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1.The building blocks of a gold price parabola are slowly
being put into place. Today, I want to show you how the stock market plays
into the parabola. Both the Dow industrials and the transports have both lost
upwards momentum and are on the cusp of crash season (the months of September
and October).
2. The
remaining public stock market investors took an axe chop to the “crisis
is over” face, with President Obama’s statements that
America’s government stood on the doorstep of default on its debt.
While default has been avoided for now, the incident has killed public interest in
flowing liquidity into the stock market.
3. I want you to take a
very hard look at this monthly Dow chart that shows the market action from
1997 to date. Click here
now to view what I think is substantial “gold parabola fuel”.
4. Note the three blue
boxes that I have highlighted. Some of you may recall my Dow 9,000 to 11,500
“shorting PGEN”, where I advised using my pyramid generator as
price rose into the 3rd blue box area, on the right side of the
chart.
5. The
reason the 9,000-11,500 area is so important on the Dow chart is not because
of any technical lines or oscillators, but because that price box is the zone
where the public came into the market in 1999.
6. The public didn’t
just enter the market in the late 1990s. They engaged in one of the greatest
and most lobotomized price chases of all time. Pensioners were blowing out
their government bond portfolios to load up on Nortel and Cisco. Mom and Pop
were getting loans against their mortgaged home to buy more stock and mutual
funds.
7. Nobody asked who was
selling to the public, or why. As the banksters and
insiders unloaded gargantuan amounts of stock onto
Elmer Fudd Public Investor, the market began to
lose momentum, as is happening now. The public booked losses into the lows of
2002 and 2009, and as the market rallied back to the 2nd Dow 9,500-11,500
box.
8. They wanted to
“get out near break-even”. There is a still a lot of stock held
by the public that was bought in the Dow 9,500–11,500 area. That price
box is “home base” for the public. I believe we are at a point in
terms of public psyche, where a fall back to that key price zone would cause
a sort of “grand throwing of the white towel” event amongst the
public.
9. There’s only so
much time and price in the underwater zone that a public investor can endure.
Many are beyond retirement age now, and believe they “can’t take
another hit”. Emotionally, I don’t think they can.
10. The banksters
know how the public investor (mark) feels right now. The public has a history
of being on the wrong side of all major moves in any market. While anything
and everything is possible, I don’t believe the Dow is going to blow
out the March 2009 lows around 6,500. I do think it could decline back into
the 9,500 – 11,500 zone for a 4th play there, one that would
“seal the deal” on the public’s stock market foray.
11. The public is already
nervous right now. What happens if the market drops thousands of Dow points
from here? The answer is that the public would move into cash and
perhaps bonds, and they would do it in size. Their
stock market “marked to 15-20% gains a year forever model”
pipedream would finally be buried in a marked to market coffin, in the Dow
9,500–11,500 zone. Since their own stocks have
generally performed much worse than the Dow, that final exit would likely be
one of substantial loss booking.
12. The US dollar has to be
substantially devalued to make even a portion of the OTC derivatives and
unfunded liabilities debt manageable. It makes sense that the public would
abandon the stock market and go “all-in” on the dollar just in
time for a dollar crisis to explode on the world financial stage.
13. One company after
another is cutting employees and earnings estimates. The 2nd half
of 2011 was supposed to bring almost 3% in GDP growth. Prospects for achieving
that goal are dimming fast. All signs are pointing towards a bankster move to herd the public into a near 100% cash
and bonds positioning.
14. At the beginning of the
year in 1979, gold was trading around $200. About a year later price had quadrupled
to about $800. I expect the price of gold to repeat that type of
parabolic action, as unprecedented institutional liquidity flows out of the
US dollar begin to occur. My ultimate gold price target of $6000 is about 4
times the current gold price, something to keep in mind.
15. Many investors in the
gold community have tried to leverage what gold could do, using silver and
gold stocks. Because we are in a crisis, assets will be violently bought and
sold in size by institutional players using computer algo
trading systems. Silver, for example, has already experienced a major bear
market within this crisis, when price crashed from about $21 to under $9.
