Why Buying Gold Now May (Not) Be A Good Idea
The announcement last night of Intel’s
(INTC) earnings placed everyone on the sidelines for yesterday’s session. Other
than a few wiggles in the first hour, there were no clear setups that I came
across.
Perhaps now that INTC is out of the way,
some meaningful price action can take place. However, it always seems like the
market is waiting for the “next” report in order to make a decision. As I had
mentioned yesterday, the market appears to be marking time and waiting for
positive, and more importantly, conclusive data that things are truly getting
better or worse. In the meantime, exercise patience.
On Monday I had mentioned that I thought that gold stocks were susceptible to
a pullback after their recent run. While I was long those stocks Monday, I was
cleared out when, once again, they could not clear their recent resistance.
Refer to a 60-minute chart on
(
GFI |
Quote |
Chart |
News |
PowerRating) and
(
AU |
Quote |
Chart |
News |
PowerRating). Then later in the day one of my
colleagues, Bo Harvey, sends me this image from an e-mail he received in his
Hotmail account. This was the sign I was looking for.
While a valid case can be made that gold may have some long-term attributes
as an investment, as traders, the opportunity right now is to take advantage of
a sector that is “in play” and let the emotions allow for some good trading
opportunities. Currently, those appear to be on the short side.
Unfortunately there has not been a clear development in terms of the
immediate outlook for price direction in the market. The
INTC earnings seem to have done little to the futures, and in
fact, the forecast was a bit lower for the quarter ahead. The market is truly
stuck. Bulls do not have enough evidence to take it higher, while the bears also
find the same scenario. Patience.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| *954* | 1116.50 |
| 950 | 1111 |
| 944 | 1104-01 |
| 938 | 1095.50 |
| *932* | 1091.50 |
| 929 | *1088* |
| *921* | 1082 |
| *915-16* | 1072.50 |
| 909 | 1062 |
As always, feel free to send me your comments and
questions.