Bill Cara: Lot of shaking going on in Goldfields, 2/7/2006 11:22 AM

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February 7, 2006

Lot of shaking going on in Goldfields, 2/7/2006 11:22 AM

If you look at the Weekly data chart of Goldfields (NYSE: GFI), a large goldminer producer with a market cap of close to $12 billion, you will think the stock is going to the moon.

Then you look at the past six days trading using 15-minute data series, and you see the phenomenon I was writing about in the previous article.

In five of the past six days, there has been a gap open up, up again, then down " then up, then down again.

If you happen to trade GFI, you must be wondering what's going on. I say, don't be one of the weak hands to get shaken out of a high-quality stock like this.

Posted by Posted by Bill Cara on February 7, 2006 11:23:35 AM | Category: Goldminer Producers

Discourse

I must admit that a movement in spot gold of this magnitude has me lost as to the action tomorrow. Panic could spread taking it down a further day or we could see a sharp rebound with spot gold up $11 for the day. I have no say or no call and cannot see this as healthy profit taking by any means. Another large bank raised its target to $600 gold this morning and I'm sure they feel like real fools at the moment.

I'm on the sidelines.

Posted by: dinov at February 7, 2006 2:59 PM [link]

This move feels like all the other large, down moves over the last 3 years. The commercial shorts pound the long specs until they puke out all of their positions. Nothing new here, gold trades more on emotion than other securities IMO. If you keep trading gold, you will understand why you need to buy weakness, sell strength and hold on to your core position.

Other traders that have been in this market the last few years are probably feeling like I am today, "is that all they got? - no they won't be done until all the weak hands are out, then I am in with both hands buying, hopefully before they gap it higher".

If you own too much gold, do what you have to do, but this move shouldn't be a big surprise, if it is, scale back. But just picture those laughing gnomes standing under the tree, with you in the branches dropping your gold into their greedy hands - soon, I will be standing next to them.

How about a Bahama Mama right about now?

Posted by: g034 at February 7, 2006 3:30 PM [link]