PHYS and PSLV – 15 APR

PHYS is just now approaching the all time high of 13.13 and has been lagging the Comex price for gold as the premium has come down to essentially par. What a great time to buy fund backed by real physical ounces of AU as opposed to real physical ounces of paper obligations to deliver fictitious ounces of gold. A new up trend is being made with a higher high confirmed on the chart. Thursday’s breakout is confirmed. Any reaction swing low must remain above the last swing low of 12.47 to validate the up trend. Resistance remains at 13.13 while lies at 12.70. Very strong support that appears impenetrable sits at 12.40. RSI has finally broken free of the neutral position and is now moderate at 62.81. MACD has completed a bullish  cross and has given a clear buy signal. Stochastic has just entered the over-bought range and must be watched for a possible embed (3 days above 80), which would indicate strengthening momentum to the upside. At some point the premium will come back into PHYS as doubt re-surfaces to the validity of paper gold and its discount price compared to the real thing. When it does, the chart will again surpass that of spot and Comex gold. Nothing is fixed, just buy the fucking dip (BTFD).

The Elder Impulse chart is now painting a green bar that indicates a buy signal.

PSLV continues to bracket between 15% and 18% premium to NAV and indicates the appetite for real silver as opposed the fictitious variety that is held in SLV. Resistance at 19.11 appears to have been penetrated with no real resistance above remaining other than the Bollinger band. Support is the penetrated resistance level at 19.11, with further support at 18.20. Price is holding on to the lower fork of the Andrew’s Pitchfork. A new up trend is in place as long as any reaction swing low remains above the previous swing low at 17.64. RSI is bock above 70 and is over-bought, again. Stochastic is in over-bought territory as well and is looking for an embed ( 3 days above 80), again. MACD remains at high levels and continues to be meaningless as an indicator. Silver has been nearly impossible to trade using any disciplined trading system. All the gains are coming on massive breakout days following sell signals. Buy and holders have been rewarded for doing nothing but sitting on their hands.

The Elder impulse chart is good when other indicators that track momentum are no longer providing meaningful information. RSI, MACD, and stochastic have been not been oscillating much and thereby not providing signals. Traders using the Elder method were whipsawed by the action on the 11-12th when a blue bars were painted. Blue bars indicated waning momentum when either the MACD histogram or the 13 day exponential moving average is decreasing day over day. Blue bars signal exit from long positions. On the breakout yesterday a green bar was painted and says that both MACD histogram and the 13 day EMA are both increasing day over day. Green signals entry points for long positions. For short term traders, a stop must be utilized to reduce risk for buys at this point IMO. A buy here is technically valid and with the trend until 17.64, the last swing low, is taken out. So a trader would likely put a stop somewhere in between to minimize loss in the event that a top is being made. In this manner I have been stopped numerous times by silver and have missed some upside gain while locking in profit. I would consider a stop just below prior resistance now turned support at 19.11.

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