Thanks for everything Bill.

Seems this was a WOOD SHED to definately avoid being taken OUTBACK TO.
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I think you should Title your books.
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NO WOODSHED FOR ME
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and/or
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NO HEADHANDING 101,2,3,4,5,

Thanks Bill.

Hi Bill,
I am a devoted student, and I have learned that you don't mince words. I am learning more from you every day. However, I have yet to grasp how to know when we are in an accumulation zone. I know it is when RSI(14?) falls to between 20 or 30, yes? But I know only how to look up one symbol at a time. Is there a way to view RSIs in a basket or watch list?
I'm watching commodity prices drop today, but when do I buy?
Give me some credit, Bill. I am trying.
Thanks!
Caren

Bill,

Your long time readers (students) should not have any problem with todays gold action even without your recent comments warning of a possible selloff.

Any "C" student or better would not have been buying gold during this last hard run because the price was in what you refer to as the "distribution zone". Any student knows that you sell in "distribution zones" and buy in "accumulation zones".

The tough trade now is; what RSI level is the accumulation zone? During a bull, we may not see 30 or lower on a weekly or monthly chart, but maybe we will.

BTW, many of todays panic sellers are pros who trade on momentum. Gold trades better, on a risk adjusted basis, when you buy weakness and sell strength. P&L is the final arbiter and many of these guys have losses on those breakout trades. Knuckleheads (just calling it the way it is).

Looking for bargains in small gold shares.

g034 said:

"Gold trades better, on a risk adjusted basis, when you buy weakness and sell strength."

What equity or commodity does NOT trade better when using the prequisite that you defined ? Buying on weakness (low) and selling into strength (high) is pretty much what we all aspire to, I think.

Todd,

The IBD stock trading "system" buys strength based on chart patterns, earnings growth, accumulation etc. They say, buy high, sell higher.

Many commodity trading funds are trend traders. Some really push the envelope when a commodity breaks out, then they get stopped out lower because they were clumsy.

So not all traders buy low and sell high. You'd be surprised.

Thanks, Bill. After your warning, I got out of my juniors. But I still held on to GG as my core holding.

Question to Bill and others - do we see correction going lower before rebound? if yes, should we reconsider even the core holding before buying back in?

Another one is on base metals. Watching too much Entertainment TV prompted me to make a rash move into Tek C. before the accumulation zone. Bill commented on major correction across the board, so any suggestions on that is appreciated.

-Dave (bad student in Bill's class :))

Hi:

Unfortunately, I just found out about this site and Bill Cara only this week-end thru Barrons. Is it too late to get out of commodities?

I guess I get at least a "C" grade then. I've been reading Bill's blog for a few months now, and have watched with amazement as the price of gold has gone on a moon shot, as Bill might say. I've resisted the temptation to initiate a position so far due to my conservative nature, and learning from Bill to trade prices. I've so far refused to chase the price of gold, or the miners.

Instead, I sold a long-term position (dating back several years) in Barrick following the earnings announcement, and seeing that Barrick looked extended on its price chart (daily RSI above 70), and also observing that ABX was at the top of a long-term price channel. The fact that Bill mentioned it might be a good time to think about paring back positions in ABX helped my decision along. Besides, I'd come to the decision that going forward I'd rather hold a basket of miners, rather than a single senior, as was true in my case.

That said I'm now looking for an entry point in XGD. Today was a start in bringing it's price closer to my personal "accumulation zone", but I think I'll hold out a little while longer to see how this shakes out.

Anyway, this is my first post here and I'd like to Thank Bill and all those who contribute in this space. It's an invaluable learning experience!

g034

I'm well aware of the IBD system. The point I was making is that every trader desires to buy low and sell high. But what is "low" and what is "high" is all relative.

Wm. J. O'Neil says that everything pretty much sells for what it is worth; and he eschews the use of popular valuation guides such as PE ratios, cash flow, etc.

How you, Bill Cara, myself, and everyone else deem "buying low and selling high" can mean, and necessarily does mean, many different things.

That is what makes a market.

Someone who bought gold back in 2001 at $265 an ounce probably thinks that the person who is looking for an entry on thiscurrent pullback is "buying way too high." But if gold goes to $1,200, then buying this pullback will look as if it was "buying low".

It's all relative

FWIW, the IBD approach certainly is designed as much more of a momentum, trend following system than that of a traditional buying cheap and selling dear system. No argument there.

Bill,

Patience.

What we are observing, I think, are the new enrollees into the billcara.com summer school. Primary school is out and they have some making up to do. That Barron's article must have been a real eye opener.

Howerver, to their everlasting credit, they are willing to ask the questions and make the requests some of us "lurkers" didn't have the "cohones" to dare.

I've been reading Bill's blog for a few months, so I've gotten used to him being right about things. My ability to time my trades by recognizing the accumulation, distribution, and points of strength / weakness needs work though.

I've wanted to play the gold movement for a while, but it often moved too far too fast. It would have been nice to just jump in one day and ride the rocket, but I decided against it. However, I made the mistake of jumping into Silver (long CDE and SLW) too soon on weakness (3 weeks ago).

My trades are small (just a student), but by percentages, the losses aren't so nice. However, I've kept about 30% of my portfolio cash to jump into gold at the right time, following Bill's advice. I'm wondering how to gauge when that will be. I remember 64-65 being the target for GLD on this pullback?

My money is all in USD, so I'm looking at GLD, GG, and AUY going forward. Any remarks?

Thanks for all the comments on here. They've really helped out.

A faithful student...

Experts: This being a global economy, why did the gold price drop only at 3AM and not with the Asian markets?

I have lurked for a little over a year. It's nice to see some new faces with the same questions I had when I started. I would suggest fully exploring the site and archives. Reviewing posts and market action during differnt periods will go a long way toward your understanding current opinion expressed here. Since I have been reading for quite some time but never posted I would like to thank Bill. This has been a trying year for you and I am grateful and inspired by your insight into the markets and life

First gold and oil down in Asia, then US dollar up against all currencies except the Yen as the US housing bubble hisses. Bond market likes it a whole lot and stock market a little in the morning. Now stocks fade and bonds off highs. No splainin this.

"Gold: Mania Phase"

http://www.bcaresearch.com/public/index.asp

Was anyone watching CNBC this am? I thought I heard someone say that the volatility in gold is because it is a "worthless commodity" BUT it is going higher because it is in a "bubble". Did anyone else catch this?

If I heard correctly, who was he? What firm? Is he right either way? Would this be referred to as having Small Cajones?

What did the world know at 3AM ET that it did not just before that?

DJIA is up even higher today, USD up 1% vs Euro, the deficit did not go down.

No sense in any of this to me.

After further review, it looks like it was a very, very busy day for central bankers of countries who want to export to the US,like maybe the whole world.

Alan, that is the most plausible explanation I have seen here for what has transpired. But, any market manipulation like that cannot last forever.

Can you give details as to how you derived that conclusion?

Ursus, I saw that the dollar was up against every currency except the Yen on Monday morning (unwinding of the Yen carry trade?) and also that the US bond market took a nice bounce up. I am speculating that the foreign money inflows into the dollar were not private because the markets are worried about the dollar trending lower recently, so that left it up to the central banks. Thank goodness for the kindness of strangers! The money supply worldwide has been going up strongly - some of it central bank money flowing into US debt instruments. Today, Tuesday, it's a different story. The dollar is down against all currencies.