Market Report: Precious Metals
The metals made a decent move on Friday and potentially could have started the next stage higher. Back in the beginning of this month, I had penciled in a target range of $1620 target for gold and $30.80 for silver and was working a number of ideas, readers of the newsletter and members have been tracking this along with me, gold and silver have slowly made their way lower.
After finally putting in a low this week on gold, for an idea we have been working and silver confirming the move. We have seen a strong break higher, and enough to suggest an important low can be in place.
The lower this pushed the more bearish stories I was reading, yet back when this was approaching $1800 and silver near $37. You could not find a bearish story that happened to be the top of a 5 wave move. Classic 5th wave top.
At the time I was reading many bullish stories I was informing members that we need to lock in gains and start to look for an entry to exit and buy back lower once the correction had finished its move.
Roll forward and it appears that we might have the low that we have been looking for.
On March 2nd I wrote this.
"Hitting the target band for this suspected bounce, so on high alert for a reversal, around $35.50-36 looks good, target is $30.80"
Many traders thought the correction was over and looking to get long, however the market had other plans and I still felt that the market had not done enough to shake off those early buyers.
$30.80 had been a target for me, as it had been a strong area of resistance and was likely to be support on any dip, and the lower silver came towards $30.80 the more I expected to see bearish articles.
Well we virtually hit that target this past week after tracking a number of ideas we eventually think we figured an idea that we can control risk now against those lows made last week at $31.08.
I think that pretty much is good enough, it almost but not quite my target but I can live with it.
Back on 1st March I wrote this for members and readers of the newsletter.
"There should be a bounce I suspect around the $1740-50 area, in 3 waves sets up a short side trade against the last swing high at $1793.
So the bears/shorts have a trade setup now and expect a move lower towards $1600-20 area".
Like silver I felt that the market had not done enough and $1620 had been a target that I was interested in. Over the past month we have been tracking a few options, but the lows put in this week were what we think the end to the decline from the highs seen at the end of Feb 2012.
It virtually hit my target, and the advance so far is encouraging in both metals.
Now nothing is ever a dead cert in the markets, we adjust as price adjusts, but we traded the move from the Dec lows way back last year when most traders were bearish I was aggressively bullish and I wrote a few article about getting bullish at those lows.
That trade out to be a great move, over $200 on gold and more in percentage terms on silver.
Towards the end of Feb 2012 we turned bearish just as most were turning bullish, as the market respected our ideas once again. Having hit our long standing targets, I am looking for some big upside to help confirm our ideas.
If you're sick and tired of selling at the lows and buying at the highs, why not take a test drive of the new Elliott Wave newsletter, we have been doing well, and readers have been thoroughly impressed judging from the feedback.
We bought the precious metals at the lows and we sold then at the highs.
If my preferred idea is working, we might not see those lows we saw this week in silver and gold for a long while.
So if you're looking for the next moves on gold and silver, I encourage you to sign up the newsletter.
The great thing was that we knew where we were wrong and could control risk, that's the great thing about Elliott Wave trading.
I still have yet to find a system that can control risk like Elliott Wave thesis.
A bad work man will blame his tools. Not all Elliotticians are the same.
Whilst the stock markets have yet to really confirm the ideas I have been working, we have been turning out attention more so to forex markets.
We had been tracking a great looking suspect 5 wave decline from the Jan lows.
Again Elliott Wave analysis nailed this move, whilst stocks and e-mini traders have been watching paint dry, some of us moved to other cleaner markets where the opportunity to make a decent low risk trade was setting up.
I see little point is watching slow moving markets when you have no clean edge, when you can move to a setup such as this on the GBP/JPY cross as it yielded over 300 pips on its decline, and that's just for starters, that's a substantial decline and enough $$$ depending on your leverage to walk away for a month and not trade again.
You decide if you want to watch paint dry such as what is happening on the US stock markets atm or trade markets that are showing clean low risk trading opportunities.
Until next time.
Have a profitable week ahead.