Report From The Gold Battlefield
Sep 13, 2011
- Please ask yourself if you are caught in a time warp, or whether reality continues to unfold, with new and more powerful phases of this all-epic OTC derivatives crisis.
- The “2008 again” crew really needs to sit this one out. I told you of juniors expert “GoldLion”. His view is that juniors are likely 3-6 months behind the seniors, in terms of being set free from the gold stocks gulag. I’ll add that asking a 20 cent juniors stock to surge to $20 a share while gold surges from $250 to $1800 is perhaps realistic during an economic super-boom, featuring the public lined up down the street, buying in a greed-fuelled mania.
- I’m not sure how reality-based such an idea is, during a crisis that has seen probably more than $300 trillion in failed OTC derivatives marked to model, allowing a totally bankrupt financial system to be kept open, for now. Just when gold juniors investors thought that no new feelings of time and price pain inside the gold stocks gulag was humanly possible… those feelings of horror are here now.
- Some gold seniors stock “prisoners” have been freed from the gold stocks gulag by the gold bullion punisher. As far as the juniors go, you get to sit there, tied to your chair, and take a few more beatings. This is where the survivors, who will become ultimate victors in the great gold war, get separated from the bust outs. This crisis is so big that it requires you to live through “pain beyond pain”.
- Only imbeciles try to trade their way through the gulag. Some of you have been real prisoners of real war. You know that anyone who claims it was party time during their imprisonment, is a certified liar. Likewise, those claiming they can flip trade you through the gold juniors gulag are fibbers at best. There are no solutions. There is only endurance of the strong, and destruction of the weak.
- You can eat more pain, and you will, if you really want out of this gulag. There can be no limit to either the amount of time you spend underwater, or the amount of drawdown you have to endure. When the sand in the hourglass drains out, you turn it over, and endure another round of pain. That’s your only solution.
- I’ve talked about carrying an “up to 30%” short position in various markets, or using put options, to build wealth, but mostly to maintain emotional sanity in this crisis. Monday, September 12, 2011 may have marked another capitulation day. I was bombarded by emails about investors in pain. It felt somewhat like the lows near $1478, but condensed in time. As the crisis moves forwards, I expect timeframes of swings from greed to fear to greatly shorten.
- Find little things to do that allow you to endure time and price movement inside the gulag. Some of them are just little mental games. Whatever it takes to endure, do it.
- The fact is that some seniors stocks have been released from the gulag, and that is a hugely positive event for juniors shareholders. That’s not a small issue. It’s enormous. It puts some light at the end of your tunnel. When you see a fellow prisoner released, there is real hope that you too could be freed. GDX just hit an all-time high days ago.
- “If only I had done this, if only I had done that, I’d be so much further ahead now”. Yes, let’s talk about “now”. Click here now to view the monthly meditation chart for GDX. When you meditate, you can’t have thoughts in your mind. So, annotations are useless when it comes time to meditate on a chart. Just look at that chart. GDX has risen about tenfold since the great dollar bear market began. Meditate, and then ask yourself, realistically, if you called all those small rises and falls, on the road from $6.46 to $66.
- Yes, if you bought large amounts of stocks at each low point, and sold large amounts of stocks at each high point you would have been “the champ”, and certainly “much further ahead than where you are now”. The theory is that recent highs at $66.98 “should have been sold”, as one of those high points, and of course the coming low point must be bought in size, to keep you “ahead of where you are now”.
- I’m not so sure there’s actually anything wrong with “where you are now”, other than your obsession with it. Look at that monthly chart of GDX and tell me how important to you those past rises and falls in the price of GDX are now. We both know you couldn’t care less about the past action on that chart. If that’s the case, and it is, then what makes the current price action different? Why is the current movement on the price chart so much more important than all those dozens of past movements?
- Gold and gold stocks gyrate. If you have no short positions in play, you book no profits when price declines. When price falls, all you think about is how much you are losing on your long positions, and how much of your position you should have sold at the latest minor top, to have avoided being “where you are now”. You understand the rewards of flip trading, but do you really understand the risk side of the equation? In this crisis, flip trading could put you on a real breadline, alongside Elmer Fudd Public Investor.
