Throw Those Oscillators Away

Source: Toby Connor, Gold Scents (10/3/10)

"Unfortunately, virtually every breakout occurs from overbought levels."

Most people have a lot of trouble buying anything when it's in an overbought condition (they have trouble buying when it's oversold, too). Unfortunately, virtually every breakout occurs from overbought levels. This is especially true during a powerful C-wave advance.

Take a look at the last two C-waves and the first leg up in the current C-wave. . .

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You can see that each one of these powerful rallies, when they broke out of the trading range, had already reached overbought levels, and then stayed overbought for most of the rest of the rally.

If you didn't buy the breakout, you missed a huge portion of the C-wave as no corrective move retraced back to the breakout point.

One of the biggest mistakes investors and traders make is using oscillators after a breakout has occurred. Oscillators are great tools if an asset is in a trading range. Once that trading range gets broken, though, investors have to throw out their oscillators as they will cause them to miss huge portions—if not all of the move.

Now let me remind everyone that Bernanke clearly stated he would print money if the economy didn't improve. We know there is no way the economy can improve because we still don't have the next "new" industry to drive job creation.

Folks, this one is a no-brainer—the Fed is going to print, and that is going to cause asset inflation. The dollar is going to drop down into a yearly and 3-year cycle low. And the market is going to make Bernanke pay for his insane monetary policy with at least a mini-currency crisis in the USD by next spring. Ultimately, it's going to cause general inflation in all prices with the possible exception of real estate.

Gold is likely now in a runaway move higher. Smart money is using any and all pullbacks to get in ahead of the inflationary storm that's coming. We saw it in the action yesterday. Gold briefly traded down to the $1,300 level and miners briefly tagged 500. Buying pressure immediately came in at those levels.

Toby_Connor_gold

I think there is a very strong possibility that the miners are never going to see sub-500 again for the duration of this bull market. And even if they do, it will be only briefly. As a matter of fact, the miners are on the cusp of a historic event that I have been discussing at length in the last several premium updates.

Toby Connor
Gold Scents

A financial blog primarily focused on the analysis of the secular gold bull market.

If you would like to be added to the email list that receives notice of new posts to Gold Scents, or have questions, email Toby.

Announcing Streetwise Live! Events
Source: Streetwise Reports (07/13/2020)

Streetwise Reports is offering 100 investors—at no charge—the opportunity to meet via Zoom with executives of precious metals companies as they discuss recent developments at their companies and upcoming catalysts.

"China's export quota could be opportunity for Canadian miners"

Latin America: Six Gold Juniors Amass 100M+ Ounces
Source: Marc Davis, BNW News (05/25/2010)

Latin America, the world's last great mineral frontier for prolific gold discoveries, is proving a godsend for some lucky investors.

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."

I haven’t spoken to my old mining stock friend, noted and universally respected gold stock guru, Bob Bishop, about Rare Element in a year, but I hear he is still a supporter and very large shareholder. I don’t believe he will hold it against me to remind you that this was one of his favorite holdings when he left the newsletter writing business. . .

It's Only the Beginning for Uranium
Source: www.financialinsights.com (06/03/2005)

Dr. Richard S. Appel, author of Financial Insights, first became bullish on uranium in mid-2003, when it appeared obvious that its supply versus demand equation was fated to seriously drive higher its price. Since then, a series of events in the uranium industry has led Appel to believe that uranium prices will reach never before seen levels.

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