When I was majoring in philosophy in college (in the early 1970's), many people asked me why I was majoring in philosophy since you could not do anything with it. My response was that I liked what philosophy was doing to me. I think it is important to look at the financial markets in a similar manner. It is not important what I think about the financial markets or gold. What matters is what the financial markets think. That is to say, I try to look at the point of view of the market, instead of my self-centered point of view. By doing that, I am usually able to deduce what is likely to take place in the future.
The Miners have been holding up very well thus far. Since the October 2008 lows, GDX has been achieving higher highs and higher lows. There is a distinct possibility that GDX may enter a bubble phase this coming Fall. I have a very loose $70-$90 price target for GDX. That makes GDX a buy under $35.
The key will be to cash out this fall and go into TLT. The Miners are just a trade, Tom. Don't get caught up in the hype as the Miners surge. Unload them, take profits, then short them. They will tank with the rest of the market when the next leg down of the secular bear begins late this year.
The purpose of the July correction is to get all the chartists, momentum players, and emotional investors to sell, so there will be few on board as the market rockets higher.
Everything is going according to plan, thus far. |
