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Gold Is in an Intermediate Degree Profit Taking Event

We're going to have a major, major buying opportunity. But we are at the top of an intermediate cycle, starting the declining phase of that intermediate cycle and many people at least people don't understand how cycles and sentiment work. They're always way too early. Most people at the top of intermediate cycles, they've got the fear of missing out (FOMO), and that causes people to buy too early if caught in the beginning of the decline.

I'm seeing this already. People are assuming that it's already way too late to sell and they say that because they think it's going to bottom soon. So they they don't want to sell now because they think it's going to bottom next week and it's just not the case.

So let's look at a long-term chart here. The first thing you need to understand and this will serve you well in every market and your entire investment career. All markets regress to the mean and I call it the "rubber band principle." So when you stretch the rubber band too far to one side it tends to rebound or regress violently back in the other direction. The further, you stretch it, the more aggressive, the regression event tends to be.

So, you see, when we get these periods where – and this is a chart of gold – but where you get these periods where price stretches too far above the mean, then you'll have a regression event and that can occur in one of two ways, either a sharp move back down or a long sideways move that allows the moving average time to catch up. This was a bit of a combination of both here.

...I've explained in much more detail: how and why, these intermediate declines happen and what parameters have to be met before we're ready to buy and we've still got multiple weeks yet before, this is ready to bottom, and give us our next leg up.

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