ABX

abx 2011 2

Just a few weeks ago we recommended selling this stock when it was slightly over $53. It did, very briefly, shoot up to $56 but has dropped about $10 from there. That recommendation was based on a triple, multiyear top and the near perfect ,symmetric, A-B-C ( a larger B wave) that took us there. Of course having undone its hedging programme entirely was enticing the Gods a little too much.

More importantly, this buy gold craze that seems to be going around for some time now, is either based on the coming end of the world (which, if correct ,  makes trading the stuff pretty well pointless), or on the coming inflation. Everybody seems to know that the 2+ trillion of money created by the Fed. must lead to inflation. That, however , may not necessarily be so. With regard to that I would highly recommend reading an article (28 pages) by Vijay Boyapati, called “Why Credit Deflation is more likely than Mass Inflation”. Just Google the titel and it is available/downloadable as a pdf file. The article is readable and is not written using the usual esoteric math and formulas that tend to disengage the reader after the first paragraph.

Right or wrong ABX should drop further to about $35, regardless.