Gold Bull to Resume
Dow Jones Industrial Average 11,266
Value Line Arithmetic Index 2,083
30-Year Treasury Yield (TYX) 4.77%
20+ Year Treasury Bond Price (TLT) 88.31
Gold 1/10 Ounce (GLD) $56.37
The Big Picture for Stocks
The 4-year cycle calls for a bear market bottom in 2006.
Technical Trendicator (1-4 month trend):
Stock Prices Down
Bond Prices Down
Gold Price Up
Though I have been thinking that the correction in gold could last a few weeks longer, it is now looking more like the correction may be over. At least our model has once again turned bullish. Newmont Mining actually suffered a 25% correction intraday over the last few weeks -- probably enough to satisfy an intermediate correction. We will post the buy of GLD at the close today (March 28).
Trends are positive, but the longer term over-bought condition and the too-high level of bullishness are keeping our model from a buy signal.
By the time you read this, the fed may have spoken. But it seems unlikely to me that the fed will be in any mood to stop raising rates, or to give the markets too much of a dovish outlook for fear that the strong commodities markets will skyrocket further.
Advanced ID (AIDO, .38) hit our target of 38 cents. That is an 80% profit in just 12 days. My experience is that you need to have a few trades like this to experience superior portfolio rates of return.
This sale leaves our average annualized rate of return for all stocks sold from the Special Situations list at over 200%.
We suggest continuing to hold selected natural resource stocks and selected entrepreneurial situations long, and index funds short.