Richard Wyckoff Composite Man Wins Again With the Silver ETF
Did silver make you rich in 2011? I have read many comments on the web of folks who sold early or late, thus claiming the market timing of silver an impossibility, and some are throwing in the towel on technical analysis and solely really on fundamentals. If so that is exactly how the Richard Wyckoff composite man wants your state of mind to be in, confused, destroyed and lost. Richard Wyckoff composite man wins, the public loses. Get smart learn wyckoffian logic.
Composite man defined: Richard Wyckoff's name to the total sum of the more informed forces that move the market. (RTT: In modern day marketing terms 'the combined group of smart money that moves markets', on this site we sometimes call him Mr Market.)
To learn all you can about Richard Wyckoff you can start here: Richard Wyckoff method.
Just knowing the basics is enough to keep your profits on great trades. One Wyckoff technical rule is that periods of extreme volume is a warning that supply is overcoming demand, and eventually supply will swamp demand and prices will fall. The most recent example of this can be seen in the silver ETF at the beginning of May 2011.
The composite man accumulated silver etf under $20, marked up prices to $50, but on the way up started to sell to those that came late to silver trade above $40, and they did so aggressively, you know this to be true as the daily volume spikes are extreme after $40, this is the composite man is selling to Joe public or the not so clever mutual fund manager. This happens in every market, and your education should start with the great itulip bubble of 1637 when a single flower sold for the value of an average house!
Does silver sell off mean the bull market is over, NO. It just means that silver may get to $250 via $25 before all is said and done. If you want to be on this chess board you have to learn how to read the game while it is in play. Learn Wyckoff, learn Hurst cycles and learn the best William Gann gave to the investing community (ie Gann Angles)
In our view Wyckoff methods mixed with Hurst and Gann logic gives you all the 'special forces' technical tools you will ever need to master security chartology. This does not in anyway discount the need to understand the ebb and flow of fundamentals within the market.
See our previous posts on silver etf for more.