2 Time #1 Gold Timer says:
The weekly chart of gold futures has been consolidating since the third quarter of 2011. If May-June of 2011 was truly the bottom, then the correction was comparable to that experienced in 2008.
Since the election there has been a mad rush by the public into gold coins. Conventional wisdom says that when the public gets excited about an investment, it's a top or at least a danger signal. But, like so many old market tales, the truth is somewhat different. The investing public isn't as stupid as some one make them out.
For instance, I remember that the public was wild about real estate starting in the 1960s, but that didn't stop property values from increasing for decades.
The last time we had such enthusiasm for gold coins was in 2008 and as the chart below shows, the price of gold more than doubled after that.
Will it happen this time? I doubt we'll get a double in four years, but I do know that Mr. Bernanke is dedicated to printing money as is European Central Bank.
Just recently, the Bank of Japan promised to do the same thing. I suppose that they figured since Bernanke has been so successful in turning the U.S. economy around, they would try the same thing. I hope you note a bit of sarcasm in that last statement.
Irresponsible central bankers such as Bernanke and Mario Draghi who flood the World with paper currency will cause gold to go up over time as the public gradually loses faith in dollars, yen, euros etc.
This, plus the fact that they ain't making it no more is a longer term positive for the yellow metal, but also note that gold can go into a funk for an extended period so hopefully, we can time our way to profits although it's been very tricky lately with massive moves back and forth.
We're bullish on gold, but the recent break below a previous low (arrows) makes us a bit nervous.
By 2 Time #1 Gold Timer Stephen Todd - (The above an Excerpt from his Dec. 2012 Issue which covers all markets)
About The TODD MARKET FORECAST
Since 1993, we have given instructions to mutual fund investors to be either 100% invested or 100% on the sidelines. According to Timer Digest, of Greenwich, CT, which monitors over 100 advisory services world wide, we are only one of four
services to have beaten the buy and hold over the past ten years.
We were rated # 1 for the past ten years at year end, 2003, 2004 and 2005. In 2006, we slipped to # 3. At the end of 2007 we were ranked # 4.
Since then, we have dropped out of the top ten for stocks, but we were bond timer of the year at the end of 2007 and 2008 which means we were ranked number 1 both years. We were rated # 1 in gold timing for 1997 and again in 2011.
TODD MARKET FORECAST (Excerpt from the Dec. 2012 Issue)
Stephen Todd P.O. Box 4131
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