Gold Bottom Fishing

It is time for me to go bottom fishing in gold. I suspect that with window dressing there will be perhaps a bit more left to this selloff. Nevertheless, I initiated a small starter position in Silver. It is entirely possibhly they will diverge, but typically and recently the correlation has been very strong. A position in gold is mostly a position in silver in terms of trend. Silver is a slightly more leveraged play but it also may have a bit more commercial and industrial use and be more scarce going forward.It isn't about being able to pick the exact bottom, it's about accumulating it cheap to develop a low correlation portfolio at the right prices.

	DBA	EEM	TLT
DBA	1.00
EEM	0.25	1.00
TLT	-0.08	-0.24	1.00

or

	GLD	SPY	TLT
GLD	1.00
SPY	0.29	1.00
TLT	0.05	-0.41	1.00
OR

	SLV	SPY	UUP
SLV	1.00
SPY	0.32	1.00
UUP	-0.28	-0.26	1.00

I don't like DBA or TLT right now so it was a choice between the above or
 something closer to

	GLD	SPY	UUP
GLD	1.00
SPY	0.29	1.00
UUP	-0.30	-0.26	1.00

Of the two, SLV ranks out better (closer to zero).

I must say, I am immensely worried that if we do not rally soon, we could flush out much lower and even crack below another 15% or so. Psychologically GOLD $1000 is a crucial area where we could get a brief panic into that area followed by a low. If possible I will get out with a fairly tight stop and try again if the near term range doesn't hold. I am approaching this with more of a traders mindset. The cardinal sin allegedly is to not turn a trade into an investment, but in this case, if it drops to $1000 I would be a buyer significantly anyways. And the way I approach "bottom picking" is to have a traders stop, but an investor's time horizon on the upside. I hope to have a tight stop and let it run.

From an investment perspective, you would not be concerned and instead wait it out and then rebalance or even increase the position size and just run the correlations in your favor.