THE MICIK MARKET LETTER
The Goldies & Gold
Alan Micik snippet
Posted Dec 3, 2012
In our 11/25/12 MML Subscriber Update we noted that:
“The XAU (the prior bell weather of the Goldies before GDX) has historically bottomed in December during Election years (and/or by mid-January at the latest). The historical average since 1985 has shown a 50% gain into March, a 70% gain into May, and a 95% gain into September from the final low price of December and/or January.
We suspect that this model might be likely to repeat once more, so while we continue to stand aside this PM sector we may turn bullish and “scale in” on GDX in a number of weeks or more. MML also has upside proprietary cycles (PC) that align rather well with that post-election tendency of XAU. For now, the poor relative strength of the Miners on this recent gold rally suggests that they “may” be vulnerable to tax-loss selling this December. Additionally, the Miners have serious Intermediate overhead supply from October’s price levels which might constrain a sustained advance at this time. It is possible that the support for GDX which we previously noted as 45.24 (the actual low was 45.35 when we called for a “risk on” week-see below) may not be revisited. Nevertheless, we shall remain observers given the historical XAU model and the Miners underperformance this last week versus gold.
Our Turkey Week “risk on” expectations from our MML 11/16/12 Subscriber Update were fulfilled for gold, silver, and U.S. Stocks as these markets all rose sharply one trading day after our “buy signal,” while the $U.S. declined and the Euro (FXE) rallied. Traders netted a minimum net profit of $17 per ounce in gold if held to Wednesday’s close as suggested, and possibly much more given the week’s style of furious “risk-on” trading. Significant trading profits should also have been realized in silver and U.S. Stocks. The Miners (GDX) did move higher, but the Miner’s rally was not as robust in comparison to all the other markets we had recommended. This “All the Same Market” (ATSM) syndrome was signaled by our PC, and the “safe time window” for this ATSM rally is scheduled to conclude on 11/26/12.”
On 11/27/12, we noted for Subscribers that:
“These (leasing) rates indicate that the CB’s may (once again) attack gold in the short-term (this week, and/or next week). At this time, the Commercials have substantial short positions in December gold and silver futures (our estimate), and the chartists now have a bullish “break-out” as of Friday so they are quite long. This triple combination is short-term bearish.”
“Sharp Gold Decline Blamed On Large Sell Order, Technicals, Softer Euro” 11/28/12 / Kitco
In our November 5th 321 Gold Update (regarding CB Leasing) we observed that “while such schemes can temporarily drive gold lower, they can never stop the long-term trend or gold would not be at its current price. This is yet another short-term shake-out by the CB’s in our opinion.” This remains our view regarding last week’s trading as well, and 321Gold readers should maintain their physical gold position. Such “leasing” by the CB’s, in due course, creates “undervalued” price zones for gold, not “overpriced” zones.
Our MML philosophy is the same today as always…never sell your physical gold. Hold the amount of physical gold you are comfortable with, and periodically “hedge” some of it (or all of it) when it is overvalued.
MML’s “hedging” positions now have closed profits against our physical gold of $162 per ounce for Investors, and our closed Aggressive Trader’s profits are now >$102 per ounce in one year.
Our latest Subscriber’s Update was on November 30, 2012, and it covers our observations for the week of December 3, 2012.
If you would like to review our current MML forecasts for gold, silver, the $U.S., $U.S. Stocks, or $U.S. Bonds, consider a subscription (details are listed below). In deference to our subscribers, we have a 4 day calendar “Quiet Period” from all Updates before any Posts.
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