re: blackwolf Re NFI's, knee-jerkers and rank amateurs - a very...

re: blackwolf Re NFI's, knee-jerkers and rank amateurs - a very timely piece and cogent piece by Dan Norcini pasted below.

Gold Market Summary

Author: Dan Norcini

It is time for the top pickers in gold to emerge out of their dens once again and attempt to terrify the Gold Community with their dire predictions.



Keep in mind that they do not have your best interests at heart but seek only to secure a reputation for accurately predicting tops and bottoms in advance. In trying to do this, they attempt to build up their subscription base and fatten their wallets in the process - at your expense. Then they can promote their rags or web sites as they trumpet their own market calls.

I have said it before and will once again: Most of them could not trade their way out of a wet paper bag and would quickly lose their shirt, shoes and pants attempting to actually trade for a living. If they were any good why would they need to charge for a newsletter? Why not simply just trade?

You can protect yourself against their deceptions by selling a bit into strength at appropriate resistance levels, buying into weakness at TA correct points, and respecting trendlines and Fibonacci levels.

Keep things in perspective and do not allow the day-to-day gyrations in the marketplace to derail your carefully thought out fundamental analysis. No market ever goes straight up or straight down without a correction of some sort.

Good traders and investors do not trade on emotion. Leave that to the new whiz bang hedge fund managers who are able to create a hedge fund if they own a garage and a computer and have a few buddies to chip in some money.

These guys are about as delicate as a bull elephant in the middle of rutting season. Their idea in trading is to hit the order button on their computer before the next guy does. The result is these massive swings and shifts in the markets as they move in and out trampling everything in their path.

These are the guys that the authorities can count on to do their bidding once the news or statistical release comes out in favor of the financial powers that be.

Ask yourself a few questions about gold. Do you really think that today’s supposed buildup in crude inventory levels is going to do anything to change the fundamentals surrounding the U.S. structural imbalances that have given us the sickly dollar? Are the twin deficits of the trade balance and fiscal budget going to suddenly improve? Are the costs of fighting the war on terror going to disappear? Are the politicians that have created the financial mess we have today suddenly going to become frugal and responsible with the taxpayer's money? Are geopolitical concerns going to vanish like the morning dew?

Knee-jerk reflexive stock traders seem to think that crude oil at $50/bbl instead of $55 is a real bargain. Remember when they were complaining about $40/bbl crude not all that long ago? It is this kind of day-to-day price action that will eat you alive if you do not have a fundamental view.

Most of what you see taking place these days is due to short term traders who have absolutely no fundamental view but follow their black box technical indicators. All that is necessary to induce these players to part with a view of the markets that they might actually have is to move the market against them. They are bulls today, bears tomorrow and back to being bulls the next day. On their trading desks in front of their computers ought to sit replicas of windmills as a token of their fickleness.

Personally, I think some of them would have had more satisfying and fulfilling lives had they gone on to meteorology school. That way they could play the changing forecast game and actually get paid to do so.

“We think that there is a 50% chance of rain tomorrow," one would say. Translation: “It might rain tomorrow but then again it might not.”

In all seriousness, this is the way many of these guys approach a market