This one really hurts!

Good morning all,

When you're in a business like mine you occasionally have friends, sometimes your best friends, ask you about the markets. My best friend, Phil, called me a few weeks ago and said he might be interested in putting some money into the futures markets and asked me what I thought. My response was hardly surprising and I told him that I've been advocating the long side of Gold for a long time. Gold had just had a day or two of downside action and I told him his timing may be perfect so get the account opened and get long. That was almost 4 weeks ago. Did my good friend open his trading account and get long Gold? Nope. Has the market rallied to new highs since that time? Of course! The funny thing is this missed opportunity has hurt me more than my friend because, from my perspective, you welcome the chance to be a hero to your best friend. So, this morning, Gold is up another $10 trading just north of $780. My personal experience tells me that Phil will finally buy Gold just before the market tops out.

What is Gold telling us right now? If I'm right it's telling us we're in big trouble. Do you remember the days of stagflation? Well, think worse than that. People ask me how I can advocate long positions in Gold and Bonds simultaneously. It's very simple. You buy bonds for the return of your principal (flight to safety) and you buy Gold just in case things fall off a cliff. Geronimo!!!!!!!!!!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities