[MalcolmSm1th]

Malaguti, personally I wouldn't have shorted it at this stage (we're discussing the sector here). The sector price is still higher than the MA and the MA is still rising.

So, for me this means NO SHORTING. Howerver, on the buying side of things the sector looks as if it's come to the end of Stage 2 or is about to if it doesn't break out. From the sector chart I would say we're in a NO BUY situation until we know more but, more to the point we're in a NO SHORT.

Some people like the idea of being in a stock, if one isn't long then we're short. I don't subscribe to that because if a stock is in a stage 1 or stage 3 then we're forever coming in and out and getting mullered by the commissions and the spreads. So, the same applies here: we have three states in our holdings: LONG, SHORT and OUT.

This to me is a stock which says very loudly REMAIN OUT and if I were long then I would be selling now though I hope that I would have already sold.

This is only my point of view. The one thing that I am learning with Weinstein is that one has to be a lot more careful and conservative going in than I used to me.

- Malc

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Malaguti, on the gold question.

I understand what you're saying and I have got charts here which have the same sort of shape and have had to get out. I have drawn some trend lines like yours and thought that they trumped the Recent High and, boy, was I wrong.

Now, a similar stock was STY.L which did have a trendline going down but the breakout (Sept 2013) didn't take it above the high of the spring of that year. The thing fell back a little and then took off properly in January 2014.

I still think that the same rules apply but not only does the trend line have to be broken but so does the recent high.

Again my view and I may be utterly wrong about it. But I think that STY.L is a good example of a stage 2 breakout which almost doubled in a month.

- Malc