I found it interesting that in the June Zeal Intelligence newsletter, Mr. Hamilton labelled all of his charts with March 23rd but had this to say in his text: “But out of the blue on March 24th gold soared $10.”
I’m guessing that Mr. Hamilton is being politically correct with his “out of the blue” statement. It seems like more than a coincidence that gold, silver and copper all broke out in new uplegs on March 24th.
So, if dropping the M-3 data on March 23 initiated this last rally, why did the rally end in May? Is M-3 data important in March but not important in May?
Well, as Mr. Hamilton points out, markets breathe in and they breathe out.
Dropping the M-3 data appears to be the impetus for the latest rally in gold/silver/copper.
The fact that these markets are now correcting doesn’t indicate that the M-3 data is no longer important.
If gold never corrected after the March 23 breakout, the gold bull market would burn out very quickly without reaching its full potential.
The current correction allows sentiment towards gold to become balanced again before the next upleg.
I was fascinated by the overall growth of the gold market in the 34 day upleg. $847 billion – WOW! These are the kinds of insights that make me think Mr. Hamilton is invaluable.
If you go back and read my posts, you will find that I never recommended anyone taking a position in silver or gold. What I did say is that I would be adding to my position when gold and silver converge on their 200 dma’s. At the time you were asking about gold, it WAS a risky time to buy and several other people in the thread pointed that out.
I established my position at prices much lower than today’s so I’m not concerned about the current correction. It doesn’t feel like I have “lost a lot of money” and I am very excited about laying in my positions for the next upleg in silver/gold.
As with any investment/trading position, you only take a loss when you sell. For you to “lose lots of money” you would have to buy high and sell low (which is what most “investors” do).
This is why I believe the first thing any investor/speculator/trader needs to do is figure out a ‘big’ picture in which to take action. A trader’s big picture might only cover one day or three days. The speculator might consider a few weeks or months to be his ‘big picture’. The investor is probably looking at six months to several years.
When I talk about silver and gold, understand that I am looking at a ‘big picture’ that goes out to at least 2011. Anything I say about silver and gold BULLION fits within this big picture. I don’t talk about the stocks of silver/gold miners because I’m not interested in providing trading advice. I will (and have) pointed out the resources that I find valuable for trading the stocks (www.zealllc.com !!!).
Yes, gold and silver are volatile. Several of the people I follow believe that this volatility will increase. Jim Sinclair believes we will see gold moving in $100 increments PER DAY before this bull market is over. If that is too volatile for you then make an appropriate decision.
I am confident that gold is headed to at least $1650 an ounce so I don’t really care how much it moves around on a day-to-day basis. Same with silver – since it is headed to $80+ an ounce I’m not going to worry about it correcting from $15 down to $9 (I hope!).
My main points:
> decide what you are: investor, speculator, trader
> if you fall into more than one of these categories you need to allocate certain percentages of you overall portfolio to each category
> develop a ‘big picture’ that is appropriate to the timeframe in which you plan to remain exposed to the market
> it is the ‘big picture’ that keeps you from dumping your position when a correction comes along – if I didn’t have a big picture for silver and gold I would probably be an unhappy camper right now because of “all the money I just lost” in the current correction