Sometimes, sitting on your hands is the best policy. Especially when keeping to a strategy. I say this as was contemplating, a few weeks ago, adding to positions in gold stocks. This is when the indicators were approaching the -2 level, but just quite did not reach that 'magical' level. I am so glad I didn't bite and stuck with my guns of sitting on my hands. The models were not indicating a strong buy, nor was a sign of strength in the gold stocks. Over the last few days, the air under the group has come out and the price of the Market Vectors Gold Miner ETF (ticker GDX) has fallen to the low $40's from about $45 per share.
Now, the gold stocks have broken their support, on volume. Not only does this indicate to that gold stocks are going lower, but it also suggests to me that the price of gold will likely follow. But that discussion is for another post.
Turning to the models, the timing indicators remain in mid buy range. This is despite a fall in per ounce price of gold in the last week, down more than $29 per ounce for the shiny metal. Offsetting this decline was a $70 billion draw down in the money stock, in my estimation largely due to seasonal factors. As I have mentioned in prior All That Glitters posts, money supply tends to decline in the first weeks of the year on a week-over-week basis. This year appears no different.
The 3-month model has been bouncing around a bit and is presently sitting at a -1.14.
The 1-year model is currently a -1.38, roughly the same place it has been for the last month.
As for the 6-month model (which if you remember if what I use as the anchor of my timing decisions) is currently at a -1.43. Just like the 1-year model, this too has largely stayed in this area for the last month or so.
I remain on the sidelines waiting for a better entry point.
Now, the gold stocks have broken their support, on volume. Not only does this indicate to that gold stocks are going lower, but it also suggests to me that the price of gold will likely follow. But that discussion is for another post.
Turning to the models, the timing indicators remain in mid buy range. This is despite a fall in per ounce price of gold in the last week, down more than $29 per ounce for the shiny metal. Offsetting this decline was a $70 billion draw down in the money stock, in my estimation largely due to seasonal factors. As I have mentioned in prior All That Glitters posts, money supply tends to decline in the first weeks of the year on a week-over-week basis. This year appears no different.
The 3-month model has been bouncing around a bit and is presently sitting at a -1.14.
The 1-year model is currently a -1.38, roughly the same place it has been for the last month.
As for the 6-month model (which if you remember if what I use as the anchor of my timing decisions) is currently at a -1.43. Just like the 1-year model, this too has largely stayed in this area for the last month or so.
I remain on the sidelines waiting for a better entry point.
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