2 votes

Look for gold to drop back to 1200 in the next few weeks

by The Diamond Dog

Greetings fellow gold watchers. It is the evening of September 16, 2013.

At the moment, December gold (that is to say, gold futures for delivery in December 2013) is trading right around 1309, as seen in the chart below. Actually it has bounced up a little since I took the screencap of the chart, and is currently trading around 1313.9. No matter. This little bounce alters my prediction not.  Gold should be back down to 1200 within a few weeks.

How it gets there is anyone's guess.

Look for gold to fall back to 1200 in the next few weeks

Will we drift down, only to get whipsawed around as the chart builds a more perfect head and shoulders pattern? Or will we see a sharp drop this week, accompanied by the Fed meeting results?  No one knows.  But the Diamond Dog's money is riding on a drop - one way or another - back to 1200.

Once we get to 1200, there's a lot further to fall, as I've noted before:  The shakeout in gold is far from over. And its a long way down.

Don't forget - you heard it here first.  On a free website. On the internet. In a post written by a dog.  Complete with a corny video at the end.

Because it's a long way down.


http://youtu.be/8K0qCCfeMAE

It's a long way down to the place where we started from.

Where did this bull market start again?

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I hope you got in

I hope you got in gold/silver/miners, and are loaded up to the gills!

I'll mark your words on my calendar, Walty

But first, as T Smith asked,

Care to elaborate why?

What crystal ball do you use?

This is what my calendar says for Dec-31:

Diamond Dog, check with Walty. Gold at new all time high, over $2000

lol

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

The move up

will dwarf this move down, and we will never get close to where the bull market started ($280.00 - 01/01/02)

Wanna bet? LOL!

That's why we have markets.

You speak with such authority.

I'll ask you the same thing T Smith asked me below:

Care to elaborate why?

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

Why?

History

Yes, I would enjoy a wager. Since you seem to posit that my scenario is unlikely, setting the odds at 12-1 seems about right.

You'll only wager with that kind of a handicap?

LAME! Not very confident are you?

Since you think mine is so unlikely, then we're even.

The only fair wager is at 1-1.

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

I'll split the difference

6-1

An even-up wager bores me.

Coward

Still no confidence in your own prediction?

Pathetic.

Your nonsense and lack of conviction bores me.

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

Last Chance

9/2

Stuff it

I've already made way more than you could ever afford to lose, you little gnat.

Good luck "Investing at the Race Track", examining your Beyer numbers and your $2 bets.

LOL!

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

Maybe you could invest

in a neon sign with your motto:
"I've already made way more than you could ever afford to lose, you little gnat."

Blo blo, bloviate, gently down the stream.....

pairs of mutual betters?

I thawed so.

9-11 was a panda job.

You can see the current price of gold on that contract here:

http://www.barchart.com/charts/futures/GCZ13

FYI. To keep the Diamond Dog accountable.

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

Care to elaborate why?

Care to elaborate why?

Good question

These are some of my reasons:

- The Fed is slowing down asset purchases, which is bearish. Less fiat money to buy gold.

- War has been averted. This is great for peace, but bad for gold. Gold does well in times of war and tension. This threat has been averted for now.

- The chart looks weak. The chart above doesn't tell the whole story - only part of it. There was a sharp rally after gold dropped below 1200. That is visible in the chart. But that little rally is running out of steam. This is the main reason.

For the full story, look at a longer term chart, here:

http://www.dailypaul.com/295136/gold-wont-tell-you-what-to-d...

If you look carefully, gold has been in a bear market since mid-2011. That's over two years. (!) Did you know that?

I don't know how much you know about technical analysis, but I've found that even to the untrained eye, the direction of a trend is evident. And to this dog, it looks like there is a long way down to go on that chart.

But let me be clear: I could be wrong. After all, I'm only a dog. And all of the above is really just post-hoc justification for my gut feeling. As a hound, I've got a good sense of smell, and currently I catch a strong whiff of bear. That shouldn't be hard for any objective human either, since gold topped out in 2011.

But anyway, I'm already short. That should tell you all you need to know already: Don't listen to a damn word I have to say. Or rather, listen, but make up your own damn mind.

And be just as critical of the bulls around here. They'll have their own set of reasons, and they'll all sound just as good. That's why we have markets. People trade, and both sides think they got the better deal. But in a market like gold, it is a zero sum game.

I'll gladly sell my gold to SIERRA; he'll gladly buy it. We'll both be happy until gold breaks - one way or the other. One of us will win, the other will lose. Money. Real money.

But the honest to god truth is that no one knows, and don't let anyone tell you otherwise.

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

Fiat money

buys paper gold.

War is right around the corner.

The bear market is a result of paper purchases.

Don't confuse symptoms with causation.

Money management is key.

p.s. Even not knowing the direction of a market, you can still make money.

What is more important than getting the direction right is money management.

Even if you've got the direction right, if you've got poor money management, you'll still lose it all.

Just look at Jesse Livermore. He had a great nose for direction, but he went bust so many times. He lost it all, and in the end, he blew his brains out.

In fact, it is probably better if you don't care what direction the market is going. That way you don't get irrationally wedded to your positions. In poker it is called getting pot committed.

Playing the market is a lot like playing poker. Have you ever played no limit Texas hold'em? There's a game that you can blow a lot of money in before you know what hit you! It is a lot like trading in the futures market like that.

You can learn a lot about money management playing Texas hold'em.

A great book, from one of the best in the business - Dan Harrington - is this one:

http://www.amazon.com/Harrington-Expert-Strategy-Limit-Tourn...

298 reviews and still a 5-star rating. Not a single 2- or 1-star review. Wow. Yes that book is that good.

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

Three cheers

for money management.

They might get as much help from this one:
http://www.amazon.com/Bet-With-Best-Handicappers-Handicappin...

Andrew Beyer is another great

Different sport - same strategy. I never had much luck with the ponies. Too many variables that can't be controlled for.

At the poker table you can always fold your hand. In the stock/futures/option markets, you can always close your position. At the track, once the race starts, you're in. No pulling out at the clubhouse turn, lol.

I may disagree with you on the direction of this market, at this time, but we are in full agreement on money management.

The Diamond Dog is a real cool cat. | Reporting on the world from an altitude of 420.

We are always wagering

on past results and future expectations.

The length of a horse race is less jeopardy, time wise, than your average 'investment'.