Sunday, February 1, 2009
Can't get that shiny shit outta my mind
Another short-term gold chart. I am obsessing over the gold price right now for several reasons. The most important and immediate one is that I am looking to take some of my recent stock market trading gains and buy some more physical gold. I believe a correction in the gold price is imminent and will probably start tomorrow. This would fit in with one last U.S. Dollar thrust up and one last thrust down in stocks (including gold stocks).
Before a trend change occurs, it is often telegraphed by the breaking of a trend line. The first "attempt" at changing the trend in price often fails, but sets the emotional stage for a true and lasting trend change. I believe the "peek-a-boo" break above the trend line in the chart above is such an event. The gold stocks have already telegraphed that this first attempted trend line break in the gold price will fail. Gold stocks would be going bananas right now if the gold price was about to explode to the upside.
A quick waterfall decline over the next 2 weeks is what I am waiting for to enter my next purchase order for physical gold. No, not the GLD ETF, but hard, physical, shiny shit for hoarding. Unlike many, I believe gold will do better than the U.S. Dollar and believe gold is the ultimate currency to weather a deflationary credit collapse. When this storm is over, gold will no longer be thought of as a kooky, barbarous relic by the average investor.