1.
I'm glad to see some more gold analysts speaking about
gold revaluation. Unfortunately, most of them speak of revaluation as a
solution to the crisis. That idea qualifies as... error of the century.
2.
There is no solution to the crisis, because of the size
of the OTC derivative debt bomb. There is only a coming end to the crisis,
and that end involves the impoverishment of creditors and the public, via
gold revaluation and/or all-out money printing.
3.
Most gold investors need to understand the difference
between a personal desire to get richer (greed) and "helping
people". You don't help people by revaluing gold thousands of dollars an
ounce higher in the throngs of a quadrillion dollar OTC derivatives debt
crisis. Drastic revaluation of gold when the dollar is weak impoverishes
those without gold.
4.
I've told investors since the late 1990's that gold
revaluation is a bankster scheme to transfer wealth
from the public to themselves, and it would deployed at staggeringly high
prices. If employed when debt is low and the economy is booming, a gold
standard locks in prosperity. If you want a real gold standard, one to
help people, fight for it when gold is low against the dollar, not high.
5.
Simply put, any coming gold revaluation is a poverty-lock.
I want gold's price higher, so I get richer, and my subscribers get richer. End
of story.
6.
I know full well what the consequences of an
astronomically high gold price are for the average person; poverty, and
probably the breadline. Know your greed, and manage it professionally.
7.
Click here now to view the gold head and shoulders top
pattern. After the first possible right shoulder formed on Friday (RS on the chart),
investors became afraid. Some liquidated, as they looked at gold as
"overbought".
8.
I want you to understand that professionals use
oscillators like RSI and MACD to decide how much capital to place at a
given point of price weakness, but not to decide whether to buy or not.
The "whether to buy" decision is determined by the amount of price
weakness and horizontal support and resistance (HSR) levels.
9.
Gold melted almost $100 from $1815 to $1725, but few
bought that weakness with any capital at all, because of an obsession
with technical oscillators. The second possible right shoulder has warped the
h&s pattern, and there is now a strong
possibility that the pattern has failed and price is about to blast towards
$1900 or higher. For those who bought nothing into $1725, there is now a
possibility that you are about to miss out on nearly $200 of price
appreciation from $1725.
10.
When you buy something, you want to have the odds of
success on your side. In the case of gold stocks, you have a massively higher
gold price in play now. In the case of the Dow, what you have is an
institutional money manager obsession with higher oil prices, as fuel to move
that market higher. The theory is that a rising oil price indicates economic
expansion, and so the general stock market is a buy. I would argue that borders on insanity, but it is currently how institutions
are flowing liquidity, and it is indeed moving the market in both directions,
relative to the oil price.
11.
I think a major disconnection of the Dow from oil is
near at hand, and when it happens the current crew of stock
market "bargain hunters" are going to get a real taste of
just what constitutes a bargain, and what constitutes a crazed price plop
into an overpriced stock market that sits on the outskirts of crash season.
12.
If gold goes parabolic, oil is likely to follow, while
the stock market, bonds, and the dollar are likely to at least temporarily
enter into a sort of triple death spiral. Don't think that an
endlessly higher oil price is positive for the stock market, or you could
find yourself part of that death spiral.
13.
Click here now to view the Dow daily chart. September and
October are "crash season" for the stock market. Most of the
investors who tried to bottom call the stock market recently didn't buy into
the lows of this decline to the 10,600 area. They bought higher than where
price is now, and are already disappointed, but hoping to get out at
break-even or at a small profit. I'm less sure about their destiny.
14.
Unfortunately, volume is tanking as price is
rallying. Notice the five red HSR lines on the chart, with the first one only
about 500 Dow points above where we are now. There is horrific overhead
resistance.
15.
If there is a decision to be made between buying the
Dow in crash season, based on an ever-rising oil price indicating all is
well, versus buying gold stocks fuelled by the skyrocketing price of the
commodity they produce, only a bonehead goes with the Dow.
16.
Click here now to view the Dow monthly chart. Most
technicians use only a single and popular time series for each oscillator,
like the 12,26,9 series for MACD. So, they currently think there is no
"sell signal" on the Dow monthly chart. I use leading time frame
oscillators. The oscillators on the Dow monthly chart look like a barrel
going over Niagara Falls, and my only question to you is, are you in the
barrel?
17.
Buying gold stocks here and now on any and all
weakness, instead of the Dow, is one of the few "no brainers" that
occur in the market on the rarest of occasions. I don't buy into the
"it's 2008 again" story. Nor do I buy the "if the Dow
falls, gold stocks will fall harder!" story.
18.
This is a new stage of the crisis, and it is the stage
of gold stock price appreciation. The only question is, are you onside?
Gold stocks could probably withstand a $400 an ounce drop in the price of
gold, with only limited damage to the stocks themselves, at this point in
time. The absolute level of the gold price is slowly putting a floor under
possible damage to the stocks.
19.
All technical signs on the GDX monthly chart point to a
target of $100. Click here now to view. Notice that the monthly chart
oscillators gave what I term "mild sell signals", but the leading
series are already looping up into buy signals! That chart is annotated all
in blue for a reason, and the reason is that it looks fantastic.
20.
Maybe the Dow monthly chart oscillators loop up into
buy signals, or maybe not. I say.... Who cares! Focus on gold stocks, not the
Dow. When the average Dow stock can sell their underlying product at
massively higher prices compared to gold stocks, then
get serious about buying the Dow. That is not the case today.
21.
Click here now to view the GDX weekly chart. Note the
massive up volume bar, one that I've termed, "epic". The
oscillators are in a sort of mid-ships position that often occurs when price
is set to surge higher, and I think it could happen even if the gold price
itself wallows here.
22.
Some readers thought that because I speak of the
"gold punisher" lording over everything in this crisis, that I am
knocking silver or gold stocks. Wrong. It's critical to understand the
magnitude of the crisis and to "know your place" within it. All
commodities will eventually super-inflate or even hyper-inflate, if the
central banks accelerate gold buy programs and money printing.
23.
Unfortunately, a lot of investors didn't understand the
size of the OTC derivatives debt bomb, so they thought gold stocks and silver
would skyrocket soon after the crisis started. That was a mistake. There has
been no global reflation of the world's economy, but I think now it is very
near. There have only been sporadic "fixes" of individual debt
bombs, like Lehman. The rising gold price is what will reflate everything,
but that takes time, and institutional money managers are not going to load
up on silver and gold stocks until that happens.
24.
Forget about the pipedream of the public buying gold
stocks to send them vertical. The public is likely going to the breadline,
and they've just finished selling their gold to the pawnshop man, for a bag
of peanuts and a roll of toilet paper. Institutional money managers are going
to pump your gold stocks upside in a way that seems "beyond
impossible" now. Don't waste time now worrying about gold stocks, in
hopes of avoiding some "pre-parabola hit" on them. Gold stocks are
what this stage of the crisis is all about, and the only question is, are
you onside?
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Thankyou
Cheers
St
Stewart Thomson
Graceland Updates
Email: stewart@gracelandupdates.com
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