System Signals Silver Sale (SLV,GLD,XAU,TSLA,GM,MSFT)

There are all sorts of trading systems out there.   Some old-timers swear by the Graham and Dodd fundamental model, that tells you to buy them when P/E ratios and dividend yields are sparkling and dump them once the ratios are no longer competitive.   Others will tell you that’s balderdash, and only technical analysis can produce for you winning trades over the long haul.   There are those who swear by cycle analysis, point and Figure charting and Elliott wave theory.  Some adhere exclusively to Dow Theory. And still more go in for Gann triangles and Fibonacci retracements.  And believe it or not, some have even made consistent money trading the interplanetary orbitals of financial astrology!   Here at Normandy we’ve examined them all at one stage or another, and we’re here to tell you that absolutely no system has all the answers – and certainly none is foolproof.  But we can also tell you from experience (and the academic literature is fully behind us on this) that the single best method of making money in the trading arena is by using a trend following system. It doesn’t sound too exotic, and it’s not likely to make you the…

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White Metal, White Hot (SLV,GLD)

We mentioned it before, but it bears repeating – the latest moves in the precious metals market have been both extraordinary and widely advertised.  And while it’s clear to all that the move off the December lows has breathed new life into gold and silver, it’s not so clear whether it will last. There we go again, throwing water on the precious metal flame.   Certainly, there are doubts – and today, those doubts are potentially more potent than they were just a week ago.   But before we get to them, please, don’t get us wrong, the latest rally has been tremendous, and we acknowledge the very real possibility of a turn in the PM market.  Every bear market ends, regardless how long it lasts, and gold’s turn will also come… if it hasn’t already.   What makes us worry is not so much the action in gold.  Rather, it’s silver – the latecomer to the party – that appears to have imbibed a little too much and a little too quickly.   Have a look here – This is six months’ worth of the iShares Silver Trust (NYSE:SLV), a reliable proxy for the metal.   What’s clear from…

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End of the Bug-Bear? (DIA,SLV)

For the last three and a half months the precious metals have been rallying.  On and off, wheeling and rocking, the whole sector, including the miners, have been waging a fierce battle to conquer their respective down-trending moving averages and recapture the glory they lost in 2011.   And everyone has been pitching in with the effort…   Almost.   Until yesterday, silver bullion was the lone holdout, the last bastion of stubborn-assed bearishness in a group that almost without exception was hailing a new era of freewheeling profits for the gold buggerers and hard currency advocates the world over. So what changed?  What made the silver market go ‘pop’ like we don’t ever remember seeing it do in the last 20 years?   Well, it could’ve been dollar weakness, which we saw yesterday to some degree – a loss, yes, but nothing out of the ordinary, and certainly nothing that would explain the extraordinary levitation of the move in silver.   There was something more at work here.   Perhaps it was tied to revelations from Deutsche Bank (NYSE:DB), that traders there had played a role in rigging the silver market for years now – and were threatening to…

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14,700% in Three Weeks! (GLD,SLV)

  Oooeee! That feels good.   There’s something about a home run that beats it all. And as you’ll see below, that’s exactly what we hit. But first a very brief update on the market’s current direction and prospects for the months ahead.   We turn first to sentiment – as we regularly do – to get a picture of Joe Q. Investor’s stance vis-à-vis the market, and, lo and behold! – he’s not ‘in’. In fact, he’s as confused as ever.   The American Association of Individual Investors (AAII) bullish percentage reading, a proxy for Main Street enthusiasm for stocks, paints a picture of a man as reluctant as ever to turn over his earnings to a market that, despite being just inches off its all-time highs, still scares the bejeezus out of him.   Have a look.     Bullish sentiment on Main Street is on the low end for the entire length of the bull market that began in March of 2009. In fact, it has declined over the last two weeks even as the indexes gained ground! Today, at 27.2, it’s unreasonable in the extreme to expect falling action in the markets for the coming months….

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Silver Dollar Anyone? (SLV,UUP)

There are a couple of stories we’re watching today. The first is the dollar, which last Friday popped up above all its moving averages, reinvigorating the bulls and slaughtering any notion that the dollar’s ascent is done with.   We’ll have a chart of the dollar for you in a moment, but first let’s outline our second big story of the day, silver.   We believe silver is now putting the lie to any notion that a return to the precious metals bull is underway. That move came to a screeching halt, you remember, exactly five years ago in April of 2011, signaling to all who would listen that the whole complex was about to turn over and give way to the bear. It took gold and the miners a few more months to top out back then, but being the good soldiers they are, it was only a matter of time (and not a question of fealty) before they swung into line.   Since then, the action has been ever lower, with slight pauses to give the geldophiles hope that their tender metal still loved them and would eventually behave as they desired.   Silver Leads the Way  …

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Squeezing the Precious Metals’ Juice (GLD,SLV)

