I’m very glad to report the German team have radically shifted their models. They stood very firmly for a continuation of the bear trend from last year to sustain through q3 and q4 of this year. They were short term bearish, medium term bearish and long term bullish. But the price action has increasingly pressured their technical view. They have shifted their medium term model to a neutral stance two weeks ago. Today they have taken a short term and medium term and long term bullish stance towards the precious metal complex.
Personally, I’m happy to report I significantly increased allocations towards the precious metal complex from early July. These recent moves follow the down scaling my allocation to the asset class early last year.
This is all history so lets not dwell on this. Which ever side of the bargain you were on matters not now. Lets focus on where next.
I maintain a super bullish stance toward the precious metals and their miners. Price has formed a wonderful base over an extended period and on smart money moving into the asset class significant inflows have subsequently occurred. This is hugely bullish. I fully expect a Nasdaq 1999 type market to develop for these assets in the medium and longer term. Short term they are over bought and anything can occur therefore at the short term end. We should fully expect to see very super extreme levels of over bought and over sold to occur. Take a look at a Nasdaq chart from 1999 through 2000 to see what is likely to occur in terms of volatility of swings. What is crucial in such markets is not to lose your position. The shake outs will be immense and volatile but short lived, if the Nasdaq is a guide.
On a technical comment i’m glad to see the Germans were able to swallow their pride and amend their model. Price, volume and momentum is clearly showing across the asset class. On a trading comment the best markets are those with momentum and deep participation. The more capital that flows to the precious metals the more we should like and focus trading time on the asset class.
As a wider comment across instruments gold is seen as a lead indicator of monetary inflation. On this basis she is sending us a clear signal of what will soon follow. This has significant fund allocation implications that it would be very wrong to ignore.
Over and out for now. All eyes to Ben and the FED tomorrow.
The report here:
Rich
(6 votes, average: 4.67 out of 5)
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