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Monday, October 6, 2014

SPECIAL GOLD AND SILVER ALERT


SPECIAL GOLD AND SILVER ALERT
OCTOBER 6, 2014


Although it is late Sunday evening and trading is just beginning in the Far East, Gold and Silver are exhibiting early signs of a favorable risk/reward buying set up. 

The setup is this: Gold traded lower, below the low of last Friday as it fell to 1183.30 shortly after trading opened. Silver, on the other hand, fell to 1666, a little above the low of last week (1664). As of this writing at 11:45 PM Sunday night, Gold is now trading at 1189.30 and Silver at 1676.50. They are still down from the close of Friday on the CME, but off their lows of earlier tonight. Therefore, we have a developing case intermarket bullish divergence, in a geocosmic critical reversal zone where Silver held last week’s low and Gold took it out. We already have a larger potential case of intermarket bullish divergence as Gold has so far held it yearly lows of 1179.40 and 1181.40 from last year, while Silver is well below its 1817 low of June 28, 2013.

Since this is a critical reversal zone, and both Gold and Silver are also in the middle of their due dates for a 17-18 week primary cycle trough (this is week #18 for Gold, and last week’s Silver low was in its 18th week), this presents us with a favorable risk-reward set up. The daily stochastics for Gold and CCI for Silver are also exhibiting bullish oscillator divergence.

Aggressive traders may buy here with a stop-loss based on Silver falling below 1664 AND Gold falling below 1179.40. If these lows hold, then we look for a potential rally back to 1265.45 +/- 19.40 in Gold, and Silver back to 1915 +/- 60. 

If this is also the longer-term 17- and 34-month cycle lows in Gold, and 18.53-year cycle low in Silver, prices could rally much, much higher. However, since this would not be a contracted primary cycle, I cannot state that will happen with certainty. It is very possible prices could fall lower, to a new low, in 11-14 weeks, after this 2-5 week rally ends.

In the event that 1179.40 in Gold and 1664 in Silver are broken, the possibility of a washout would still be in force. However, this is a critical reversal zone (October 7-8 +/- 3 trading days), and a normal primary cycle low is due, so we give this alert to all our Gold and silver traders now. To us, it is a favorable risk-reward set up for buying, given these conditions.


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