HUGE INFLECTION POINT IN GOLD

I am a big believer in symmetry in the market. Many times, a stock, sector or a market will bounce off specific moving averages in a bull market for a very long time. The same goes for a bounce into moving averages in a bear market. The longer something holds a specific area…and then breaks, the bigger the implications as markets recognize something has changed. I am now watching the price of Gold closely as there is the potential for a major change in its complexion.

Very simply, one has to go all the way back to January 20,2009 to see that since that date Gold has held its 150 day moving average all the way up. Every time it pulled back into it, it would hold and head back to the upside…for another leg up in its bull market. This is important because it has hit this level so many times. It hit it in April 09, July 09, August 09, February of 10, March of 10, July of 10, January of 11 and again, just recently, on September 26,2011. On that day, Gold pulled into the 150 day average almost to the penny before bouncing.

The big problem is that Gold experienced climactic action that usually signals an important top of consequence…and the problem is that Gold seems to be wedging off this latest bounce. A quick glance will note that the 150 day moving average for the GLD is sitting at about $154. A break below and Gold will head into its first real bear market in quite a while.

I still think Gold is in a major, longer term bull market that started many years ago…and still believe the move ends in a monstrous climactic run akin to what happened in the 70s/early 80s. I just think it is due for some pain…and it may be closer at hand. If it holds, it holds. Just wanted to keep you in front of what I am seeing.

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.