February 17 2006 Is the corrective wave over?

A 26 point day is enough to shake the most persistent bull, and did chasing us from most of our positions. Now we are long some remnants of the position guarded by puts. And buying GLD. In retrospect (and although we knew it at the time we didn't play it that way) the sell off produced a perfect Wyckoff panic pattern. We bought on the second day of the fall and should have scalped on the third. Didn't. Will next time.

Silver is on the trendline like gold. We'd be buyers.

February 3 2006 Drift with slight upwards bias

We sat on our gold and silver positions as every one ran around in circles yelling overbought due for a reaction the sky is falling. Of course there will be a correction. Of course we know when that will be but we're not telling.

January 31 2006

Closed Feb positions yesterday, remaining long Apr into Fed meeting. Added to Apr positions today.

January 27 2006 Friday week's negative day...

turned out to be non-indicative, and this week we had a week of "drift" all of it within the apparently negative day. A week of inside days, signifying, we think not much selling and buyers still interested. Two big bear days in the last 8 sessions and no follow through. Our stop is under 540. AND Fed meeting coming up, and into delivery month. We will be rolling into April very soon, whether with a pause or not undecided as yet. Fed meeting sometimes produces a sell off as seen here. There is no technical way to predict reaction this meeting. Bears close watching in run up.

January 20 2006 Key Reversal Day, One Day Reversal

Friday's action was not constructive for short term and futures bulls. GLD investors will shrug it off. Both a key reversal day and a one day reversal coming after a short term trendline break a pull back could easily occur here. It has nothing whatsoever to do yet with the long term trend. The futures basing point is 524. We would say the two day momentum is down, but we thought the gap down Wednesday would have more follow through too.

January 13 2006

We spent the week buying gold. You should have too.

All the trades from this week are not here, but you get the idea. Old high taken out. Special techniques are necessary in the futures and we are using them.

DECEMBER 2005

Like Einstein we sometimes have trouble counting. It's actually a 9 year rounding bottom, not 7, but what-the-hey, close enough for government work. Especially in this administration.

As may be seen from comments below we have been following gold for some time. And will continue.

Now for a little technical analysis quiz: Using your everyday ruler and the measuring techniques from Technical Analysis of Stock Trends how far should the bulls run from this chart?

Check back here next week for the correct answer.

There's the forest here's the tree. Of course it will come back. But how much farther will it go before it comes back. Like jumping in a cold swimming pool.

The stop is back under the November low, technically. Of course you can set a money management stop. If you had been reading this letter all along you would have been long back at 430 or 390 or .....

See Paris Hilton in all her glory at the bottom of

the page.

Futures traders should have exited gold last week. Time now to watch and wait. This is a welcome retracement for investors looking to put on a position. Investors in other instruments in gold will be unaffected by this short term retracement in gold. Check this page for stops.

We wouldn't be buying or selling right here. We'd be doing our favorite thing: waiting. Wasn't it Jim Rogers who said I just sit around and wait until there is money lying on the table and then I go over and pick it up? Look at the rising open interest in gold. The running of the bulls is about to start.

As promised, here is the picture of Paris Hilton