WAIT ! - Ski-doo-looney-loo just added an addendum to his Call:
...just had this Pm'd to me:
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SKI Update
8/8/05
CONCLUSION: I am waiting to buy until the first UP day (close) in the gold stocks. Will I get one soon?
I apologize if my suddenly frequent messages are disturbing, but this is THE week. I only send these if it’s important. I believe that I haveb an important handle on the gold stocks this week and this is bull vs. bear time in a big way.
The master 92-96 index buy signal has, of-course, been generated today for the close tomorrow (Tuesday, 8/9/05). I am writing this before the stock market closes in the U.S., but I’ve watched the gold stocks open the day higher only to sell off as expected. I continue to expect that
the gold stocks will decline tomorrow for the fourth straight down day into the signal (note that it is rare for the 92-96 index to buy at a low, reinforcing my recommendations below). The 92-96 buy signal indicates that a bull market has started, but it is not always correct.
It’s perfectly fine to buy tomorrow’s close and then to use a 92-96 index sell signal as the stop, but read on please.
I am writing to emphasize one scenario that I stated in this weekend’s Update. It’s the one where the index buys and then sells quickly at a small loss. That is a perfectly common and reasonable possibility. If tomorrow’s anticipated decline continues for another day or two (depending upon the size of the decline), the index may just sell quickly at a loss. There is no rule that says that the decline has to end at 4 days down. Such runs usually end at 4-5 days, but there have
been times when they’ve extended to 10 days down. For example, the one real loser out of those 92-96 index trades listed in the last Update continued for 9 days down, for example.
Therefore, I am going to wait to buy until the first up day. That is the logical strategy: I may buy a little (2%?) higher than the index, but the odds of being correct will be extremely high, and if I “only” make 148% instead of 150%, what’s the big deal? Remember how I always write that I am risk-averse, that one wants to avoid large losses. I
want to avoid the possibility of losing 2-5% on this buy signal in 2-3 days (even though 3% is not a “large” loss). It is rare for the 92-96 to buy at a low and that 3 Down and 5 Up run into last Wednesday’s high can really be a major high.
If the gold stocks go up tomorrow (8/9/05), I am buying 75% and then will add on each and every down close. If they go down, as expected, I will delay buying until there is an up day. And if you don’t have the luxury of being on vacation from a university (me) and watching these goldies during the day, then you can just buy as soon as possible, the
day after an up close.
I’ve discussed this with my colleague and his conclusion is that I am being logical and analytical.
He stated that he does not hear my sometimes emotional tone. I strongly recommend what I am suggesting:
Be prepared to buy, but wait.
If the gold stocks unexpectedly turn up tomorrow, I will be buying. If they continue down into a quick 92-96 sell signal, then they may also generate the 35-39 index sell instantly (those prices are also at 7.62 now) and SKI will remain bearish.
Why does SKI suggest delaying? This time I’d truly say it’s NOT that I am being “chickenski”. It really is wisdom gained from experience.
I am now calm because I know what to do.
P.S. After I’d written this weekend that I was worried that real estate hadn’t been going down, I read the excellent site
truecontrarian.com only to become aware that last
Thursday-Friday witnessed an extraordinary drop in real estate related
stocks!
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re: [ " I am now calm because I know what to do."]
....R-O-T-F-L-M-A-O !?!?!?
If his next post starts with - KMart, gotta go to Kmart , Haines 32, Boxer Shorts, KMart.... I'm an excellent driver, I'm an excellent driver... 10 minutes to Wapner, uh - oh 10 minutes to Wapner....
Then I'll understand ~
321gold.com is a great site... but, why in the hell are they giving bandwidth to this escapee from the Rubber Room ? |
