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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • Market Summary, Monday 3-10-14: GOLD, SLW 0 comments
    Mar 10, 2014 4:27 PM | about stocks: GOLD, SLW

    Randgold Resources Limited (NASDAQ:GOLD) and Silver Wheaton Corp. (NYSE:SLW) summary.


    Randgold opened gap-lower and then pushed to lower levels. The thrust energy on today's low was much less than the previous downward push on Friday, 3-7-14.

    The chart below shows a modified trendline that has been adjusted to conform to as many contact points as possible. The slope of the upward trend has been reduced from 650%/year to "only" 540%/year.

    (click to enlarge)GOLD Daily

    Chart by TeleChart

    The chart shows that today's session is below the trend. In some trading models, this is considered an exit signal. However, the push below the trendline during this session is much weaker than Friday's down move.

    This loss of downward energy indicates that for now, the selling pressure is spent and that GOLD may be in position to either establish a trading range or to continue its move higher.

    The 85 - 86 level is a significant resistance area. Our plan is to wait for a breakout through this level and then monitor for a test before evaluating the data for another entry signal.


    Silver Wheaton spent the day testing Friday's low. Both of our stops (soft and hard) are intact and we are staying positioned in SLW.

    Those stop levels are:

    • Soft (discretionary), 24.84
    • Hard (fixed), 24.81

    (click to enlarge)SLW Daily

    Chart by TeleChart

    Volume has contracted significantly on the test.

    When a market moves lower to a prior low and volume contracts, that indicates that there are no more transactions available at that level. The area of transaction volume is either at lower levels or at higher levels.

    Since the low was established at the last session on heavy volume, and with today's volume more than 57% below the previous session, we can conclude that as with GOLD above, the selling pressure in SLW has dissipated.

    This gives us an indication that SLW has tested its low and is in position to move to higher levels.

    In addition, the chart shows that SLW appears to have established a trading channel. If this channel stays in-effect, it may provide excellent target areas for a partial or complete exit.

    Disclosure: I am long GOLD, SLW.

    Stocks: GOLD, SLW
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