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Przemyslaw Radomski, CFA
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Przemyslaw Radomski, CFA (PR) is a precious metals investor and analyst who takes advantage of the emotionality on the markets, and invites you to do the same. His company, Sunshine Profits, publishes analytical software that anyone can use in order to get an accurate and unbiased view on the... More
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  • The Risk and Reward Ratio on The Precious Metals Market

    The Risk and Reward Ratio on The Precious Metals Market

     

     

     

    This essay is based on the Premium Update posted on July 1st, 2010

     

    At times daily volatility can cause one to lose the big picture from sight - focusing on trees is ok as far as one doesn't forget about the whole forest. This universal approach can be applied today since we have just seen a massive decline in the prices of gold, silver, and mining stocks. In this case, we would like to provide you with our thoughts on something that might influence the precious metals sector (not every part thereof to the same extent) - the head-and-shoulders formation on the general stock market (charts courtesy of http://stockcharts.com.)

     

    Let's begin with the long-term SPY ETF chart.

     

     

    This week’s SPY chart clearly shows a continuation of the bearish trends, which were prevalent to last week. There has been continued development of the head-and-shoulders pattern and this has been confirmed by an increase in volume. The long-term chart above suggests that the pattern has yet to complete.

     

    Note the low point is below two previous bottoms. Also, note the pattern in the chart of weekly volume levels. This bearish head-and-shoulders formation has and will probably continue to spell trouble for the general stock market. More details will be seen on the short-term charts.

     

    The final confirmation of pattern completion will likely come from price movement in the SPY ETF or directly from the main stock indices such as the Dow Jones Industrial Average. Visible declining below the neck level (SPY: $103) and then increasing only slightly, accompanied by low volume increase would be a final confirmation of the bearish trend. Subscribers who seek to short the general stock market may wish to watch these signals closely as there may well be some good profit opportunities in this speculative activity. 

     

     

    This week’s short-term chart reveals that the June top is slightly below the one seen during in January. Since the right shoulder in the pattern is lower than the left, the neck is likely skewed as well.

     

    The price would need to move below the solid blue line in the chart for completion of the formation. Without this type of movement, the breakdown is not complete although it may appear to be.

     

    The RSI is presently in the 30 range, which corresponded to local bottoms in early May and February. However the late January RSI in this range did not result in a local bottom until a week later. In late May the 30 level in RSI did not mark the final bottom either.

     

    Consequently, the RSI alone does not imply that the bottom is imminent. If price were to move sideways and then lower or simply move lower immediately the implications would likely result in the SPY ETF below a level of $103 and then moving up on low volume would be a bearish signal.

     

     

    The DIA ETF, a proxy for the Dow Jones Industrial Average confirms the above comments about the non-existence of the breakdown at this point. The left and right shoulders are relatively equal - no breakdown has yet been seen here.

     

     

    The Broker-Dealer Index this week indicates the likelihood of a breakdown. The financials have been very weak for several months and especially in recent days. This is normally a clear indication that declines will follow in the main stock indices.

     

    Consequently, the odds favor a breakdown from the recent head and shoulders pattern in a continued move downward. Although this is not a certainty, it is probable. If the general stock market moves below the neck in this pattern and then rises slightly on low volume, shorting SPY ETF could be profitable. Part of the precious metals sector, namely silver and mining stocks are at particular risk when the general stock market is trending in ways seen today.

     

    We have frequently commented on comparisons between gold and silver investments. While writing about gold being preferred over silver we have meant much more than just the profit potential of both markets. It simply indicated that silver and mining stocks are more vulnerable to general stock market's weakness and therefore carry a higher probability of not moving higher. This can also be stated as a higher risk to reward ratio.

     

    Caution: the following is an example to be used only for illustrative purposes. The quantities, percentages and dollar amounts quoted are not in any way implied to be meaningful except in explaining the risk to reward ratio.

     

    Let us say, for example, that gold has a 90% likelihood of increasing in price, silver has a 70% chance and mining stocks have a 60% chance and all of these markets would move up or down by the same amount during the move. All would be likely to move higher since, in this example, all percentages are greater than 50. Since gold is the most probable to go higher, it would be less risky. Therefore, gold would be preferable over silver and mining stocks even if all of them are likely to rise.

     

    To address the subject of risk to reward ratio, let us go a step further with our previous illustration. Suppose that we invested $1,000 in each of the situations above. Let us further hypothesize that the upside potential or likely profits were $400 for each if our investments all reached their full potential.

