Gold is now trading at all time highs. That’s very bullish technical action. We have a confirmed ‘true bull market’. I am using the term true bull market as opposed to ‘cyclical bull market’ which is a counter trend within the primary trend of a bear market. Gold is the only market out there printing all time highs. It therefore is the one market that has the best potential for explosive moves to the upside. There is no overhead resistance, nobody has the urge to sell. This is the perfect setting for prices to go parabolic.
I have outlined the way I see the price of gold evolving over time on my public list. We have now reached the point where I drew the red circle into the chart. Although I saw some intraday weakness and some candles looking like topping or reversal candles, the fact gold printed new all time highs is bullish. Within a bull market new all time highs are to be bought. Trend followers buy strength and new highs. Ed Seykota is famous for his willingness to buy new highs. Printing new all time highs is also a prerequisite for prices to march higher and print much higher prices over time. Put another way, if you look back and analyze past bull markets, lots of new all time highs are needed on the way to reaching the ultimate price high of a bull market. Technically speaking this bull market still has a long way to go as gold was able to rise while the US Dollar was rising. This is an incredible sign of strength for gold. Gold moving up in all major currencies is further confirmation of gold’s strength.
Here is Jesse Livermore’s advice on how to trade in a bull market.
Up-to-date US$ Gold chart on my public list.
Having exposure to physical gold and silver sure has fulfilled its function of being a great insurance against paper currency risk. Here’s another example about the importance of owning physical gold and silver.
Gold and silver are money. Everything else is credit.
– J.P. Morgan
My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469
Have a great evening!
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