BUY SIGNAL FOR GOLD & GOLD STOCKS

Today, 30 minutes after the open, I bought RGLD Dec 35 calls (I have high hopes for this trade as it immediatedly was in the "green" a +$5000 by the afternoon close). I also hold Dec UBB puts. My IMCL calls expired worthless today. I am excited by the early results of my "next day $indu forecaster"--I am backtesting and assigning probability statistics to this new tool.

A huge move up in gold today. Yesterday a very unusual movement in interest rates as the markets made new lows--The long bond futures -- if you include the day session AND the after-hours session -- were up 7 9/32 points in price. The cash 30-year bonds were up 8 31/32 points. The yield on the 10-year Treasury was down 33 basis points to 2.99%, while the yield on the 2-year Note wasdown just under 10 basis points to 0.96%. These are not typos. These are, however, the biggest price increases I have ever seen, and the lowest yields in the history of each bond maturity.

In 10 months my small trading account is now plus $63,000. I am enjoying the teaching aspect and mentoring of my junior associate, Shannon Gram. The first book I gave her to read before starting to trade was on self discipline. The second lesson I taught her was on money management and position or bet sizing. The next lessons were review of my 3 trading rules. (the fewer rules you have the better--when my sons were growing up I had only one rule for them--they were not to get married until they were age 26--they both later married at age 26)
Also I am really big on positive mental images and positive self talk. I told Shannon, "great traders have ice water running thru their veins. You must treat your trading account as a small business. Only 5% of traders survive long term."

Currently we are developing entry and exit strategy for our swing trading. We use fibonacci retracement levels to pick support and resistaance levels. I tell Shannon that these are the most dangerous and volatile markets of my lifetime. However with the volatility comes great opportunity. Shannon is studying the biotech sector--I want her to get to know these stocks well. I have some knowledge of the gold mining stocks but have learned that I am not a gold bug and I am not married to any sector. We use Zacks and Investor Business Daily to "grade" each of our stock trades---we use a check sheet prior to entry of each trade and do a postmortem check after each trade--win, lose, or draw.



The stock market is telling us that something terribly bad is awaiting us in the future. Cash and treasuries remain king and now a small holding of gold shares or a gold ETF make sense. Yesterday both $Trans and $INDU made new lows--I have revised my near term low forecast for $indu to 7100. I now think that gold will rally and we may even see up to $1000 smash up in a day if a short squeeze happens in December.

Sunday I will post my market forecast for Monday. For those of us of Judeo-Christian beliefs our trust is in a personal God who created us, sustains us and cares for us now and into the future. Your 401K may be a 101K but we still have so much to be thankful for this Thanksgiving season. No amount of money will buy good health, productive happy children and grandchildren or the love and support of a lifetime spouse. This holiday season give a special prayer and say thank you to our servicemen who guard and protect our U.S.A.