That type of price action is not a “correction”. It is a bear
market.
16. A new bull market was
since reborn for both silver and gold stocks, but don’t think you can
outperform gold with silver or gold stocks in this OTC derivatives-based
crisis….without taking some serious kicks in the financial head on the
downside. Focus on enduring those kicks in the head, because you are not
going to avoid them, despite what the timers are telling you. At some point,
I think silver disconnects from gold and implodes, while gold sits
there watching the action with a smile. I
think it happens at prices far above $50 an ounce, but I think it happens.
17. It’s very
important to carry at least 20% cash in your accounts, if you are active in
the gold and gold-related markets. The other 80% will make you more than
enough profits if the 20% cash position goes off the board.
18. If the dollar starts a
new leg down, institutions will go into a state of near-panic, and they will
be looking towards the major banks, Tim Geithner, and Ben Bernanke for
guidance. Institutional liquidity flows stand to become very violent in
nature from here on in, and a barrage of price surprises could cause you to
panic. You don’t need a lot of gold-related items to make a lot of
dollars in a parabolic move, but you need to keep solid levels of cash in
your accounts to keep you from feeling “my account is going to
zero!”, and selling out, as the markets begin to display huge whipsaws
of price action.
19. Be very careful about
playing master trader with trend channels. Focus on horizontal support and
resistance if you want to take “enhanced” liquidity flows action. Click here
now to view where a conservative Dow investor would begin a buy program
and end it. The black HSR line denotes horizontal support, and that is the
where I believe the public enters liquidation mode.
20. You want to buy what the
public sells, particularly when they do it in size. At minimum, you must
avoid taking any action they are taking. Note that the larger buys extend
below the support at 9500. The buy pyramid (pgen)
ends about 8900-9000, so you catch what is sold by “team stop
loss” if support at 9500 fails.
21. Gold
rises to $1635. GDX rises to $62. Gold declines a bit and GDX tanks. Gold
rises back towards $1635 and GDX wallows around $57. Your individual gold
stocks in many cases are below the highs of 2006! Between trips to the vomit
bag, I want you to understand that there must be no limit to what you
can endure on the horrific front lines of this gold stocks battlefield.
22. You are in the gold
stocks gulag and the winners are the survivors with the most intestinal
fortitude. All other schemes to gold stock riches lead to the garbage
can, and the only question is, are you onside? Picture yourself tied to a
chair while a bankster-financed hedge fund manager
tortures you. Why? Because that is the reality of where you are, right here,
right now.
23. You don’t predict
yourself out of the chair, you endure your
way out of it.
24. Click
this key
GDX chart now. Notice the 3 big blue HSR lines. Price is gyrating around
the first one now, in the $56 area. The next one down sits at about $44. The
3rd one down sits at about $28. I’m not trying to freak you
out. Nobody knows where price is going, but the grown-ups can take action at
these key support areas, while the kiddies will liquidate. At minimum,
don’t liquidate. Do I think price is going to $44? No, but it is
possible. Look on the upside. Price could blast up through the $64
area and turn that party pack of a price zone into your key buy area.
Gold is $1635 as I send this off. I’m about as worried about the
ultimate picture for gold stocks as I am about a dollar fly on a block of
gold bullion. Worry less, respond more, so
you…get richer!
Gridtime! Take the gold stocks pain. It could be a lot worse. You could be FUDD,
headed for the breadline! LOL! All you need to do is focus on being able to
endure GDX $44, if it happens. That should not be an issue, if you really
deal with it now, rather than pretend it can’t happen. If we astroblast thru $64 instead, then at some point $64 is
going to give you the same feelings that $44 gives you now. Nothing changes
over time in the gold market, except
your level of professionalism.
Special
Offer For Website Readers: Send me an Email to freereports4@gracelandupdates.com
and I’ll rush you my new “feed me the dollar bugs now!”
report, covering what I see coming in the corn, wheat, rice, and sugar
markets, and how and why I’ve placed heavy amounts of risk capital
there. Thanks!
Thankyou
Cheers
St
Stewart Thomson
Graceland Updates
Email: stewart@gracelandupdates.com
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