My 1st Million At 33 – yes, you can do it too

If you have read the latest article by Ike Iossif from financialsense, and have followed the charts of XAU, HUI, or gold spot, you must have observed the pattern of two failed consecutive thrusts. Right now, we are going through the third try, which I believe to be premature.

When looking at the chart, two things popped out. One is the repeated failures, with higher lows. The other thing is that the 200 days moving average is ascending up quickly to meet the lower points. If the gold market is to be in the bull market, the next move should be UP, and a BIG UP. To go up big time, you cannot do so without a good period of consolidation to store up the energy. If I draw a line of the recent two peaks, there seems to be still some room between that line and the 200 days moving average. I believe that gold market must consolidate until all the rooms run out (or even fake a bit to go lower), and then be “forced” to jump up BIG time after that. (Courtesy of StockCharts.com for $HUI)

Now the alternative would be that when the room runs out, the gold market resolved to the down side instead of up. Either resolution will be a fairly sizable move. I’m obviously betting on a positive resolution.

The other thing that I don’t fully agree with Ike is that I don’t believe the general market will necessarily go down when the gold market goes up. In the very recent history (this year), gold market has been very synchronous to the general market. This synchronism will not be broken that easily or that soon. The decoupling of the two markets should take time. Same for the coupling process (which took time to develop). Therefore, I’m still hoping that general market is fairly synchronous to the gold market, and will go up & down together, although they don’t make much sense at all.

Obviously, such common factor between the two markets would be the Fed interest rate policy. Therefore, I’m betting on UP for both precious metal and general markets after September 20 timeframe.

Of course, my views are not in agreement with Robert Hughes, and Martin Pring, both of which are more deflationary. Certainly, if my bets are off, my networth will probably suffer some 20% decline (quite big both in relative and especially in absolute terms). Yeah, I’m very NERVOUS. For my remaining cash, I keep putting them on the sideline for fear of such unfolding scenario.