goblin - gold and markets

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    Read your comments under the OXR post about the markets and gold price.

    I totally disagree with your assumption to buy into Blue chip stocks.

    My first basis of my decision is that the US markets are now heading towards a downtrending situation. They are forming lower lows. The DOW broke below its previous low of 10,400 points. S&P500 broke below the 1125 level. The NASDAQ broke below the 2000 point mark. You can also see that the uptrending lines have recently been broken. We are heading towards lower markets in the US, and we usually follow their direction.

    Blue chips represent the majority of the market, and if our market does follow the US, then going into most of the major Blue chip shares would be a disaster. People will need to be careful what shares they are going to buy into over the next few months.

    The second basis for keeping away from Blue chips is that most of these larger shares have now gone ex-dividend, therefore no reason to be there now for at least a few months. Personally I am tending towards the short side of the market, and looking for shares with steady streams of revenue, and certain small spec shares that have new potentials for increasing their revenues. As to small resource mining stocks, that will depend on the prices of commodities. Will they continue up? I will not say, but we have not really had any pullback in their prices for some time, so a correction should occur at some stage.

    As to gold, there is a weakness in the $USD. Even Japan has announced they are going to review their policy. The overall weakness here should push gold prices higher. A break of $USD415 in gold should push gold prices higher. The general trend is up for gold, it has had a correction, and should continue up from here.

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