NOW IT IS TIME TO WATCH CAREFULLY
We are now at the key inflection point I was hoping was going to develop in the worlds favorite market. We have learned several things about this precious little gem that have been interesting. First we have learned that it is a store of value and always goes up in times of crisis. Second, it has never been worth zero. I think G Gordon Liddy, Rhodes scholar, was our instructor on this one. Third, we have learned that China will be the new world leader and the Yuan will take the US Dollars place as the worlds reserve currency. Our teachers on that have been single A ball players for the most part. Fourth we have learned that the governments are artificially suppressing the prices of Gold and Silver to stop them from being at $50,000. We have also learned that there are several 7 year olds asking their parents how much Gold they own, and if they don't why? We have also learned that in spite of the meteoric rise in the price of this over the last several years, this is actually the best time to buy it and it is sure to clear $5000 or more. We have also learned above all these other lessons, that "it is different this time."
As to the wisdom of any or all of these teachings stated above, I don't have any idea if any of them are correct or not. My research does not confirm most of them except the 7 year olds buying frenzy. That is something I have experienced directly with friends mine and their children, so I know it too be true. I may have left out a few lessons from this list, since I always tended to tune my instructors out at some point during my years in school.
In my little world, this is very simple, this is a very good sell setup. It is not a sell entry. It is a place now where it has rallied in a down trend above my upper bands, at a time during the year when the seasonal bias is down. Further, there are some multi year cyclical influences that are also kicking in here. This just tells me to look for short entries here. Whether or not they turn out to be big moves, or whether or not the actual entries even setup on the daily charts, I do not know. It is my intention to try and ride short entries if I get in them, for a larger move because of my big picture view. What will be tough to do when the break does happen whether or not it is now or 2 years from now, is going to be the massive daily ranges we are going to see. We got a preview a few months back of what the feature presentation is going to look like once it gets here. If I happen to be short and get two consecutive $100 days in my favor it may be hard not to take that money. I will cross that bridge if and when I get to it. In any event with all sarcasm and kidding aside, this market is setup now on a weekly basis for a sell, so I am looking for something to setup to get short here.
It does seem unlikely that we could get a big move down here without the stock market going down, so we will see if that separation will happen. Maybe both will keep rising.
It does appear to me also, that quite a few other markets are setting up as retracements in down trends.
Here is one of the of those other markets that I am looking at, the British Pound. It is pretty much the same picture as the Gold market. It does also have some bullish sentiment which makes this one attractive to me. The Grains are also mostly into my bands in the sell zone, and Bonds are into the buy bands. I suppose the Indexes are still by COT standards a sell, but my bands have turned up there so those setups are not as good.
The difference to me between the currencies, bonds, Gold, and the stock setups, are that all of them are retracements against the trends except the indexes. The indexes are against the trend.
The one thing that all of them have in common is that none of them have a daily pattern for entry that I would use going into tomorrow. I will be watching these for entries this week.
Good Trading this week