Monday, October 12, 2009

Another Look at Gold

I thought it might be interesting to have a look at one of the leaders of the bull run in gold. Royal Gold (ticker RGLD) has been an absolute standout in this regard. the 10year weekly view (chart above) illustrates the same negative divergence or non-confirmation exhibited by the GDX and HUI which I noted previously in my post Gold and the Buck with the charts in Ooops.... Forgot the Charts.

RGLD needs to take out $50 convincingly on VOLUME. It is one of the clear leaders in the sector and as such needs to lead not lag. If I one takes a step back from the excitement of the buffett table and starts to add up the clues, clues such as:

one might be inclined to be a tad cautious. I know the gold bulls will consider this anathema, pure heresy as they believe gold is going to 3, 4, or 5,000/oz. I have a hard time refuting that argument but as long as the above mentioned discrepancies remain I cannot rule out that gold may in fact go to 3, 4 or 5,000/oz...... but may do so via $650 or 750/oz.

Hence my cautiousness on gold.

Housekeeping notes;

I was stopped out of my SKF position at $23.49 for a loss of just over a pt on 1 unit long.

Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit US$ Index bullish ticker UUP @ $22.75 stop @ $22.44
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

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