Gold Investment Directory

Archive for November 28th, 2009

09/28/08 – Wondering how the bailout (or it’s failure) will affect gold? I don’t portend or pretend to know what is going on behind the doors as Congress negotiates this “bad” bill, but from all my indicators are that wall street will initially get caught up in the hype, and then the plan will “fall” out of favor…

My work is indicating just that, that the gold market is setting up for a massive, yes I said a massive comeback. First stop is to attack, very aggressively, I might add, the old highs at 1000/oz.

So, how can you take advantage of the next move? Especially, if you were the few that listened as the gold market yelled for us to get out of the way of the oncoming avalanche. Well, as traders know, take your profits when the indications are that the markets will turn and “re-position” yourself when the market likewise “calls” out to us to come back to the party – as I believe it is doing as I write this article.

GOING FOR THE GOLD – HOW?

I’m no longer a big believer in “hard assets”, to difficult (for me anyway) to sell tangibles, the execution is too slow, the price haggling is too much BS. In short it’s not as efficient, or anywhere as convenient as the trading pits on the futures and commodity exchanges, this is especially true when it comes to the options pits (which is where I trade). So, this is where I have chosen to play the stock market, the futures and all the commodities (yes, you can play all of these markets in via stocks). For those who are interested in playing the gold markets you can do so via the following stocks and or indices; abx, nem, gld, or the xau.

PLAYING THE BANKS…

Banking and the financial crisis or the presumed exuberance of it’s passage can be played and or invested in through the utilization of options on; xlf, wfc, wb, etc. So, while the shorts have been stopped, on certain stocks, the “put” option protection (investing) remains in effect.

While I sit and analyze the above, I find even the stronger survivors of the recent debacle, are looking a bit top heavy, with little to go to the topside (or in an upside rally), in fact I am getting ready to short the next rally in any of the banking stocks I’m watching (which I can’t divulge here), and searching for a  place to take a position in the gold arena. In other words gold (investors) are not buying into the going’s on in Washington (and around the world.

Presently it is going to be a bit frustrating to “gold” traders up at these present levels (10/10/08), but the indications look like for the next few weeks, the traders (institutions) are squaring off their positions, covering shorts and repositioning in longs (call options or hard assets), for the next rally.  This would play out, given the recent “stock market” debacle as it settles back and forth, in it’s attempt to test the most recent “panic” bottom in the 8800 range, though I don’t believe it will remain tough at that level, as I see a horde of buyers (vulture investors) sitting in wait at the 7700 (on the Dow) price level.

WHY TALK ABOUT THE STOCK MARKET?

Whether you believe it or not, or want to believe it or not ALL MARKETS are indicators of their fellow markets.  One tells what another is going to do, when it is likely to do it and at what levels it will probably occur.  That being said, you MUST KNOW HOW TO READ THE MARKETS, understand their language and how to interpret what they are saying to you! This comes with time and training – Back testing, CNN, CNBC or FBN won’t tell you or teach it to you.  Hell, half of the commentator’s on these stations don’t know what the heck the news is dictating to take place anyway – so why listen to them?  It’s fun to watch these puppets fundamentally analyze the markets based on what is in the news they are broadcasting.

I once told my fellow investor’s: “If you want to be a good trader, make money consistently in the stock and commodity markets, then TURN OFF THE NEWS!” It is often “inaccurate” and or “late to the party”, i.e., used as an excuse for what the market “HAS ALREADY COMPLETED DOING… NEVER WHAT IS ABOUT TO DO!”

Keep your powder dry, be patient and get ready - IN MY OPINION, the next move is going to be a very worthwhile position to take in the gold and stock markets.

~ Good Trading

Oh, the bailout, in my opinion was nothing more then a “power grabbing” excuse used to rape the tax-payers coffers of what our “government” has stored up. My question is this; if we have all this wealth to toss at wall street, why hasn’t our government readjusted the tax code, lowered our tax rates and thus allow Americans to really enjoy the fruitage of their labor(s)?”