Wednesday, August 28, 8:29 am EST. Hearing from a reader, I realized that I could offer some explanation and clarity, transparency, about a thing or two.
I’ll often write about some 13 symbols that I track… among which are such issues as GLD, that ETF representing the actual price of bullion. Another being NUGT, which is actually a triple-leveraged ETF that moves, on a daily basis, some 3-times the rate of the movement of a gold miners stock index. I include NUGT and GLD primarily for TIMING purposes, and not for actual trading of either of those instruments! Let me explain…
In the stock analyzer program that I use (which shall remain nameless, as they will NOT let me use their name without their express written permission, and I refuse to let them have such control or power over me), there is a proprietary relative price strength kind of a function or indicator. It is quicker than the standard RSI anyone else can find and use. This quick price-strength indicator, within the program, when I sort the list of 13 symbols by it, will move the symbols up and down within the list in such a way, that I am able, by myself and for my own purposes, use the sort result as a kind of measure of RISK with the precious metals sector! If you don’t understand what I am saying, don’t be troubled by it… It’s something only I need to know and to use.
But, here’s what I do… when metals are heading down, NUGT price collapses, and it heads down the table in my sort, while GLD, the least volatile of 13 symbols, climbs toward the top of the list. Low-risk entry typically coincides with NUGT at the bottom of that list… GLD at the top, and all the different miners in-between.
When a healthy bull rally commences, I’ll see NUGT start to advance up through the list, while GLD starts tumbling back down through the list, as the miners advance harder in price than GLD, and find themselves, once again between NUGT at the top, and GLD at the bottom.
I trade or invest in those symbols in between the triple leverage of NUGT and the NO leverage, bullion ETF of GLD. I also enter the daily data into the OEXpert 7 Stock Market Timing program, as it does seem to work with gold, when it is in a bull market, like now, to time and find low-risk bottom entry areas in price, when gold corrects or consolidates in price. If you will recall, I had said that the indicators were telling me that gold had possibly bottomed, as risk appeared to be low, and that a rally might ensue… right at the end of May. And, that is precisely what DID happen.
Now, since the end of May… Gold and all the associated symbols, have told me that a very healthy bull rally in the sector started then, and has played out incredibly well for the past 3 months. So much so, that risk, in this sector, as measured by the Xpert program is just about as high as it could be. I’d wait for any kind of a pull-back before I were to go trying to get aggressive at this point. My mining shares and funds have done phenomenally well!!!
I believe this new bull market in the metals is still very young yet, and that plenty more other opportunities are likely to arise. I’ll seek to follow, keep up with, and call the upturns, as I think that the indicators are able to signal to me.
In the mean time, I’m thrilled to have such price moves and gains, as I do, in issues like AG, RGLD, PVG, SSRM, SGDM, WPM and GDX. The 7 in which I have some considerable investment.
Harold
Gold Stock Trader 