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The Gold Story

March 30, 2010

There is a saying, that bull markets roll and bear markets spike. I think, the best trading experiences (and not trade related experiences) and learnings come when you view the entire situation from a holistic point of view, and of course, from a psycho-social point of view.

The consistent “feel-good” nature of an economy coupled with, government keeping the “winning formula” constant and  quite happy market agents trading on the long side of the market(which is almost always the psychologically comfortable way) create rolling bull markets. Something akin to “let the good times roll”.

Right on the opposite side of the spectrum is a bear market, where the entire economy is in dumps, government trying to rev up a dead engine with stimulus, policy announcements ,rate cuts and add to it the frustrations, denial and anger of the retail, create spiky markets to trade.

I wont say, the above holds true for all assets. No, but off late, GOLD looks like that.In the intraday, it rises well and good, and then again falls.

From the long term charts, 16242 on MCX looks like the line in the sand.

GOLDM

GOLDM and 16242

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