A daily chart of gold looks a little ugly for the bulls. It looks like a head and shoulders. I wouldn’t be in a hurry to try to buy gold. First buy would be 1297 Second buy I really like is 1265. I wrote about 2 months ago that I was going to scream if I saw one more cash for gold store open, or heard one more right wing nut on the AM dial talking about “US dollar is fiat money” or you have to own gold because the bible tells you too.
Its always been a good idea to have 10 percent of your assets in gold or silver, as a disaster hedge. And gold has tripled in the last decade. The problem is, that is just about the time that the rest of the world gets friendly to this market.
About 6 months ago, I had a friend, Brian, call up and ask me specifically about silver. He was bulled up, right when we were rallying up to 30.00 dollars an ounce. I cautioned him that you want to be selling into 40 year highs, not buying into them.
Today we are 5.00 lower. If you paid 30 dollars for something and its now worth 25, that is a 16% loss in value. Not the best way to retire, especially if you make it up in volume.
That being said, I would be a buyer of silver at 26.00 and again at 23.85. The 26.00 level looks to be a good buy if we flush down there, getting rid of the weak longs who bought above 30.00 looking for a momentum play. The only momentum was the decline in their account after that purchase. Unless, of course, they used a sell stop. If they did, then they can re-load. If they didn’t and they are out of ammo, then, there’s nothing to do for now.
That is all.
CER
