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Saturday, December 1, 2012

Use Multidimensional Reasoning Or Don't Trade Gold

Use logic, not emotions while great advice from Jim finds execution in probably less than 1% of investors/traders.  This percentage includes the invisible hand which dominates 'the game' over the majority. 

Timing requires logic and reasoning supported by sophisticated, multidimensional reasoning and analysis.

I am often asked which markets and/or indicators do use to time gold.  My simple answer would be all markets and indicators analyzed simultaneously.  For example, gold tends to be ready when silver is ready.  Silver tends to be ready, when the Australian dollar is ready.  The Australian dollar tends to be ready, when equities are ready, and so on.

A limited work-up of this type reasoning is illustrated in charts 1 and 2 below.  Notice how the red and green lines tend to coincide with tops and bottom in all three markets.

Jim's also right when he says,

Please wake up! Just like in 1978- 1980 the manipulators will be on the long side as soon as you all finish throwing in the towel like last week.

I would also add that multidimensional computer analysis can quantify the setup.  Or, in layman terms, the gold market can be timed a lot better than throwing in the towel in disgust.

Chart 1: Nasdaq 100 (QQQQ) And Nasdaq 100 Diffusion Index (DI) &
Australian Dollar (FXA) And Australian Dollar Diffusion Index (DI)


Chart 2:  Australian Dollar (FXA) And Australian Dollar Diffusion Index (DI) &
Silver London P.M Fixed and the Silver Diffusion Index (DI)



Headline: Use Logic, Not Your Emotions


If you believe that fiat paper will survive this you are so wrong. Gold is the only asset that will survive the constant manufacturing of paper money and the dynamic expansion of debt.

Pension funds, if they had to mark their assets to market, would be as broke as the Student Loan Program is. If student loans get forgiven it is a direct payment, in a sense, to each loan holder for their loyalty.

How can ANYONE even think about such a thing as the country approaches the popular new MSM boogey man, the Fiscal Cliff?

Source: more


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