tells you that gold dust refers to fine particles of gold that are produced
by machining. They can also occur naturally. I agree.
- Please click
here now. DUST-nyse is a triple-leveraged
ETF that shorts GDX-nyse. I don't think that
shorting gold stocks has ever been as important to the gold community as
it is now.
- Most investors try to use short
positions to call tops in markets. Instead, I suggest you use them to
manage your emotions in the lowest prices areas, as you accumulate your
gold stocks. I refer to these prices areas as my "
personal surprise zones".
- If you look at this DUST chart
over the past two months, you can see that the price has risen about
100%. Investors like to wait for a substantial correction in price
before buying any asset. I don't think that's such a good idea in this
- If DUST was a mining company,
I'd endorse that strategy, but it is not a mining company. It's a
leveraged bet against mining companies.
- I view DUST as emotional
insurance, not financial insurance. Most investors never expected gold
stock prices to fall to the levels they are at now, and many are
- A similar thing happened in
2008, but in 2008 you didn't have an investment vehicle like DUST to
help you navigate through your personal surprise zone. So, many
investors sold out into those lows. Let's not repeat that error in 2012.
- Buy only the amount of DUST
required to kill the emotional urge to liquidate your gold stocks. You will be pleasantly surprised
by how little stock is required.
- Let me use a key analogy to
illustrate the importance of vehicles like DUST to the gold stock
accumulator. Natural gas just rallied about 10%, but has been sinking
for years. Companies are beginning to cut back on production.
- Still, it can take many years
for prices to recover and for supply shortages to develop. I add small
short positions in natural gas on small rallies like this one, while
buying much bigger long positions into price weakness.
- I don't do that because I think
the price is going lower or to " call
a turn". It's done because I'm continuing to accumulate the
asset and I don't know what my emotional condition will be at prices
that could be much lower than where we are now.
- Don't wait for a "big
rally" before adding short positions. Professionally manage the
risk that you sell a lot of your accumulated long positions in a moment
- What if GDX and your individual
gold stocks keep falling here, before any rally of size occurs? It
happened with natural gas. Small short positions are the main reason I'm
still accumulating natural gas from an emotionally comfortable position.
- Leveraged traders often fully
hedge their positions, by entering into short positions that are as
large as their core long positions. Unfortunately, financial drawdowns
are part of the gold stocks game. You can't avoid heavy drawdowns, but
you can avoid capitulation.
- Look forward to adding DUST to
your portfolio at even higher prices than where it is now, because you
know it will be overwhelmed by your vastly bigger purchases of GDX,
GDXJ, and individual gold stocks.
- Where are the big buying areas
for GDX? Please click
here now. HSR (horizontal support & resistance) sits in the
$41-$42 area. It is defined by the highs that I've circled in blue on
the left side of the chart.
- If GDX touches the $42 area I
would suggest you add some DUST shares at the same time as you buy GDX
and related individual issues, to help manage your emotional psyche if
it doesn't bottom there, but instead plummets to much lower prices.
- Has quantitative easing turned
into your bridge on the river Kwai? Perhaps.
One thing is for sure; it doesn't really matter how much quantitative
easing is coming if you have thrown in the gold stocks towel.
- Please click
here now. You are looking at a 60 day chart of gold priced in Indian
rupees. If you are wondering why the gold market feels somewhat
"lifeless", that chart explains the situation.
- In US dollars, the price of gold
has been drifting lower. In rupees, it has been moving steadily higher.
India's gold dealers are not interested in paying up for their gold.
They don't have any "breakout" points on the chart.
- Most jewellers
are well-stocked with gold. They have little interest in buying now.
There has been a slight slippage in price over the past few days, but
that is hardly what an Indian gold dealer is going to call a "big
- Please click
here now. That's the daily chart of gold priced in US dollars. Note
the "lifeless" trading to the right of the chart. The Stochastics oscillator is trading in a similar
fashion; wandering aimlessly.
- Western gold investors think the
price is drifting lower, while Indian dealers think the price is
soaring. Western investors, sadly, tend to sell price weakness, while
Indian dealers do not buy price strength.
- Those two "liquidity flows
forces" are at work now in the gold market, and the net result is a
gold price that is drifting like a sailboat with no sail. This scenario
will change. Stay focused on gold stock accumulation,
but do it professionally. Don't bite the dust. Buy the DUST!
For Website Readers: Send me an
email to email@example.com
and I'll send you my free "Technical Fakeouts"
report. Learn whether a breakdown from a support zone is likely to be real or
just a fakedown that takes investors out of their