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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (6042)	3/23/2004 11:36:14 AM
From: TrueScouse	Respond to of 313921

lj: <<the long term trend -- which for me is governed by a 14/52 week MA cross-over in the POG>> This post is not for you Joe! IMO you're a real TA expert and I really enjoy your posts, but sometimes I forget that there are many observers on these boards who are fairly new to technical analysis. I got a couple of PMs asking me about how the MA cross-over works. So... it's shown in the following weekly chart of gold: stockcharts.com[w,a]whoayyay[pb14!b52!d20,2][vc60][iut!ll14!lah12,26,9!la12,26,9!lb14!ld20!lyb20,2.0] The blue line is the 14-period simple moving average of the weekly close prices, and the red line is the 52-period SMA. When the blue line is above the red line, the long-term trend is up (bullish). The lines crossed from bearish to bullish in July 2001 and have remained bullish ever since. My strategy will be to remain bullish on gold until the lines cross again -- which could be 5 years from now -- who knows. That's not to say that I'll be 100% invested in precious metal stocks all that time. In fact I'm already down to about 70% PMs from over 100% 6 months or so ago! Also, I'm constantly trading part of my PM position -- as one "pops" I take some profits and put them into another that I think still has to move. And if something happens like the CLG PR this week (or the IMA lawsuit re Navidad), I try and discipline myself to get out immediately and put the funds somewhere more promising for now. Incidentally, I came up with the 14/52 weekly cross-over some years ago after testing about 30 years of gold and silver prices in TradeStation -- and optimizing so that I found the best numbers that would have kept me in every major trend during that period -- bullish or bearish. This is a very slow indicator and you will give back a big chunk of profits when it eventually turns, but that's the price you pay for a trend-following system. Hope this answers some of the questions... Regards, Howy