S&P 500 Retracement AND Buying Opportunity for GOLD

Previously on Long & Short Investment there was an article on S&P 500 Next Resistance Level and discussed how difficult it will be for S&P 500 to break $1150 level. Since 2010 S&P 500 has been pretty much trading in between $1135 and $1150. This trading pattern could come to an end with today’s big decline

Prepare to Add GOLD to Your Portfolio Before Too Late!

The graph below is a 2 year chart of GLD.  As you can see from the long term chart, the price of GLD is very close to reaching the upward trend line.  After reaching the peak early December 2009, GLD has been on the decline ever since.  I'm thinking

SP500, Gold Down Day Again...

SP500 closed today at 1091.84 and will most likely reach 1087 tomorrow before moving higher towards 1105. Generally, the stock market will continue to be volatile unless it cleanly breaks 1087 and 1072 supports. Until then, wait for these break out levels before making any firm decision on the direction of the stock market.

Gold has come down considerably since it reached its high of $1226 level. Both Gold ETFs, GDX and GDXJ, have gone down more than 10% during the same timeframe. GDX closed at $47.75 and GDXJ closed at $25.48. These are good entry points since gold will eventually go up again. If Gold goes down again tomorrow, I will be buying more of them.

SHORTS Win today!

Yesterday, I posted that Gold will go down from $1220 level and it did just that today. If there are any sluggish recovery signs in the unemployment number tomorrow AM, then there will be a significant downturn in the stock market including Gold. However, it will not go down continually. It will present a great opportunity to enter the Gold market as well as some of ETFs.

Alert: GOLD’s Potential To Fall From Current Level

Gold is now trading around $1220 level and had gone up to fast in a short period of time. I believe it’s time for Gold to retrace back to lower level, possibly in the range of $1160 or even down to $1080 before it continues its rise. If you are looking to enter Gold market, I highly recommend waiting until it falls to lower level. It would be a good opportunity to enter some of the Gold market ETFs that I posted yesterday.

Introducing New Gold ETF

Once Gold broke the $1000 resistance level, it has been on nothing but an upward trend. It has quickly broken the next two projections at $1080 and $1160. Gold will continue to go up as long as the dollar is weak. As dollar gains strength, Gold will lose steam and will go the reverse direction. But for now, Gold’s next target is at $1240. Investors should not be asking themselves if today is a good time to get into Gold. Instead, they should be asking themselves how they can buy Gold now.

The two ETFs, SPDR Gold (GLD) and Gold Miners ETF (GDX), have done very well, as Gold price continued to move upward. GDX has done better than GLD in 2009. GDX has gained 46% while GLD has gained 25%. However, there is now a new ETF that could serve you even better than the first two ETFs. It’s called Market Vectors Junior Gold Miners ETF (GDXJ). Unlike the other two ETFs, GDXJ provides exposure to junior gold miners. Since these junior gold miners markets are smaller, the potential for their growth is much higher compared to other Gold ETFs. The portfolio of GDXJ consists of 39 different junior gold miners. GDXJ will experience more volatility than GDX and GLD since many companies in the portfolio are still in early stage without much revenue. For short-term investors, GDXJ has a higher potential compared to GDX. For long-term investors, I do not recommend GDXJ due to higher volatility. Instead, GLD could be more attractive in your diversified portfolio.

I do not own GDXJ as of today. But, I plan to buy shares of GDXJ sometime this week as a short-term investment. I am confident that as Gold prices continue its movement upward, GDXJ will definitely reap the benefit.