WOW!!! This guy has been dead on the point. I am hanging in and forgetting the top callers we climb the wall of worry:
Gold, Silver & Related Stocks - I like to save the best for last. I would like to begin this section with a paragraph from my February 8th article on gold entitled Has The Fat Lady Sung?:
With that being said, I want to talk about yesterday, and today, and even tomorrow because there is a plethora of less than holy people calling a top for probably the fifth time in the last month and a half. The first top was called back on December 12th when we hit an intraday high of 545.00 and then fell to 493.00 seven days later. My clients used that "top" to add on. There have been other tops as well, but you get the idea. Now what we are seeing is a self-fulfilling prophesy of resistance at 569.75, but we have not yet seen the top. Better yet, this is not the correction that everyone has been waiting for. What this is, in my opinion, is nothing more than a three to seven day move down which should be followed by some sort of short consolidation, and then a resumption of the leg up. This counter trend move down may find support at 553.25, but more than likely will test 539.50 or even 527.00, forcing all the speculative weak longs out at just the wrong time.
It just so happens that this is precisely what has happened. We tested 539.50 (in the March 06 Gold contract) and held it on a closing basis. There was a retest a couple of days later and that retest has been followed by consolidation and a gradual increase in price. The April Gold futures contract closed out the month of February at 563.90 and will test the spot price resistance of 569.75 sooner or later. I have absolutely no doubt of that.
What I want to do now is modify my forecasts for the rest of this move. This is really important, so pay attention. I have felt for some months that we would test 569.75 a number of times and, at best, make a marginally higher high. This would then be followed by a correction. I now no longer believe that to be the case. I am looking for a quick move up to short term targets of 603.00 and 644.00. At or close to 633.00, I expect a correction of no more than 5%. This correction will then be followed by another relatively fast move to +/- 678.00 where another 5% correction will be possible. My eventual price target is now 728.62 in the spot price and I do not expect to see any meaningful corrections until that price is hit. Once the price target of 728.62 is touched, I expect to see our first really significant correction of this Bull Market campaign. That correction should be somewhere in the neighborhood of 25% and will bring us right back down to the 550.00 level.
With all of this being said, I will not try to time any of the corrections, but I will add on once I have seen two consecutive closes above the 569.75 mark. What will I do if and when I believe the 25% correction is under way? I really don't know but I suspect I will do the same thing I've done since 2001, i.e., sit through it with my positions intact. Why? I don't have any guarantee that it will reach 25% and I don't want to take a chance and find myself out of the Bull Market. Just ask all of those who sold out their positions back on February 10th, expecting a "correction," what that is like. In short, I am long gold and will stay that way.
With respect to gold stocks, I continue to be long BVN, CDE, GG, GLG, NEM, and RGLD. I used recent weakness to add on to BVN at the 25.75 area knowing that the concerns for the Peruvian elections had been overdone. Likewise, I will use concerns about NEM's balance sheet to add on to that stock today or tomorrow. Gold stocks, much like silver at this point in time, will follow the price of gold for a while. With respect to silver, I will add on to my current positions once I see two consecutive closes above 10.00.>>>>>>
321gold.com |
