|This is a buy the dip market. Dips have been brief time wise and shallow price wise since the Fed meeting. The question of how long this rally will last or whether it is a cyclical or secular bull will only be answered after the fact. Since my original purchase of GDXJ at $31.66, a few days after the December Fed meeting, which was well documented here, I have been buying up a storm of precious metals and their shares (also well documented here), assuming (perhaps wrongly) that this is the start of some major advance. |
The first line in the sand to demarcate whether this is a bull is for GDXJ to decisively close above the $38 level. Honestly, I have no idea whether GDXJ will do so. But I will give it every opportunity to do so. I don't need to be a faithful Gold Bull with some highfalutin Elliot Wave forecast or PNF analysis to make a million in the Gold Market. All I have to do is follow the trend and use a flexible trailing stop, realizing there will be 10%-15% corrections (if not more) along the way. But this market hasn't risen enough to be concerned about that yet.
Originally, I thought the start of a substantial bull rally would come in Q2 or Q3. But in contrast to some who like to fade others, I prefer to fade my own views at times and not remain a prisoner to any rigid set of ideas. That's where most investors/traders get in trouble: they get locked in to a certain view of a market and can't let go. The key is to remain open, flexible and patient and act quickly when one is wrong or add to positions quickly if one is right. Getting out early when one is wrong is just as important as increasing positions exponentially when one is right.