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I was senseing that the run up in gold and silver over this past 3 day weekend was a bit much without the interference of the NY boyz, and true to form, they came through after the retail traders overextended themselves with the first hour of trading today. Not to worry, however. I suspect we will not go sideways for too long, maybe a week or so. If the past intermediate cycle is any guide, it could take 2-3 weeks to get gold past the previous high of 1432 - just long enough to wear out the weak hearted. And then it will be time to fasten your safety belts.
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Hi John,
ReplyDeleteI have sold half of my AGQ today. I figured that the downside risk is more than the upside for now.
Do you have suggestion for a re-entry price?
Thanks.
good evening john,
ReplyDeletethis is a nice idea giving us trading ideas
a day ahead. Are you using purely technical indicators for your stock picks, and if not, what else are you using to analyse a stock? I am a poor stock picker, or maybe my timing is bad....
Is this sell off in the market a buying opportunity? Short lived or longer lasting?
MONTY
Hi Fung -- you have made a very nice gain with AGQ and congrats! You will never go broke if you always sell you positions at a profit.
ReplyDeleteOf course I don't have a crystal ball but my thinking re: AGQ goes like this: silver has cleared the highs of December and is at 30+ year highs. It is still only 30% above its 200 dma.
At this point, considering the complete lack of overhead resistance and the historic data of previous silver parabolic moves that show it can rise to between 45% (2008) and 65% (2006) above its 200 dma before expiring, I think silver just keeps going higher and higher - week after week.
That said, and in my opinion, there is no technical reason to ever jump off the silver trade until it at least reaches 45% above its 200 dma.
So, my long winded answer is that any amount of your portfolio you are comfortable having exposed to AGQ should be 100% committed for the ride - as trading in and out is likely to cause you more harm than good.
Fung, give a little study to previous silver parabolics. You will discover that once they get going they are a string of green candles giving a trader no advantage for getting in and out. (It's a nice problem to have).
Monty - I do some research on each stock to see what its fundamentals are, book value, debt ratio, earnings growth and projections. I also look for insider trading, read the latest press releases and SEC filed documents and sometimes scan the Yahoo message board for information.
You should not have to be a poor stock picker as mining stocks are in a powerful secular bull market....meaning that over time they only go one direction (up).
I think this sell off in the market is going to be short lived and this is a fine time to buy - particularly if you intend to hold your investment until it makes a profit.