I mentioned early today to watch the 20 MA. It was broken and the market closed well below it. This doesn't mean the market can't rally back, but a solid probability trade would be trading a test of the bottom side of the 20 MA.
Note the Volume increase today, well above average. If this 5 wave has completed, there will be a 3 wave structure to the downside. I am not going to call a massive collapse but i wouldn't be surprised to see a 1155 within the next couple of weeks. The 200 MA will be support there and the 50% retracement of the impulse wave.
Trade update: Endeavour Silver Corp (EDR) Silver mining company on the TSX.
Entry: 6.01 (on the 27th, and held with the expectation that gold and silver will get a bid)
Exit: 6.29 (first sign of trouble after a strong morning on the 28th)
Currently holding AXR, with the expectation of a short term bounce in Gold / silver.
AXR is very similar to EDR, however, it is not as extended.
Current entry is at 6.60, and decided to hold over the weekend, as Egypt has really heated up, causing issues with the oil supply. This fear in the middle east region will in my opinion bid up the price of gold / silver. In addition to that, there is a possibility that QE3 is coming our way. By March the debt ceiling will be breached so the government will have to go to congress to raise it.
Gold and silver is in a correction, until a new high is breached I will have to stick to that view. I am very cautious about these mining company, however the past couple of days many I have been following are popping, 5-10%. EDR, AXR, SBB, FVI, AVL, GPR, P, FR all on the TSX. Mining stocks are quite volatile, so tread carefully.
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