March 22, 2008
Calling the Top in Gold… Again
You’ll recall in early February I wrote a post, Has Gold Peaked?, in which I tried to call another top as I had done so brilliantly (ok, luckily) in both the Chinese and Indian stock markets. The gold price plunged last week completely enveloping the last few weeks of UP, returning to the point where I originally called the top. So I’ll stand by that original call and expect the run up to $1000 an ounce was the ultimate trap.
If you look at the recent action in the financials, the regional banks, even the retailers … it makes sense to stick a fork in the yellow metal. But as always, I reserve the right to be catastrophically wrong.
UPDATE:
I just realized that the Sequential had a 13 count in February for monthly GLD which gives further confirmation that the uptrend has exhausted itself. (Duh, I did mention the monthly 13 count in spot gold before, but forgot about it.)
March 22nd, 2008 at 5:45 pm
This time I think you’re right.
March 22nd, 2008 at 9:44 pm
mh497: If I’m not, I can always write another post, Calling the Top in Gold… Yet Again. :-)
March 23rd, 2008 at 12:27 am
“it makes sense to stick a fork in the yellow metal”
Do you mean it will continue to plunge or will it go back up?
March 23rd, 2008 at 5:19 am
I agree on gold, however the move in the other commodities makes me a little worried. Either some big hedge fund is imploding or we are witnessing the last of the bull sectors fall apart. The latter does not bode well for the overall market.
March 23rd, 2008 at 9:24 am
Maybe the ole’ digger at my work wasn’t so wrong. But I tell you I was cringing last week when I missed that extra “latecomers” peak. Does the top in gold equate to the bottom of the credit crisis?
March 23rd, 2008 at 1:49 pm
@ib119: “Stick a fork in it” is a colorful way of saying “it’s done.” I expect price to wander around between say 650 and 1000 (how’s that for a range!) for a good long while.
@Born: They’ve been so strong for so long, it’s time for a rest at least.
@Nik: Yes, I think so, but then things like CIT happen and I wonder if I’m wrong about the end of the credit crisis … someone in Barron’s this week said it was like a forest fire, which I thought was a great description… you stamp out the fire over here and it springs up over there — it just keeps on spreading.
March 23rd, 2008 at 8:32 pm
CM- agree looks like good rollover area- do you have a target area. respecting the previous trending up move, you do expect it to find a level where it will stabilize and get on back on trend up but maybe at a lower slope rate?
March 24th, 2008 at 8:14 am
pete: Targets for GLD — the halfway retracement is around 81.96 and the golden retracement (.618) is around 77.60. I have no idea what it will do after that.