As I sat watching the market's action this morning around 8, or so Gold, rolled around on CNBC down $4 A nice modest loss due to some strength in the dollar. The next time it rolled by, it was down $14. "TWSAU" are at it again. Remember bull-markets are described as steady movements upwards followed by short violent corrections to the down side. Likewise, bear markets are the exact opposite. Just look at the USD index and tell me what that looks like. The dollar is dead and anyone buying into it has the attention span of a flea. Unfortunately such things is how these market's have become, an emphasis on the need to make money on something ANYTHING every day no matter what. Whether we chase prices up or down buy on high RSI's or whatever, we break all rules for the money... Gamble-holics... go to Vegas we don't want you here. The same guy on the floor of the NYSE buying Goldcorp right along with you will be the same guy who bought AIG last week (and apparently still is) How desperate are we to make profits that we will buy up a stock of a company that is still selling for -.08 times earnings and pays no dividend has no decent prospects and has the government supporting most of it. Don't be a sheep, you will make more money than you can dream of in time.
The drop in gold fits right along with a trend line that has been in place since 905, so I like gold here although things are making me rather unhappy. I told you to watch IAG as there earnings was last week and I thought it would surprise the market greatly. It did. And if you were ballsy enough to bet that they would beat expectations, you were right but you did just that...bet. this is not how I invest and is why I did not inform you to buy before the earnings. IAG is probably my favorite gold stock hands down, however, they are way within overbought territory and MUST fall eventually back to the break out point at 11.50. The breakout was premature, and pushed along by technical analysis traders based solely on their earnings report. The hourly RSI hit in the 80's on Friday and daily is about at 70. If you missed the boat, so did I, but it's the safer bet, the breakout still has far to go, and will at some point fade out and follow gold again. GSS is holding at it's breakout point and would be a good place to buy more as the target is still about 2.75 for the short term.
Sentiment this week on gold is way too bullish for my liking so I'm expecting a boring week. Like I said in the title, this is why we keep some cash on hand.
That's about all I got, as I've been not at my best for the last few days. I will keep you updated no matter how brief it may be.
Hold on...
-J
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