One ray of hope for the bulls is that these Head-and-Shoulder Patterns are so obvious, you have to wonder if they’re actually going to work. The Dow and the S&P 500 are the most widely followed markets in the world. Surely the smart money has taken positions ahead of this move. Surely other investors can see it coming and added hedges like we have in RGS (with the (SMN: 7.09 -0.26 -3.54%) and in RCE with (DUG: 12.01 -0.23 -1.88%). Who’s left to be hurt by this besides a few die-hards? So, because it is so anticipated, this pattern may not work out. That said, the odds favor a move to the downside in both the Dow and S&P 500.
They are being led lower by vulnerable sectors like energy …
You can see how vulnerable energy is. That’s why we added (DUG: 12.01 -0.23 -1.88%) to RCE. And now, gold …
Gold looks to be the strongest of these markets. I’d look for support at 913 to be tested very soon. Soon afterward, we could see a move higher.
If gold does break support, that could mean a quick trip to the 850 area … and probably the best buying opportunity you’ll see for the next five years.
So, gold looks pretty win-win to me.
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{ 2 comments… read them below or add one }
Sean, Now I am beginning to understand the break-up at Money and Markets. It seems like you guys are in total disagreement. You say buy gold and Larry says SELL SHORT. Please correct me if I am wrong.
Hi Sean. I recently purchased your gold report and have read it with great interest and anticipation. I intend to buy some of each of your picks. In your advertising for the report you indicate it will include three follow-ups in which you will provide news on gold, suggest whether we should add to positions and, “most importantly, tell us when to sell!” My question is, do you intend to also tell us when to buy? Everything I’ve read of yours recently says you expect gold to go down some before it starts its anticipated rise, so I assume you did not intend your readers to purchase your picks immediately, but rather to await the expected downward trend. Am I understanding this correctly, or did you mean for your recommendations to be implimented immediately? If I’m right that the time is not yet ripe, will there be a communication from you as to when it is? Would very much appreciate your response.
Thank you,
Debra