Gold got slapped around pretty good today — down $19.
As I mentioned last week, I am short Gold for a trade. This was strictly a technical
trading call; I still believe a 10% correction is possible — Gold looked
toppy, and gave several other technical and cyclical sell signals before the crackage.
While I think Gold eventually goes much higher, that is strictly a
product of my macro-economic outlook. This technical break looks significant,
and could see Gold pullback towards support, somewhere between $500-520 (See a
weekly chart for the best view).
A few of you have asked my opinion on how gold stocks might behave relative
to or during a market correction. The short answer is "I don’t know."
The longer answer is that I’ve never analyzed companies relative to the
overall market moves; trying to game the execution of company managements ON TOP
OF tracking the precious metal is too difficult. Its an area where I have no
edge or special feel — and no expertise whatsoever.
DISCLOSURE: Short GLD