Changing Sentiment

Of course you recall earlier this month when all rallies were sold. The PMs could never seem to get any upside traction because rallies were ultimately viewed simply as opportunities to sell at a higher price. These market "sentiments" are very powerful and often difficult to change.

Fortunately, over the past few days, sentiment has shifted back in our favor. Do you recall the big dips of last Thursday, last Friday and Monday? If not, here's a gold chart that can serve as a reminder:

Note the stark contrast to the action from earlier this month. Instead of piling on and driving lower, market participants are now once again looking for support levels that can be bought. We've jokingly referred to these chart formations as FUBMs as if all selloffs were brought about by The Wicked Witch herself, only to have Turdites everywhere rebuff her and rally the victim back above the level at which the assault began.

You can see a pretty, little FUBM forming on today's silver chart. After a waterfall decline that climaxed with $1.03 being taken out in 3 minutes, silver has reversed and is now well off its lows. Earlier this month, such a savage beating would have resulted in additional selling but not today. This is very important. IF we have truly rounded the corner and prevailing sentiment is now back to "buying dips", we can feel even more confident in our purchases and we can also resume aggressive dip buying for a while. Let's watch and see if today's FUBM is taken to completion as this will be a clue.

Unfortunately, that's it for now. Today will be a long day so I may not have another thread for you until later this afternoon. Keep the faith! TF

p.s. And these are for Art Lomax or anyone trading the DAG.