PHYS and PSLV Update – 1 Apr


Gold and silver both are on the receiving end of the traditional labor report smackdown. for newbies this is where precious metals are attacked regardless if the jobs report is positive or negative. It happens once a month like clockwork. Today’s spin is that the jobs report was good, so the Fed will be raising rates at some time in the future, which of course means the depression is over and all the problems have been solved. Whew, thank goodness, I was starting to worry there. Yeah right.

PHYS, the real gold bullion ETF, fell to 12.40 before buyers showed up and snarfed up the bargain. Traders likely got stopped just below the last swing low around 12.45. I was trading with a small portion of my holdings and was stopped at 12.42. The bet was that the swing low at 12.45 was going to hold and nullify the current down trend, lower highs and lower lows. This bet has proven wrong with a new swing low presently at 12.40. the previous swing high at 12.65 is now resistance. MACD continues lower while RSI is tracking down the middle and is saying enthusiasm either way is neutral. Stochastic is hanging around over-sold levels and doing nothing in particular. The Elder Impulse chart is back to painting a red bar, indicating entry to short positions. But, in this case with the 65 day exponential moving average still increasing, it is ignored. Essentially yesterdays green bar was a whipsaw and drives home the need for stops if you insist on trading. Investors are buyers and they hold. They will be rewarded handsomely in the end no matter what.


PSLV is also off its low early in the day and has nullified the current up trend. The trend is now neutral until a higher is put in or a lower low. Resistance is now the swing high from yesterday at 17.83. Support remains at 16.78, the last swing low. RSI is drifting lower and working off the over-sold condition quite well. Stochastic is hanging around like with PHYS and not saying much, only flirting with over-bought rather than over-sold. Stochastic is best when it crosses the 80 and 20 level in a positive manner or embeds (above 80 or below 20 for 3 days or more). The Elder Impulse chart has flashed a blue bar that signals waning momentum and calls for exit from all trades. The blue bar comes when either the MACD histogram bar is shorter than the day before or the slope of the 13 day exponential moving average is negative. Today it is the histogram bar, which is usually the case. My stop on silver is at 16.76, just below the last swing low at 16.78. I am hanging with PSLV to my stop.

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