We open today with a word on the precious metals and whether the latest burst higher for gold and her friends is for keeps, or merely an overreaction to financial stirrings at home and abroad.   We’ll open with a look at the chart of the SPDR Gold ETF (NYSE:GLD), everyone’s favourite proxy for the metal. But before we do, a quick word on the dollar, a key factor in understanding movements in gold, and a laggard of an investment of late.   The dollar is down some four percent in the last ten weeks, the majority of the decline hitting over a seven day period at the beginning of February. It was precisely during that time frame that the price of gold skyrocketed – by over 20% – in a move that many people are hailing as the end of the bear market in the precious metals.   So is it?   Well, while it’s true that the precious metals complex generally moves inversely to the dollar, the size of gold’s reaction to the dollar’s recent dump was both surprising and, in our view, exaggerated. But that’s not uncommon in the gold pits.   What we do know is…

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Dollar Miner, She’s a Whiner, Bet Your Money, Take your Time (UUP,GXD)

  There’s nothing to talk about. That’s it. It’s over.   Call the latest moves whatever you want, but don’t call them just another dip – just another buying opportunity before the bull resumes.   This thing is getting buried, and you’ve got a front row center seat. Pictures permitted. Not for the faint of heart.     We’re of course referring to the commodities in general and precious metals in particular, the sector and subsector that have absorbed unimaginable, galactic blows during this latest market selloff. Not that anyone seems to have noticed – or wanted to talk about, so robustly ugly have they been. Commodity Anorexia!   Let’s start our analysis with the chart of a company whose very name is synonymous with the commodities, a miner of both base and precious metals with significant energy interests besides, Freeport MacMoRan Inc. (NYSE:FCX). Until a year ago the company had a market capitalization in excess of $40 billion. Today it’s worth but a shadow of that figure – weighing in at a mere $8.35 billion.   This is the epitome of market ugly.     The company’s shares have been in a five year free-fall, nearly congruent with the broader commodity asset…

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Gold Wins, and Gold Loses

The most dramatic moves in the market last week belonged to the precious metals and their associates, which jumped like a shocked rodeo steer as the dollar lost ground. The question now facing gold (and dollar) addicts is whether those moves were for real. Has the dollar’s relentless drive skyward now stalled? And will that trigger a sustained bull move for the precious metals, finally, after a four-year run through the investment world’s alley of septic horror? Nothing’s certain, but our take is like this… In the first place, there’s nothing that says the dollar and gold have to maintain a perfect inverse relationship at all times and through all markets. They won’t. There will be factors that either add to or detract from the general relationship, and that has to be kept in mind as we advance the discussion. The Dollar Remains Potent Second, both the fundamentals and technicals for the dollar remain bullish, despite the nearly month long decline we’ve just been through. The rest of the world’s major currencies are in the midst of substantial QE initiatives, all of which conspire toward dollar strength, and precious metals weakness. Three, the charts show a potential bottom now in…

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Perfect Match: Cross Border Financial Wedding Trade (TD)

A good week to all. May you profit 37 times over on all your trades this week. A quick report on last week’s initiative before we get down to business. You’ll remember that we went long/short using silver bullion (SLV) against the gold miners (GDX) in our May 3rd trade. Our reasoning was based on the premise that the miners had gotten ahead of themselves, pricing in a rise in the precious metals that appears now to have floundered. With that, we put on the trade and pocketed a $580 credit for our troubles. And today? A week later, the spread has tightened, as we suspected it would, and we’re up another $160 per board lot traded. We’re still a ways from closing the trade, though, as we expect further tightening between the two. So hold fast, and stay tuned. With help from above we’ll turn this into an outright devil of a winner! We’re going to piggyback this week on an idea offered by fellow Normandian Matt McAbby in his article from last week called Seismic Market Move Imminent. For those who can’t get enough of whipper-snapper Matt’s writings, you’ll remember that he pointed up a likely burst from…

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Nothing in the Hole – Gold Miners Surface Empty handed! (GDX, GLD, SLV)

We’re witnessing some very contradictory developments on the precious metals front, which we believe it important to highlight today. But before we do, a word from a man for whom we have a great deal of regard. Not our loyal reader, Jimmie Rodgers, but rather many-time billionaire and former Soros attaché, sinophile and renowned gold bug – a man whose calls on the commodities market have been as good as any – Jim Rogers believes the time to begin buying gold again has not yet arrived. In a recent interview, he claims he’s still waiting on a buying opportunity and that the metal has a mind of its own: “sometimes it moves with the dollar, and sometimes it doesn’t.” As far as we’re concerned, the story on gold hasn’t changed. It’s a question of investor inflows and nothing more. It was investor inflows that drove the price toward $2000, and a lack of those same inflows that drove it lower these last four years to its $1140 bottom last November. Until investors get excited again about the metal, there simply ain’t nothing doing. We should be quick to add that a great deal of gold’s recent weakness has come at…

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