     

    The likely gain, or reward, would be $360 for gold since there is a 90% chance of the $400 profit, $280 for silver which has a 70% chance of the $400 profit, and $240 for mining stocks.  Since the risk for each was the investment of $1,000, the risk reward ratios would be 2.50, $1,000 divided by $360, 3.57, $1,000 divided by $280 and 4.20, $1,000 divided by $240 respectively. The statement gold has a lower risk-to-reward ratio that the other precious metals is thus supported by this example.

     

    Another example: gold has a 90% likelihood of rising 10% higher (and if it moves lower, it would move 10% lower), silver has 90% likelihood of rising 11% higher (and if it moves lower it would move 50% lower). Which of them has the better risk/reward ratio? Gold - because even with higher profit potential for silver (11% vs. 10%) the real difference is what happens if the move up does not materialize at all (only 10% probability). In this case gold investor loses 10%, while silver investor loses 50%. We get the feeling that at this point you would have preferred to own gold instead of silver even though it had smaller profit potential. Of course, you cannot go back in time, so you need to take the negative outcome into consideration before you put your money on the table. In this case it would mean buying gold instead of silver even though it was likely to gain less during an upswing. Moreover, those who invested in silver could brag about their higher profits not mentioning the fact that they were risking 50% of their money, while gold investors only risked 10%.

     

    Let's run a simple simulation for the above example. Speculation is not a one-time bet - it's a set of many bets, and what matters is if you lose or gain money in the long run. So, let's see what would happen if there were many similar situations to the one described above.

     

    With 10% of losing and 20 trades the average value of losing trades would equal 2, so we would have on average 18 winning trades and 2 losing ones.

     

    For 20 trades with the abovementioned odds and gains/losses the gold investor would gain 1.10*1.10*1.10*…*1.10*0.9*0.9 (18 times winning 10% and 2 times losing 10%). So, in the end the effect would be 1.10^18 * 0.9^2 - 1 = 3.50 meaning that the investor would gain 350% of their initial capital.

     

    At the same time with the abovementioned odds and gains/losses, the silver investors would gain 1.11*1.11*1.11*…*1.11*0.5*0.5 (18 times winning 11% and 2 times losing 50%). So, in the end the effect would be 1.11^18 * 0.5^2 - 1 = 0.64 meaning that the investor would gain 64% of their initial capital.

     

    Shocking isn't it? One could achieve over 5 times bigger profits just by paying attention to the "what if we're wrong" question. Moreover, if the gains and losses were spread evenly, the first loss would occur after 9 winning trades. Please recall that the profit potential alone was bigger for silver, meaning that if we had only winning trades one would have biggest gains by investing in this particular market. The point here is that up to this tenth trade gold investor would have smaller gains than his silver colleague, and the latter might argue that paying attention to losses makes no sense if markets are moving only up, and that the gold investor is wrong for preferring the yellow metal over the white one. The silver investor would have no idea that after his next trade he will wish that he had joined his golden colleague in the first place.

     

    Please note that the above situation is just an example, in the future it could be the case that the risk/reward for silver is more profitable that the one present on the gold market.

     

    Consequently, we strongly believe that the risk/reward ratio with focus on the long-term growth of one's portfolio is the most profitable way to approach any market, and that paying attention many factors instead of looking at the day-to-day gains will eventually prove very useful. Please keep the above examples in mind while examining the correlations matrix below.

     

     

    The correlation matrix has some changes this week. The positive relationship for silver and mining stocks with the general stock market has declined somewhat. The corresponding coefficient for gold with the general stock market still remains lower than the other metals. What this means is that gold will generally be more resilient during a downswing in the main stock indices; it will most likely hold its value more so than silver and precious metals' stocks. 

     

    Summing up, gold itself continues to be the preferred part of the precious metals sector at this point due to the tense situation on the general stock market. Meanwhile, we have just sent out a Market Alert to our Subscribers describing short- and long-term implications of yesterday's downswing for Precious Metals Investors and Traders.

     

    To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time.

     

    Thank you for reading. Have a great and profitable week!

     

    P. Radomski

    Editor

    www.SunshineProfits.com

     

     

    * * * * *

     

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

     

    Sunshine Profits provides professional support for precious metals Investors and Traders.

     

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free weekly trial to see if the Premium Service meets your expectations.

     

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

     

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

     

     

     

     



    Disclosure: no positions
    Jul 02 1:56 PM | Link | Comment!
  • Decline in Stocks & Gold-, Silver-, and Mining Stocks Investors' Profits

    Decline in Stocks & Gold-, Silver-, and Mining Stocks Investors' Profits

     

     

     

    This essay is based on the Premium Update posted on June 18th, 2010

     

    In our previous essay we have mentioned that it does not seem that the ultimate top for this gold rally is behind us. Consequently, this week we would like to provide more information on what may influence various segments of the precious metals market, and what you can do about it.

