|
On Sunday night, just as I was
finishing my first draft of Smart Investing Daily, our editorial
director sent me the breaking news of the debt ceiling deal.
We had little to go on as far as what
was in the bill, but I told you that the markets would love a deal, and that
gold might take a hit.
I was way wrong...
But did I just see pigs flying by my
window? Did the finacial market finally wake up and
see this government deal for what it is? Weak, insubstantial and unpopular?
For those who took a slight gain in
gold as I said to, you're probably fuming.
Since Monday, gold has climbed to new highs and the
markets have hit a low for 2011.
So what went wrong for us?
The markets had been chugging away
through really bad economic data. Unemployment is still above 9%, housing
prices are back to 2003 levels, consumer spending fell in June, and consumer
sentiment dropped sharply in July.
But the Dow jumped more than 200 points
in two months.
I said that the market would welcome a
deal... And if the deal had been a good one, I think my predictions would
have panned out. What I didn't count on was the market being more discerning
than it has been since 2009.
Where does that leave us with gold?
Here's the chart I showed you on Monday:
But let's take a wider look at how far
gold has climbed. I redrew the lines from Monday's chart:
See the channel in blue? That's the
limits of the current uptrend. The breakout above $1,550 pushed prices almost
to the top of this trend.
I maintain that we'll see some kind of
pullback in gold prices. But that pullback will keep prices within this
channel. This is called a bullish
correction, and I talked about it on Monday. Could prices
still fall back to $1,550 as I noted?
Maybe. Notice the last time prices
touched the top of the trend... Prices traded sideways before dropping almost
$100 an ounce in a month.
I think it's less likely now.
A correction could take gold back to
$1,600. From there, we could see some more sideways trading until that bottom
trend line provides support.
To be honest, I'm surprised the media
and the markets called the government out on its lame debt deal. Every
station had at least one elected official saying they were going to vote
against it. Folks from both sides of the aisle, and of course the Tea Party
people, gave it a thumbs-down for very different reasons.
The government let us down on this
one... big time.
The fight over it didn't help our
credit reputation, either. Indeed, the rating agencies are still going to
downgrade our debt rating. Public opinion across the world has already done
that.
And that's why markets are hitting
fresh lows this year. That's why gold prices are blasting through records.
This is a time when you should ask
yourself, "Is my wealth in jeopardy? Am I relying on government programs
for a secure retirement?"
If the answer is yes, you need to take
action now. Put your financial future in the only hands you can trust -- your
own. And we'll be here to help you make smart investment decisions. Using
these big trends in gold is one way.
Jared showed you another way
yesterday, through reducing risk and making consistent gains.
And even if you use a major financial
company to help make your retirement and investment decisions, you have to be
an engaged investor.
Being self-reliant has never been more
important... or more profitable. In fact, Jared sent me this note yesterday:
The markets may continue to fall
apart. MasterCard (MA:NYSE) is about the only thing showing
strength today, I don't want to give it back. These are the trades we love to
see. In one day, we scoop out 18%-20% and walk away.
Like
butter...
Sara Nunnally
Taipan Publishing Group
Article
brought to you by Taipan Publishing Group. Additional valuable content can be
syndicated via their News RSS feed. www.taipanpublishinggroup.com.
Article
originally published here
|
