AssetDesign

Gold has had a tremendous run over the past two years and as it burst to 3,400 before backing off, I'm feeling that the consensus for a sure trip to 5,000 is beginning to get too prevalent.Can't lose sight of the fact that we have completed a five wave impulse and needed to correct. The only question is have we already corrected and now are on the path to higher highs? Or are we completing a B wave and are setting up for a trip down to complete the C wave.I like the latter option for the moment, so much so that I took profits on many of my gold miner stocks in anticipation of perhaps an opportunity to pick them back up at much lower prices. Still maintaining physicals and will add should prices retrace sufficiently.

The Head and Shoulders top appears pretty obvious here. But I have been fooled in the past by so obvious "tops" only to see my short positions get destroyed. That being said, with such generous profits still in hand, I'm taking some off the table in anticipation of a very possible pull back. This has been typical "end of month" futures-related price action yet one can't ignore the fact that the top might be in, at least for an intermediate term.

Gold is clearly in an impulse wave that I feel is the wave five of a larger third wave. Generally, a fifth wave in commodities is often the biggest. While in normal trading vehicle, the third wave is the largest. So either way, momentum remains strong.GDX however is not as strong but my expectations are for this to change. Recent miner financials have showed that high gold prices along with lower energy costs result in strong positive cash flow. There are too many bargains in the miners sector and as cash levels increase, look for M&A opportunities.