A reader asked me to comment on the metals. Industrial metals are in a very well defined downtrend, as is easily witnessed on the DBB Industrial Metals ETF below. Lower highs and lows, below the MA’s. No signs of basing whatsoever. This chart is about as bad as a chart can look. The only redeeming feature might be an oversold condition that might suggest a rally within this downtrend. I for one can’t be bothered with such a trade. I look only to the best charts from both long and short termed prospective before entertaining a trade.
Gold and silver are also in horrid downtrends. Yes, the gold sector has a seasonal blip potential at this time (July – October). That tendency may support an oversold bounce back to around $1150 or so. That’s not enough for me to buy into a sector that recently cracked major support at that $1150 area. This commodity, like sliver, is in a downtrend. Mid termed traders should avoid this trade, as should long termed traders. Gold has a very, very short termed (weeks, not months) trade potential in my opinion. My pal Brooke Thackray, who advises Horizons Seasonal ETF (HAC-T) is nimble enough to trade this kind of time period in his ETF – he noted to me that HAC has a position in their platform for this trade. I think HAC will make some money on gold (Brooke is a very savvy near-termed trader) – but I won’t be shadowing this trade. The reward is too little given the mid-termed trading parameters of ValueTrend’s Managed Equity platform.
Keith Speaking at Toronto MoneyShow
I’ll be speaking at the Toronto MoneyShow on Saturday, October 31, 2015, 3:30 pm – 4:15 pm. Please click on this link for details: http://www.worldmoneyshowtoronto.com/expert-details.asp?speakerID=929709SPK&scode=039526