You'll never guess who's predicting $1500 gold by Memorial Day...
FORMER MLB slugger Jose Canseco says everyone should be in gold, writes Greg Guenther in Addison Wiggin's Daily Reckoning.
And he thinks we'll see $1500 an ounce by Memorial Day.
So there you have it...
Honestly, I'd rather hear George Clooney's thoughts on knitting than a former bash brother who shot his finger off with a gun talking up gold. The last thing this gold rally needs right now is more scrutiny from the cheap seats.
You hear that, investors? Check out that stock market. What an impressive rally! Pay no attention to this shiny yellow metal that could be putting in a meaningful bottom and preparing for another face-ripping rally...
But is Canseco onto something?
Maybe the slugger knows something we don't. It's no secret that gold is topping the charts as the year's best performing asset. After starting 2016 just shy of its lows, gold smashed through resistance and went parabolic in a matter of weeks.
The levee broke when gold finally cleared $1200. Traders piled into the forgotten metal, sending gold futures up as much as $60 in one session. After years of darkness, a light appeared at the end of the tunnel...
But no parabolic rally can last forever. Whenever a chart starts to look like a hockey stick, you can expect some wild action to spring up. And that's exactly what happened with gold after the early February big breakout.
You can't expect a change in trend like this one to be perfect. It won't be easy to buy. And you'll experience plenty of whipsaw moves. We've already seen gold futures slide right back down to $1200 after the initial breakout move. That's fairly common – especially when it comes to a dangerously overbought chart. Traders with shorter timeframes cash out (they don't want to leave that hot money on the table).
While precious metals themselves shake off their bear market rust, we're seeing some big pops in various mining stocks continue to bubble to the surface during this market rally. Freeport-McMoRan (NYSE:FCX) – one of the BARF stocks we highlighted earlier this month – continues along the comeback trail by posting a gain of more than 12% yesterday. This stock has just about doubled from its late January lows, easily besting the major averages.
Of course, it hasn't been a smooth ride. Huge market moves like these are never squeaky clean. But if you have the stomach for these trades, you can bank some incredible gains in a very short amount of time.
We should see a small pullback in these mining stocks that could allow you to jump in for a quick trade. If we can get an orderly consolidation, another leg higher in the short-term is possible.