Gold's been cooperating nicely for the last couple weeks, hasn't it?
Well, unless you're short, I that is. As expected, buyers have pushed gold up toward our near term target of 1,620.
As you can see in this week's chart, though, resistance at that level is holding so far.
I still think Gold will push to 1,630, but if you're sitting on profits, keep your eye on this resistance next week.
By the way, if Gold does sink beneath the lows set last year then the bears will have a field day, so keep that in mind because, in spite of this rally, the medium term trend is still down until we break the dark blue down trend line I've drawn on the chart.
Next, the S&P is coiling up for a move here at the highs set back in 2008. While in the short term this rally sure is due for a sell off, don't bet the farm against the bulls folks.
The Fed's easy-breezy monetary policy and bargain basement long term interest rate bonanza may have failed to help unemployment much, but it sure is making for fancy fun in the stock market.
I may sound like a broken record at this point, but in this low interest rate environment with Boomers and everyone else chasing any kind of return on capital, the bears are up against a wall of buyers.
Unless Bernanke raises interest rates or some other bonehead in Europe decides to try to confiscate depositors money a la Cyprus, then any corrections are just breathers to attract more buyers.
Don't get me wrong, I'm a short term trader and if I bought a dip here I'd watch it like a hawk. Only the nimble need play this game because the rest of the economy is still mired in Obamanomics and the Great Hangover from the Global Financial Crisis.
As long as Obamacare is an economic wet blanket scaring the crap out of employers across the nation and as long as over 14 million Americans are under or unemployed, the REAL economy won't recover no matter how much money the big banks stash away.
But never confuse what SHOULD be with what is in a paper money economy with the Fed and Washington D.C. priming the Keynsian pump like the Energizer Bunny.
Leave 'value investing' to Buffett and instead realize the markets are more about the Greater Fool Theory and Castles in the Sky than anything else. Ride the crowd, but don't get trampled when they spook and stampede.
Until next time...
Good Investing!
David K. Miller
Managing Editor, Absolute Wealth
