Headline today “Gold Soars Above 1600”.. Really, a rally up to 1608 is considered soaring? I didn’t realize that.
I am more convinced than ever that this is a price level worth fading. To quote a friend of mine today, ” All the lousy traders he knows are buying gold at these levels, initiating new longs”.
Sell it, put a buy stop in, and head off to do something else. If you listen to the radio or watch TV this week, you’ll be dying to get long gold. I just can’t justify buying it here. For heaven’s sake, if you do need to get long, then put a sell stop in below your purchase.
AS for the Dow Cash Index.. Today we are taking a down turn. However, where are we relative to the recent 900 pt rally??? We are 1/2 way back at 12,314. We could go as low at 12,200. I re-iterate, I am a buyer of dips here.
August 2nd will come soon enough. Like all other politicians who have preceded them in history, Both the Right and the Left, will push this “argument” to the last minute.
That way both sides can tell their constituents, “I fought long and hard for you” or some such nonsense.
Bottom line, its in no one’s interest, except for the extreme Tea Party zealots, to have the Government default. The extremes can believe what they want to believe and say what they want to say, because thankfully this is still a free country.
However, in my opinion, in the end, we’ll meet in the middle and the zealots on both sides will limp off the playing field, with the “loser’s limp” soon to decry the game itself.
August 2nd co incides with vacation time in Europe. The continent basically shifts into low and goes on holiday. Once this debt issue is settled, the markets will have to focus on a new Bogey man to fear. My hunch, it will go back to the PIIGS, or perhaps if we have a spike in grain prices, the new bug a boo will be “Food Inflation”.
Of course, this is just my opinion. Take it with a grain of salt. All I know is that in 20 years of trading, August generally provides little to no bang for the buck for traders. August follows a close second to December for “worst month of the year to trade”.
Good Trading
Stay disciplined
An idea is only good if you make money. The rest is just words.
You can’t go to the grocery store and buy food based on your “opinion”.
CER