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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, 3-17-14: GOLD, SLW 0 comments
    Mar 17, 2014 5:47 PM | about stocks: GOLD, SLW

    Both Randgold Resources Ltd. (NASDAQ:GOLD) and Silver Wheaton (NYSE:SLW) Closed lower in what can be viewed (for now) as testing price action.

    The daily chart of GOLD shows a penetration of the trend-line and a close below that line.

    If this break had taken place with heavy volume, that would be an indication that something is not right and that supply is coming into the market. That supply may still appear. However, we can see that the volume contracted on the day so this trend-line break is weak.

    We are maintaining the long position in GOLD.

    (click to enlarge)GOLD Daily

    Charts by TeleChart

    SLW underwent the same type of testing action but there was no apparent break of the trend-line.

    (click to enlarge)SLW Daily

    Charts by TeleChart

    As noted on the chart. A negative factor is that volume did not contract as can be seen in GOLD above.

    This is a warning sign that we may need to prepare for an exit.

    If SLW opens gap-higher at the next session and continues higher, then we will probably maintain the position.

    However, if SLW opens unchanged, that indicates there is more supply than desired.

    As with the Cameco Corp. (NYSE:CCJ) exit, if the bid/ask spread is not acceptable in the pre-market session for SLW, then we are prepared to exit at the open.

    Disclosure: I am long GOLD, SLW.

    Stocks: GOLD, SLW
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