Chemaes, do you think it is wise to rely on tech analysis in this economic climate. We're back to the usual formula where the U.S. dollar rises when the Euro heads for the cellar....again. Just check today's headlines that certainly don't bode well for Europe's bailout plans.
"Spanish Bonds Slide on Call for Bank Bailout Limits; Bunds Gain" -- Bloomberg
"Exclusive - IMF, EU clash over Greece's bailout prospects" -- Rueters
"Euro Zone Deal Over Bank Bailout in Doubt" -- Financial Times
"Greek protest turns violent during general strike" -- AP
"Why Europe is looking like a mess (again)" -- Washington Post
And, of course, this list goes on and on. Everybody in the PM arena realize there is a race to the currency bottom and the U.S. faces it's own "fiscal cliff" very very soon. So a flight to the perceived safety of the U.S. dollar makes absolutely no sense.
So the decline in PM prices at today's outset of trading simply reflect that old mindset that gold and silver should head lower as the U.S. dollar strengthens on world currency market. Precious metal investors don't agree with this old mantra and I suspect we will soon be seeing silver and gold rising significantly regardless of any rise in the dollar. Perhaps we are seeing this occur today.
I'll see if i can explain. Have you ever noticed that a majority of time when news is released it seems to have the opposite affect you thought it would? Do you believe that insiders act on information before the general public get's a hold of it? Have you heard of the saying buy on the rumor, sell on the news? if you answered yes to these three, you and i are not far off.
I believe that any news released today was already acted upon in the past by the insiders who heard of it in the first millisecond. Once they acted on it, the brokers who managed their accounts acted too and they're buddy, and so on. Days or weeks later when the news is actually released to the general public, those insiders "sell on the news" to well intentioned people like yourself, since they "bought on the rumor" a while ago.
If i follow the charts and the models I build, I am always acting with the money, instead of chasing the money.The news becomes unimportant when i trade except when you need to know there is really big news pending, that will whipsaw the market, like Fed minutes, so you step away from the oncoming train.
Money managers on CNBC, News headlines, Gold analysts etc. etc. are all full of it. They get paid to print, just to write anything and everything. Yesterday the FED official got blamed for the sell-off. I think I could show you a chart of the dollar index, oil, copper and the USD/EUR that would prove that yesterdays move started two weeks ago and the FED guy was the scapegoat of the day because he spoke. If Romney farted on air yesterday, and the FED guy didn't speak, Romney would have been blamed.
today, the models and prices I ran said in the morning 33.19 was the target unless it rose back above 33.86. It went as low as 33.36 and you've been around long enough to know that for me, that 17 cents difference was a miss. I would normally go long when I covered but because a lot of things were moving weirdly I decided to sit out. Normally a miss like that would scream bullish but again, there was no volume, so I'm skeptical.
long winded but, explains my thoughts.
good trading to you
Chemaes, great response and good points but you suggest that inside traders trade on events before the public gets the news. Certainly I agree that financial history in western markets would prove your point. But it is my impression that Western bankers, traders, and financial whiz kids may be relegated to the back burner by larger forces of which they have no insight. Our major creditor, China, is quickly losing interest in western markets as well as the U.S. dollar as an exchange mechanism. And the Saudis, with their vast holdings of treasuries plus continuing sales of the largest commodity on earth, oil, are not likely to pre-announce their plans to shift assets and trades away from the dollar. Mexico makes deals with China to trade oil without using U.S. currency. Canada strikes deals with China to sell their vast oil sand production.
The Western financial world could be upended with practically a flip of the switch. So trading within our stock and commodity markets may no longer drive prices as in the past. But, aside from western fiat currencies, gold and silver are respected and accumulated.
Again, I suggest that technical analysis that worked so well under the parameters of past history might suddenly and unexpectantly see a change....under a new set of parameters established outside the western banking system. And that concept may now be discounted/priced by some of the traders in PM investments. Who knows for sure? GLTU