Jim Sinclair says to buy “fish lines” and sell “rhino horns.”
Stated another way – buy value when the price has plunged and sell when prices have gone parabolic.
In today’s world that means:
- Sell the dollar index
- Buy gold
- Buy silver
- The dollar index has made an impressive rally. Note the extreme “over-bought” condition in the TDI.
- Gold has fallen hard since August 2011. Note gold’s extreme “over-sold” condition.
- Silver had been smashed down since a near $50 high in April 2011. Reminder: that rally started from less than $9. Silver is now deeply “over-sold” and sentiment is terrible, which is often an indicator that it is time for a reversal.
- The Disparity Index (on the weekly charts) shows the price deviation from the 40 week moving average.
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