Trader Scott’s Market Blog
September 27, 2016
Guessing/overanalyzing/figuring/predicting in regards to markets generally leads to confusion/hesitation/fear/no confidence – which usually means one thing – losing. We all need to have some (at minimum somewhat reliable) method to be able to survive in markets. And we need to have complete confidence in that method/plan/strategy/system, so that we can employ it in what are often very volatile emotional times. And the ability to employ that method in those volatile times is part of the trading skill set required for some type of consistency in markets. As an example of the guessing, etc. that way too many people do, I included a Q and A from this King World News interview with Bill Fleckenstein. I know that I often ridicule the guests at King World, mainly because they’re usually wrong, but not in this case. I like Fleckenstein and he is one of the few sane guests there. I certainly don’t always agree with him , but I do believe that he knows how to “navigate” within markets, and that is a very difficult skill set. So I do enjoy reading what he says. But, I mainly want to focus on the questions for him from “whomever”. Notice two things – first, the questions are all based upon guessing/overanalyzing/figuring/predicting. He gives good answers to them. And also notice, even though it’s a small sample size (but it’s generally the sentiment that I hear currently about the PMs), the searching for reasons/excuses why the PMs can’t/won’t rally. So the current reaction in PMs is continuing to do its’ job in dampening bullish sentiment.
Fleckenstein On The Recent Weakness In Gold, Silver & Miners
Question: Bill: the news is silver is softening of late and the reason is causing this is the slow down in production in the use of silver in China. wondering if this situation will keep silver soft going forward for a while. the financial news reports seem to celebrate this. is this just noise? thanks for all you do for all of use..
Answer from Fleck:“Yes. People usually make up stories to fit market action.”
Question:Bill:Many miners showing head-and-shoulders or double tops, as well as bumping their heads on downward sloping 50-day lines. Will you hold off purchases until these hurdles are cleared? AEM and GORO seem to be among the very few current survivors.Thank you.
Answer from Fleck:“I don’t have to do much, as I have a lot of exposure. I may/will add for a trade if I get the right setup.But I think you are over-dramatizing the current situation. You make it sound as though a collapse is imminent.”
Question:Bill,The gold mining complex seems to be acting more poorly lately, in spite of a weaker dollar. In fact, it seems to be much more correlated with the general stock market. Do you think this is just a “couple of months” phenomenon? It has been happening in August & September, just when gold seasonally does better and stock do worse. Do you see a catalyst that will return the precious metals miners to move inversely to broad stock indices?Thanks for your invaluable service and many insights.
Answer from Fleck:“First, the dollar is barely weaker at all, so that’s not meaningful. Not sure what it will take exactly to get gold to break, but something will.For the umpteenth time, miners do not move conversely to stocks generically. They follow gold, which can react to news that causes stock weakness by going up or down. There aren’t any hard and fast rules.”
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.