Gold Stocks Lead the Way

Thursday Nov 3, 2011

Gold stocks recover first, that was the case in 2008, and it looks to be the case now. 

 

GDXJ Hourly

 

This is the entire year. One can see that GDXJ fell into a lower trading range this fall. It is now attempting to break out of that range. This is suggesting we are about to surprise the bears with a break to the upside despite the negative news about Greece et al. 

Bull markets top amid good news not amidst the negative news we are having on everything from Libya to Greece to MF Global. Oh did you notice that the regulators ( see page C1 of the WSJ today) are now entering the MF Global Fray?  Aren;t the cows out of the barn already, where were they last month?

So what's an investor to do now?  Well I would suggest if you buy anything, buy something that is still under its longer term averages. Most of the popular stock indices have recovered to their averages. 

URA

Uranium is out of favor and below its 200 day MA. But the second solar energy company subsidized by the Administration took Chapter 11 this past weekend. Wind power is similarly inefficient. URA will have its day.  A recover to 14 would be a 40% move from here. Just an idea. 

Fear is still way too high for this to be a top in the market. VIX and TLT both jumped dramatically on the 500 point two day sell off. By the time the top arrives, complacency will have taken root such that VIX and TLT don't stir on sell offs. That is the time to get vigilant and begin selling. 

Comments

[valentin Tristan]

Can this be the next Lehman.
http://news.yahoo.com/analysis-leaving-euro-carries-massive-costs-181337877.html
They should be buying all the gold that they can buy with their money before they run out of euro's or bring in their own worthless fiat money.