Gold Sector Strategy

Folks, as if it was preordained gold got blown up in pre-US trading this morning as the media are absolutely blaring all kinds of stupid things for lowly gold bugs to endure and for gold bug haters to chest thump about.  This is market sentiment and psychology on full display.  We are robots, not sentimental humans.

We have a target of 960 on gold.  It would be too much to ask for it to just go there, non-stop.  I would love it, but with the psych/sentiment backdrop taking hold with the media fully on the case, and in consideration of the CoT alignments we need to be prepared for a bounce (at least) at any time.  We are now in the realm of in-day (and certainly in-week) reversals.

Unfortunately, I am not a guru.  I am a human pretending to be a robot at the moment.  So I cannot tell you when to buy.  Were I to be in the market for physical metal I’d probably be on the phone today, without much worry about which way the next $100 swing is going to go.

As for the miners, an investor may start thinking about plucking partial positions in this quality situation or that one and putting them in a bag (that includes a lot of cash) with the understanding of buying all in and around a bottoming process.  As an example, in 2008 I bought at HUI 250 and then found myself buying again at 150.  Each of those levels were support levels.  One obviously failed miserably, yet it all worked out swimmingly in the end.

Notes on the above:

Back then all funda were in line.  Today they are not.

We do have a target (sooner or later) of 100 +/- on HUI.  That is not a directive, but it is there and needs to be respected.  If you cannot take the heat of HUI 100, understand that ahead of time.

Also, remember that the margin clerk is in play and he is not a nice man.  He wants his settlement.

I wanted to put out a few notes this morning because I have family commitments today (of all days!) and may not be able to be at my post for much of the day.