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My worst trading performance has been when I have
gone short. I have made big money (like when I was leveraged short during the
fall of 2008 as documented here and here),
but I have also lost large amounts of money fighting the hoards
of determined bulltards still stuck in last
century's paradigms. The tsunami of paper depreciation unleashed upon us over
the past decade makes shorting any market much more hazardous than being
long. Trust me, I have learned my lesson in this
regard the hard way.
Right now, my subscribers and I are short
senior Gold stocks as a scalp
trade (after catching the high in the GDX ETF on February 2nd). So far, so
good. It is almost time to flip back to going bullish on the precious metals
sector. When I look at the general common equity markets, I see rabid paperbug froth
everywhere. Just a few minor points of extremely bullish sentiment to point
out.
First up, here's a chart from a piece by sentimentrader.com, which examines the ratio of money flowing into a Rydex bull mutual fund versus a bear fund (i.e. examines
retail money flows into bullish bets versus bearish bets):
Next up, a chart of a proprietary NASDAQ sentiment
indicator from Market Harmonics:
Record highs, eh? I can see why, what with the
super-strong economy and what not. And here's the opinion of the trusted and
revered investment advisors that always buy low and sell high for their
clients (sarcasm off). Following is the NAAIM (National Association of Active
Investment Managers) sentiment survey thru last week:
I am thinking a sharp chop lower in common equities
followed by a drunken and staggering final charge into a March peak. After
that, we'll have to see. But for now, risk is exceedingly high in common
equities. There's rarely a need to tell a Gold bull about such risk, as those
who have crossed over to the dark side and embraced the secular bull market
that is the enemy of the state rarely
need reminding that we are in the cycle where paper declines relative to
real/hard assets.
Own physical Gold and sleep well. When the Dow to Gold ratio hits
2 (and we may well go below 1 this cycle), consider waking up from that
comfortable financial sleep and looking for something to buy with your bling bling. And if you're interesting in speculating in the
paper markets after you have established a core position of physical metal
held outside the banking system, consider trying my
low cost subscription service.
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