Gold Stocks Are Turning Up
Commodities / Gold & Silver Stocks Apr 13, 2012 - 12:41 PM GMTBy: Michael_Swanson
Something funny is happening in the mining stock world. Gold and gold stocks have been in a correction since last September and it has gone on for so long that many people are giving up on them just as it appears that this correction may be coming to an end.
Just a few days ago the well respected commentator Dennis Gartman declared on CNBC that the gold bear market that began ten years ago is over. His reasoning - the recent FOMC minutes release proves that “the game has changed.”
He is not the only one negative on gold. Jonathan Hoenig, who appears on FOX News as the "capitalist pig" also warned yesterday that gold would continue to fall and punish gold bugs.
But in reality this looks to me the time to be buying mining stocks and I just put my money where my mouth is by buying back into a big basket of gold stocks Wednesday morning.
And yesterday gold stocks did indeed turn up off of their recent lows.
On a short-term basis yesterday's move came after gold stocks became oversold on a daily chart and most of them time when they get in this position and move like this they at least rally for a few days, but I think this rally is going to end up being an important bottom, which would make buying now a great investment.
I it is the long-term chart that makes me think this.
Over the past ten years there have been five times in which the HUI and XAU gold stock indices have fallen below their long-term 200-day Bollinger Bands. Each of these drops have made for fantastic buy points in the gold secular bull market.
Unless Dennis Gartman and the other bears are right then this moment in time will also mark another wonderful buy point in gold stocks - the kind that only comes around a couple of years.
Now if you are familiar with my writings and my book Strategic Stock Trading this may look to be a different way of buying stocks than I normally advocate, because I often talk about buying stocks at the end of a big consolidation phase and before a big bull run starts when the long-term 200-day Bollinger Bands get very narrow.
This is a good way to time a new bull run.
But you can also use these long-term bands as major buy points when a market falls below them to accumulate positions. That is what I'm advocating to do with mining shares now and am still doing myself.
To get future updates from me about the price of gold and actionable investment ideas subscribe to my free newsletter at
http://www.wallstreetwindow.com/newslettersubscribeforfree.htm
By Michael Swanson
WallStreetWindow.com
Mike Swanson is the founder and chief editor of WallStreetWindow. He began investing and trading in 1997 and achieved a return in excess of 800% from 1997 to 2001. In 2002 he won second place in the 2002 Robbins Trading Contest and ran a hedge fund from 2003 to 2006 that generated a return of over 78% for its investors during that time frame. In 2005 out of 3,621 hedge funds tracked by HedgeFund.Net only 35 other funds had a better return that year. Mike holds a Masters Degree in history from the University of Virginia and has a knowledge of the history and political economy of the United States and the world financial markets. Besides writing about financial matters he is also working on a history of the state of Virginia. To subscribe to his free stock market newsletter click here .
Copyright © 2012 Michael Swanson - All Rights Reserved.
Disclaimer - WallStreetWindow.com is owned by Timingwallstreet, Inc of which Michael Swanson is President and sole shareholder. Both Swanson and employees and associates of Timingwallstreet, Inc. may have a position in securities which are mentioned on any of the websites or commentaries published by TimingWallStreet or any of its services and may sell or close such positions at any moment and without warning. Under no circumstances should the information received from TimingWallStreet represent a recommendation to buy, sell, or hold any security. TimingWallStreet contains the opinions of Swanson and and other financial writers and commentators. Neither Swanson, nor TimingWallstreet, Inc. provide individual investment advice and will not advise you personally concerning the nature, potential, value, or of any particular stock or investment strategy. To the extent that any of the information contained on any TimingWallStreet publications may be deemed investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Past results of TimingWallStreet, Michael Swanson or other financial authors are not necessarily indicative of future performance.
TimingWallStreet does not represent the accuracy nor does it warranty the accuracy, completeness or timeliness of the statements published on its web sites, its email alerts, podcats, or other media. The information provided should therefore be used as a basis for continued, independent research into a security referenced on TimingWallStreet so that the reader forms his or her own opinion regarding any investment in a security published on any TimingWallStreet of media outlets or services. The reader therefore agrees that he or she alone bears complete responsibility for their own investment research and decisions. We are not and do not represent ourselves to be a registered investment adviser or advisory firm or company. You should consult a qualified financial advisor or stock broker before making any investment decision and to help you evaluate any information you may receive from TimingWallstreet.
Consequently, the reader understands and agrees that by using any of TimingWallStreet services, either directly or indirectly, TimingWallStreet, Inc. shall not be liable to anyone for any loss, injury or damage resulting from the use of or information attained from TimingWallStreet.
Michael Swanson Archive |
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
