and realized that since a double-dip looks almost improbable at this point, the turnaround and expansion of the economy going forward should start alleviating fears of inflation and prices of gold should start dropping. Any thoughts?

 

[max momo]

Gold hasn't gone up for 10 solid years due to fears of inflation...

 

[tmetz168]

Does That mean Gold will go up higher?

 

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[RideHD]

I've been testing a gold timer based on weighted moving averages, and so far it looks pretty good. Got a longer term confirmation signal to buy two weeks ago that remains active as of tonight. Shorter term indicator is more volatile of course but still positive. I am going to continue monitor it against the GLD ETF to see how it does...

 

[max momo]

Sold my SLV position today @ 37.10. Do believe I can buy back cheaper...

 

[RideHD]

MJ,

As mentioned above, I am still working on a gold timer (still showing uptrend, although volatile short term). I used the correction to lock in profits in stocks that started lagging during February and early March and have been establishing new positions in stocks that held up solidly or gained during the correction. Of note, Baidu (BIDU) and Priceline (PCLN) held up quite well for later stage growth stocks. Opentable (OPEN) is one of my new positions. They are virtually alone in the online reservation space and have a great chart. Jazz Pharmaceuticals (JAZZ) is another, a US company focused on the domestic neurology and psychiatric drug sector with great earnings, a solid pipeline, and strong chart. Finally, I also have two positions in the oil industry (watching oil prices of course) and one in the shipping industry. Yep, my indicators show the uptrend has resumed!

Anyone else have ideas to share?

Cheers,
Ride

 

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[Rickson9]

I can't find anything cheap enough for me to buy. I stopped buying stock almost 2 years ago. Personally I find it difficult to buy when prices are rising, but that's my own character flaw.

Best regards.

 

[Rickson9]

Rickson9,

Sorry to hear you did jack-all last year, may 2011 be even better.

Do you have any entry and exit scenarios for the OP query?

I don't see any entry scenarios so far this year. My exit scenario will be for companies that lose INSIDERS ownership or become chronically unprofitable.

Good luck to the OP!

Best regards.

 

[max momo]

Today the HUI provided a near perfect text book example of pulling back to test the spot from breakout. Another higher probability entry point; but I would keep in tight stops b.c. late spring often sees a sharp correction in the gold and share prices.

 

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[max momo]

And yesterday platinum provided a text book breakout pattern - three white soldiers...

 

[arnoldscubicles]

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[CEBenz]

Definitely sounds like spam to me Sparlin, but amusing editing.

 

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[ruzara5]

Gold and silver. That is a hedge even in a moderate or up cycle.

 

[^eagle^]

Silver dropped over $6 in an hour tonight. Talk of buying again at $40 or time to unload?

Osama is dead. Europe still sucks. time for a dollar rally?

 

[Rickson9]

I didn't trade anything in 2010 and in 2011 I still haven't bought (or sold) anything.

However, with my investing method, I don't really need to.

Riding coattails is exactly that - just riding.

Best regards.

 

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[^eagle^]

looks like the drop was due to people cashing out overleveraged positions as the margin requirements changed. Looks like another buy opportunity as we continue to beat up the dollar. '

 

[max momo]

ooooh, a three candle FAIL. on platinum - great stuff!

yah, they are bringing out all the big guns, even OSL's body out of deep cold storage to defend the dollar here at this CRITICAL level. Double bottom here badly needed to hold (last USD low almost exactly two years ago at 71.32 on April 22, 2008) or else real momentum to the downside could ensue.

I never had much success trying to buy right at these large price zig-zags. Even if Ag re-covers, the momentum should be down (the non-conformance of silver last friday -down when gold and platinum was up strongly - was the shot across the bow). Ag 41.22 might provide some decent support (first fibonacci retracement number). After that, the trend rails of $34 and $38 provide next good support. Wouldn't be surprised to see Ag hit those number and rise strong back to $50, make the expected double top, and then drop for a few months - playing out the typical seasonal pattern. But you never know.

Fun Action!

Always a good show in the grand ponzi casino...