Fear Cannot Drive Investment Decisions

Fear part of our evolutionary fight or flight survival mechanism. It works to override high-order consciousness in favor of reactionary limbic responses. While conditional responses are a wonderful survival technique, they are death in the trading/investing world. They are so counterproductive that organized ‘Trading Operations’ use them as their primary controlling tool.

Headings such as “Death of Commodities” and the “Mother of all bubbles” create fear. That fear tends to evoke reactionary selling. An initial flurry of reactionary selling triggers the non-thinking black boxes to instantaneously react. Towards the end of the operation many readers are too disillusioned to buy the dips.

The latest trading operation in gold is no exception. The small correction has created so much doubt and fear it’s likely that many will not return to gold or the gold shares. The transfer of ownership from the weak to strong hands, unfortunately, is simply the natural progression of the secular trend.

The sell off, though accompanied by a lot of arm waving and hype, has been minor. The trend energy of the gold shares can only be described as exceptional. Not only has trend energy, REV(E), surged to new highs, it’s appreciation has begun to accelerate.

Gold Miner's ETF (GDX):


Increasing relative strength of the junior gold shares against the majors also supports the growing interest (acceleration) within the gold shares.

Junior Gold Miners to Major Gold Miners Ratio:


Those using fear (conditional responses) to direct their investment decision will be shaken out of this secular bull market.