Tuesday, October 6, 2009
Waiting for the pullback
With gold knocking on the door of all time new highs it's about time to start hearing the "waiting for a pullback to buy" crowd.
C wave breakouts get overbought and most of the time they stay overbought for considerable periods. Those that couldn't buy the breakout in 07 because they occurred at overbought levels never got a pullback to get in.
Anyone fretting about short term draw downs ended up chasing gold higher.
If you're so worried about a short term draw down you can't pull the trigger you might consider at least buying a core position so you don't get completely left behind in case this C wave unfolds like most C waves do.
Soon after the breakout we will start to see the overbought top pickers trying to short gold. Chasers, top pickers and doubters are the fuel that C waves run on.