Safehaven | Gold Sell, Bond Buy | Printer Friendly Version

May 19, 2006

Gold Sell, Bond Buy
by Charles Meek

Dow Jones Industrial Average   11,206
Value Line Arithmetic Index   2,025
30-Year Treasury Yield (TYX)   5.27%
20+ Year Treasury Bond Price (TLT)   83.08
Gold 1/10 Ounce (GLD)   $68.15

The Big Picture for Stocks
The 4-year cycle calls for a bear market bottom in 2006.

Technical Trendicator (1-4 month trend):
Stock Prices   Down
Bond Prices   Up (See below)
Gold Price   Down (See below)

Markets
Our model is giving us a buy signal for bonds and a sell signal for gold. Note the chart below on bonds. We are oversold and turning upward. This may just be a temporary contra-trend move in a bear market as people flee stocks for a safer haven. But bonds are oversold and trying to turn upward. If you turned the chart on bonds upside down, you have the chart on gold. Gold is overbought and turning lower.

That is the strategy. Now here are the tactics. Place a market buy on TLT and a sell-stop on GLD at 67.90. As executed, we will place stops to reverse the positions as follows: Sell-stop on TLT at 82.49 and a buy-stop on GLD at 71.18.

Regards,

Charles Meek
MeekMarketModels.com

Mr. Meek is a Registered Investment Advisor and editor of MeekMarketModels.com.

MeekMarketModels does not guarantee the accuracy or completeness of this report, nor do they assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only . In making any investment decision, you will rely on your own review and examination of the facts and the records relating to such investments. Trading the market is extremely risky. Our suggestions are often very speculative and not suitable for many investors. Past results are not indicative of future returns. Meek Market Models, Inc.