This post was just published on ZYX Buy Change Alert
On the QE3 news, gold, silver, and miners rocketed up. Now that we have had time to carefully study the QE3 program it is absolutely clear that the momo crowd misunderstood the QE3 program. Momo crowd’s arguments are simple; the Fed is printing more money, it will cause inflation, dollar will become worthless, the only way to protect is to buy gold and silver.
A careful study of the QE3 program shows that the momo crowd is wrong. QE3 will strengthen the dollar, and probability of it causing inflation is very low.
We have started developing a three-day seminar titled Gold and Silver Post QE3.
For the benefit of our subscribers, over the coming days we will make available free of charge to subscribers a micro version of the seminar content on-line. The seminar will explain the forgoing in simple layman’s language that everyone can understand.
The real question is how do we trade and invest in gold in an environment where the momo crowd controls the metals, the momo crowd misunderstands QE3 and ECB bond buying, and fundamentals do not support the elevated gold and silver prices. The answer lies in trading and investing gold differently based on the duration for which the metals are to be held. For the very, very short-term, the momentum is clearly up and very strong. On the other end of the scale in the very long-term fundamentals will win out.
An old saying that in the short run markets are a voting machine but in the long run markets are a weighing machine is aptly applicable to gold and silver at this time.
Our models are adaptive, that is they change with market conditions. As we enter the detailed economic forecasts provided by the Federal Reserve today in our models along with the strong up move trading data from today, weighting of various factors in our models will change. This will lead to different types of signals compared to those given the last couple of weeks.
It is said that the proof is in the pudding. Since 2007, our models have given 514 signals on metals and miners. These trades have ranged from very long-term to very, very short-term. To date these signals have resulted in only seven losing trades, the rest of the trades have been winners. It is impossible to bat 100% in forecasting markets.
As the models adjust to QE3 data next week, expect a series of trades and specific actionable information based on the new adjusted models.
