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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • Gold And Silver - Those Heeding Market Activity Are Being Rewarded. 0 comments
    Aug 23, 2013 11:59 PM

    Saturday 24 August 2013

    Last week was an homage commentary to the market forces, what
    we always attribute as being the most reliable source of
    information. For the first time in many months, we began
    recommending the long side in futures, starting on 7 August: 19.42
    for silver and 1308 for gold. We have been in and out a few times but continue to remain long, adding on Friday's strong rally.

    The "news" has not changed all that much, with many PM
    proponents still promising the substantially higher prices. More
    articles are beginning to assert "Gold/Silver is ready for a substantial move higher," type-of-hype. Of course, these are the same people who have been singing the same tune for well over a year. The sin
    in lack of timing gets glossed over in the [old]"new" drumbeat.

    It can be asserted here, on record, that we have shunned the long side of paper futures for quite some time over the past few years.
    There were a few buy attempts near the lows of the 18 month
    trading range, but nothing of any duration, simply because the
    market was not primed for long positions. That appears to have
    changed, not because we say so, but because the market is making the statement in the form of price behavior.

    The early probes to the long side, since 7 August, were always
    cautious with an eye out for getting hammered, as in some of the
    unwarranted take-downs in April and June. There was an initial lack of confidence, based on what the market had done, but the
    developing activity of the past few weeks has altered that view and puts it more in line with all of the ardent beliefs in the "not-allowed-
    to-show" Demand side of the equation.

    This was addressed almost a month ago in "Newton's Third Law Is
    About Ready To [Over] React. Be Prepared, [if you kissed it, click
    on http://bit.ly/1bXsEJE] The widely recognized artificial paper
    market manipulation, by the criminal central banks and Wall Street
    enterprises, [if you, or anyone else you know acted in the same
    way, you would be in jail, branded as a financial "terrorist," the new
    noun used by government to curtail all Rights and suppress free
    speech].

    The Truth, that which almost all of us seek, is always to be found in reading the charts. They may be difficult to read, at times, but
    those times are also a message, perhaps just to stand aside. One
    does not have to be technically astute to understand the logic of
    developing market activity as it unfolds in a chart. Common sense
    is all one needs to follow what is presented in them.

    Friday was another good day for gold and silver. It was similar, but
    not nearly as time sensitive, to last week's "Buy Right Here Right
    Now," scenario that began a very strong rally, [Fundamentals Never
    Say When. Charts Do And It Pays To Listen, 3rd and 6th charts,
    http://bit.ly/16RJhRi]. The 6th chart is an intra day on silver, and it shows the entry/exit levels since we started recommending the long side.

    The area identified as potential support came from our 10 August
    chart, using information that the market provided to make a logical
    conclusion. [Only Votes Cast In Elections Count. Same For
    Markets, [click on http://bit.ly/15mjhKP, 1st chart for gold, 3rd
    chart for silver, below]. The weekly is more helpful for context,
    where the daily and intra day are used more for timing.

    GCZ W 23 Aug 13

    The overlapping bars, since the last strong breakout, tell us that
    buyers and sellers are in balance. From balance comes unbalance
    and a trading opportunity. The market has given a few clues as to
    which way the unbalance direction would unfold. Firstly, there was
    a strong upside bar that preceded the small 5 day trading range,
    TR. Another clue comes in recognizing how little price retraced the
    gains from the rally 7 bars ago. It shows a weak reaction, and we
    know that weak reactions almost always lead to higher prices.

    The market has put everyone on alert to be prepared to act. All
    that is needed is a reason. What would that reason be? If you see a wide range rally bar on increased volume that goes above the TR,
    it is a buy, as was demonstrated on the previous strong rally bar.

    Here is another market axiom. Price patterns repeat, over and over
    and over. All one has to do is be able to recognize them and be
    ready to act. Not all patterns will lead to the same results; some
    can even result in a loss, but if you act on a series of 10 such
    trading opportunities, you are virtually guaranteed a profitable
    outcome. The "guarantee" is based on the Law of Probabilities.
    It works.

    GCZ D 23 Aug 13

    Three of the most recent TRs have been identified below. What a
    coincidence. We just mentioned how patterns repeat, and here are
    three examples. The market gives us yet more important
    information about this last TR breakout. Underneath is what is
    called Bullish Spacing, where the current swing low is ABOVE the
    last swing high. It tells us buyers are not waiting to see if/how the
    last swing high will be retested. There is now a greater sense of
    urgency. We are "reading" the footprints of all market participants.

    That is an edge. Having an edge leads to greater profit potential.

    GCZ 90m 23 Aug 13

    Here we see the same band of support, identified a few weeks ago,
    has proven to be helpful in putting market behavior into a context,
    and that context led us to see greater profit potential from the long
    side in quite a long time, over a few years.

    In previous charts, we discussed how the sideways price movement
    was likely absorption, and if it were, price would rally, which it has.
    If you knew nothing about silver's situation, or gold's, you would still come to the same conclusion about how to approach the market.
    That, too, is an advantage, and it is equally available to everyone
    at the same time as/when price develops.

    Last week, we said the single most important observation on the
    weekly chart was the gap up range for the week. It was wide, a
    strong close, and on increased volume. Sometimes, markets are
    that simple.

    SIZ W 23 Aug 13

    Bullish spacing is very apparent on this chart. This observation is
    equivalent to last week's weekly gap to the upside. As was pointed
    out earlier in gold, the inability for price to go lower and stay low,
    during the week, was amplifying a likely upside breakout based on
    the market's advertising the bullish spacing. Again, using the logic
    of developing price activity can sometimes lead to a very obvious,
    or at least probable. outcome.

    Keep in mind, as we talk about futures, this bodes equally as well for those operating only in buying and holding physical gold and silver.
    The additions in both physical gold/silver from just last Thursday are looking great, not that is has to for the reasons for buying are
    vastly different. The buy from two weeks ago looks even better.
    Consistency is important.

    SIZ D 23 Aug 13

    A correction usually entails at least a third retracement from the
    last low to current high. It is not a hard and fast rule, but
    mentioned to contrast it with price consolidation, when a
    retracement is shallow, as you can see clearly how activity within
    the box hardly retested anywhere lower. Once again, the market is
    signaling its intent, based upon the entirety of all market
    participants.

    Anyone who thinks markets are random simply is ignorant in reading
    developing market activity. We will say it again: market patterns
    repeat, over and over, and by observing them in development, it
    provides an edge in knowing not only on which side to position, but
    also when.

    It's a win-win.

    SIZ 90m 23 Aug 13

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