Market Update – October 19, 2016

As to gold – with short term trading, my goal is to hit singles, lots of them. (For investments, I’m trying to hit grand slams.) If I get more than a single, great, but I am just trying to survive. So I am adamant about taking partial profits, both to lower overall risk, and to pocket something. If your goal is to hit lots of singles, as opposed to much bigger trades, then you have to also maintain a high batting average. So for the short term trade in GDX some of you have done, I took partial profits again into the resistance area yesterday (and once again, I took profits too early, as GDX is continuing higher today), so I have 1/3 of a position left. But both GDX and gold itself are short term overbought, and certainly not at a good entry point for either a long side trade or an investment. (However, an overbought technical condition is not, by itself, a reason to sell.) So overall, on a shorter term basis, this current rally in gold still has some legs – but we need to be careful what will happen to PMs when overall complacency starts to unravel, especially next month. It’s a good time to have plenty of dry powder.

Originally published on One Radio Network