- To view my GDX profits momentum chart, click here now. The bottom line is that GDX is chain sawing its way through the dollar bugs at the rate of 100% per year, based on the action out of the June lows. I expect that rate to accelerate substantially in the coming years. The only people taking the stock you throw in the garbage can now, are the banksters. Where do you think it is going? Do you think Elmer Fudd Public Investor is buying a share? No. He can barely pay the mortgage on his underwater home and he’s waiting for the government to save him from himself. That will not be happening.
- Still, you can’t expect something like GDX to rise 30% in 3 months without a pause in the action at some point. Maybe that point is now, or maybe it doesn’t really come until near $80 on the GDX. Are you going to learn the answer… the hard way? $1478 was a point of massive capitulation in the gold community. I got a zillion letters describing all the reasons why the dollar would rally and gold stocks would fall. My question is, how did it work out for those of you that acted on what boils down to nothing but your own fear? Let’s make sure that $1478 is the last zone of capitulation for every single member of the gold community, for the rest of this bull market.
- The reality is that those feeling the most fear now, bought the least or sold the most into the lows of $1478.
- The Sheriff. There’s a new sheriff in town, and his name is Mr. Unleveraged Physical Gold. This period in time can’t be 2008 again because the physical gold players are beginning to act aggressively.
- One of the themes I predicted for 2011 was “gold community aggression”. For a long time, the gold community was on the defensive, when it came to debates against the dollar bugs. I told you that would end, whether you wanted it to end or not.
- You don’t need to explain the merits of your gold bullion holdings to the dollar bugs. Stop wasting your precious time acting like a worm. It is the pathetic dollar bugs that need to explain to you the merits of their garbage paper money system, which has a track record of every single issue having gone off the trading board, for all of time. Don’t defend yourself against any dollar bug, ever again. You are almost insulting your own gold by doing so.
- I bring you real characters in the gold market, and hide their identities. Richie Rich is one new character I’ve just introduced to some of you, and for those who don’t know, Richie is holding a million ounces of physical silver and 30,000 ounces of physical gold bullion. He’s becoming aggressive. He’s eating pain alongside you during times like this, but there’s a new level of confidence and aggression, and he’s not alone. The dollar bugs are best to stand down now, because the physical players of size are slowly taking control of the gold market, and beginning to show tremendous disdain for the leveraged players. Team monster physical is beginning to feel its own power. It’s a veritable fire hose blast of golden adrenaline surging through their veins!
- Understand that this is a fight, but at this stage in the crisis it’s not about guessing the next direction for gold, or what you could have made by selling big at the latest minor or intermediate high. That action worked in the earlier stages of the crisis, and many of you would not be here now, at all, if you had not employed it then. There is a time for very aggressive trading. That time is not now. Now it is time for Babe Ruth to step forwards and everyone else on the gold team to stand down.
- The greatest traders know it is time to sit on the bench, now. That understanding is part of what makes them great. The worst ones believe it is time to trade more aggressively. If you are ready to take on Babe Ruth in a home run hitting contest, please step forwards into the gold market. If you are a professional bunter, I’m afraid you might be destined for a financial precipice if you don’t know it’s time to get off the field and onto the bench. The big boys are in the house, and the question is, are you onside?
- Click here now to view the head and shoulders chart pattern update for GDXJ. Note the right shoulder that initially formed, highlighted by the blue circle. Price rallied, but then declined into a bigger right shoulder creating a better picture of symmetry, to match the action of the left shoulder.
- You can’t know if that pattern fails or activates, and in the biggest picture it just doesn’t matter, so long as you are prepared to buy or hold your positions if it fails. Click here now to view the gold bullion picture of simplicity and logic. Gold is simply trading in a box between $1700-$1900, with a 2/3 chance of breaking out upside, and a 1/3 chance of going on sale for you down towards $1500. There is no fear, and there is no 2008 again. There is only you, marching forwards against the dollar bugs. The big difference between now and 2008 is that now you have huge physical players marching alongside you! Now, let’s get out there on the gridlines, and deliver the whipping to the dollar bugs, that we came here to deliver!
Sep 13, 2011
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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: