Watch what happens in the Gold market THIS YEAR.

[rickortreat]

The rise over the past three years from $350 to $640 has been a wild one, but that was only the beggining.

There are a number of factors behind gold's move upwards, but like all things bought and sold in the open market, the dynamics of the market itself has a lot to do with what will happen.

Everyone in the market is there to make money, as a consequence most people will chase what is hot.  Gold is a prime example, as last year saw it break out above $575 for the first time in decades and ran all the way up to $730 before collapsing.  You had a lot of people getting in late and driving up the price in their desire to get in.

The problem with gold is, is that it represents a very small market relative to other things.  Right now Microsoft is bigger than the entire gold market to put things in perspective.  This means that once people recognize that Gold isn't going back below $575, and instead headed to $800 once again, the price can rocket very quickly.

The winners in the markets are the ones with the deepest pockets.  If you can make the other guy blink you win- reguardless of fundamentals.  If you get anything out of my posts- get that!!!

There was a massive intervention to stop gold from rising once it got to $730- all it took was some massive selling of gold into the market, enough to overwhelm the buying and scare the longs into covering.

Any time you have manipulation in the market that pushes the market in a direction it doesn't want to go, will only result in a stronger, move vigorous move in the opposite direction.  The Gold market has now recovered from the price collapse and has now built a new base. When the price breaks out above $655 again it will be the start of a new move - the second leg of the great bull market.

By the time this one is over Gold will be over $800 and probably a thousand, although not in a straight line or all at once.  I expect some hesitation at the $655 level, and then $676 before making new highs.

[rickortreat]

Just wanted to provide an update.  They again tried to sell Gold down, and as I suspected (predicted) $600 held, (actually $603 and change, but so what)  And Gold has since risen to $627, from $603 in 10 days.

Gold is still in a consolidation pattern, so there should be time to buy still.  Upward resistance is currently at around $640.  IF it breaks through there, you might be out of time!  I am not sure if it will or if it will fail when it reaches that price.

Jim Sinclair, who made a fortune in Gold in 1980, thinks that this time between now and the end of the month is the window for Gold to take off.  From a technical analysis standpoint, when a consolidation pattern following a huge runup in price, typically the consolidation ends with another huge runup- this is the nature of bull markets.  Bear markets do the same thing, but in reverse.

Start now by choosing which gold stocks to buy and watching their price moves on a daily basis (along with the price of Gold itself) and see which ones respond the most to Gold's strength.  That way when the buy signal comes, you'll be ready.

[rickortreat]

Gold has now broken out of it's consolidation pattern, as I suspected, breaking out to the upside.  There are still horizontal price levels to be taken out, and the next one is at $655.  Gold is currently at $649.80 and has seen prices as high as $654 today.

Once Gold gets above $655, there is only one more way point between that and $730 which was the high last May. 

This is the time to get in, if you haven't already.  Gold is now back into an uptrend that should take it past $730 this year.

The objective is to now figure out the sell point, but if makes sense to use trailing stops on your stocks.  Make sure you leave enough room to not get shaken out on a normal down move, but tight enough to protect your profits.

[rickortreat]

Gold is now at $659.  This is in the territory of former resistance, the price gold could not hold above.  It now appears that the available supply has been taken up, which means the price starts to rise seriously now.

If you're not in, hurry up, once we go above this level, we won't go below it again.

[Rolando Blackman]

Hey Ricko!!!
   
Thanks for the insights...I am acting upon this tomorrow.
   
- RB
Shaq #1

[rickortreat]

Good job Rolando!  Make money!

Gold closed at $666.70 on Friday, well above the horizontal resistance level at $656.  If you're buying Gold shares, there's still time, as the miners are lagging Gold to a certain extent.  This is somewhat normal and to be expected as miners leverage over gold increases when the Gold price starts to rise.  There still seems to be some doubt in the marketplace, but this may be due to the number of people who bought in late when the market peaked last at $730.00

Those people have been stuck since then, and may be bailing on those shares after finally getting even on them, sore on Gold forever.  They will really be sore when they watch those shares they sold rise to new highs!

