THE VALUE VIEW GOLD REPORT
Disciplined Analysis of Gold
by Ned W. Schmidt, CFA, CEBS
Schmidt Management Company
May 30, 2004
TRADING THOUGHTS is about what the name in implies. The purpose of this publication is to promote timely and profitable trading of precious metals. We do not believe every turn in the market can be called. Our goal is that our recommendations should be profitable. These goals are not the same. Profits are the goal. Trades are not the goal. DO NOT EXPECT ALL RECOMMENDATIONS TO BE PROFITABLE. No system can achieve that lofty goal. TRADING THOUGHTS is not intended to be a lengthy newsletter filled with witty comments. The goal is simply to state whether conditions in the precious metals market are favorable or not.
Traders are advised that unless they have exceptional experience, not to trade against the basic trend. Those trades against the market trend will not be expected to be as productive as those with the trend.
Investors should focus on Buy signals.
Investors should focus on Buy signals.
Investors should add to positions on Buy signals.
The only reason we put the Do Not Buy signals in is that we have had requests for "sells" by those that trade. That said, most investors should ignore these signals and not sell in a Bull market.
The markets had a better tone to them this week. Gold moved up and Silver seems to have bounced off the last bottom. Both seem to be attempting to shake off the sullen feeling of the past few weeks.
Watching a little of the popular business media this week I was impressed by the number of gurus that say oil is ready to come down in price. However, I do not remember any of them forecasting that it was going to go up. So, how do they now know it is coming down. These experts probably do not have any Gold in their portfolios.
Gold continues to show that the down trend has been broken. The likely pattern to develop is a series of small rallies and corrections that will develop into a familiar channel pattern. Slowly that action will push the price back through the high set earlier.
Both markets are returning to what I would like to call more "normal" markets. A lot of the action the past year, especially the sharp run up in Silver, was driven by funds, of all kinds. That "mad" money seems to have left the markets.
Gold is working its way toward a Do Not Buy signal. As written before this action is part of that process of building the channel pattern that will take Gold higher.
Silver is do the same thing. When developing the graphs each week the late trading in both is used as a proxy for Monday's price. That methodology gives an interesting result. If Silver's price is down, it gives a Do Not Buy signal on the short-term indicator. If Monday's price is up, it gives the signal on the intermediate indicator. So if it changes next time you see the graphs, that is why.
Both metals might be somewhat weaker this coming weak. On a short-term basis they are both a little over bought. However, as discussed above this action is part of developing the upward bound channel.
Buyers should wait for next Buy Signals
Your eternal optimist,
Ned W. Schmidt, CFA, CEBS
TRADING THOUGHTS is published 45 times per year and distributed by e-mail. An e-mail subscription is $225 per year. Email subscribers to THE VALUE VIEW GOLD REPORT can receive TRADING THOUGHTS as part of a $99 e-mail package subscription to THE VALUE VIEW GOLD REPORT. Fax subscriptions are available for $325 per year. TRADING THOUGHT is not available by regular mail. To receive TRADING THOUGHTS along with THE VALUE VIEW GOLD REPORT click on link below or send your check or credit card information to: Schmidt Management Company, PO Box 846, Boca Raton FL 33429. Fax orders can be sent to 215-243-7161. Our phone number to place an order is 561-447-0874. Under no circumstance will subscriptions be cancelled or refunds issued after the receipt of your first issue.
Please remember that no method is perfect nor is the one
running the model.
All estimated returns are for the model portfolio and do not reflect those earned on actual portfolios.
NOTICE: This article may NOT be reproduced without the expressed, written permission of the author, Ned W. Schmidt and Financial Sense. Selective quotations are permissible as long as the author, Ned W. Schmidt, and this web site www.financialsense.com are acknowledged.