Gold's Technicals Get Better!
Aug 17, 2010
1. "This is not working, let's try something new."
-approx. quotation from Deng Xiaoping, head of China, circa 1978.
2. Brilliant observation on Deng's part. Let's have a round of
applause for Gman Deng. When you steal the entire wealth of your
citizens for yourself, turn them into slaves, and murder millions
of those who don't share your "enlightened new era vision,"
who prefer common sense instead of your Frankenstein Movie, yes,
Deng, you need something new. Or maybe you shouldn't have tried
to fix what wasn't broken by robbing and murdering millions.
Just a "minor" observation on my part.
3. The past is the past, and Chinese corporations are moving
forward, as is the Chinese Gman, (probably temporarily
in the case of the Gman). Chinese citizens wonder if a day is
coming where the goods in their dollar stores will be made in
America. I don't see things going that far. It's a good thing
that I don't. The 21st century will be about "the rise of
many new major players" more than the new "Empire of
China". Click here
to read Jim "mighty man" Rogers' latest words on China,
a view I not only share, but back up with personal buy action
on the Chinese FXI-NYSE, the "Chinese Dow."
4. I'm prepared to buy the FXI to zero because my risk on the
deal is that China fails to become a major economic power.
In my view, whether they become number one or not is irrelevant
to me making money. They don't have to be number one, just a
player on the international stage. I would further argue that
if they "blow it", the Chinese Dow does not go to zero,
but simply trades at a lower level where I would actually be
even happier operating, because my risk to zero is smaller.
5. Here are the FXI charts. So far, so good. There's nothing
on these charts that suggests to me that it's 2008 again, (for
anything except paper money). Quite the opposite. The weekly
chart has a huge H&S bull continuation LOOK (not really
a chart pattern, but it's what I term "head and shouldering
action") and there's a smaller consolidation taking place
now, which itself is large by most traders' standards. Here's
a look at that consolidation.
Note the red and blue supply and demand line boundaries.
6. The Chinese stock market daily
chart is anything but oversold. Only the 20,12 series of
Stochastics is overbought, and it can stay that way for quite
a while. Everything else is on a buy signal. Use
my exclusive Pyramid Generator to put the 21st Century Chinese
Empire in your corner, to professionally accumulate it as an
asset, as a player, rather than play as a Vegas-style pot shot
Question: What's the difference between Canadian Elmer
Fudd Public Investors, and American Elmer Fudd Public Investors?
Answer: "Enron is safer than gold!" -American
Elmer Fudds. "Enron is safer than gold, we agree, but
Nortel is the safest!" -millions of Canadian Elmer Fudds.
7. "We're going to keep rates low for an extended period
of time"- Ben "Dr. Pinocchio" Bernanke,
8. English Language Translation: "We're going to load Elmer
Fudd's stock and real estate market carcass into junk bonds &
cash, in a 'growth with safety' propaganda show of epic proportions,
a multi-year process so the lobotomized price chaser is totally
comfortable sitting inside the paper money blast furnace. Then
we hold a lotto to see which of our 6 year old kids gets to unleash
the gold punisher, and turn on the blast furnace! Call Orville
Redenbacher, because we're going to need a major supply of popcorn
for this long play comedy!" -banksters, Aug
9. Attention Silver Bugs: I know you were told silver was going
to play 2008 again. There's a 66% chance silver goes higher,
not lower, per Edwards and Magee. Not just higher, but takes
out the $21.46 highs of this bull market. Silver and gold stocks
are confirming gold's price action. There is no "non-confirmation"
and those who think there is are welcome to join Elmer Fudd in
the paper money blast furnace while I get richer, in silver.
Here's a look at the classic symmetrical triangle in play on
chart. When price oozes out to the apex, the chart pattern
becomes totally unreliable, a pot shot entity. While you can't
"demand" any chart answer to your market wants and
needs, the bottom line is that the ideal point of breakout from
a symmetrical triangle comes at about 2/3 of the way to the apex,
which is where we are... now!
10. Whether it is a primary, intermediate, or minor trend move,
silver tends to confirm the action of gold with an oversized
move in the same direction, after lagging in the earlier stages.
With the stock market possibly poised to rally, we could see
silver do very well here in the very short term as gold looks
somewhat "tired" in that same very short term.
11. Here's the daily
gold chart via one of the higher quality gold funds. Note
that price has recovered to just over the 61% zone Fibonacci
retracement marker. That's often an indication price will recover
the entire move. Those of you who liquidated your gold holdings
because you "knew" that the mark to model (hide it
in the closet and shove it down Elmer Fudd's throat) solution
for a quadrillion dollars in otc derivatives was working, well,
you just lost out on a fabulous $75 upside move, as did those
demanding gold fall to their various supertargets well below
the 1160 marker. I bought paper gold all the way down, then converted
it to physical near the lows, accomplishing two goals:
12. First, I bought gold on sale while others liquidated. Second,
I increased my physical holdings at a point where I was unsure
how I would hold up mentally if price declined far more. If you
have, for example, 100 ounces of physical in your hand, versus
100 ounces in a trading account, I can virtually guarantee you
will feel fear when the price falls in your paper account, but
not with your physical, even though you hold the same amount
of gold! Win the mental game, and you win the profits-to-you
13. Various writers can clarify a certain point at a certain
time near-perfectly. I urge you all to click Big Jim OTCD's "Big Clarity
Picture" snippet on the OTC derivatives situation, which
is 99% of what the crisis is all about.
