Gold & The Big Mkts: Sideways Move Ending!
Mar 15, 2011
1. Japan is dominating the news. Let’s take a look today at some events that may have gone unreported by the major media: “I bought uranium stocks with full margin, after they leaped 400%. I thought they would quadruple again immediately! After Japan ended nuclear power’s future yesterday, I sold everything at huge losses. It’s all over. I’m ruined!”
- Typical leveraged uranium investor, March 14, 2011?
2. “BEIJING (Reuters) - Japan's nuclear disaster will make the new generation of reactors safer, according to China's energy chief and to a leading builder, but neither suggested there would be any change to the timetable for building new plants…. China has only 10.8 gigawatts of nuclear generating capacity in operation after more than two decades of construction, so the plan to get almost four times as much underway in the next five years represents a dramatic acceleration.” – Reuters News. Mar 14, 2011.
3. Yesterday morning, as the stock market opened, my uranium buy fills screen lit up like the Times Square Christmas tree. Click here now to view the latest daily chart action. Many technical indicators are already deeply oversold. Note my comments on the chart about yesterday’s gargantuan volume bar.
4. If you want to open your uranium Christmas presents on Profit Booking Day, you need to face the pain of Christmas shopping now.
5. The price action now in the uranium market is uranium’s equivalent of the Dow’s 1987 crash. The uranium store just issued a monster 20% off sale on uranium itself, and an even bigger 30 to 50% super sale on the uranium stocks.
6. Some dropped 30% just yesterday alone! It’s a rare super-sale. Click here now to view the uranium weekly chart.
7. The volume of trading, just yesterday alone, exceeded the entire weekly trading volume for any week in the past two years! If Japan wins the fight to keep the levels of radiation under 100,000 microsieverts, can you even imagine the possible size of the rally in uranium? Has that thought even occurred to most investors? For every share panic-sold, one is panic-bought, by the pros.
8. Don’t think we’ve bottomed. My buys extend to zero. So should yours. I hope we go lower, so I buy more. No grocery store promises you they won’t have a cheaper sale in the next flyer. Buy some uranium at this sale, but don’t pretend it can’t go any lower, just because you are buying now. The market doesn’t care about what price you and I pay for anything.
9. Gold is under heavy pressure this morning. Here’s the latest action on this morning’s gold chart. That is one nasty looking chart, and you can see this morning’s bull-bear fight centred around that red “neckline”. That’s just the one month chart!
10. Here’s a look at that month of trading framed within the past one year of trading. Click here now to view. While price could reverse and blast higher, this chart says in neon to me is that a move to 1200 or 1100 is not predicted, but easily possible.
11. Martin Armstrong is one of the world’s greatest technical analysts, arguably the greatest, and he cautions everyone not to cheer for a rocket ride to $1700 from here, because a horrific crash could follow. Click here now for a look at Armstrong's Latest Technical Work. It might take a few extra seconds to open the document. I consider it the greatest technical work on gold so far in 2011, by anyone.
12. I’ve argued the same thing, from my studies of the investor mind. A rocket move above $1430 would bring the public investor into the gold market on the buy side in size, setting the market up for a horrific crash soon after that happens.
13. The entrance of Elmer Fudd Professional Price Chaser into the gold market now, is the very last thing any of you need, to benefit your investments. You want to see gold rise in price as it punishes debt, not because the world’s stupidest investors want to make themselves some big fast toilet paper widget gains.
14. Gold’s volatility is already growing enough, without Fudd on board! Japan, the Mid East, Ben “Dr. Pinocchio” Bernanke hundred trillion dollar OTC derivatives balance sheet marked to 2 trillion dollars of lies, $100 trillion of unfunded liabilities, and the list goes on and on. The crisis is not over. Not at all. It is accelerating and QE is the accelerant. QE never was a solution. It’s a payment mechanism to pay the banksters trillions in OTC derivatives winnings, and that, dear readers, is why QE is going to infinity, not because it is a solution for anything.
15. Armstrong talks about “sustainability”, as it applies to a bull market. I’ve urged you all to build the emotional and financial tactics to view gold through a $300 price window; you must build yourself emotionally to be able to withstand a $300 price correction without even uttering a word of concern, let alone beating on the “sell me out now!” button.
16. Trading out your inner core positions to “escape” a downdraft is idiocy. You should have high cash positions as well as high ounce positions to manage whatever happens. If you have no gold, you can’t book any profits on it if it launches a super spike for whatever reason. If you have no cash, you can’t buy any gold if we drop by several hundred dollars an ounce.
17. Tactically, I’ve urged you to buy put options into this rally. How many listened? With silver the situation is more strained. The uptrend line is cracking, and it’s a big one. When price trades below an uptrend or HSR (horizontal support & resistance) line, the line is coloured red. The blue line that has supported silver through a doubling of price is turning red! My longterm minimum target for silver is $80, with a possibility of $200. Use all weakness not to bail, but to buy more if you are a silver player!
18. It has been some time since gold has made a significant move up or down against the dollar, and time is running out in terms of resolving this situation. Many in the gold community are vastly over-weighted in juniors situations. Some of you own zero physical gold, while being 100% invested in juniors. That strategy has broken the financial backs of many.
19. Physical gold is power. It gives you the power to buy dollars, to buy junior shares, to buy…anything.
20. If you’ve bought some dollars as gold has soared, and gold takes a hit, your dollars are rallying against gold. Dollars are assets just like gold is an asset. If you make a profit on your dollars, do you think you should book some of that profit?
21. Tone down the “Gold is tanking so I gotta bail!” statements of nonsense, if the dollar mounts a rally against gold. Instead, tone up the profit booking on some of the dollars you are holding now, if you are lucky enough to see them rally to a profit position. Stop thinking about dollars as money, and starting viewing them as an asset. If you are interested in getting… richer.
22. Always make sure the exiting side of all your market transactions is a winning transaction. 99% of investors don’t understand why it is so important to view the dollar as just another asset in play. The dollar-as-money obsession is one direct cause of the lifetime losses in the market that are experienced by 99% of investors. When the dollar rallies, you book profit on it for one reason only. So you get richer.
23. Click here now to view the Dow chart.
24. The stock market has lost all upside momentum, just as gold did in October, and the foods are doing now. I’m long China’s stock market and short the Dow. The major markets are exiting the trading period that gold was leading them through over the past 4 months and are preparing to begin trending. Investors have been brainwashed by the banksters into committing huge amounts of capital into tiny price dips, and are now almost “all in”. A major hit on gold now could devastate the gold community. While we could still break upside, the question is, are you prepared now, with a healthy amount of cash, to buy the devastation, if the break is downside?
March 15, 2011
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