Weekly hot take - Wall of Worry
16/01-20/01
Welcome to this week's edition of our newsletter, where we will be taking a deep dive into the precious metals and providing an update on the crypto market. I will also highlight risk management advice, so make sure to completely read this week’s update! Let’s get started !!!!
Recap of last week :
Last week we talked about how $gold looked strong and $silver looked a bit exhausted. Also we mentioned that a negative divergence, like the permabears have been posting about daily, doesn’t have to materialize immediately. Our plan was to stay long and ride the wave. Because once metals keep going they barely look back. How do we do this ? —> we ride the ema’s of the daily chart.
Deep dive into metals charts
$XAUUSD
Monthly
You can’t deny that the monthly chart looks very bullish here with such power candles to the upside. When we look at the larger bull or bear trends for gold, we can see that we’re in a confirmed bull trend when we make a monthly close above the EMA 9 and EMA 20. From current strength our bias on the monthly timeframe is that we’ll be moving higher the coming months, as long as the move up is supported by the monthly EMA 9 and EMA 20. Are we going to face multiple big resistance levels such as $1923, yes. Does this mean we have to short it all the way up bc of some divergences on a daily timeframe, NO! The plan is to stay long unless the bigger trend gets invalidated.
Weekly
On the weekly candles we can also see that we are strongly pushing upwards. Is it wise here to be shorting and top calling like the permabears. NO! Sorry if I sound repetitive but I really want to clarify the importance of not listening to every bear on twitter when there is a really really strong bull trend developing. Again here to keep it nice and short. Plan is to stay long above the EMA’s on the chart. They are still supporting the price higher, so we SIT TIGHT.
Daily
Same story here. I outlined in previous weekly update that gold looked strong and was likely to hit $1923 before any pullback at all. This clearly was the case. There might be some consolidation/correction coming up now on the daily timeframe. As we can’t keep rising this strong forever. Imo a pullback is likely here at $1923. I am not trading the daily timeframe personally as I am long since the big bottom of last summer. I’m going for the bigger swing. My trading plan is to stay long as long as the weekly EMA’s support the price action. But short term (leveraged) traders be aware of the potential of a pullback forming from $1923.
$XAGUSD
Monthly
For silver on the monthly timeframe we can see that we’re also above the EMA 9 and EMA 20. Again no one can deny that we’re in a bullish trend here. All the ‘I need confirmation first’ guys can’t say it’s bearish anymore. The gameplan with silver is that on the monthly timeframe it can pop hard, but silver is a volatile beast as everyone knows, so we have to watch it more closely on the weekly and daily timeframes. The monthly RSI has tons of room for higher. So if you joined with the buys this summer, we stay long and sit tight.
Weekly
On the weekly timeframe we are also supported by the EMA’s —> this means that we stay long until invalidated. We’re kind of in the middle point of the $20-$30 range so there is obviously some doubt and fear here of going back to $20 , but also FOMO for a move to $30. On a weekly timeframe I’m staying long. I have to mention however, on the one hand silver feels more exhausted and last few weeks were kind of sideways. On the other hand we can see that it has reconnected with the EMA’s so it might also be ready to break higher into the upper half of the box. We are on alert for next week. Upto $silver to decide.
Daily
On the daily timeframe for silver we can see that silver is trying to break higher from this consolidation. This is supported by the STRONG monthly and weekly trend. This is why it can be important to just position early with a good risk reward setup and then the most important : SIT TIGHT and LET THE TREND DO THE WORK! With past week(s) of consolidation, RSI has also cooled-off and we have room for higher on the daily timeframe. Next big levels are highlighted on the chart. +- $26. Btw here : still no real warning signals or invalidations on the daily EMA’s so we just keep riding our positions.
Summary metals :
Once in a certain trend , let the trend work.
We’re above EMA 9 and EMA 20. Just ride the trend until the ema’s get broken to the downside on the daily.
Cancel out the twitter noise.
If you had listened to the bears with their big followings, you’d have missed out on insane amount of gains.
Read the weekly newsletter from goldgirl to not get shaken out of strong trending moves. ;-)
Crypto
Last week I covered crypto shortly. I highlighted that it was at the perfect timing band to initiate a long position with a tight stop at the lows.
I’ll show once again why.
Once every 4 years we make a low from a timing standpoint of cycles. Does this mean $bitcoin goes to $1M like some people say. NO! It tells us that given cycle analysis (which is based on human behavior), one can initiate a position in that timing band with a rather low risk entry. The next 4-year cycle can be huge or the next 4-year cycle can go sideways ( to $60k and back to $15K) but atleast we entered at the bottom and rode the wave up to $60k, supported by EMA’s. We will sell when we break down below the EMA’s. Simple as that. So the key is to listen to the market cycles, enter when risk reward is excellent and then ride the waves (small or big). As we initiated a long position last week at $17000 range we’re up around 20% on this position. We can move stop to entry and just ride the wave now, no matter how big or small, we’ll never lose our money.
Compare the crypto chart of last week to now. Pretty solid call huh ;-).
Final takeaways:
Enter the market using cycle analyses for the lowest risk entries
Move your stop , that was at the lows, now to entry.
Sit tight & let the trend work
Make a lot of money with managed risk
Thank you for your attention
That's all for this week's newsletter on precious metals and crypto. I hope you found the information provided to be insightful and that you learned something new. I would like to thank all of the readers for their attention. Don't forget to like, follow, and subscribe to stay up to date on the latest news and updates. Thank you again and I'll see you next weekend!