A Crash but maybe not The Crash
I was looking for a gold and resource shares rally starting in the Jun/July timeframe followed by a Sept/Oct crash in the general market. I suggested investors cash up in the rally with anticipation of picking up some low hanging fruit in the crash.
The price of gold hit a low on August 15th as the DSI touched a low of only 6 for gold and 7 for silver marking an extreme of emotion. While gold bottomed, silver and the shares continued down into September. The rally could have used a good dose of Viagra since it was pretty limp at best.
The price of juniors tanked with the overall stock market in the last couple of days and there was lots of low hanging and sweet fruit for those who were cashed up. On Thursday the 11th, the general market continued to tank while gold shot higher. The DOW managed to drop 1400 points in two days but gold went up $30 in a day dragging many junior resource lottery tickets higher, kicking and screaming all the way.
I was wrong on both the timing and strength of a late summer gold rally. It came weeks after I suggested and wasn’t anything to write home about.
However, I think we are in the first inning of what will be exciting times for resource stock and metals owners.
The DSI for the DOW and S&P has tumbled to 10 and while hardly good enough for a major turn higher, it’s low enough to kick the cat into a good bounce. But the crash has only begun. After the cat bounces look for fireworks a few weeks from now. Good for gold and silver, bad for the rest of the bubble.