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1. The PDAC conference is in
full swing in Toronto. The PDAC is the Prospectors & Developers Association
Conference. I can tell you that the feel of this conference
is: solid. There is no indication of any mining stocks
bubble. Markets tend to display this kind of aura in their middle
phase. Mining stocks are in the middle phase of a monster bull
market, and poised to enter an epic third phase higher.
2.
This 3rd
leg higher will be fuelled by financial system implosion fears that grow
amongst institutional investors, not by a 1979-style “I’m greedy,
gimme the gold!” public buying mania. It will be fuelled higher
by long-term central bank gold buying programs, which means long term dollar
devaluation and long term gold revaluation.
3.
On Sep 11,
2001, thousands of people were killed as the world trade centre was
destroyed, and the world changed. As the mid-east revolutions
began, once again, the world changed.
4.
When the world
changes, you need to respond to that change. I began to short the stock
market with real cash, as the mid-east revolutions changed the velocity of
the rise in price of oil, against the dollar. The revolutions opened
the door of possibility, but not the door of guarantee, to a drastic drop in
GDP growth, or even a total elimination of GDP growth, and a return to
official recession.
5.
Oil was
headed higher anyways, due to Ben Bernanke’s trigger finger on the
banksters’ money printing gun, as well as long term demand/supply
issues, but the velocity of the price rise suddenly changed, bigtime.
6. Corporations and
institutional money managers around the world are suddenly racing to
substantially lower their GDP and corporate earnings estimates, just here at
oil $105. What happens at oil 115? How about at $125?
$150? $200? What happens to institutional liquidity flows
if that happens?
7.
Shorting the
stock market is not a game, when real money is on the line. The public
is not involved in the market in a big way right now. You don’t
have a billion price chasing public investor wieners on the other side of
your Dow short trade, like you did in 1999. Do you see Morgan Stanley
issuing you a free Triple Sell Signal, like they did in 2007? No.
8.
Your
competitors in the market this time are the Fed, the banksters, and
thousands of institutional money managers. They may not be very nice
people, but they are market winners. The bottom line is you
better come to the Dow shorting battlefield with a lot of weapons, a lot of
risk capital ammunition, and be prepared for a bloody long war.
9.
A minor
suggestion: Leave granny alone. Granny doesn’t need a
portfolio of Dow put options, just because you’ve “called the
turn”, to save her from herself. My “minor”
suggestion is: Make a lot of wealth using your capital, then give
some to her!
10.
Here’s a
look at the near-term Dow
Chart. Remember when upside momentum died on gold and gold stocks
at $1387 in October? Momentum is a moniker for the velocity of the rise
in price of an item against the currency it trades against. The upside
momentum of the Dow has died.
11.
Click here now
to view my longer term Weekly
Dow Chart. What you are looking at over the past month, is the
direct result of institutional money managers re-allocating their cash, to
reflect the effects of their projected oil price ($110-125) on corporate
earning and GDP numbers.
12.
If the global
revolution theme ends quickly, the markets could go back to rising mode, but
we are fast approaching “sell in May and go away” and then the
Aug-Sep-Oct period that I call “stock market hurricane season”,
because crashes often occur in that time period. If you are out
of the market, I would not be looking to enter the market on the buy side in
size, unless we get a much more substantial take-down in price.
13. Ben “Dr.
Pinocchio” Bernanke has a new worry. Oil. A
high-velocity rise in the oil price could speed up the need to raise interest
rates. Ben’s hope to keep rates low and then aim a new
blast of QE at the stock market may be seriously delayed or even imperilled,
if oil skyrockets.
14.
More
revolutions could take place, and if they occur in countries like Saudi
Arabia, then the stock market, the T-bond, and the US Dollar could all go
into a united free fall.
15.
The risk of
this death spiral is real, and it calls for a limited tactical shorting
attack on the stk mkt.
16. Silver. The dreamer
looks at the past, and seeks to recreate and repeat the past.
Unfortunately, that’s impossible. The public tried it in the
1990s in the stock market and in real estate into 2005. Don’t
repeat the tactics of losers against a background of pretending to know where
silver is going. Silver has soared in price from the depths of the bear
market. Your dollars now only buy you a fraction of the silver
that they bought when there was a glut of silver. You
can’t build serious wealth by paying up for dreams.
17.
The
(pipe)dreamer thinks, “but what if silver soars like it just did,
maybe silver will be at $200 or even $300, I should back up (what remains of)
my financial truck now!” If I mention silver stocks, a
kind of eerie silence presents itself. A few silver stocks that are soaring
are bought, but most are ignored.
18.
Don’t buy
the sizzle. Buy the steak. The steak is what hasn’t
moved. The sizzle is the item you feel the urge to chase after, and
rename that urge “analysis”. I’m starting to see
highly dangerous statements about silver’s rise being made like,
“sell everything you own, do it now! Put it all in silver,
now!”
19. These are the statements of
market losers. They failed to buy into the silver glut and want to
re-create what they just missed. Can’t happen.
Pipe-dreaming your way to wealth, solely by following your emotional urges,
is not a viable strategy. It’s a price chasing clown act.
If silver is going to ten billion dollars an ounce, or even just 50%
higher, where do you think silver stocks are going?
20.
If you
don’t build ownership of an item in size, you can’t build
wealth. The only time size is available is when the item is
cheap. Click here now to view the Silver
Miners ETF Chart. As the price of silver blasts higher, the silver
stocks will move exponentially higher. Notice the huge size of the
pyramid is that I’ve drawn above the rough $20-27 range. Price
could soar to unknown heights if silver blows thru $52, as I’m 99% sure
it will. My strongest suggestion is to look thru the ETF and find the
stocks that really haven’t performed yet.
21.
It takes time,
a lot of time, for companies to recover from events like the greatest
financial crisis since 1929. I absolutely believe that gold
$1400-1700 is the zone where the stocks begin to do all you hoped they would
do at gold $800-1200.
22.
Here’s
the GLDX
Gold Juniors ETF Daily Chart.
23.
Notice the huge
h&s continuation pattern I’ve highlighted. The GLDX ETF holds less
companies than other ETFs, so it brings you more risk and more possible
reward, because it is more volatile. Using my PGEN pyramid generator,
which goes far beyond scale trading, the GLDX could be the ideal ETF to play
what I believe is coming astronomical volatility.
24.
The reality is
that the gold community is not greedy at gold $1430. Most analysts blew
it, and shorted gold or sold out into $1310, instead of buying. Now the
game is to wait for some magical correction that is “just right”,
to get back in. That crazed mentality is nothing more than jumping out
of the fire and into the fry pan. Rather than standing on the sidelines
and waiting until gold $1700 to make the same type of statements about gold
you see on silver now, instead you need to focus on gold and silver stocks,
and be prepared to buy the weak ones now, and at prices far below what seems
rational.
Special
Offer for Website Readers: Send me an email today to freereports4@gracelandupdates.com
and I’ll rush you my new Flying Five Oil Juniors report tonight!
I’ve put together the 5 favourite oil juniors from surveys of investors
that are most likely to outperform the BMO oil juniors ETF, provided you use
the correct tactics on them, in the market. I’ll go over those
tactics in detail for each stock for you. Thanks!
Thanks!
Stewart Thomson
Graceland Updates
Email: stewart@gracelandupdates.com
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