Why I call it “Music of the Market”

Posted July 22, 2014 By Phil Elrod

Why I call it “Music of the Market”

Look closely at the price bar action relative to the horizontal lines.

Those horizontal lines were put in several days before the day of this chart.

It is not very apparent but there is a line at the top of the chart.

Those horizontal lines (like the staff lines on a music sheet) are a road map to price action. I cannot imagine trading without them.

The secret to creating these lines can be found in my eBook SEE THE MUSIC OF THE MARKET.

Figure 1 Copper Futures 200 Ticks per bar 7-22-2014

Wouldn’t you like to have such a roadmap when you trade?

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A brief message to my liberal friends.

Posted July 19, 2014 By Phil Elrod

I know you think you have good intentions.

But I have a message for you to think about.

Paving the road to hell with good intentions does not change the destination.

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Trading Gold and Silver – Part Two

Posted July 9, 2014 By Phil Elrod

When I trade it’s almost always a trade based on pure technical analysis. The one exception is when I trade gold or silver. As I discussed yesterday, the futures markets for gold and silver are ruthlessly manipulated by the bullion banks, led by JPMorgan, whose naked short position alone in silver is proof positive of such manipulation – and the government sits by with their thumb “you know where” and does nothing. Anyway, I do like to trade these markets from time to time, but technical analysis is not near enough in such markets. You have to be aware of the fundamentals as well. I try to enter long only after the bandits have done their damage by driving prices doiwn.

For the fundamentals of the gold and silver markets the best source available, without paying for the info, is Ed Steer’s Gold and Silver Daily newsletter. I read it daily and it is well worth the time – even if you do not trade them, but are only just interested in the precious metals markets.

Casey Research has a free publication worth reading as well, and Ed Steer’s newsletter is affiliated with them as well. If you want to trade gold and silver stocks, Casey Research has several good newsletters/advisory services that are possibly worth the money.

The point is that when the manipulators have attacked the price of gold and silver and driven it down, a very good trade is possible when the metals rebound. But it is a fundamentally initiated trade because technical analysis cannot tell you when the crooks have finished their attack and will back off and let the market rise for awhile.

If you want to subscribe to Ed Steer’s newsletter or any of Casey Research’s other offerings, the link is: www.caseyresearch.com.

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Trading Gold and Silver

Posted July 8, 2014 By Phil Elrod

My first trade in the futures market was silver. It was a long time ago. My timing of that trade was absolutely perfect – for the market manipulators, that is, but not for me.

I chose to go long silver early on a Wednesday morning, entered my trade and placed my stop-loss. At about nine-thirty, approximately two hours after I had entered my trade the silver market dove. The manipulators pulled all buy orders and the market dropped like a rock. My stop-loss did almost nothing to protect me and I lost much more than if my stop could have been executed at (even near) my intended value. My broker’s explanation, when I asked what the hell had happened, “a big commercial seller overloaded the market.” That was pure BS. Even in those days, those in the inner circles of futures trading knew that the market was manipulated. In my opinion, the market manipulation started soon after Nixon removed gold as a direct link in value for the US dollar.

I just about gave up the idea of trading as a result of that introduction to the futures markets. I licked my wounds for several days, reread my trading manuals (from the man in the cowboy hat) and decided that I would give it another try.

Now, almost thirty years later, I know what happened that infamous Wednesday morning. Actually, it had happened more than once on a Wednesday before and would happen again on a Wednesday many times again in the future. The manipulators were at work. And they continue to do so today. The old Comex (I called it the Criminal Metals Exchange) has since been merged into the CME, but the silver market (and Gold as well) is still the same old Criminally Managed Enterprise. And it will be as long as the government approves – or the real market overwhelms the paper market of the CME (which is more likely to happen than the government correcting the problem).

The government needs to control the price of gold and silver – even though the dollar is no longer redeemable in either metal. The almighty dollar must still be protected – up to a point – and therefore gold and silver price needs to be controlled.

Okay, the precious metals markets are manipulated – question is, are can they still be traded by the little guy? My personal answer is a highly qualified yes. IF YOUU KNOW A MARKET IS MANIPULATED – and you still want to trade it – you have to get into the market right after the manipulators have driven it down artifically.

That is easy to say, but hard to do. The markets today are virtually 24 hours per day for the trading week. And the manipulators are widespread, so their attack can come at any time of the day and any day of the week. If there is a weakness to be exploited by the individual trader, it is, in my opinion that the manipulators are there to drive the market down – not up. So we need to watch only for a very large move to the downside and time our long entry near the bottom of that move.

And after they have finished their artificial suppression in the price of the paper market, the market always rallies back in the other direction – sometimes that rally is very large and in a short period of time. A little guy can make a very nice trade if he can time his entry at, or near the bottom of the manipulators downward move.

The key to making this trade is to time the entry so that you enter a long position after the manipulators have driven price down – and be ready to exit quickly should you misjudge the bottom a bit. A savvy trader can enter several times, take a small loss and recover all his losses plus a nice profit when the price rebound comes. But caution is the name of this game.

The manipulation of these markets is getting more and more tenuous for the CME crooks. They may lose control of the market at any time – and I would love to be in the market on the long side when they do.

I continue to read about tight supplies in the gold market, and especially in the silver market – so my favorite trade, after all these years is still silver. In my opinion the upside for silver is, percentage wise, much larger than for gold. The manipulators are still alive and kicking – they no doubt still control the market – for now. But it appears that their ability to drive the price down at will is waning. Remember, any manipulation of any market works – until it doesn’t. Once the market is free to find its natural level it will do so fairly quickly. Free markets still work – when they are allowed to do so.

One of my goals in life is live to see the silver market manipulators buried in an inevitable avalanche of longs that will finally allow silver to reach its natural price – and that price is going to be several orders of magnitude higher than its current level.

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