Gold and You: Topping Out or Topping Up?
Dec 14, 2010
1. Gold war update from the front lines: The Gold Community retook $1400 last night. Silver is close to retaking $30. I won the battle as to whether gold would take out $1424 on the upside or $1315 on the downside. Most thought $1315 would fall. It didn't. Gold soared to $1430 basis dec futures and many gold stocks continue to exhibit violent upsurges.
2. I don't like losing. So I don't. Don't you throw your gold away either because of all the correction talk going around. Click here now to view this morning's Gold Chart with the new range highlighted: Gold's New Range Chart.
3. Gold is now trading between 1370 and 1430, and doing so after breaking out, upside, from the 1315-1424 range. The fact is… gold is marching higher. An army of gold top callers are about to meet their maker. The Gold Punisher is in the technical analysis house, and he's not taking prisoners.
4. There is no head and shoulders now, any more than there was one in the last 1315-1424 range.
5. There is no double top either. What there is, fellow gold fiends, is an upside superblast going on right now, climbing a classic wall of worry. I've bought US dollars into weakness in some size, from other paper currencies, not from gold sales, and if there is a significant gold correction, later, I'll use those dollars to increase my gold stock position total size.
6. I have absolutely zero interest in liquidating core gold bullion positions now to ''get them cheaper later.'' With gold stock, the biggest risk to you now is selling out to avoid the correction. What will happen instead is you miss out on the biggest upside move since 2008.
7. Because Gold Stock is higher priced now than at the lows of the start of the bull market and the lows of 2008, it requires more price movement to produce the types of returns you saw from those earlier bull low points.
8. Regardless, the risk now is immeasurably greater of being out of gold, than it is of being in, and you can take that to the bank. Your bullion bank. This is a not a timer's competition. It's a crisis. It's not a game to see who can flip the most gold hamburgers with the most leverage in the unsafest online account, in a war zone. You see, the banksters don't think it's a game or a timer's competition. They think it's a war. They think they win by putting you on the breadline. They are correct.
9. Their strategy is to take you out of gold right here, right now, right before they blow up the bond market, thereby blowing up all you financially have, all you financially are. An epic transfer of wealth. The coming action caused by the bond implosion could make the day of the lows at Dow 6500 look like a remake of the television show Happy Days. Sorry, but ''Happy Days meets Godzilla'' is a vastly more accurate description of what is coming here on the next episode of… The Big Show.
10. Most analysts are giving very little, or zero, coverage to the bond market as a house of cards. I think it is all-critical. A sea change is at hand. Click here now for a look at the T-Bond to Dow Diamonds Ratio Chart. Look at the trading range we are in between 1.05 and 1.35. The 1.05 marker is in danger of failing, and technically has a 66% chance of doing so, as all sideways moves have a 66% chance of consolidating the existing trend.
11. That existing trend is: Down. Here’s a look at the monthly chart. Bond to Dow Monthly Ratio Chart. You are looking at ten years of price action. Price is rolling over. I don't believe that a real estate price collapse from here would collapse commodities like gold and food. Quite the opposite. I think we are starting to see food, and the Dow itself, starting to behave as currencies, joining gold on the currency stage. The Dow is rallying despite a growing institutional sensing that the US Central Bank and Govt are nearing an ''out of control'' situation with the bond.
12. When institutional money buys the Dow while believing rates could soar, the door is open to what HSBC's currency chief describes as an Armageddon type of situation. The institutional money managers want to believe the Dow is rising and rates are rising based on growth, but the view that a horror show is instead the correct reality, is growing like a wildfire.
13. We are likely transitioning into a stage of the crisis where items that are encumbered by debt could start to fall as a group (something the gold community only waited 30 years for), even seemingly unrelated items, while debt-free items rally strongly, also as a group. Real estate and bonds are debt items.
14. The bottom line in the next phase of the crisis is: Creditors get devalued, and debtors that have financing charges fixed at low or zero rates for an extended time get to experience almost what could be termed a debtors' party, as what they owe becomes much easier to pay.
15. What is critical to understand is that the Govt (aka the Gman) does not view itself as verging on default, but on the verge of burning all their creditors, burning all their own citizens. The govt is not worried; they are ecstatic!
16. The public wrongly believes that if the dollar falls, real estate will rally. Again, they are ignoring the bond market, which could probably not be in a more dangerous position for real estate than where it sits right here, right now.
