Point Or Go Figure!

Last Monday we took a quick stroll down memory lane as an exercise of revisiting the respective milestones that our point & figure charts had offered us on silver over the past few months. If you missed it then I strongly suggest you go back and read it as it demonstrates how powerful P&F chart can be. There is no noise, no drama, no talk, no opinions, no rumors, no confusion – all we get to look at is pure price, nothing else.

Here’s where we left off last week – to the already battered gold/silver bugs a price objective of 21.5 must have bordered the ridiculous, surely the mad ravings of a deranged market megalomaniac emotionally caught up in the sell off at that time. Don’t worry – I’ve been called worse 😉

Well, let’s fast forward one week and here we are – the low missed the bearish PO by half a handle. I’d call that good enough for gubinment’ work. A thought regarding the upgraded bearish PO of 11.5  – possible but not likely in the near future. FYI – due to the length of the previous sell off we would have to bounce into 27.5 in order to see a low flag pole reversal. So the silver/gold bugs have their work cut out for themselves.

Now if you consider how well we have traded both silver and gold over the past few years then you may presume that we spend a lot of time thinking about or debating precious metals. Nothing could be further from the truth. Frankly I couldn’t give a rat’s rectum about gold, silver, platinum, any of it. To me it’s a merely a futures contract and I leave the educated opinions to people much smarter than I. All I do is look at my charts, evaluate the ongoing trend, the odds of a move in either direction, and Bob’s your uncle. Successful trading/speculation does not have to be time intensive. Just because you just spent a weekend disseminating every single gold/silver related blog doesn’t mean you have a better edge trading it. As a matter of fact too much immersion and accumulation of supposed facts may obfuscate your ability to execute winning trades. Sometimes less is more – all you need to know about gold, silver, or pork-bellies is a simple chart. You may agree or disagree with me but our results over the past few years speak for themselves.

AAPL is another example – we’ve played this once since shortly after it scraped its 700 mark – my Apples And Lemons post in November 2012 is only one salient example. And if you look at the P&F chart below then you clearly see a sacred Wall Street cow that was slaughtered out in the open. Complacency held through the first waves of correction and only in the past six months have fund managers altered course. Of course once it paints a bottom nobody will want to have anything to do with it, which is when we’ll start buying it again.

But back to the future – here’s AAPL on the 7th – that’s two weeks ago today. My contention was that a drop into 415 would lead us lower.

And here we are today near the 390 mark. Is it going to jump back higher? I don’t know but this chart is not telling me anything that would lead me to change my position right now. At the current time a push into 410 or 415 would be needed to produce a low flag pole reversal warning. Once/if that happens then we’ll talk – until then I’m holding for the target.

Now regarding equities I don’t have much to add to my Friday musings but to summarize: The bearish case is still theoretically possible but it’s greatly weakened. The P&F is now painting a low pole reversal warning in addition to the concerns I already presented.

And if you’re still waiting for the ‘big sell off’ then let me remind you that the SPX/ES has not breached a weekly or monthly NLSL for a long time. And as long as long term Net-Lines remain unchallenged momentum continues to favor the bulls. A breach of the weekly NLSL last Friday would have been a good start that may have led to more downside but alas it did not materialize. This means that the current weekly NLSL has been tested and thus has now become part of a support base. It’s valid for four more weeks so the bears may get another shot at this – let’s see if they can muster up enough mojo.

Of course I’m being a bit cynical saying that for it’s usually not the bears that start a bear market – it’s a lack of exuberant bulls. And as long as I keep seeing this being called the ‘most hated bull market ever’ I think more upside is assured. Only once the bears start getting bullish would I start thinking beyond the possibility of a mere correction.

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,