WHAT ABOUT GOLD???

I got a few e-mails about my comments on gold yesterday. In my haste, I didn't specify the context I was referring to. I see a possible short term pull back that could cause gold to come back to the 1010 - 1040 area (101 - 104 on the IAU) to retest that previous resistance. This would create another buying opportunity on gold. Ultimately, I think that gold could go to around 1300 to 1400. This is a good area to take profits and wait for another good entry. If you don't want to sell your long term hold position on gold, you could consider using a protective put on the IAU or GDX and ride out any correction. Also, take a look at how far gold is from its 50 day MA (see chart 2). It hasn't been this far away from its 50 day MA (above it) since early 2008 when it made a nasty correction. I might be early in my prediction, but it is a good area to start lightening up on your gold positions. Also, I've seen nothing but "invest in gold" commercials on CNBC. As a contrarian...when I see that, I start running for the exit. Now I don't want to try to buy puts a stock that is still in a strong uptrend. That is risky...but what if I can find a gold stock that is already in a downtrend and could be set up for another move down? That pattern is AEM. It is hitting resistance around $63. It is also at a 50% retracement of the last move down. The stock is below the 50 day MA and the 50 day MA is moving flat...or slightly downward. I like the reward to risk on this pattern because you can stop yourself out if it breaks above all that resistance...like around $64. The downside initial target would be around $52-$53. That could be as much as a 3 to 1 reward to risk! In other words...if you win, you are looking to make three times what you would lose if you are wrong. We know that we can still be wrong...but with that type of reward to risk, we only need to be right 30% of the time to make more money than we lose. Yes that is right...just 30% of the time!! For a safer entry, you could look for a closing price below the 10 day MA. Other nice bearish gold patterns include HMY and SA.