17. A major bear mkt in bonds would turn real estate into a chart that looks like the Nasdaq after 2000. The public's move into real estate after the initial fall now, is exactly the same as their stupid move into more Nortel and Enron stock after the initial fall. I had people tell me it was free money when they bought Nortel after it fell to $90. On the road to $1 share price and followed at that point by massive dilution. Free money was correct. Free monopoly money.
18. The real estate bear is not over. Nor is it ending. It's barely started in my view. News highs are likely not years away, but decades away.
19. Most investors think way, way, way too big in the short term, and way, way, way too small in the long term. In a bull market, you never sell core positions, regardless of the size of any supposed correction you are predicting for yourself. Here's a look at the current zones of play for the GDXJ Chart.
20. The gold juniors were trading between approx. $36 and $43, and now they are trading between $40 and $45. That's the only reality there is. Short term traders are buyers in a pyramid formation on all price weakness under $45 to $40, and sellers not just to $45, but to $200! For a solid portion of your risk capital, your gold stock sell targets need to be vastly beyond what is rational, for the first time in the history of the gold market.
21. The bigger picture is the new trading range that came into play when GDXJ took out highs at $43.31 in early November. You decide the upside of that range, not me. I would suggest $60 as a bare minimum for the hamburger flipper, and $100 for the moderate investor is not out of line. Numbers like $50 are a joke. For the new range GDXJ play, you need to be a buyer on all weakness into the $43 or lower price point from any point between there and GDXJ $100 in my view. I want you to understand that while juniors are high risk assets, the price of bullion above $1400 is a game changer for them and for you. Billionaires like paid subscriber T-Rex, who is rumoured to eat banksters for breakfast, understand the situation and are taking action, whereas the smaller traders are wasting time trying to top call themselves to the breadline.
22. When it comes to the gold juniors, whether you use GDXJ, ZJG, SIL, or the individuals, my urging is you work to get your mind not into top call mode, but instead into top up mode. Do whatever it takes to achieve that state of mind, because Jim Sinclair, one of the only real insiders in the gold community, is warning you right now that the banksters are setting up to repeat their performance of the 1970s, when they made all the money on the long side, while the speculators top called themselves to the spectator stands. This time is different from the 1970s. In the 1970s there was almost zero risk of the dollar going off the board. The top callers missed reward, but didn't eat risk. This is not the 1970s. It's a marked to lies 1930s situation. Those who laughed at my standing prediction that the only solution the banksters have ever had in mind for the crisis is to put the public on the breadline, should look at the statements beginning to be made, finally, by some of the world's largest money managers. They are using the ''A'' word: Armageddon. Let's see how hard the laughers laugh while standing in the breadline. I'm going to go out on a limb and suggest it won't be very loud. Don't top call yourself out of gold and into the paper money blast furnace just as the banksters turn it on, or you are likely to join them!
23. Most investors in the gold community blew themselves out of a lot of bullion as it tanked into the lows of 2008. Most mainstream investors did the same thing to themselves with the general equity markets in 2000 and again in 2008. They bought no Dow in 1980 as it broke out upside, never mind into the previous lows, but then tried to hamburger flip it for 20 years.
24. Like bullion, the juniors are trending higher. The difference is that bullion is on the verge of a possible upside pop, while juniors are on the verge of an upside parabolic move! If gold gets taken down hard today, the question is, are you going top out, or top up? Let's do it!
Dec 14, 2010
email for questions: email@example.com
email to request the free reports: firstname.lastname@example.org
|Tuesday 26th May 2020
Special Offer for 321Gold readers: Send an email to email@example.com and I'll send you my “ETFs Versus Individual Miners!” free report. I highlight the unique risks and rewards associated with key individual miners and ETFs, so investors can decide whether to own the miners, the ETFS, or both! I include buy/sell points of action for each item.
Updates Subscription Service: Note we are privacy oriented. We accept cheques.
And credit cards thru PayPal only on our website. For your protection
we don't see your credit card information. Only PayPal
|Subscribe via major credit cards
- or make checks payable to: "Stewart Thomson" Mail
to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario
L6H 2M8 / Canada
is a retired Merrill Lynch broker. Stewart writes the Graceland
Updates daily between 4am-7am. They are sent out around 8am. The
newsletter is attractively priced and the format is a unique numbered
point form; giving clarity to each point and saving valuable
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: