Friday, September 11, 2009

Ask a five year old!

I had a spirited discussion with a trader today who assured me that gold would soon crash along with the stock market any time now.

Now I don't know about the stock market. We surely haven't entered a new secular bull market, so at some point yes we are going to be making a trip back down to new lows. I'm kind of leaning towards this being a cyclical bull market within a much larger secular bear market but it could just be history's biggest and baddest bear market rally (actually a cyclical bull market is just a really big bear market rally).

But I am under no delusions as to whether gold is in a bull market or not.

Just to make this simple, enlarge the chart and then go stand on the other side of the room and decide whether you think gold is going up or down.

If you don't trust your judgement or perhaps your eyesight is bad (don't get me started on that one, damn I hate getting old!) ask any five year old for their opinion.

If the consensus is up then one has no business selling gold and buying dips is the correct strategy.