We can expect to see a short term pull back in the price of gold and a rally in the stock market. Large institutional investor's stock portfolios will reach sell triggers and convert into cheapened gold. Small investors will take a beating as gold prices fall while they try to cash out. Freshly purchased small investor's stock portfolios will then suffer as the price of gold recovers due to large investor and governmental reallocation from stocks.
To beat this strategy take a contrarian tone. I have no doubt that large and governmental investors will successfully manipulate the market with this strategy. Small investors armed with their gameplan will protect themselves. Buy gold on the next weakness and sell stocks on strength over the next couple months.
Original published date 11/8/2011
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