Next Big Trade In Search Of Bull Markets

22Sep/140

Gold And Silver Are Dramatically Oversold

Oversold isn't a buy signal, but it does give an indication of excessive bearish sentiment that is unsustainable over the short term.  It's impossible for a market to remain scared to death for too long because it eventually runs out of sellers and buyers push the market back higher.  At that point you have to re-evaluate and either prepare for the next downleg in a bear market or if it's the last bear downleg start getting ready for a new bull market.

Silver has been just obliterated over two months, but it's also overdue for a major bounce.  Silver has been oversold for two months now which is very rare and is at an oversold low for the year.  Look for a crossover in the TRIX to indicate that this downleg is at least temporarily taking a break.

slv

I find it very interesting that gold has gotten this oversold yet has not made a new low for the year or this bear market.  Gold is now at its most oversold level for the year just like silver.  So again it is likely this bear leg is getting long in the tooth.  At the start of October it will be a 3 month long downtrend so it's overdue on multiple time frames for some type of rally.

gld

 

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22Sep/140

Tweets, Headlines, and Charts for 2014-09-21

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21Sep/140

Notes On Carnage In Gold And Silver

Last week I observed some very extreme sentiment from both the bulls and bears on gold and silver that was really quite striking.  On the bear side I saw one technical analyst I follow (that is usually bullish on the metals) state that he "is tired or hates gold and silver", something I hadn't seen him ever admit before.  A podcast I follow where they normally are bullish on gold and silver basically said there was no reason to buy gold and silver, and they didn't see any reason why it wouldn't keep going down.  That podcast has also basically capitulated on being bearish on the general stock market.  I saw Business Insider had an article entitled "Gold Looks Like Death" written by one of their prominent dollar bulls, basically rubbing it in the face of anyone bullish on gold or silver.

On the bear side of the metals I see very exuberant and overly confident commentary from the bears.  I see an all out attack now on dollar bears from the likes of CNBC and Business Insider who proclaim that dollar bears and gold bulls have gotten it wrong for too long now and need to give up.  In reality the gold bulls have been wrong since September 2011, but they were right from 2001 until September 2011.  The bulls have been wrong during this recent bear market in the metals but it's still left to be seen if the secular gold bull is actually over or not.  But the bears in the metals are super confident given the fact metals have declined for 3 years now and silver recently broke support.

silver

Looking at a long term chart of silver you can see that we are in rare oversold territory here, with the 30-day RSI only getting under 30 a couple of other times in the last 7 years.  You can see why it took so long for silver to break support too with former resistance acting as strong support for a long time.  I see a couple of different scenarios here but the bottom line is probably that silver will decline somewhat further before bottom.  It's possible it gets into the 15s but I would be surprised if it fell much further than that.  With capitulation in the air I think it's very close to the final bottom of this bear market.

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21Sep/140

Tweets, Headlines, and Charts for 2014-09-20

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20Sep/140

Stage Analysis Report

stageanalysisFor more information on Stage Analysis and how it's used check out this page.

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20Sep/140

Tweets, Headlines, and Charts for 2014-09-19

  • Bird’s Eye View of the Gold Stocks http://t.co/IcAuRQzMu2 via @sharethis
  • “"Somebody said to me, 'But the Beatles were anti-materialistic.’ That’s a huge myth. John and I…” http://t.co/4GStA7RAuS
  • RT @tischendorf: $SLV $SILVER Monthly chart 15$ area 'Price Magnet' analysis. $GLD http://t.co/zLszFnHrNx
  • Ugly reversal in the small caps today, small caps haven't been working for months $IWM $IWC
  • Commitment of traders reports look very constructive for the metals given the 3-day selloff at the end of this week as well $GLD $SLV
  • NEW POST: Tweets, Headlines, and Charts for 2014-09-18 http://t.co/kMTV1oX0ed

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19Sep/140

Tweets, Headlines, and Charts for 2014-09-18

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