Do you like gold? If you do, read on. And if you don’t, listen up!
There are good reasons to follow gold and the mining stocks, if only that they provide great swing trade profit opportunities. These can either be in line with, or counter, to the direction of the broader market.
Now I’m not one of those people who will tell you to have 10% of your portfolio in gold as an insurance policy.
Gold is a terrible insurance policy.
Sometimes its price is pro-cyclical with the broad market. Sometimes it is countercyclical.
And gold gets into these interminably long secular bear markets, such as from 1980 to 2001, when the only thing it insures is losses.
It has even been a very tough trade in recent times since 2011. What should have been a new 4 year cycle up phase beginning in 2017 has never really gotten off the ground.
But a recent 32-month pattern suggests that maybe, “We ain’t seen nothin’ yet!” Or maybe that’s wishful thinking.
What Happens When You Wish Upon a Golden Star
Gold needs to have a monthly close above 1369 to signal a new bull market.
Likewise, a drop below 1133 would be ominous. 1046 is the final failsafe support level below which lies catastrophe for gold holders.
Folks, this is no insurance policy. But, oh, do those intermediate swings provide trading opportunities! More on that in a moment.
Meanwhile, the picture for gold mining stocks has been horrendous.
The bear market from 2011 to the end of 2015 saw the HUI gold mining stock index plunge from above 600 to a low of 100.
A big rally in 2016 was an opportunity for nice trading profits, but since then, “Meh.”
Clearly if the HUI gold stocks index doesn’t break out through that trendline now around 180 gold bugs are in for more very rough sledding.
If it does break out through that long term trendline, then with the way these stocks move, we’ll be talking about some massive profit opportunities.
There’s Still Gold in Them There Markets!
So I stay interested in gold and the mining stocks.
I cover them from a technical perspective every week in Lee Adler’s Liquidity Trader. To give you some perspective, here’s the latest issue of that report.
Every week I update you on the price targets, time frames, and stock picks, if any, to take advantage of those rallies that come several times each year, even in bear markets.
Now I don’t sugar coat this stuff.
Gold stocks are tough trades, and it has been a long time since we have seen a persistent uptrend.
I won’t be calling buys every week, just when the technical signs are in our favor. If the signs are bearish, my technical work will keep us safe on the sidelines.
But swing trade buying opportunities do come along every few months.
One day, we’ll be on board for the next big move, which history shows are usually multiples of the turning point price.
We can never be certain which short term buy setup will evolve into that, so we’ll keep dipping our toe in the water when the setups present themselves, so that we can enhance the odds that we’re on board for the next big move.
That’s why you should follow gold and the mining stocks.
And here’s how. Try my Gold and Mining Stock Trader risk free for 90 days. Once you do, you’ll be hooked on the fascinating twists and turns of this age old market!
Click here to start following the precious metals technical story now.