The following chart, depicting gold in four major currencies, clearly shows the trend. This golden bull market is NOT a dollar-only event.
As expected, gold and silver are losing ground and the dollar is gaining, prior to the election. I am somewhat surprised that the stock market is also falling. Don’t be fooled by these short-term moves and pay attention to the big picture and the major trends, like the chart above. As the chart shows, the move up is not a straight line, but a jumble of ups and downs that TREND up over time. I expect the markets to look very different by the end of the year. Better, not worse.
I have been very hard on Larry Edelson this year. He has kept his readers out of the market since the first of the year. He was correct in calling a pullback, but gold and silver never came close to reaching the depth’s he touted.
In today’s daily, he has some very intelligent things to say about the economy and gold. Actually, he could have written it for our pages, as most everything he says you have read here before. And he is extremely bullish on gold. Here is what he wrote:
So while downside is still present, and there are opportunities to make money on the downside, never forget that there is one asset — bar none — that you should own for the longer term.
It’s gold. There is nothing better than gold. If you own gold already, hold, and wait for my signals to add more gold. If you don’t own gold, get ready to buy — either on a decline back to major support levels, or a full-blown breakout to the upside above $1,823.
However, he is still leaving you in “limbo.” He is asking you to sit on the sidelines until gold falls into the $1400s (most unlikely) or breaks out above $1,823. When you can now buy gold for $1,700 (or maybe a little less in the next few weeks up to the election), I personally would not wait for gold to top $1,823 before deciding to buy or add to my position. But, as I said, his big-picture analysis is very good.
I have strongly suggested that you do NOT TRADE this market. I have written that the most important thing in investing is SLEEP. You must be able to sleep at night with the investment choices you make.
A friend of mine, who inherited a LOT of money has ignored my advice and for the last couple of years has become a “day-trader” of ETFs and stocks. Yesterday he emailed me the following:
David, Stop the bleeding please! I may bite the bullet and bleed some more? My father’s portfolio is down 4%, with only a 7% gain remaining for the year! (he was up big until recently) The market expert I trust the most say’s, “Stay focused on big picture, we are just a few day’s away from the Big Prize! The dollar will hit its 200-day moving average on more market selling.” This is going to be the scariest pullback yet! Most will not survive! I will not follow the sheep and lose my position, when the entire market could blast higher in a violent way? How the Hell did I get mixed up in this @#%$; my hair is falling out, and you’re right about not sleeping. I can’t take much more.
Mind you, he has well over ten million in the bank, yet by trying to make some extra profits trading the metals – he can’t take it any more and his hair is falling out. He has never listened to me, except once, years ago, when he purchased a few hundred thousand dollars worth of junk silver that he still owns with a hefty profit. When you try and trade these markets you will end up very frustrated and probably lose money too boot. Most traders do.
I asked Trader David R again, last evening, if he thinks his prediction that gold will hold at $1,680 or $1,690? He emailed me the following:
I remain bearish short term and yes am very bullish longer term. We all know how this story ends, just have to figure out what chapter of the story we are currently in.
This is one tough market to figure out right now, short-term at least. Even David R is scratching his head. Using moving averages and charts in this market is no guarantee of success. I smiled when David spoke “my language” and deferred to the Big Picture. As long as “we all know how the story ends,” think Big Picture and sleep well tonight with your gold and silver – in a very upside down world.