Gold going gangbuster
Posted by Frugal on December 2nd, 2009
Gold just made a new high at $1217 today. I believe that it can easily go to $1300, and possibly touching $1400 before pulling back. BUT it can also easily fall back to $1080.
The bottomline is that I don’t know whether it will go up or go down tomorrow. But nobody else knows either for sure. However, recognizing your own ignorance is often better than being the best trader in the world to try to catch the lowest point and cash out at the highest point. This strategy is especially powerful in a true bull market like gold.
As I have explained in my post on Kelly’s Criterion for investing, such strategy is very well suited for an asset class that is in a bull market. Simply buy more when it falls, and buy less when it goes up. This strategy goes counter to a traders’ mind, of cutting your losses early, and placing stop orders. And as I have also said in my post that such strategy WILL bring extreme volatility beyond the tolerance of most people. The obvious risk for such strategy is that one must ascertain the validity of such a bull market.
It is clear to me that gold & mining stocks are in a major Elliot wave 3. I don’t know whether this is wave 1 of wave 3 (which I’m leaning towards), or wave 3 of wave3, but either of the up waves should be quite strong.
So the train is leaving the station. Are you on or not?
More related posts:
Digg it Del.icio.us Reddit Furl BlinkList Newsvine Yahoo MyWeb
December 3rd, 2009 at 7:02 pm
1st Mil,
Good posting. One thing to mention is that while gold in pretty expensive, silver is still somewhat more manageable. You are correct that gold could be higher, especially with interest by the Chinese and Indian governments and an overall lack of appetite for U.S. dollars.
However, silver is still under 20 dollars, so if your readers might be interested it taking a position.
December 14th, 2009 at 2:33 am
I’m a bit late, has the train left yet?
December 22nd, 2009 at 11:34 pm
The train has left the station. Unfortunately though, it’s going below ground now. Look out below.
-Mike
December 23rd, 2009 at 12:15 am
I tried to avoid the train station in the first place with Gold. Much to volatile and performs horrible over the long term. I think you’re making a smart choice by cashing out now.