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Gold/Mining/Energy : Western Copper Holdings - WTC.T -- Ignore unavailable to you. Want to Upgrade?

To: div5226 who wrote (480)	8/18/2002 2:07:49 PM
From: Little Joe	Read Replies (3) \| Respond to of 754

"Therefore looking at the charts for advice on future price movement is not helpful. If this is the case, as I believe it is, silver should recover, soon, to its level prior to this raid." I strongly disagree the silver charts have been right on so far. The double top worked out and now we have a potential down flag. I think it will break out to the downside, but if it goes the other way the charts will reflect that action also. One thing you must understand to use charts in trading is that they don't always help. There are times when the charts don't tell us anything, but generally if the market has a strong move in either direction the charts will reflect this. While you may not catch every cent of the move, you also will not be buying only to watch your investment drop lower, which is discouraging and not good for your pocket book. My disagreement with your approach is that you are relying on fundamentals. I don't think many people really understand the fundamentals of the gold and silver market including the Ted Butler's of the world. If he is so smart silver would be trading at $10,000.00 an ounce. When his predictions don't bear out, he says it is because of market "manipulation". He and others like him will never admit they were wrong. Look at the commercials in the commodity market, they missed almost the entire recent move. If you followed them you would have missed the move and they are supposed to know what is going on. If you rely on fundamentals and the market goes against you, you usually add to your position and then the market goes against you again and you add to your position, before you know it, you are broke. Since technical analysis by its very nature would not allow you to do that, you don't go broke and you preserve your capital to trade another day. I guess this is a long winded way of saying until the charts improve I am out. If this is the low the chart will let us know. It may be that I will have to buy higher, but I would rather do that when I am relatively certain that prices are going higher than buy on "fundamental analysis" and have the market go against me and against me and against me. The truth is in over 30 years of trading, I have never seen a fundamentalist who could successfully predict the price of gold and silver and I doubt that if they exist they are giving their opinions out for free on the internet. Most of these people are promoting their newletter or product or appealing to gold and silver bugs. Look at our analysis of Western Copper despite the help of some very good people who know what they are talking about, we still don't know enough about the fundamentals to understand where this stock is going. We don't know what it is going to cost to get this stuff out of the ground and likely will not until a feasability study is done. Yes, it looks good, but there is risk. The charts could be sensing this risk, which for all we know could be higher than we think. Or there could be something going on with the company that none of us suspects or knows. Look at enron, world com, bre-x to name a few. For that matter just go back and review the manhattan metals thread to see how most of us derided Elizabeth Andrews and a few others who indicated that there would be problems moving the town. Many smart fundamentalists were fooled when this turned out to be the case. The charts, however, were telling the story. Years ago I subscribed to a service called "Bullish Review" which analyzed the committments of traders and gave trading advice on them. The editor created a device called a "signal failure", and whenever the market went against the commercials, he would say it was a signal failure, not that the commercials were wrong. After following his newsletter for two years I concluded the commercials are slightly better informed than the rest of us, but they are not omniscient. Another experience in this regard relates to my days of commodity trading. My broker's family was in the chicken market. In other words they were commercials. They were very good at calling long term moves but their short term analysis was lousy. Well I guess this turned into a rant but I hope it is helpful. The long and short of it is, that I believe the charts do tell all and since they are a history of prices, they must tell all. When we ignore them because we think we understand the fundamentals we do so at our peril. Little joe