It’s Saturday, March 25. We’ve been awaiting a long anticipated rally in the precious metals, and shares of their miners. Here’s what we know: There has been a technical price bottom put in place back in December. That bottom begins on the 15th, and price rose out of it from the 23rd. We had a very tepid, unexciting ‘rally’ of sorts, that lifted prices to a peak on 2/8. For a month, from 2/8 to 3/8, prices settled back in what was, at first, a consolidative manner, but became a correction. The correction commenced to put in a higher low, from the 8th, into Wednesday the 15th of this month, 10 days ago.

On Wednesday, the 15th, we got a real nice price pop on considerably greater volume. This is the manner in which a desirable rally starts, but we then begin to look for confirmation of it, by means of a follow-through. The follow-through confirmation will typically happen after the first pop has been digested, and is looked for to take place within the 4th to 7th trading days after the initial kicking off of a rally. Yesterday, Friday the 24th, was that 7th trading day after the hopeful pop on the 15th… and, there has not yet been any confirmation follow-through. The action on Tuesday, the 21st, in price, looked as though it might have been one, but upon further inspection of price, and then, of volume, it was pretty clear that it was not. We would typically give a market just 3 more trading days to follow-through and confirm. That would take us to Wednesday, the 29th. After that, all bets are off. So, with that analysis, lets look at all 16 charts for anything…

We’ll start with any that rose on light volume, or were, at least, unchanged. These would include: PVG, GLD, SLV and RGLD.

Others fell on light volume, such as: ABX, SSRI, SGDM, SLW, GDX, SILJ, HL, NUGT, AG, FSM and CDE.

I’ve got a decliner on average volume in PAAS.

We’ve got 2 things here: First, I already know that volume for an average of all 16 must have been light, and a look tells me that it was. Average volume was down by 40%! Second, both gold and silver rose on Friday, but the preponderance of miners did not. This, sort-of, confirms my notion that traders were lightening up, and getting out of some shares on day 7, when no follow-through, confirmation rally was materializing. If I may throw a third observation in, I would further guess  that as we approach, and go thru day 10 next week, I would expect that maybe even further selling might take place, as traders give up on the hope of any rally altogether… Let’s see if that should play out. I hate trying to predict… especially the future!

I will often try to anticipate what I think might happen in the markets, but I know I can never tell any market what to do, so I always try to let it tell me what it is doing, and plan accordingly.

Here’s to your accumulation of real wealth!
Harold F Crowell


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