29 Feb 2012

I hope my comment about silver breaking that trendline didn't lead you to buying it.  I use trendlines for channels, and only use them for buying when the price easily crosses the trendline - something where the price is flat for a while, the trendline comes down to it and it only requires a few percent gain to break up and through.  A 30% gain and then a break is not a good risk/reward choice.  The time if any to buy is on significant pullbacks - touching lower bollinger bands, not upper.  Sorry if I misled you.  I never chase performance, even if it breaks a trendline.

However, it and gold breaking their trendlines and then reversing as hard as they have is bearish for both of them.  Sorry if that seems obvious.

 As you can see we have had a slow moving small decline from the peak in the Summation index.  The RSI and TSV still remain at overbought levels.  However, there is no guarantee that this won't try to turn up again like it did several times in 2009 and 2010 after a long increase.

My short term oscillators (top 3) show that we are getting a little too negative in the short term.  Yes, really, and all we got was -53 in the Dow.  However, as the time frame gets longer, we are still not cheap for the medium term (the bottom one).

"When the facts change, I change my mind. What do you do, sir?"
John Maynard Keynes