November 9, 2012
The whole market sold off this week after Obama’s re-election as President. Today’s headline was that this week was the worst week for the stock market in over 6 months. Silver Wheaton hit a low this week of 38.57 on Nov 6th, but closed today at 40.39. I like that the stock is showing relative strength by declining very little, while most stocks went down 3-8% this week. Best of all, my sell-stop was not hit, so I am still in the trade.
Timing is everything! Although a picture perfect chart formation formed, the timing was not right for the stock to break out yet. Remember, most stocks follow the general direction of the stock market, and right now that direction is down. My guess is Silver Wheaton will continue to set up its base, and break out in the near future. . But if the correction continues, my stop will likely be hit and I will be out of the position.
Apple, one of the high-flyers, closed today at 547.06. The stock hit an all-time high of 700 in September, and has declined 20%. Right when Apple was approaching 700, all the news was bullish and analysts were calling for Apple to go to 1,000. Too much bullishness leads to lower prices, and Apple’s stock is no exception. Watch for the peak in sentiment, and at the extreme, either high or low, stocks will usually go the opposite direction, confounding all these so-called “experts”!
Learn the secrets the wealthy use to become wealthy in this FREE eBook. It’s a must for anyone who wants to become financially successful!