From 321gold.com this morning"...........Our investor's model confirmed a major buy signal, and investors shall now stay invested until a major sell signal, which could be months or years away. My suggestion? Take up fishing or golf, it will take your mind off the daily fluctuations and away from quote screens.
Our trader's model is on an IP1 after the buy signal in Nov, which is a "buy and hold" mode for traders who normally swing trade the ups and downs. Partial profits can be taken on a TLB (trendline break) of support, and re-enter on a TLB of resistance. This allows traders to bank some profits while having an opportunity to hit a homerun which they normally do not by trading the short term.
Summary
The current bull market in gold is perfectly set up to whipsaw those who try to outsmart the market. Everyone knows the market is overbought, and as soon as it drops 3 to 4% one day, traders rush to exit, only to see the market bounces back the next day recapturing all of the loss and more. These folks are now out of the market and when prices continue to move up, these sidelined capital eventually give up and buy back, thus providing more fuel for the rally. So, without a crystal ball, how do we know when the real top is in? Without sounding pompous, I believe that is a wrong question. That is something we don't need to know ahead of its time.
Investors follow the investor's model, and traders follow the trader's model. And if you are like me, who is fortunate enough to have a separate investment and trading account, you keep busy by observing both models. Keep it simple, and follow the markets.
End of report
Jan 20, 2006
Jack Chan"