The next resistance level is at $676 and will probably be reached next week.  The present concern for me is to figure out when to sell this rise.  I will post here when I do, but you should all learn how to trade on your own, and not what anyone else says.

The whole secret to making money in stocks is to buy and sell at the right time.    It isn't an easy thing to learn since no one can really see the future. (At least as far as I know!)  And buying or selling can only be known to have been right or wrong when you get to the future.

But the market gives off signals as to it's direction, and that's what Technical Analysis is all about- an aid to determine and follow the trend and develop buy and sell points based on price behavior.

I am watching a trend line above the gold price that I think will act as a stopping point.  I can't give a precise figure since the trend slopes upwards, and the stopping point depends on how long it takes for the price to get there.  The sooner it rises to that point, the faster we'll have to sell.  If it rises slowly enough, it can rise for a very long time without ever touching that line.  At the moment we are in the bottom range for this trend path, so no worries about selling yet.

The general market looks very weak now- although the price has been rising the rate of increase continues to slow indicating forward momentum is waning. It now appears that the market will start making lower highs and lower lows, meaning the trend will change to down.  If you have money in IRA's in the general market, be very carefull here. We are right on support for the Indu's here, so going lower will be a sell signal.  Watch on Monday to see what happens.  If we get a bounce, the market is telling us it's not time to sell yet!

[rickortreat]

This is a classic situation- Gold was hammered down yesterday, all the way to $655.50 WHERE I SAID THERE WAS SUPPORT!

That support held, and we're up over 20$ today, to $678.20.  This represents a breakthough of the $675 level which was a peak last June.  As I said in an earlier post, I expected it to be taken out this week.

Gold is now heading higher, $730 is the high from last May, and represents the next clear target.

The price should rise more rapidly now, and the gold shares will start to pick up and try to catch up with the POG.

[rickortreat]

Gold has now reached the next level, breaking out to the $680 level.  The $730 price target is now a realistic goal to be taken out and may happen very quickly since the Dollar is breaking down.

Remember Gold is tied to the Dollar, since the Dollar is the world's reserve currency.  When the Dollar is weak, Gold becomes strong, and that time is now.

INO.com has good charts for looking at the USDX and Gold. Mining stocks are rising sharply now, and it is a good time to be in. 

The important thing now, is to be ready to sell into strength as gold gets stronger.  There are always corrections in a bull market, and you will have to be ready to both buy and sell to profit.

I will try to post at the next sell point, preferably a little before to give you a chance to get out without being hurt.  I am doing this based on the price of Gold itself, which is a little different than the individual mining stocks.

I expect that the hysteria I anticipate in the market will drive gold up very sharply, eventually going up too far too fast, so you want to be in here now to profit from it, and be ready to get out when that hysteria plays itself out.

[rickortreat]

Gold got jerked around this week, but this is not a sell signal.  In fact, this is where you should be buying the miners on weakness.  This is the last post I'm going to write on Gold here.

Not because I don't want any of you to benefit, because I do.  I would like all of you to protect your money and make more by allocating it correctly.

If you value what I write here, and want to learn more, just go to www.cometgold.com where I post as rickortreat.  There, I can also post charts with my comments and do a much more thorough job of explaining things than I can do here.  There is no point in duplicating my efforts, just to save you the trouble of going to a new web site. 

The sites you should know about if you want to get into the gold market are:  jsmineset.com - Jim Sinclair is a genius with exceptional skill and understanding as a trader.  He teaches with his daily commentary on gold and is as straight a shooter as you will find.  stockcharts.com Which enables you to chart nearly any equity you can imagine, and annotate on line - there is also a chart school there to teach you the basics.  Kitco.com will give you the current spot price for gold and silver- and even give you an applet for your taskbar that updates the price constantly.