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Buy Into Real Silver or Silver Shares Not Silver Tongues
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"Ignore Silver-Tongued Devils’ Discussion at Ben’s FOMC Circus-Like Sideshow.
Instead, purchase real silver, silver shares or your favorite gold or gold shares. Political cartoons are for entertainment only. Precious metals are for real wealth, not a paper confetti delusion these clowns are selling." – Traderrog
Federal Reserve Chairman Benjamin Brenanke is on the hot seat this Wednesday and Thursday nervously wiggling in his chair spouting smooth-over platitudes in a shaken voice and attempting to cover his you know what. It isn’t working and we personally have never seen him so obviously uneasy in public. As FOMC policies and mandates from the AM-BUSHED administration fail in a disastrous cascade of messes, the silver futures market was busy moving from $13.15 to $13.35 in only one market minute. We had recommended standing trade orders above $13.28 so, off we go.
Silver’s performance last year was nearly double that of gold and gold traders got over +20%. With the latest market failures in subprime derivatives, and sinking housing markets and consumers, precious metals are receiving higher pressures on the buy side. The metals were not selling in the past few days but neither were they buying. We did not see any volume or serious push to move them up so we have been stuck lately in sideways, choppy summer markets. The good news is metals did not experience much of a spring “Sell in May and Go Away.” Rather, the selling was mild for both shares and the physical metals. Now a new summer rally is underway and we think it can extend for another two or three weeks before arrival of the annual, normal, August selling cycle.
September Weekly Silver Futures Find Support at $12.50 and Moved Into Rally.
Note fast Stochastics in lower box signal basing and buying in June-July even as silver’s price was dropping and selling in top box. These are strong leading indicators for entry.
Weekly August Gold Futures on 7-18-07 Were Not Asleep Either.
Previous chart negatives were the March-April double top taking gold from $700 to $640 support. This was a normal spring selling cycle after a fine rally; not a collapse in prices. We suggest traders use weekly charts to decide a new trend. Use the dailies and faster charts for your entries. Our forecast is for gold to seek $700-$740 in the current move followed by more August profit-taking and selling. Note that last year, gold fell from a July high to an October 1 low. For 2007, we suspect the schedule is moved forward in time. Cycles are historically repetitive but never exactly identical. This newer calendar should support gold until the first trading week of August with selling during following two weeks.
The speed, velocity and volume for gold’s fall rally could be determined by failures in stock indexes and the faltering debt markets. On the other hand, silver is more volatile and reactive. We forecast silver to move higher than gold this fall on a comparative basis and with some very wild trading. Silver futures traders please take note of this. We will be personally trading silver futures this fall and will carefully select “Hit and Run” positions taking smaller bites of the silver trading apple. We strongly caution inexperienced silver futures traders to use option spreads and shares along with the SLV Silver ETF instead of trading those futures without experience. Silver and coffee along with soybeans futures can make you or break you in a flash. First, control risk and the gains will take care of themselves. Further, do not over-trade one single position. Good trading standards suggest installing no more than 5% of your account balance on one trade. Be careful out there. Have fun and good precious metals trading! -Traderrog
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Roger Wiegand is Editor of Trader Tracks Newsletter and his soon to be opened Daily Tracker for active gold, silver and energy traders. Roger provides recommendations for short and longer term trading using stocks, futures and commodities with specifics.
Contact Claudio Bassi, at Trader Track’s New York City publishing offices for a trial subscription. Call 718-457-1426 Monday through Friday, 9:30am to 5pm or, e-mail cbassi@miningstocks.com
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