     

    When speaking about any money-related topic it is always useful to back up one's arguments with numbers, and influence is no exception here. While correlation alone does not imply causation (meaning that the fact that something is correlated with something else doesn't automatically mean that one of them influences the other, but the analysis of correlation coefficients for the precious metals stocks market is still important, because we often know more about the shape of the relation from other sources. For instance, we know that gold mining companies' profits (and thus their stock prices, and the HUI Index) depends on the price of gold, not the other way around.

     

    Having said that, let's take a look at our correlation matrix:

     

     

    Two factors are worthy of notation in the correlation matrix this week. First, there has been a significant decline in the coefficient for Gold and USD. Previously, both were rallying and there was a relatively high positive correlation between them. In the past two weeks or so, this has changed. Whereas gold has continued its upward movement, the USD has declined slightly. At this point - since gold moved higher in the past weeks - this number further supports the strength of gold and the validity of its rally. The yellow metal has strong momentum and is likely to maintain its rally in spite of where stocks and currencies go.

     

    The second observation we wish to make this week with respect to our correlation matrix is the positive relationship seen between the general stock market and silver / mining stocks. The 30-day coefficients are both above 0.7, which means that the correlation is strong.

     

    Mining stocks and silver are currently driven, to a comparable extent, by the general stock market and gold. It follows that trouble for the general stock market can clearly spell trouble for the mining stocks. At the same time the value of the correlation coefficient between gold and stocks is lower - about 0.4, which suggests that any trouble on the general stock market are likely to hit gold in a much smaller way than it would be the case with silver and mining stocks.

     

    Therefore, if the main stock indices would be likely to move much lower, then it could be a good idea to stay out of silver and mining stocks. In fact, we have been steering our Subscribers away from mining stocks and silver for some time now. Gold emerged as the clear choice a couple of weeks ago when considering risk and reward ratios and this is still the case today.

     

    Since the situation on the general stock market is so important right now, let's take a closer look on the long-term SPY ETF chart (charts courtesy by http://stockcharts.com.) 

     

     

     

    On this week’s long-term general stock market chart we see that the lower resistance line has been surpassed with an upward move. The shape of the current chart and the volume patterns as well seem to indicate that we could be seeing the formation of the familiar head-and-shoulders pattern. This is a crucial development if it comes to pass. This would be a strong, bearish indicator for the general stock market and for silver and mining stocks as well. We will continue to monitor this daily and advise our Subscribers accordingly as this becomes more clear in the days ahead.

     

    Here is a brief synopsis of what we will be looking for. If the main stock indices move to levels seen early in 2010, in the range of 114-115 and then decline, this will confirm the formation of the pattern and declining volume along with higher prices will indeed spell trouble. The next confirmation would be to see the volume increase along with lower prices after they reach the 114-115 area.

     

    The range of the future downturn can be estimated by the size of the head or top of the pattern, which also corresponds to the 50% retracement of the 2009-2010 rally - around the 94 level in the SPY ETF. So although at first glance some may be inclined towards bullish sentiment in reaction to recent moves, this is not really warranted at this point in time.

     

    Taking into account the comments made previously - that the general stock market is very likely to rally in the third year of the Presidential Cycle we end up with the conclusion that the main stock indices may begin to decline in the next few weeks, and move lower throughout the summer only to move up again in the final part of the year.

     

     

    On the short-term chart, we see a close approximation to the 61.8% Fibonacci retracement level as a resistance close to the January high, thus making this resistance level stronger. Although we may see slight increases in the coming days, it does not appear that this will be the likely case in the month ahead. Further confirmation of this can be seen on the next chart.

     

     

    On the Broker-Dealer Index chart, note that the upward move today in the general stock market did not keep the financial sector from declining. Conversely, it moved to its previous support level, and decline afterwards thus further verifying it as a resistance. This is a bearish sign indicating that declines in the general stock market are quite likely from here, but not necessarily right away.

     

    Summing up, the situation in the general stock market may look bullish at first glance. Taking a broad perspective into account and analyzing multiple factors, it appears that the formation of a head-and-shoulders pattern may be in progress. If the head-and-shoulders pattern does indeed complete, there may be an inclination to sell long-term investments in silver and mining stocks. This is not yet the case, nor is it advised at this time. However, this is a possible development over the next few weeks.

     

    To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time.

