A Stunning Silver Forecast Comes True, What Next?

In latter August I penned a forecast for my subscribers to TMTF on Silver, and below is a brief excerpt from August 31st:

I believe Silver is about to stage a pretty large advance based loosely on the Elliott Wave pattern I see unfolding after a 9 odd month consolidation. (Obviously, there are also fundamental fiat currency/debt events worldwide that give it the underlying bull chart pattern). Since the average person can’t run out and buy an ounce of Gold for $1,240 tomorrow, as the unfolding of the fiat crises continues to enter the public psyche, you will see a strong populace movement into buying silver, silver coins, etc. To wit, many silver stocks are moving up strongly of late, signally an imminent breakout of this precious and industrial metal.

The triangle pattern has taken nearly 9 months so far, for starters before a broad pullback.

I bring this up now, some 11 weeks later because Silver did in fact rally up from around $19 per ounce to $29 per ounce, and this was forecast well in advance using my crowd behavioral methodology and pattern recognition. The explosion in price I predicted happened much faster than even I expected, but does show the power of the crowds as they take hold of a new trend or a perceived trend and run with it. Part of the theory to be long silver also had to do with it being “poor man’s Gold”, which I indicated in my forecast. This is also crowd psychology in it’s finest form. People perceive Gold to be “too expensive”, but they can buy silver for only $29 an ounce. To wit, most investors do not really understand the difference between a stock that has 2 billion shares outstanding and one that has 20 million shares outstanding, they only care about price. They often think if a stock is $2 it’s “cheaper” than the stock at $100, little do they realize that a $2 stock that goes to $1 is a 50% loss, but they perceive that as a small risk due to the price. With Silver, you have the mom and pops running out and buying it because it’s “cheaper” than Gold.

Now that Silver has run to $29, my target, and then dropped back, what should expect next? Well, we are in that “broad pullback” I mentioned back in late August that would occur once $29 was hit. Technically speaking and looking at typical crowd behavior, I am expecting consolidation to continue for awhile under $29 per ounce. I call this recent pattern an A B C rally, and once the C wave ends at $29 in this case, forecasting the next move is extremely difficult and can be exasperating. The C wave ran from $19 to $29, and at the tops of those moves everyone is bullish and breathless. Figuring out how the crowd behaves after those patterns is similar to pulling a rabbit out of a hat. With that said, I would expect a 38-50% retracement of the $10 move to about $24 an ounce worst case, and then we should re-attack the $29 highs and likely move into the $32-$34 per ounce range within the next 60 days or so. Silver will continue to out-perform Gold for the foreseeable future as well if I’m right. It appears by my chart below that we already had our initial corrective low, and now we will consolidate and break out.

Markus is a professional Forex Signals trader, money manager and forex trading service provider. Trade live with the author of this article at ForexSignalLive.com

How Long And How High For Gold, And How To Play It

Regular readers of my articles on Gold over the past few years know that I have a theory on this Gold Bull market.

In summary, it’s that we are in a 13 Fibonacci year uptrend that started in 2001, and now we are in the final 4 years of that uptrend. It is in this last 5 year window that I theorized started in August of 2009 that investors really get involved. As the crowd comes in, prices push higher and higher, and then more and more investors come in and so forth.

The very recent rally has pushed us up to about $1,420 per ounce, on the way to my projected $1480-$1520 pivot highs on this leg from the $1040 area in February of this year. Subscribers to my TMTF newsletter have learned about Elliott Wave Theory and how to properly apply it to benefit from both the ups and the downs in various parts of the markets, as well as commodities and precious metals.

If I am correct, we are in the 3rd wave up of 5 total waves from the August 2009 $900 per ounce levels. The first leg went from $900 to $1225, the second leg was corrective to $1,040, and now this 3rd wave should complete at around 150% of the 1st wave’s amplitude. In English, the probabilities are for Gold to continue higher to about $1527 per ounce, possibly a tad higher if the typical Elliott Wave patterns take hold, and also assuming again that I am correct in my read of those patterns.

One of the better ways to play this next 4 years of upside with intervening corrections is to look at prospect generator companies. These are Gold, Silver, and Copper explorers that do the early field work in identifying prospects for drilling. They then farm out these projects to willing partners and retain equity stakes and /or percentiles of the project itself. This reduces their need for capital while retaining nice upside for shareholders, and diversifying. When you are a tad long in this current wave pattern’s tooth, this is way to stay onboard, but not go overboard. I have personal ownership positions in a few of these types of companies, and my subscribers are aware of the few that we really prefer. Should one of the projects not pan out, you are not placing your entire shareholder bet on one drill project, and yet if they hit on a few, the upside can be substantial.

In the meantime, below is a chart pattern of where I see this rally peaking out and where I forecasted recent pivots. As we approach these levels, ($1480-$1525), it may be a good idea to pull back on some of your positions whether it be the metal itself or individual stocks.

Markus is a professional Forex Signals trader, money manager and forex trading service provider. Trade live with the author of this article at ForexSignalLive.com

Precious Metals and Stocks Converging To Top Together in January

In recent articles and forecast updates for my subscribers, I have been preparing them for a top in Precious Metals and US Markets around Mid January. We may have already seen the intermediate top in Gold and Silver recently, and the SP 500 and US markets are not far behind.

There are a few factors I look at to forecast pivot tops and bottoms consistently and a little ahead of the curve when my crystal ball is clear. I look at Sentiment readings, Elliott Wave patterns (As I view them), and Fibonacci relationships and time. If all of these are lining up to give me enough evidence of a convergence and a bottom or top, then I go ahead and make the call or begin to forewarn.

