**Click the chart for a closeup**
We should see either one more further break of the bottom channel line (which would then act as support on a retracement), or a small corrective move higher to finish out the counter-trend move. A possibility in the coming week or two is a few very strong down days pulling the price far down from its trend, followed by several days or a week of consolidated sideways movements.
It's tough to say exactly at this point the gritty details of how it will all play out, however we are not so much concerned with how far DOWN the market is going to go until we are ready to close out our trade - what we are concerned with is the extent of the counter-trend rallies which will offer key entry points and position-building points.
Either way we'll keep you posted. The Precious metals look to be correcting inside of a smaller pattern within this downtrend movement. Silver has had a pretty broad trading range so far of $.68 / oz (4%), while gold is consolidating tightly - this should also be a theme with gold where a large move is followed by consolidation and then another decent move. However, if and when the dynamics of the move change we will keep you updated, and of course will begin letting our readers know when these trends are expiring and the optimal time to go long on PM's and stocks (and short the USD inadvertently by converting it to alternative assets). Expect volatility in Precious Metals to move to extreme heights over the coming months.
The first note I would like to make is about general investor psychology - bear markets always seem to take everyone by surprise even though someone can reliably predict them if they keep a detached mind - i.e. don't listen to the hype about stocks "always going up" and that perma-bull mumbo jumbo. Remember, the people telling you that are usually 90% + invested (mentally bought in) to the idea, or they are trying to sell you a product like a fund. These guys can't survive if they are bearish, it's just plain bad for business.
As such, bear markets by their very nature are far more "exciting" than bull markets as they seem to emerge from nowhere and wreak carnage with breathtaking speed. As a good example, consider this:
The Past 3 Trading Days on the Dow have taken prices all the way back to November 9, 2009 - erasing almost 6 weeks of gains in such a short span. Who could have seen this coming?
Well, you already know the answer to that...
I try to be as clearheaded about my investments as possible - I don't live in any major financial centers or even in a very densely populated city so it's easier to avoid the general social mood that comes with heightened stock markets. Draw your conclusions from the data, not the data from your conclusions - you will have a much stronger approach that will net gains consistently and leave everyone else chasing the mood-wagon in the dust.
If you cannot keep this sort of attitude about investing then it is in your best interest to find someone who can do this for you that has these attributes. Hard to find, I know, and even harder to really quantify or prove. But that's one of the ways Investophoria can help.
We do offer proprietary investments but I only work with people in my city who I can meet in person regularly with and develop strategies. However, we are going to be setting up a full blown website with some study guides for beginner investors or those who would like a refresher, a few trading resources, a model portfolio (which will be an exact mirror of mine), and a weekly or monthly publication. If you are interested in something like this or you as a potential customer have an idea, feel free to send them my way via the email button on this page.
And to wrap things up for the weekend, here's exactly how the Dow finished off the day:
Have a great weekend everyone.