These days I’m more stressed than ever. Knowing that my gold-related investment could take a (big) fall anytime is not an easy feeling. I’m sitting tight for the moment (but can change my positions anytime).

My guess is that gold may make a high around $1320 to $1340. The price from last Friday certainly qualified. It is entirely possible that the high is in the rear mirror already. For now, the general stock markets & gold are in sync, taking the cue from the fall in $US (or rise in Euro/etc). Both are quite overbought, I think it’s about time or almost time for both to pullback. For non-daytraders, I think the general trend for both is still slightly bullish. One could continue holding until the year end or early January. There is probably going to be a pullback in the middle, but the animal spirits would probably come back.

For this time, I believe Hindenburg’s omen will probably fail (to pull back significantly). I’ve never seen this technical indicator so widespread reportedly by various media. The widespread reporting is actually bullish as a contrary indicator. It was even in the Asian newspaper. But of course, the built-up of bearish sentiment could simply delay a necessary fall.

Probably before the last “lemmings” to take notice and decide to switch from bearish to bullish camp, a bigger correction would still await us ahead.

If $US index does get to 76, (which I have serious doubts that it would) I would certainly lighten up more aggressively. As long as Bernanke has his wish, a devaluing dollar is good for stocks (& gold). But of course, when pricing your “rising” US assets in international currencies again, the rise would seem much less spectacular.

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Tags: Gold, Gold Nearing