     

    Thank you for reading. Have a great and profitable week!

     

    P. Radomski

    Editor

    www.SunshineProfits.com

     

     

    * * * * *

     

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

     

    Sunshine Profits provides professional support for precious metals Investors and Traders.

     

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free weekly trial to see if the Premium Service meets your expectations.

     

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

     

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

     

     

     

     



    Disclosure: no positions
    Jun 24 9:53 AM | Link | Comment!
  • Gold's Last Breath? Really?

    Gold's Last Breath? Really?

     

     


     

    This essay is based on the Premium Update posted on June 18th, 2010

     

    Back in early 2000, during the euphoria of what later became known as the Dot.Com Bubble, one well-known professional investor stuck his neck out and predicted the bursting of that bubble. Jeremy Grantham was a bit early and was willing to give up millions in fees from customers who fled his fund transferring their money to managers who promised the party would never end.  In 2000 Grantham predicted stocks would lose 3.9% per year annualized for the next 10 years and he was proven right.

    Given his prescient calls, we like to pay attention when Grantham publishes his famous quarterly newsletters, which have appeared since 1999. The publications represent his personal views on the stock market. Although he doesn’t write specifically about gold, concentrating more on equities, the various asset classes are all inter-related and as gold investors it behooves us to consider all aspects of the economy. Grantham, co-founder and chief investment strategist of Boston-based GMO has recently published the spring edition of his quarterly newsletter entitled “Playing with Fire (A Possible Race to the Old Highs)”.

     
    Grantham is predicting the opposite of what he said in 2000. When the NASDAQ was at 5,000 he said sell. Now with the NASDAQ at about 2,307 he's saying buy.

    Grantham is far from euphoric—don’t forget that in the title of his missive are the words “playing with fire.’ He says the massive bailout program stopped the meltdown of the financial system and engineered at least a temporary economic recovery. The obvious cost of this bailout is well known-- deterioration of the Federal balance sheet.

     

    Grantham explains why he believes the rally will run through next fall.

     

    “In October we enter the third year of the Presidential Cycle, the year every Fed except, of course, Volcker’s, helped the incumbent administrations get re-elected. Since 1932, there has never been a serious decline in Year 3. Never! Even the unexpected Korean War caused only a 2% decline. Even when Greenspan ran amok and over-stimulated the first two years instead of cooling the system down – which he did twice, having not suffered enough the first time – he stimulated Year 3 as well. The result was that we entered Year 3 in October 1998 and Year 3 in October 2006 with horribly overpriced markets, and still the market went up, and by a lot.”

     

    So far since 1932 the market has had 19 tries to go down in the third year and has never pulled it off, he says.

     

    Grantham believes that the market will move in the next 18 months or so back to the old highs, say, 1500 to 1600 on the S&P, accompanied by an equivalent gain in most risk measures, followed once again by a very dangerous break.  If the break comes rates will still be low and thus difficult to use as a way to jump-start the economy.  The financial system will still be fragile, and the country’s piggybank will be more or less empty.

     

     “We are definitely playing with fire and need some luck.”

     

    Another veteran global investor, Mohamed El-Erian, who runs Pimco and has lived through several financial crises, also recently issued a report to his investors. He described the new, dangerous state of today’s global economy like this: “The world is on a journey to an unstable destination, through unfamiliar territory, on an uneven road and, critically, having already used its spare tire.”

     

    The U.S. used its spare tire to prevent a collapse of the banking system and to stimulate the economy after the subprime market crash. The European Union used its spare tire to help save the euro due to the meltdown in Greece. Having used up its spare tires, it seems to us that the world could probably not cope well with any new crisis.

     

    Another financial heavyweight and famed contrarian, Marc Faber, gave a talk recently at the leading Austrian economic think tank, the Ludwig von Mises Institute. The publisher of the “Gloom, Boom and Doom Report” gave his perspective on the financial crisis and his bleak outlook for the future.

     

    Faber said that contrary to what the “talking heads” are saying, markets are not out of control. It is the central banks that are out of control printing money. As a result, Americans must re-think what constitutes a safe asset. Traditionally ranked from most to least safe are the following assets: cash, Treasuries, corporate bonds, equities, commodities. However, since the Federal Reserve will keep interest rates at zero, cash and long term bonds will be a bad place to hold one’s money and equities will also be a risky proposition given the effects of rampant currency depreciation, he says. According to Faber, precious metals are the best place for wealth preservation. In an environment of money-printing and high volatility physical gold is the best thing to own.

