Actually, you could see it setting up for a sharp rebound. Oversold conditions like we had early this week don't come around very often. When I read that Jimmy Rogers predicted $1200 GOLD, that was the final indicator, as he has admits publically that he is a terrible PM timer. So, the RSI (relative strength indicator) was at 11, which put it about where it was in the depths of 2008 when SILVER fell to $8.78 from the $21 mark some months earlier. Now, we're not out of the water yet, since it takes 3 bold UP days (the 3 sentinels of technical analysis) to signify convincingly that the trend has REVERSED to the UPSIDE. We need Monday to be another strong up day. Personally, I'm kind of positive here and look for PMs to regain much of the lost ground quickly.
Where's resistence? I'd say at $32.50 on this runup. And, I wouldn't be surprised if PMs meader until the positive fall season begins. For GOLD, usually in July. For SILVER, usually late August. IMHO, the politicos want the election year to be a happy time. Outrageous SPENDING should be the order of the day through the election season.
As for those shorting the futures markets, they can flip on a dime, and go LONG. They are price, technical conscious, and are not thinking long term like stackers do. It's a herd mentality. So, when the ship turns around, they all turn their little boats around in the same direction.
I would advise that patience is required over the long term when accumulating PMs. Please do not use fiat that you need for everyday expenses and wind up over extended. Liquidating when you shouldn't is not fun grasshopper.
Posted: Fri May 18, 2012 10:37 pm
