By Ryan McGuire
for Gold Avalanche
A note on my last post - January 2nd. I was wrong to say that I would not go long on the markets if I were a short term trader, because in fact that's exactly what a short term trader should have done. In the future, I will refrain from commenting on short term trading. It's not my specialty, thus I will leave the trading stuff to Scott and Toby.
After making intermediate bottoms earlier this year, the indexes are tracking together. On a Daily basis, the transportation index has broken new all time highs. The Dow still has a long way to go to reaching new all time highs. Right now, I believe we are on the near side of a topping pattern, and I anticipate a handy surprise from the Dow Jones to the upside after a sell off that will probably happen in the next couple of weeks.
At that point, it will be critical to ensure that both the Dow and the Transportation averages are hitting new highs together. If not, we will be in a position to exit positions, short the market, and load up on bonds and gold as opportunities present themselves. If this scenario does play out, I will also be looking to use sidelined cash to seriously jump into positions as the markets oversell.
In fact, with Gold experiencing a sell-off over the last few weeks, if one were looking to buy, now would be a good time to buy a small quantity.
If you haven't made a move yet, or are just joining the show, now is not a good time to jump in. As everyone gets more and more excited, you'll want to be raising cash because you will know that a good buying opportunity is just around the corner, based on the (hilariously simple, yet awesomely effective) research we're doing here.
Happy Investing,
R
