@Scott, as we have personally communicated, I am an intermediate term gold trader. The last time I traded I started buying the SPDR Gold Trust (GLD) on April 1, 2011 and started selling my accumulated shares on September 8. I have been completely out of gold since December 13.
One of my indicators is a Moving Average Oscillator based on the separation between its 50- and 200-day moving averages. Over many years it has been useful to buy gold when the oscillator first reverses to the upside, especially when it is below 2%.
Based on how low the indicator is at the present, I agree with you that this may be a supremely attractive buying point. However, I will wait until the oscillator turns higher.
Including today's big rally the oscillator will turn up within two weeks if GLD makes it to 165 by then. I will be a buyer if that happens.
One can certainly make a case to own some of the metal as an expression of one's fear about the economy and the political situation, and I have accumulated a modest position that I keep in a safety deposit box. However, I separate that totally from my trading.
SPDR Gold Trust (GLD) Moving Average Oscillator
Through Friday, May 25th |
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Re: Demographics
mInvestor
6/1/2012 2:25:25 PM
@Fred,
Can't agree more, neither candidate can fix the problem. The only way we get out of this mess is letting market working itself out. It's supposedly to be a free market. Unfortunately, our government is trying to intervene. What they actually got will be slowing down the recovery. They are also smart, but they still do this. Why? Because they try to win the election.
And yes, you are right. Whatever they do now won't fix the current problem. They will bring consequences to next generation. By that time, all those politicians will be long gone. Too bad, our kids need to clean up the messes for us.
Hopefully, we will find one candidate is not that hungery to power and glory, and willing to do something useful to people and the world.
Don't pay attention to the mainstream media on gold -- they are contrarian indicators.
They would have you think that gold was been a disaster for years. It started 2011 at $1400 and climbed to $1,900 on a blow-off top, then retraced 30% back to $1,500. Classic bull market action.
The fundamental explanation is that each time we enter a new phase of the crisis they "fix" it by printing more money. So what do you think is coming next?
If the government is lying to give us false confidence, I wish it would do a better job at it...because my confidence is about gone.
You should probably repeat that Scott--because 6 months from now, people will be asking you "Is it too late to get into gold?" as the market heats up again.
Best gold buying opportunity in 4 years, in my opinion. A near 30% retracement matches almost exactly the correction in 2008. In addition, the COT futures report shows lowest gold speculative longs and highest amount of shorts since Sept. 2008 -- major fuel for a rally.
@Scott, you wrote:
"Maybe the election won't matter. That's actually how I feel, especially since both the economic and market data on historical performance of Repubs vs. Dems is marginal at best."
I have a very dear friend of 40 years, a commodities trader, who has expressed precisely the same opinion. He also has said, as you did, that neither candidate can fix the problems we face.
Perhaps you are both correct with respect to the economy, but there is more to my life than the markets. There are tactics and opinions expressed by the candidates that will have a direct effect on the wellbeing of my grandchildren and I have made a personal assessment as to which candidate and which philosophy is more likely to permit my grandchildren to enjoy the life I have been privileged to lead.
At my age it probably doesn't matter what the outcome of the election is, but it certainly matters to them, in my opinion.
@Scott,
I watch the government numbers in order to get a feeling about the probable reaction of the market.
As a result I am 100% out of equity and own only BOND and MINT ETFs with the balance in cash.
As you know personally I have been out of gold for months, but am likely to get back in if the news from Asia and Europe continue to worsen.
The trader and analyst Jim Sinclair calls this approach "MOPE" -- Management of Perspective Economics.
The idea being the the government can control markets but giving people false confidence.
I agree this doesn't work and sometimes has the opposite effect of making markets more volatile than they need to be.
BTW, I am always unimpressed with how voters are so susceptible to the economy -- voting however the economy swings. Throughout history the economy has been volatile and cyclical. And often there is very little the government can do to fix it.
In fact, I think the notion that emerged in the 1990s that the government and Central Bank were omniscient and could "banish the business cycle" was the most dangerous idea that got us into trouble.
Maybe the election won't matter. That's actually how I feel, especially since both the economic and market data on historical performance of Repubs vs. Dems is marginal at best.
I think the problems are too big for either candidate to fix, frankly. The real problems would have to be fixed by larges across-the-board changes brought about by a sea-change in U.S. Congress.
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