In the case of Gold, we see a really muddy chart pattern over the last several weeks that to me can only be read as toppy after a near $390 rally off the February lows this year. There are no clear Elliott Wave patterns anymore over the past few weeks, and the recent drop from $1422 to the $1360 ranges also doesn’t compute well for me if I’m a bull.

I have been on the long side of Gold since February of 2010, with the one intermittent bearish call I made in June before a huge drop. It looks like now is a good time for Gold and Silver to pause in the long uptrend, which still has about 3-4 years remaining if I’m right. This next pullback is likely to take Gold down to $1270-$1280 and then I will assess from there the next direction and price action. As you can see in the chart below, the recent action is toppy looking and could be read as bearish.

The SP 500 as I have outlined near year end 2010 is in the final stages of the advance from the Summer lows of 1010 on the SP 500 on July 1st. The Fibonacci and wave relationships then have been quite symmetrical and I see no difference on this final leg up. The difficulty is assessing whether this final 5th wave to the upside will extend past my 1285 targets and run to 1315, or truncate just below and begin the correction. I am looking for about 105 points SP 500 correction from the 1285-1315 topping areas over 7-10 weeks.

This too will work off extremely bullish sentiment readings which are running at or near the same highs as the January 2010 and April 2010 highs which I had forecasted as well. The areas that would be hit hardest in the coming wave 2 correction will be small cap stocks, so lightening up in that area and buying protection is not a bad idea to protect your long portfolio positions.

Markus is a professional Forex Signals trader, money manager and forex trading service provider. Trade live with the author of this article at ForexSignalLive.com

How To Learn Forex Trading Correctly

With Forex trading being such a lucrative business, more and more people want to get into it and require training in order to become skilled enough to trade. There are two main methods to learn Forex trading, traditional book learning and live training. Each has its good and bad points.

There are those among us who can learn in a linier way and process facts and figures into something meaningful. However the vast majority of traders need to learn Forex in a more practical setting, in a real live market, with a real live trader.

The popular method to learn Forex trading is to buy an e-book, course or go to a seminar. All of these options will require you to learn to trade in a theoretical way. What I mean by this is, you will learn techniques, theories and tricks that do work but are still only theory until they are applied in the real market.

Many people simply cannot learn from a book and get confused with information overload. The problem is it’s hard to know what technique to apply, in different circumstance. You can literally suffer a problem known as paralysis through analysis

The number one option for to learn Forex trading is directly from an industry expert. A live mentor. He will be able to show you years of experience and help you short cut the agony beginner traders go through. This is also a great confidence booster, as you will see live trades being made.

Trading in a live market, gives you the advantage of real world situations. But trading a live market alone, will probably leave you pretty stressed out. By using the services of a live mentor, you can avoid much of that stress, and more importantly avoid making costly mistakes.

Live Forex trading with a mentor can be a very good way to get your feet wet, without the risk of jumping in headfirst. Having someone there to help you learn Forex trading can be a big help as you learn techniques and strategies by actually implementing them.

Regardless of your personal learning style, you will find it very advantageous to learn in a real world situation. It is much easier to translate the knowledge, into reality, when you see it in action.

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Forex Trading Holy Grail, Learn The Secrets Today

This is a very special message to everyone searching for the forex trading Holy Grail system. I intend to reveal it in this article. Before I begin, I would like to say that anything worthwhile in life takes time and effort to master. Trying to learn forex is no different

During a profitable month in my service, a member contacted to cancel. He explained how he took the first 3 trades I sent him, and they were stopped out, and how he became fearful and stopped trading. Because he stopped he missed the next 2 trades that were very profitable. Then he jumped into the next trade which was stopped out. Then he quit altogether.

Can you see how the only difference between the winning trader, and the losing trader, is they think differently? One trader learned to not allow the stress of the forex market to control them, the other has not.

If you cannot gain control of your emotional state, your emotional state will control you. Do not underestimate how important this really is.

One important truth about indicators is that they are only designed to present price action in a different way. Price action itself is the absolute truth about what is currently happening in the market. Price action is what is happening to your bars, and what resistance/support levels are being reached/breached. If you can understand the driving force behind these moves, you can better understand the market.

When I look at the forex market I always try to get a feeling of overall sentiment. One classic example of this is when we know a big news item is coming. The market will go into a range. This is a direct representation of everyone thinking; “I’m not trading until this news is out of the way”. Another example is why pivots work. Everyone who is in a trade is looking to get out, and many are looking to get in at the same point. So the market reflects this by either bouncing or pushing through.

“Price action is the most important indicator to master, combined with an understanding of what drives it.”

The last thing you need is a good system. But it must be your system. I personally like to use EMA’s and support and resistance only, somebody else may like RSI and Bollinger bands, others may use chart patterns.

It is important to know how to ‘look from a distance’ when you learn Forex trading. By looking from a distance you can see more. By trading this way you will see what resistance and support levels may stop your trade. You will see what news is about to be released, or has just been released. You will discover that, trading this way will give you peace of mind and more confidence to trade.

Every experienced trader will tell you that a good percentage of their losses are due to missing something, or loosing focus on the bigger picture. This factor is so important.

“Trade your own forex system but never ignore the other factors effecting the market”

Conclusion: If you feel like I have not told you anything new and are still wondering where the holy grail secret is, I suggest that you trade very small until what I have written fully make sense to you. I have told you the secret of successful trading. It’s not exciting but when you master it, it can make you a lot of money.

Markus is a professional Forex Signals trader, money manager and forex trading signals service provider. Trade live with the author of this article at ForexSignalLive.com