And Just Like That, It All Changed
Warren Bevan | Jan 25, 2015 04:49AM ET
An absolutely massive week for leading stocks.
I’ve talked recently about the ability to keep it small during the tough times and go heavy during the good times and things turned good this past week.
After one leading company reported great earnings and gaped up large overnight other leading stocks and markets saw their behaviour change instantly to very positive.
Much of my life has and does revolve around markets and stocks and once you become really dialled in, spotting changes becomes easier. It takes time, much study and a bit of luck to see and feel the changes. So, after about a year of poor action things have changed in the blink of an eye.
So far so good but I’m always watching closely because things can just as quickly revert to poor but I do hope we can make this run last until May or so, or longer.
As I’ve said on numerous occasion, I think we have another couple or few years left in this bull market and the fun/blow-off phase is yet to come. The metals continued to behave well and are now taking a much deserved rest so we now have to look for higher lows.
Gold gained 1.08% on the week and is now stalling out at the $1,300 resistance level.
Nothing goes straight up for too long unless it is the end of a major run so now it looks like gold will pullback and take a rest.
2 steps forward, one step back is great action.
So now we look for a higher low around the 200 day moving average or anywhere from $1,260 to $1,240.
I’m more focused on leading stocks right now but gold is acting good and very trade-able if you’re so inclined.
Silver gained a solid 3.04% for the week and is finding the 200 day moving average too much for now.
Gold is still leading silver and silver is also looking for a rest now.
A nice pullback to the $17.50 area to put in a higher low would be ideal and looks to be the scenario playing out in front of our eyes.
Both gold and silver should have a new higher low in place within 8 or so days now and then they can turn up again.
Keeping it simple is usually the best way forward so I try not to get too caught up in the news events like ECB QE, coups or politics.
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Price and action are all that matter ultimately.
Platinum was flat, only gaining 0.13% this past week.
Platinum has a nice bull flag formed here that should move us higher anytime now.
That said, with gold and silver looking to roll over a bit, we could see platinum move back to test the $1,250 area if we break under the lower level ofthis bull flag at $1,265.
Palladium gained 2.39% on the week and I’m not so sure where we go from here.
This small triangle/wedge is a continuation pattern lower and with gold and silver looking set for a small pullback we could see palladium break lower.
On the other hand, gold and silver are strong in the general context of things so palladiums triangle pointing to lower may be false.
The tip-off to which scenario plays out would be a move above $780 or a break under the $760 area.
All in all, we are seeing great action from gold and silver that is looking more and more like a major low is in place but I’m still not 100% on that one yet.
I’m very focused now and putting in the long hours required when markets are behaving well.
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