14. Here's a link to Jim's website: www.jsmineset.com/
15. I refer to Jim Sinclair as "Big Jim" because he
held 22,000 COMEX gold longs in the last bull market. In today's
world, that is the equivalent of a position of 200,000 contracts.
16. I'll leave it your hands, to decide if various alignments
of Space Rocks (be careful when you play with God's toolbox,
your masterplan to play super-prophet could enrage the owner
of the toolbox, and rather than a golden genie, you become a
mouse in a maze) are more important than a quadrillion dollars
in OTC derivatives, hundreds of trillions of which are likely
worthless, making the net worth of the world arguably...
less than zero. I'll leave it in your hands, to decide
to if you think it is a good idea to bet against Mr. Big and
climb into the banksters' paper money blast furnace and huddle
up beside Elmer Fudd, for safety of course.
17. What Jim is saying with perfect clarity, and something I
screamed about when no golf ball advisor knew what an OTCD was,
is that the sole real cause of the crisis is OTC derivatives,
and zero has been done in the real world, to address
that epic problem. [Editor's
note: Highlighting is mine.]
The OTCDs continue to weigh on the world, a quadrillion dollar
asset destruction steamroller driven by the gold punisher, and
OTCDs are the reason that the gold community has been so wrong
in calling for "inflation any day now". There is inflation
of goods, but not of overall asset prices. I took a course on
OTC derivatives when they first came out. After passing the course,
I threw the text book in the garbage. That's all that OTC derivatives
18. Garbage that is sold to price-chasing wienerheads by the
banksters, with the sole purpose of turning themselves into trillionaires
now, and quadrillionaires next. Congratulations to the banksters.
They succeeded in accomplishing stage one of their goal! Congratulations
to Fudd and the Fundsters. They've put their grandchildren on
a multi-hundred trillion dollar payment plan to enrich the banksters.
19. Here's a look at the GDX
Daily Chart. Note the head and shouldering action I highlight.
While gold bullion looks a bit "stretched" after the
$75 upside party, the GDX, like silver, looks set to confirm
the price action in gold. Should the stock market begin to rally,
and my sense is it likely will do so, you could experience
a fairly solid bout of cash register ringing on your gold stocks.
The right shoulder is higher than the left, indicating a strong
situation, and the head and left shoulder are now morphing into
the head of a larger and more symmetrical H&S, another positive
sign! Here's a look what I mean on a 2nd GDX chart: GDX
20. You want to be a buyer of all gold stock weakness;
don't clown around here, because the hourglass held by the gold
bear clowns is running low on paper money sand. Drive yourself
towards a focus on the juniors. A focus does not necessarily
mean putting more total assets in juniors than other areas of
the gold arena. It's a focus, not an obsession. Some writers
talk about the "safety" of juniors compared to seniors.
That's a totally moronic statement. Gold bullion is the world's
lowest risk investment, while gold juniors are the world's highest
risk, ironically. (Not counting OTC derivatives and anything
Elmer Fudd Public Investor recommends to hold for the long term
at his price entry point)
21. You don't need 99% of your money invested in juniors to make
a lot of money. If your management team is killed, so could your
investment be killed. There's "only" about a billion
risk factors in play with juniors. One of the biggest risks is
price volatility risk, 2nd only to "off the board"
risk in terms of danger to you. You need to manage price
volatility risk with a pyramid of buy orders to zero, or you
risk being obliterated by the reality of the insane and growing
price volatility in the juniors sector. Let me repeat with a
nuclear powered foghorn, what almost nobody (other than juniors
stock supertrader GoldLion) in the gold community is clueing
into: A mountain of back-breaking work has been put in by
all the stakeholders of many juniors operations, over many many
years. The results of that work are about to rise up like a golden
22. Regardless of any selloffs that will occur going forwards,
in the juniors as a group, you are going to start to see "takeover
mania", as well as "positive announcements affecting
the stock price mania". Individual juniors are starting
to see their stock prices jumping on drill action and news action.
That is the theme of gold juniors here and now, and it is highly
likely to dramatically accelerate over the next 6 months!
My question to you is:
23. Are you prepared?...prepared for the party? If you own no
juniors, or blew yourself up on them in the past, my suggestion
is to focus on the GDXJ-NYSE and ZJG-TSX ETF funds. Diversify
over price, not lottery tickets. Take control, not analysis drivel
after gold has rocketed and the banksters are unloading onto
those analysts and their flocks of price chasers, and remember
that even if gold is going a million dollars higher, all that
matters is whether the banksters are capable of knocking you
off of your golden horse with a $30, $50, $100, or $300 hit when
you "know" it can't happen. Only price diversification
can protect you from the vicious and never-ending attacks
of the banksters.
Aug 17, 2010
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Thomson is no longer an investment advisor. The information provided
by Stewart and Graceland Updates is for general information purposes
only. Before taking any action on any investment, it is imperative
that you consult with multiple properly licensed, experienced
and qualifed investment advisors and get numerous opinions before
taking any action. Your minimum risk on any investment in the
world is 100% loss of all your money. You may be taking
or preparing to take leveraged positions in investments and not
know it, exposing yourself to unlimited risks. This is highly
concerning if you are an investor in any derivatives products.
There is an approx $700 trillion OTC Derivatives Iceberg with
a tiny portion written off officially. The bottom line: