Mar 24, 2006 What about gold here? Richard Russell 321gold . . . Inc . . . 7: "There are certain times when I stand back from the stock market and say, 'Let 'er rip without me.' This is one of those times. Stock valuations are very rich, and as the major stock averages rise, volume has been contracting. So frankly, at this point I would just rather own T-bills than stocks. I guess the real reason that I won't sit with this market is that I haven't the nerve to ride through the inevitable declines. And the reason for that is that I'm afraid that each decline could be the beginning of a major down-wave, and the last thing I want to sweat through is exactly that -- a major wave to the downside.
What about gold here? To answer this question, I'm going to refer to my weekly charts along with their (blue) 20-week moving averages and their (red) 40-week moving averages. These are charts that I don't believe you'll see anywhere else. The first chart below shows weekly gold on logarithmic or ratio scale. Over the last seven months gold has gone almost parabolic. This is powerful almost vertical action, and ordinarily it calls for a major correction. Whether that's what gold is fated to undergo no one knows, I certainly don't."
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