A gold correction is currently underway. I think GLD will fill the bottom end of the Bollinger Band, which is currently at around 80. Not surprisingly, GLD's fall comes with a rise in the stock market and the lowest VIX (fear) reading in a while.
High VIX = High Volatility, which typically means High Fear. Relatively speaking, it's still high. But there are definitely a lot of people talking about a bottom lately. I find myself pulled to bottom pick the S&P500 here, but my instincts tell me that we are nowhere out of the woods yet. Comparing the economic environment to the last recession, it feels like 2001 because people are still talking about bottom picking (internet) stocks on the way down.
I'm staying cash and sticking to my plan of buying Gold on the weekly technical bottoms in 2009-2010 until the next "game changing" event like the fall of Lehman. The only clear trade/trend that I see is all currencies are becoming devalued, which only means good things for gold.
If you've been waiting to buy gold, your opportunity is coming soon! Watch the action for the next few days and weeks. I'm targetting a 1/10 position buy between 80-85. So that means if I have $10,000 to invest, I'm going to buy $1000 between 80 and 85.
If it blows past 80, be careful and slow down the buying.
Posts
