Was the American stock market plunge reason to be nervous or just a buying opportunity? I’m asking because I’m green when it comes to investing and I want to hear other, more experienced opinions. I’m a newbie when it comes to stock market investing but I do understand that lots of people have recently lost lots of money. But is the drop a reason to be scared for someone new coming in like me?

America is not an unstable 3rd world country or anything. So things should stabilize in a while and then head back up. Isn’t this a great time to buy stocks cheap?

For someone green like you, no. You should not be buying stocks. Seasoned investors should only jump in, then jump out quickly with profits of 2% or better on the swing. Whether you play the long or the short side, when you get 2% profit, jump out and wait for another attack. Think guerilla attacks against the better trained and equipped institutional snipers.

For a riskier strategy buy gold and hold it long term.

Gold is still operating under a powerful resurrection cross.

The Fibonacci retracement shows that we are near the 50% retracement level which may be a good entry. It is also very near the 200 day MA line which also may be a good entry.

Watch the 200 day MA line. If broke, look for an entry at 80.17 which is previous support as well as the 61.8% retracement.

If there is a long white candle bounce off the 200 day MA line with a volume of 30 million shares or greater, go long.

I am currently long in GLD myself with about $300 at a cost basis of about $92.50. I plan on accumulating more at current price levels.

Fundamentally, there is little doubt that gold will rally at some future point in time. As you hear Obama talk about government spending more and more money to help the economy, think dollar dilution.

Rumor has it that some big institutional firms like JP Morgan are shorting gold in order to prop up the U.S. dollar. So this longer term strategy is not without risk.

Guerilla attack the institutions by taking profit on your longs when they cover some of their short positions in gold. Go for a swing move of 5% then take profits, wait for another pullback, then do it again.

Don’t get too greedy with anything in this market: bulls make money, bears make money, but pigs get slaughtered.