| From: SliderOnTheBlack | 12/17/2008 10:33:22 AM |
| | 8 Recommendations of 22924 |
| |
Gold Stocks: Trading Thoughts...
Here's the present trading channel for the HUI Gold Bugs
Index. Forget your Elliot Waves, ignore the Candles, and don't
waste your time on P&F, because THIS is the money line...
If you ever listen to anything I ever say -- listen to this:
Never, ever... EVER trade the technicals in a vacuum.
The Fundamentals always matter... ALWAYS.
So don't take your eye off the "fundamental" ball, even though
the technicals are screaming -- "To The Moon - Alice!"
And right now, the US Dollar, which rallied on the "mechanics"
of the deflationary effects of a credit bubble collapse, is
now collapsing under the "fundamental" weight of the Fed's actions.
And I don't need to tell anyone here, that a weak US Dollar
is a primary catalyst to a higher gold price.
We now have a Fed that has removed any pretense of it's
desire to re-flate at any cost. And it is re-adopting
a weak dollar policy (watch Kudlow scream...).
Now that doesn't mean that at some point in the future,
and even in the very near future, that the Central Banks will
not re-focus on -- silencing the canary in the coal mine.
...because they will. So anticipate that eventuality vs.
getting caught reacting to it at a later date.
But for now, the threat to this rally in gold and gold stocks
is not Central Bankers whacking gold, it's the overhang
of what will continue to be a stream of negative economic and
market news.
So stay on your toes, keep TIGHT stops, and let Ole' Yeller
run, as long as she doesn't break the support line of the
trading channel shown above.
At some point in time we should expect a 50%ish retracement
of this move that started with a "V-Rally" off the intra-day
low of HUI 191 on December 5th. So, plan your re-entries
accordingly, if stopped out of this run.
And if we get stopped out... don't chase... make the pullback
re-entry worthwhile, because you can always add on strength.
Stick to the trading channel above and you won't give back
this move.
...and that's "Job #1" -- to never give back a major move.
Never... ever....EVER.
Mo later,
SOTB
PS: If we hit HUI 320 today (or, before Dec options expiration)
... you may not hear from me for a few days <vbg>.
PPS: And remember --> TIGHT STOPS!
...and when I say tight, I mean TIGHT. |
