Tuesday, June 3, 2014

Well, Bob Moriarty is calling a bottom, anyway

321gold - correction ending soon. Here's Bob Moriarty's opinion:
I’ve mentioned many times before the value of being able to measure investor sentiment using the ratio of the XAU over gold. I know of no one who has ever made a fortune doing squiggles on a chart. If the value of the dollar changes every single day, the value today cannot be the same as the value yesterday or 34 years ago so you are treating a curved value as a fixed value. If charting worked, we would all be rich. Likewise with fundamentals. At every top there are 100 fundamental reasons why you should buy. And at every bottom there are 100 fundamental reasons to sell. That’s what makes tops and bottoms.

Markets move on the psychology of investors. Investors are a herd and when they all want to buy, you should sell to them. When they all want to sell, you should buy from them. Right now investors hate gold. When you have major banks telling people “don’t be tempted to buy gold mining stocks” when they are at the lowest prices relative to gold in history, you are seeing a giant buy signal.
Well, at least he gets a very sensible dig in at the technical analysts.

And it is a good point about treating a variable value as a fixed value.

And then he goes on to explain to you why True Gold popped on 2 million shares today - cos he wrote about them. Here I thought it was something to do with all the buyout excitement we're seeing these days.

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