“you have to get on board now or risk getting left at the station”
How many times have we heard gold bugs use this as an excuse to buy into a declining market?
They have the strategy right, they are just looking at the wrong market. One doesn’t get left behind in a market that is correcting and holding below a declining 200 DMA. The world never just all of a sudden wakes up and decides hey we need to pile into a stagnated or declining market. That’s not the way human emotions work.
Humans are herd animals. We follow the crowd. It’s the reason why bubbles form. There are only two times one ever has to worry about getting left at the station. One is during a baby bull. We already had the baby bull rally in gold so there’s no risk of missing that again.
The other time one has risk of getting left at the station is during the final bubble phase of a bull market. This is the other period when price can just keep ramping higher and higher, going much further than anyone originally anticipates.
Yes traders have risk of getting left at the station, but the risk is in the stock market not the stagnated gold market. In this weekends report I’m going to cover the psychology that drives a bubble because we are in the initial stages of one right now. This is your second opportunity to make an insane amount of money very quickly. This time it’s in the stock market. If you missed the baby bull in gold, don’t miss this one.
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Gary, I know this post is about the s&p but I wanted to run a scenario I am tracking in gold which I believe you somewhat alluded to as a possibility. Gold seems to be in a bear flag on the hourly. I am looking for it to roll over next week (instead of a continued bounce) and head slightly below the March low but not much further (1185-1190). The miners, instead of getting smashed, I’m looking to make a slightly lower low than this last one and that being the area where they begin their next rally. Is this a possibility for you?
- Possible but not very likely IMO. I think the S&P is getting ready to breakout of the 2 1/2 month consolidation soon. When it does we’re going to get another big rally in stocks and that will put pressure on gold sending it down into the left translated cycle and at least a test of the triangle trend line.We need deeper sentiment readings and the commercials need to cover a lot more shorts before gold will be ready for the next sustained rally.I keep telling people this but no one ever listens to me at ICL’s. The big potential right now is in energy stocks.Of course everyone will miss this one just like they missed the bottom in gold last Dec. and the top in gold three weeks ago. I try to warn people ahead of time but they never listen.
- You might be right again but u and anyone who bought Dust will be in a world of hurt if gold continues to rally. Dust is already down 20 % + since the gdx bottomed. It could go down another 10-15% easily. By the time it turns around and rallies will the stress be worth it? It prbly won’t even gain that much due to the decay
- Gold is not going to continue up and up. Gold is doing exactly what I said it would do. It’s delivering a dead cat bounce and suckering in everyone to drag them down into the final yearly cycle low.Gold will rally for 5-8 days and then decline for the next 20-30 while the stock market produces it’s next leg up.I’ll say it again. This is your chance to exit if you got caught at the top.
- Gary
We’re not going to listen to you till you stop telling us we never listen to you. Worked on my kids. Love you playing the short side nowadays.
Normally I never bother with shorts, but in this instance I think the banks are going to try to run the stops below the December lows so I think we’ve got a little insurance.
Gary
Robert
waverider