There’s an old saying in the trading world. Bulls get rich, bears get rich, pigs get eaten. We’re in that situation right now in the gold sector.
As you’re probably aware, gold and almost everything gold-related has been dropping this past week. Some would say dropping fast. Others, wanting to avoid the pain, just shake their heads and walk away quietly… In any case there’s no denying it.
What the saying means is when it’s time to be bullish, be bullish. When it’s time to be bearish, be bearish. And there’s never a good time to get piggish. Pigs eat anything you toss in front of them, any time. Just watch old gangster movies. (yuck!)
So here we are, with GLD testing 116 just four trading days after bumping up against 119. My how quickly things change.
As the 5-day chart of GLD shows, it’s been a pretty typical decline. Nothing goes up in a straight line (except CMG and IPAY when they’re on a tear). And nothing comes down in a straight line. What we watch for is behavior at expected and known levels. On the way down, things tend to bounce up when they hit levels.