Gold and Silver

December 13, 2005

With gold and silver making new highs every other day, a lot of attention is shifting to the precious metals. There is no shortage of opinions, and certainly no shortage of forecasts, and we at Traderscorporation have received our fair share of emails asking for our opinions, outlook, and forecasts. Most folks are quite disappointed when we say that we honestly don't know. We follow the markets, not predicting them. And as a follower of the markets, there is only one indicator we follow, and that is price. We cannot argue with price.

The simplest way to follow a market is to simply follow price action. Upon a pullback or consolidation, resistance is created. Upon the break of that resistance, or what we call a TLB (trendline break), we buy. Upon a rally, support is created. Upon the break of that support or TLB, we sell. That is it, folks.

So, does current price action say buy or sell? Neither. Now is not the time to buy or sell.

  • Time to buy was on the TLB in mid November.
  • Futures traders who bought on our TLB in Nov can hold until a TLB of support.
  • the next buy signal will occur upon a pullback, then a TLB of that resistance created by the pullback.

Of course, we can dress it up a bit by throwing in a couple of moving averages, and a simple direction indicator. Voila! A priceless one of a kind trading model, available only atwww.traderscorporation.com (a shameless plug)

Silver - the regular model.

Silver - the deluxe model.

Summary

When it comes to technical analysis, less is more. Aspiring technicians often employ too many indicators, and often they contradict each other. Keep it simple and don't forget about price.

 

Jack Chan at www.traderscorporation.com

13 December 2005

Jack Chan

Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the US dollar bottom in 2011.

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