Commodities/News

Trader Scott’s Market Blog

December 26, 2016

There are always news stories out there which can confirm our own bearish and bullish biases. It’s tricky to base an investment decision (exit point maybe) on a singular news item, as generally big picture news items have zero market timing benefits. But news items can add up over time, sort of like they’re in a trend themselves. And understanding those big picture news items as an entry point can be very effective, when the current trend is going contrary to those news items. Meaning, when a market is moving countertrend to those news items (the bullish ones in this case), then the development of the bottoming process can be an outstanding opportunity. Those big picture news items will be an excuse/a reason/a factor to help drive the speculative buying over the years following the low, thereby pushing prices higher. But we need to be patient for the selling climax, basing, bottom process, accumulation to set up the next big advance. Just buying blindly because, for example, the gold permabulls are getting confident and boisterous as gold has had a powerful upmove – this is never a good idea. Like the permabulls were right before the election, when I was actually getting quite concerned about gold (in this quick post), as it needed a good selling wave first to set up the next big rally. No one knows for sure how deep and how long any selling wave will be, following a greedy, speculative top. And the summer top in gold and the gross upthrust on election night were certainly examples of greed. We can have an idea where the low will take hold and how long it will take, and we can watch for the warning signals into those price areas. But the market has to begin “showing” us.

So we can view some of these following stories as a bigger picture very bullish outlook for commodities in general. These things are very slowly starting to add up. They are in no way timing tools, but in total they will be powerful forces for a major bull move in commodities in 2017 and continuing for quite some time. The huge bond bear market will be very helpful in that regard also. The recent stories about the Yuan SDR, the Sharia gold, and the US election, have of course been used by the frauds and shysters to sell PMs and/or PM newsletters. (Does anyone else ever wonder whether the so called gold “manipulators” are actually paying off these crooks to push gold on folks at the worst possible times to buy/entry points. It makes you wonder.) The Yuan SDR and the Sharia gold stories are a bullish background for commodities and gold. Even the US election should eventually provide a bullish background for a few reasons. We have a President-elect (whom I voted for) who has a huge ego and a big mouth, in a country which is very split andglobally split also – a toxic brew. And he is crediting himself with the bull market in stocks (which actually started in March 2009, sorry Donald), and the “over a trillion dollars” spent on Christmas. But for some reason he, nor are most of the Trump supporters, “crediting” him with the surge in yields since his win, which has wiped out all the stock market gains, plus “over a trillion dollars”. Mr. Trump believes his success in business can be transferred directly into reshaping the government. We’ll see about that. But one thing is for sure, the masses are awake and have had it (this post). We are entering a very dangerous period militarily and climatically (not“global warming”). And the central bankers are slowly losing their omnipotence. We can add the following news stories to the previous list. These are about theRussian Ambassadorbeing assassinated, the Chinese militarybecoming more aggressive, and theUN Resolutionregarding Israel.

The previous post was about the many opportunities in a market bottom, both on the way down into the final low and on the way back up – and not buying all at once, but layering in. My belief for several months was to use late November onward to look for the beginnings of a bottoming process and retests in PMs, but focus only on silver and the miners. So I did a long side trade in silver futures on November 24th into December 14th. But I mentioned several times (like comments section here) that I wanted to see even lower lows (below $15.75-80) to begin layering into physical silver, which occurred last week. And using the same layering strategy idea with the miners, with some profit taking. Some of you have written in about using the big selling waves to buy miners. Just looking at past market bottoms will show this requires patience, but it’s a lot better idea than where they were over the summer.

About

Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.