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Every once in a while, a bull market gives you a great opportunity to buy. The problem is that these opportunities only become obvious weeks or months after they occur.
In my January 4th Trading Comments I noted that: “Gold and silver are presently testing support. More testing is possible, but the long-term picture remains very bullish. It would take a close in silver below $29.00 to turn the silver chart bearish.” So months from now when we look back at today, will it be obvious that this present dip in gold and silver prices is a great buying opportunity? Yes, I think so. This low would also be consistent with my forecast for 2011 that gold’s “low for the year will be made in January, probably in the first week.” Time will tell, but I recommend that we begin building a trading position in anticipation of much higher precious metal prices.
Gold
1) The position bought at $1405.20 on the Comex spot gold close on December 28, 2010 was sold on January 4, 2011 at $1397.50, which was its stop-out point. Loss: $7.70
2) The position bought on at $1401.50 bought on December 29, 2010 was sold on January 4, 2011 at $1402.00, which was its stop-out point. Profit: $0.50
3) The position bought on at $1413.00 bought on the Comex spot gold close on December 29, 2010 was sold on January 4, 2011 at $1406.00, which was its stop-out point. Loss: $7.10
4) Buy one position at $1372.50 or on the London PM fix on January 6, 2011, whichever comes first. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1357.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1364.00. (updated 6 January 2011)
5) Buy one position on the first Comex spot gold close above $1382.00. Stop-out point: I’ll set a stop-out price after this position is filled. (updated 6 January 2011)
Silver
1) One position bought at $30.297 on the Comex silver spot close on December 28, 2010 was sold on January 4, 2011 at $30.420, which was its stop-out point. Profit: 12.3¢
2) One position bought at $30.297 on the Comex silver spot close on December 28, 2010 was sold on January 4, 2011 at $30.325, which was its stop-out point. Profit: 2.8¢
3) One position bought at $30.679 on the Comex silver spot close on December 29, 2010 was sold on January 4, 2011 at $30.520, which was its stop-out point. Loss: 15.9¢
4) One position bought at $30.679 on the Comex silver spot close on December 29, 2010 was sold on January 4, 2011 at $30.475, which was its stop-out point. Loss: 20.4¢
5) Buy one position on the first Comex silver spot close above $29.42 or at $29.18, whichever comes first. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades 15¢ below your purchase price. (updated 6 January 2011)
6) Buy one position on the first Comex silver spot close above $29.60. Stop-out point: I’ll set a stop-out price after this position is filled. (updated 6 January 2011) View all Trading Comments >>
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