Through all the hate mail and the gold bugs telling me that gold was going much higher, we remain short and are on target for our next target of 1600. The price action doesn’t lie; you can’t fight the tape nor the trend.
The pundits would have you believe that this is the time to buy gold however, it is always better to buy in an uptrend. We have no idea how low gold could go – from 1600, 1500? 1400? No one knows. A year from now gold could be much higher but today the picture looks bleak.
Since August 12th we have seen a couple of short covering rallies which we continued to sell. Trying to out guess the market is a fool’s game. We are short and will sell at resistance levels until the price action changes. The trend is down and that is where gold is going.
Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper knowing that we can trade either side without emotions.
In all markets price action determines what will happen in the next day, week, or months. Keep the two strategies separate, the worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
