In the days and weeks ahead I may start to do more close coverage of both the gold price and the mining stock sector. I may do this because of the chance that the gold price may soon unleash itself into a raging (bullish) monster and it could start to become more relevant and timely than any other sector in the market right now.
I have been doing a lot of coverage of the sp500 and the SPY ETF. But I have to tell you honestly, where is the trend in that market ? It seems like a wasteland of swing trading ranges and lack of real gusto in terms of direction. The direction will eventually reveal itself but I want to cover the areas that I believe deserve the most attention and ahead of everyone else before they become ‘mainstream’ ideas.
Of course I will still need more confirmation about the possible moves in the gold and mining stock sector in the weeks and months ahead but I am sensing that something big may be close to happening in this sector and I want to be on top of it before the dog and pony show starts on the major business TV networks.
It could very well be that the gold market will become the ‘only game in town’ soon. People have said that before but to be honest I have still up to this point not really noticed a mass public adoption of the gold story.
But I have seen some signs that they have adopted the trend. For example Yahoo Finance has put the gold price right on their homepage under the main other quotes for the DJIA and sp500.
I believe this was only done within the last 6 months to 1 year. I could be wrong about that but I believe it was only fairly recently that they decided to do this. They are putting a commodity along side the multi TRILLION dollar equity markets. Essentially they are giving gold a chance at the game. Yahoo Finance is no slouch either. In 2008 month of May they has 18 and a half MILLION visitors. Now we are in late 2010 and they are probably pushing 20 million or more per month. So to me it is a big deal that Gold is now part of that 20 million viewership.
Probably at this point a lot of people are sick and tired of the stock market and the endless whipsaws. But remember, the masses want to own something that they know will only go up. Even though they may be sick of the markets, they probably still crave something that will be good to them and will just keep going up and up and up.
If the gold price can manage to get a new breakout above 1265.05 in September it may start to finally create a public love affair with this sector and maybe the mining stocks as well. We really need to see that before this sector can ideally top out.
Right now as I write, spot gold is trading at 1212.05…
This is only 53.8 Dollars from the All Time High!
The gold market is fully capable of blasting 53.8 dollars higher in one single day! In fact it is capable of blasting higher 100 dollars in a single day. Maybe the futures traders will want to get ahead of the September seasonals this time. Afterall the gold price has been blasting higher since the year 2001. One would think that it is starting to become common knowledge that gold trades strongly higher in September. It would seem to make sense some would want to get in a bit earlier than the crowd this time for a change.
Here at BestOnlineTrades I try to identify important trend changes well ahead of time before they become main stream stories.
Also I have started to transfer to an almost all pure technical analysis bias. In other words I have for the most part stopped reading bloomberg finance and other major finance fundamental news and I have completely stopped watching CNBC. I have come to realize that all the fundamental news is a mere distraction and a waste of my time. Sometimes however with individual stocks this is not the case at all. Sometimes there are very important forward looking events that can effect the dynamics of how a stock trades going into that date.
The trade is always on the chart and it speaks louder than any fundamental story. the problem with fundamental stories is that no one knows how much exact weight that particular story is really going to affect the market. The market takes into account thousands or even millions of factors. Why should I be so naive to assume I know the fundamental story that is moving the market? I don’t . And I do not believe anyone else should either. But they do. And of course it is everyone’s right to do so. The financial media is always looking for a reason for every move.
When gold is blasting higher 50 dollars a day several days at a time, the media will say it is because of war or fears of inflation. But when the top is in, they will be singing the same tune and the whole public will believe them and pile in right at the top.
Anyway, the bottom line is that you should know that I do not pay that much attention to the fundamental side with some exceptions as it relates to individual stocks…
How gold behaves in the next 2 weeks is going to be very key as we head into September. Gold bears close watching now in my opinion. It may be more relevant than the stock market now.
The stock market is stuck in molasses, but maybe gold can be set free soon…