Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold Three Month Consolidation May Be Over

Commodities / Gold and Silver 2010 Dec 29, 2010 - 02:27 PM GMT

By: Jeb_Handwerger

Commodities

One of the most interesting realizations I have gained from studying the financial markets is that success comes from developing a clear set of rules and sticking to them despite the current psychology and tenor of the market.  Contrary to popular opinion being successful in the market is not based on how smart you are or what university one attended, it is sticking to your discipline and following a methodology. 


           One person who has greatly influenced me is Jesse Livermore.   Jesse grew up very poor and didn’t have a formal education like most of the fund managers today.  He was extremely disciplined and developed a rules based methodology, which made him one of the most successful traders of his time.  One of his famous teachings is the smarter one is, the easier it is for the market to fool you.  Many times the market does the exact opposite of what the economists and the pundints predict.  Jesse learned a simple method to learn how to follow a trend and monitor price volume which helped him surpass the top traders of the time.  However, Jesse Livermore committed suicide and in the note left behind he considered himself a failure for not sticking to his own rules.

           The recent sub-prime debacle and the 2008 market crash shows that the smartest academicians had absolutely no grasp of the dire situation that was at hand and continued to recommend the “buy and hold” doctrine.  The Federal Reserve themselves were not admitting we were in a recession until many investors suffered a major loss.  Meanwhile, behind the scenes institutional investors were trading the volatility and making huge profits on the short side as technicals gave clear sell signals and shorting opportunities during the downtrend.  The professional traders and institutions don’t subscribe to the “buy and hold” methodology even though they market it to the ill-informed public.  Institutions and hedge funds go long and short and move to cash when conditions warrant it. 

           Using a basic set of technical rules and reviewing market tops a technical trader can be able to prevent a major loss and wait for less risky opportunities to capitalize and increase gains. 

           Since October the gold etf (GLD) had three failures at upper resistance and has not been able to make a major move into new highs.  In early October, I warned of a major rally in the dollar and a rise in interest rates much to the dismay of market “experts” who were expecting QE2 to devalue the dollar and keep bond prices high.  The exact opposite occurred.  Bond prices plummeted, the US dollar rallied and gold has been rangebound.  My mining recommendations in precious metals, uraniums, molybdenum and rare earths have significantly outperformed.   

           On Christmas Day much to the dismay the Chinese central banks raised interest rates for the second time since October.  I expected it at their last meeting on December 13th.  As I wrote after the last meeting that the pause was due to the holiday season and mentioned to wait until after the holidays to wait for a hike.  Obviously, their decision to surprise the markets on Christmas Day signals the urgency of their efforts to curb irrational speculation, rising prices and commodity costs.    The Chinese also cut rare earth exports which is causing a major increase in these mining shares.  I expect them in 2011 to further look for natural resources abroad to further fuel their growth and demand.  This last rate hike was looked upon by the markets as weak and commodities have skyrocketed since the announcement. 

Please check out my blog and free newsletter at http://goldstocktrades.com where I post up to the minute observations.

By Jeb Handwerger

http://goldstocktrades.com

© 2010 Copyright Jeb Handwerger- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules