After yesterday’s midterm elections, gold reversed course and surged. Historically, markets tend to make a decent move after the midterms, and sure enough, history has repeated itself remarkably: gold has once again mounted a very strong rally.
When the trend is strong, there’s no pullback; when there’s a pullback, the trend isn’t strong. When the trend is weak, there’s no rebound; when there’s a rebound, the trend isn’t weak. On days when the market is sliding steadily, don’t try to call a bottom. On days when it’s climbing slowly, don’t go against the trend and take a large short position. In either of these extreme market conditions, there’s basically no opportunity to trade against the trend.
Gold is currently in a strong uptrend. Strong trends don’t pull back, and a pullback means the trend isn’t strong. A significant short-term correction in gold seems unlikely for now. We’ll have to wait for what we’ve called “dying amid euphoria”—that is, when too many people can’t resist chasing the rally. Only then might we see a correction.
When the trend is strong, there’s no pullback; when there’s a pullback, the trend isn’t strong. When the trend is weak, there’s no rebound; when there’s a rebound, the trend isn’t weak. On days when the market is sliding steadily, don’t try to call a bottom. On days when it’s climbing slowly, don’t go against the trend and take a large short position. In either of these extreme market conditions, there’s basically no opportunity to trade against the trend.
Gold is currently in a strong uptrend. Strong trends don’t pull back, and a pullback means the trend isn’t strong. A significant short-term correction in gold seems unlikely for now. We’ll have to wait for what we’ve called “dying amid euphoria”—that is, when too many people can’t resist chasing the rally. Only then might we see a correction.