Yesterday morning I wrote that gold stocks were entering a "buy zone" and that I was in cash(well not totally - I still own a few on my WSW Power Investor small cap list), waiting, and ready to buy. Well after I wrote that gold gapped down and slid all day long. By the close it dropped 20 points. More shocking though the XAU fell 8 points and the HUI had a 20 point sell-off. I was hoping that gold stocks would hold up while the metal dropped, thereby giving me a buy signal, but the opposite happened.

This suggests that there is more downside to go. We haven't hit bottom yet.

Last night I looked through my charts and figured that another big down day in the metal this morning would likely bring us the bottom. All we need now is to see the metal down big and the stocks firm up and we can safely get in this market. You know a key reversal day But so far this morning that isn't happening as gold is trading up 3 points as I write this.

So, I'm sitting. Waiting. Watching gold trade hour by hour for the final bottom and I'm going to buy wherever it comes as the subsequent rally will be huge.

You just have to hang in there for it.

To find out what gold stocks Mike plans on buying click here: WSW Power Investor for 10/02/06