Stock Market commentary March 22-26
Well, we finally saw profit taking sessions on Thursday and Friday in this hot stock market. The US stock market has been on a tear in the past month and it looks like the momentum right now is still to the upside until the uptrend is broken. The inverse etf’s have risen a bit in the past few trading sessions and if you see the market strengthen then these etf’s may fall in price. One thing I am gonna focus on this week is the gold price. We have seen gold prices hit record highs last year at over $1,200/ ounce but we have seen the price decline steadily in this past year. The main reason has been the strengthening of the US Dollar. It’s crazy to think that the US dollar is rising when the US govt has been printing money like a non-stop printing press but country woes in Europe has led people to hide their money in US Dollars. So if we see continued strength in the US dollar then we may see lower gold prices. I am looking to short the Gold ETF below $107.40 with a downside target to $103. If I am wrong, I’d cover my position above $108. If you want to short the gold stocks, I will probably short GG at $38.50 with a downside target of $36 and ABX at $38.30 with a downside target of $36 as well. I would set some tight stop losses on these 2 positions. Keep your losses small.
I dont think the gold price and gold stocks will collapse but it’s a short term trade.
Have a great week!
Mike
I’m out of all my gold stocks short trades. It didnt work out as well as I thought considering that the US dollar rose sharply and Gold broke some support levels. GG went as low as $36.35 while ABX went as low as $36.79.
Mike