“After 22 years in and around the financial services industry and enough losses to know I must put my pants on one leg at a time like the rest of us, I stopped believing I could time markets on a consistent basis. However, last Thursday, technical analysis work I do that dates back to before the 1987 stock market crash, produced the biggest overbought reading ever for copper, gold and silver. It was so compelling that I felt I owed it to my readers to alert them of it and the belief that a very substantial correction could occur literally in a matter of hours (Please read) http://news.goldseek.com/Grandich/1147363320.php
Since then, a sharp correction has apparently begun. The $64,000 question is, will it be another couple day wonder and on to new highs, or a more meaningful decline that lasts weeks or even months? I’m sorry to say that I don’t have a solid answer. What I can say is:
The secular bull market in gold has so far eaten up and spit out any and all who have claimed the end was here.
It has corrected just enough to remove itself from the front pages before charging on again to new heights.
All the fundamental factors that have made me so bullish remain. The only two factors that have changed are the metals are no longer cheap and my aggressive bullishness is no longer clearly a minority viewpoint.
I believe the above is the bottomline good news. The not so good news is:
The easy money is over. The crowd has finally awoken but the “Johnny-come-latelys” who piled on in the last few weeks may need to be washed out before we can pick up where we left off prior to gold being front-page news.
There’s a strong chance that we will need to work our way lower after the natural rebound we should see into tomorrow and Wednesday. Friday’s weekly close is one of the more important ones in quite some time.
If there are indeed forces who have manipulated and/or capped the precious metals market and haven’t already been killed or maimed, they are all but certainly going to use this hiccup and hope to turn it into a whooping cough, in hopes of salvaging some serious losses.
What’s the best course of action?
Decisions made in very emotional times tend not to be our best choices. Turn off the computer and TV, take a long walk and try to remember what your plan was just a few days ago and ask yourself if some serious fundamental changes occurred that warrant action or would any actions you take just be in reality a way of releasing the stress?
If you realize you really didn’t have a solid plan that took into account the potential negatives, get one ASAP. The volatility witnessed these last couple of days is going to be around more often as we move into the more speculative and mature nature of this secular bull market.
The ultimate crime in investing is not being wrong (trust me) – it’s staying wrong.
Stay tuned.”