     

    Faber says the fiscal situation is much worse than it is made out to be. U.S. government leaders will try to postpone the hour of truth, pushing the problems off for future Presidents and Congressmen.

     

    David Einhorn, president of Greenlight Capital, a hedge fund, and the author of “Fooling Some of the People All of the Time” doesn’t think it will take that long for the hour of truth to arrive. In a recent New York Times opinion piece “Easy Money Hard Truths” Einhorn wrote:

       

    Before this recession it appeared that absent action, the government’s long-term commitments would become a problem in a few decades. I believe the government response to the recession has created budgetary stress sufficient to bring about the crisis much sooner. Our generation — not our grandchildren’s — will have to deal with the consequences.

     

    Einhorn points out that it was once unthinkable that triple A, “risk-free” institutions could fail.

     

    Our government leaders are faced with the same risk today. At what level of government debt and future commitments does government default go from being unthinkable to inevitable, and how does our government think about that risk?

     

    The current European sovereign debt turmoil is a prequel to what might happen in the U.S., he says.

     

    I don’t believe a United States debt default is inevitable. On the other hand, I don’t see the political will to steer the country away from crisis. If we wait until the markets force action, as they have in Greece, we might find ourselves negotiating austerity programs with foreign creditors…Though we don’t know what’s going to happen next, the good news for our grandchildren is that we will have to face our own debts. If we realize that our own future is at risk, we might be more serious about changing course.

     

    Before moving on to the technical part of this week's update, we would like to comment on one the questions that we've received this week:

     

    The question is if with existing homes sales number looking like a decline does this generally make the price of gold go down or up.

     

    Generally, the average real estate prices don't change quickly - the price line is rather smooth (please take a look at the real-estate-related charts in the Gold Fundamentals essay for details.) Therefore, whatever the influence of this tendency would be on the gold market, it is very likely that this effect is already discounted in the price. Consequently, if gold market was able to rally significantly during the past years along with declining real estate values, we expect this trend to continue.

     

    To see if our own future as precious metals investors is at risk, let's begin this week's technical part with the analysis of the long-term gold chart (charts courtesy by http://stockcharts.com.)

     

     


     

    The weekly gold prices right now are above the previous high weekly close. This means that if gold does not decline on Friday (and we don't expect it to decline), the weekly close this week would be the highest ever in nominal terms.

     

    There is a short-term resistance line slightly above were we are today. This is the only negative factor that can be seen at this time, so its impact is limited. The RSI and stochastic indicators both point toward gold moving higher before its next top is in. The stochastic indicator level is not yet above 80, which is typical for a local high. The RSI is not close to its normal market top levels either.

     

    Moreover, seasonal tendencies for gold point towards more strength in the coming days, as the mid-June bottom appears to be behind us.

     

    Please take a look at the following charts for details (please note that we've assumed gold beginning the July slightly above $1,255 - this is not our official prediction for this date, we've put this number there to provide you with "real" size of the upswing instead of the percentage one):

     

     

     

    Based on the seasonal tendency patterns, the expected trend is to rally to the end of the month, consolidate at the very end of the month and in early July, and rally around the second week of July with the possible top forming in mid-July or so. This would perfectly fit into our target forecast (detailed target is available for Subscribers). We would see gold move to or above the rising support level formed with December and May tops, take a breather, and then move higher once again. The top could form in mid-July and it could be followed by a regular summer consolidation. This is the most probable scenario based on the signs we have available today.

     

    The final chart this week will be the one featuring the GDX:SPY ratio, because of its usefulness in timing tops. Since we have seen a strong rally to previous highs the question is if this is the top or not?

     

     

    Based on the analysis of other charts we inferred that gold is likely to move even higher before topping out, but a confirmation is always useful, and the GDX:SPY ratio provides us with one. It flashes a "sell" signal when it moves on a huge volume, especially when the ratio encounters a resistance level. None of the above has been the case recently. Therefore, the above chart does not suggest that any tops are imminent.

     

    Summing up, based on the information that we have available today, it does not seem that the ultimate top for this gold rally is behind us. Naturally, we may need to revisit this view if we see new developments on the market, but at this point, we remain bullish on the yellow metal.

     

    To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time.

     

    Thank you for reading. Have a great and profitable week!

     

    P. Radomski

    Editor

    www.SunshineProfits.com

     

     

    * * * * *

     

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

     

    Sunshine Profits provides professional support for precious metals Investors and Traders.

     

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free weekly trial to see if the Premium Service meets your expectations.

     

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

     

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

     

     

     

     



    Disclosure: no positions
    Jun 19 11:22 AM | Link | Comment!
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