Dec
22
2009

  Hoping GLD Hits $116 Sooner Rather Than Later

My technicals called for buying gold when it got down to $110 in GLD, and also at the 50-day moving average (around $108), and then at $106. I bought at the other levels, not thinking it would actually get down to $106 when it turned up 12/16.

But now it is down to $106+ and the next level of support is $104.70. So do I sell now at a loss and buy lower? In this case, I don't think so. I'm pretty comfortable owning gold at the prices I paid, I'm confident they'll eventually turn a profit. But I do need them to turn a profit probably before February or so, or else my patterns will be wrong. If they don't turn up in the next few weeks, they might continue lower. In which case I may have turned the gold into an "investment" rather than a trade. . . which is not a good trading discipline.

But for now I'll sit tight, and am still hopeful that the price will get back up to $116 or so before heading down again. I think the next downturn will be greater than this one. If this downturn turns out to be the big one, I'll be confused. I'll have to check the charts to see where I went wrong. But until then, I must stay the course, despite the paper losses.