THE VALUE VIEW GOLD REPORT
Disciplined Analysis of Gold
by Ned W. Schmidt, CFA, CEBS
Schmidt Management Company
July 27, 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.
Jul 2004 (Per Kitco)
Gold: $389.40 Silver: $6.18
Both markets are being pushed down to day I believe due to the continued decline of the NASDAQ market. That market has clearly broken down. If one wanted to write a textbook on technical analysis and needed an example of a market breakdown, one could use the recent experience of the NASDAQ.
That breakdown is putting a lot of pressure on funds. Those that are leveraged probably feeling the most pain. Many probably need to raise cash, equity.
So they sell what they own, including Gold.
Gold and Silver positions may also have a profit which makes them attractive places to raise money.
These periods of selling have been good to those taking advantage of them. Yes, I wish we knew they were coming but that is not possible.
At some point both markets will shake off this drag and likely move higher.
Both metals giving Buy signals today on the short-term indicators. The intermediate indicator, which I prefer, is moving that direction but will takes some time to get there.
Both metals are setting up to bounce. Likely then correct somewhat and then intermediate indicator should kick in. But that is really guessing. Better to just let it play itself out.
I hope that few have holdings in the NASDAQ stocks, or funds, as that market is going to really get painful.
Your eternal optimist,
W. Schmidt, CFA, CEBS
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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.
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