Like That, Safe Havens Are Back in Favor
CNBC news, Feb 26, 2013.The Italian election results are in, and stocks have
sold off hard.
here now.You are looking at the weekly chart for the Dow. Make sure you
double-click on the image to fully expand it. Hedge fund managers seem to be
engaged in a competition, to see who can talk their short-weighted book with
the most gusto.
3.A decline of just a few hundred Dow points can make
a leveraged hedge fund a lot of money, so I would be careful about assuming
the Dow is about to crash.
4.My suggestion is to focus on the key support areas
near 12,876 and 11,248.If the Dow goes down there, you could buy a little bit
of stock.You could use my pyramid generator, aka the PGEN, to
scale in your buys systematically, around each of those points.
5.Shorting the Dow is a very questionable
proposition.Gamblers would likely fare much better by buying GDXJ, or
individual junior gold stocks, which look set to outperform almost everything
in the near-immediate timeframe.
the daily GDXJ chart.Traders who bought into the $16 area (I did) could book
a little profit at $18.50, $19.01, and $19.84.
7.The bulk of junior gold stock that is bought in this
general price zone should be held as a long term core position, because
Shinzo Abe appears to be attempting to reflate the world.
8.I think his strategy will backfire, and the Yen will
collapse, but if he succeeds, his actions are very bullish for gold stocks.
9.If he fails, thats even better news for precious metals investors,
because gold could begin a near-parabolic move to the upside.Im convinced that a collapse of the safe haven Yen currency would likely create severe cost-push
inflation, in every major Western nation.
10.Goldman Sachs is in the news, arguing that the
downside for gold is bigger than they anticipated.They are quoted by Business
Insider as saying, The
gold market sell off is about to accelerate. They mention a target of $1550.
interesting, because gold already traded in the $1556 area last week.I think
their target has already been acquired, so they can cover their short
12.Maybe they already have!
13.James T. Bond completed a very successful mission yesterday.For a
closer view of him in action on the price grid, please click
the daily bond market chart, and you can see that a breakout from the bullish
wedge pattern has occurred.The first target in the 14520 area was touched yesterday.
15.Note how the bond hovered just above the black downtrend line,
before leaping higher.If Chairman Bernanke reaffirms his commitment to QE
before congress today, the T-bond could rise to my 2nd target, in
16.If the bond can rise above 150, I think gold will surge over
$1800.Regardless, a rising bond price is good news for gold & silver
investors, at this stage of the crisis.
17.Once cost-push inflation (inflation in goods for
which there is little or no substitution available) becomes a concern for
institutional money managers, gold should rally even more strongly, while
the T-bond falls in price.
18.As a best guess, the T-bond price might rise to 200 or even 300,
before cost-push inflation becomes widely recognized.
19.A crash from the 250-300 level could harm bond market investors,
but it would not result in materially higher interest rates, even if bond
prices were cut in half.
20.The technical positioning of gold on the price charts now, hints
that Chairman Bernankes
speech to congress will be bullish for gold.
21.On that note, please click
here now.You are viewing the daily gold chart.Note the action of my
14,7,7 Stochastics indicator.It can produce both momentum and value buy signals.
22.Momentum signals tend to occur with the oscillator sitting around
the 40-60 level.Value signals tend to occur under the 20 level. The current
signal is a value
23.Having said that, gold has rallied almost $50, from the $1556 area
lows.In the very short term, a 50% pullback is easily possible, but I think
gold is either beginning a trending intermediate move higher, or is just one
away, from doing so.
24.Silver looks very good here, too.Please click
here now.I dont
use the 4,8,9 MACD, unless the 14,7,7 stokeillator is flashing a buy signal on the gold chart, which
it is now!All lights are green for the metals, and all we need now, is for
Chairman Bernanke to wave the starting flag, to begin the race higher.Lets cheer for him to do so, today!
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