By Chris Kimble
He who has knowledge spares his words, and a man of understanding has a cool spirit. (Proverbs 17:27)
If we learn the discipline of keeping ourselves calm and quiet (which is a challenge during these times) we will hear what the "Power of the Pattern" is telling us. I remain of the belief that the patterns should do the talking and I should do the listening.
Often times during a period of panic, investors flock to the Swiss Franc (FXF), as a safe haven.
Buyers have pushed the Franc up against key resistance in the past few days, creating a very bearish wick at the same time. What is this pattern telling up? That Panic may be reaching extremes!
When it comes to portfolio construction, a variety of tools can come into play, helping investors determine whether they should over or underweight risk. The panic towards the Franc and its hitting resistance does suggest that, at least for a while, "panic may have peaked" and risk assets should do well.
The pattern in the Franc at this time is suggesting that stocks could move higher for a while and Gold/Silver could well fall in price.