In a recent interview, Patrick MontesDeOca, CEO of the Equity Management Academy, said that a Spring top in silver may have been completed and it is time to exit any long positions.
MontesDeOca admitted that in the Academy’s March 10 recommendations, “We did not anticipate the massive, tremendous attack that we saw here on 2 March.” Silver went right down to complete a 61.8% Fibonacci retracement, with the low at about $16.80, before the market showed a huge reversal bar. At that point, MontesDeOca recommended traders cover any shorts.
Today, MontesDeOca used a Fibonacci retracement model to show that the market, after a 50% retracement to $17.58, appears to “want to challenge the 61.8% retracement of $17.8950. If we do get to this number, it indicates that this is a time to take some profits off the table.” MontesDeOca expects that market will then consolidate.
After the December lows and the recent high of $18.53, MontesDeOca said, “We have a pretty balanced picture of the resistance levels and the support levels.” The market tested the long-term level of support, which became resistance on the 13th, and broke the resistance on the 15th, making that resistance a level of support. From there the market has gone up to challenge the second resistance Fibonacci trend line, which is where we are at a 50% retracement. “If we see a blow-up,” he said, there are “several targets in the $18.09 to $18.06 area,” and he “strongly suggests unloading any long positions for a little bit of a correction.”
Using the Academy’s proprietary VC Price Momentum Indicator, MontesDeOca said that the price has gone into what he called a red zone. Such an area indicates a level of supply and is well-priced for some kind of supply or resistance to come into the market. The market hit $17.79, which was what the VC Price Momentum Indicator predicted. Although the market is going to have a challenge moving through the daily and weekly levels of resistance, there is a probability that it could. If the market does, MontesDeOca said, “Liquidate your longs and wait on the sidelines.” If there is a correction, we will begin to see daily levels of support at the $17.51 area. If the market closes below those levels, the next level the market will test will be the weekly average price of $17.30. By Monday, he said, “We’ll have more precise numbers.”
The goal of the Equity Management Academy is to provide a select group of investors with the tools and information to invest wisely and well for the long-term in these tough economic times. For more information about the Academy and Patrick MontesDeOca, please email email@example.com or call 805-418-1744.