Friday, July 15, 2011

Janus - The two faces of the current PM situation

Well,

Did you miss the current run up in the precious metals?  Oooh, let's take a look shall we?



























Looks like the bottom may have been in late June, and now the technicals are getting a bit stretched, and as an investor, you are not looking at an optimum time to buy as your risk of losing if you enter here is much higher than 2 weeks ago.  If you buy correctly, you can eliminate a great deal of risk of losing your principal.

However let's examine the other side of the coin shall we?  Not only should you look at the daily charts when doing tech analysis to determine low risk entry points, but also the weekly charts, especially when you are dealing with a long-term trend.

So, here goes.


























Well, if you like to look at the weekly charts, you've barely missed a thing.  And honestly, that's probably where you need to add your core positions, on the weekly charts.  It's OK to trade on the daily charts, but core additions are what's going to make you real money in this PM bull market.

Note the arrows at the bottom where MACD has crossed to the positive.  There were nice run-ups on the two prior crosses, and I have a feeling that this time is going to be no exception.  Also, note that this MACD dip made it below the zero line, as the prior 2 did not.

So, if you are adding to your core, buy some positions on Monday.  If you are adding to trading positions, wait for a better opportunity.

On a personal note, I am beating the GDX and SIL indexes (50/50 weighting) this year by 3%.  If I was a hedge fund manager, I'd be rolling in the dough charging my client fees for that outperformance.  I attribute my success to technical analysis, and buying at low-risk opportunities and hedging when things have looked wildly overbought.  Can this strategy backfire on me?  Sure, but for now it has been working like a charm.

I'm back in the markets (PM's mostly), and I am about 85% invested.  Always a good idea to keep some cash around to scoop up any short-term opportunities in wildly oversold stocks that have great fundamentals.

Until the next time...

Fiat Doubter 

Tuesday, July 12, 2011

Looks like meat is back on the menu boys!

OK,

The summer consolidation for the miners is over.  Looks like it ended a little earlier than usual this summer.

Gold is back near its highs, and GDX and GDXJ and many of the junior miners are showing fan-freak-ing-tastic inverted head and shoulder formations, and are trading at a discount based on the fact that most will need to appreciate 20-30% to get back to there May highs.

The euro is imploding, and gold has busted through the old high as priced in Euros and Pounds.  The only reason the dollar will rally over the next couple of months is that the Euro is in serious trouble with the oinkers, and the world will deem the Euro the most worthless piece of toilet paper in grand scheme of worldly toilet paper.

So buy, get back in there and buy, I tell you.

Until the next time...

Fiat Doubter