The question on many people's minds now is, "What next"? My view is that there are enough skeptics of gold to keep it rising for some time to come. As I stated in Sunday's post, Trading Ideas For the Week http://wallstreetwatchdawg.blogspot.com/2009/10/trading-ideas-for-week.html, I believe that gold is in a secular bull market dating back to 2001, and that secular bulls end in one way, and one way only: With the public becoming irrationally exuberant about the possibilities of wealth generation through the asset in question. In other words, the common thought at the end of this gold bull will be that gold will never go down again. "This time is different" will be the theme of the day. Cab drivers will be buying and selling gold, as will soccer moms, school teachers, grocery clerks, doctors and lawyers. Unfortunately for them, it never is different, and the public's mass immigration into gold, and the popular delusions that accompany it, will be the sign that it is time to look for an exit. Until then I will grab the bull by the horns and ride, adding to positions on swing reverals upwards as gold bounces out of it's cyclical bottoms.
I added to positions today as Gold not only broke through long term resistance, but is also just one week removed from a weekly cycle low. Note that gold has had a consistent rhythm in its weekly cycle of appx 21 to 26 weeks between lows. Thus, I see plenty of support for a sustained move higher. My target for this leg of the advance, between now and next spring, is approximately 1340.
Here's the real chart of gold's current value in inflation adjusted terms.
http://www.ritholtz.com/blog/wp-content/uploads/2009/10/gold-REAL-dollars.gif
Looks bullish to me.
Fubsy
No comments:
Post a Comment