1.India's central bank
just chopped interest rates, in the face of the worst economic growth in 10 years.The
RBI unexpectedly also reduced the cash reserve ratio (CRR), the share of
deposits banks must keep with the central bank by 25 bps to 4.00 percent,
which will infuse an additional 180 billion rupees into the banking system. CNBC news, Jan 29, 2013.
2.Quantitative easing and rates to zero policy is spreading to every major economy around
the world.Horrifically, despite these enormous fire hoses of liquidity, gold stocks continue their unending slide.
3.By this point in the gold super bull market, most gold stock investors believed they
would be wearing a crown of solid gold.Please click
4.The market never
ceases being a fight, and in a super-crisis, the fight becomes a clash of the titans.Gold
stock investors have never faced a greater challenge than they face right
now, but neither have the bears.
5.To view gold stocks from the eye of a titanic bear, please click
here now.In a boxing
ring, you cant
run or hide from your opponent.Victory is all that
matters, but if you fail to respect the abilities of your opponent, you
6.Every gold stock
investor remembers the carnage of 2008.I bought gold stock into the lows of
that carnage. Id
buy into the lows of an even worse gold stock wipeout, if it happened.If you are afraid, buy put options on GDX and
7.If you are a gambling bear, buy put
options on NUGT, the triple-leveraged version of GDX.
8.Ive showed you the bears greatest weapon, which is that head and shoulders
pattern on the HUI weekly chart.Ive told you how to handle fear, if you have it.Now, Ill show you the weapons
of the bulls.
here now.You are
looking at the 14,7,7 series of the Stochastics
indicator, on that same HUI weekly chart.
10.I use the 14,3,3 series for the gold bullion weekly
chart, but stocks are more volatile.I want only the
cream of the
signals crop, and
the 14,7,7 series passes that test, with flying gold stock colours!
look at the 2005 and 2008 bottoms, you can see that the first buy signal
generated by the Stochastics oscillator ushered in
a big rally, but then there was a final washout
there, a 2nd Stochastics buy signal
occurred, and gold stocks staged gargantuan moves higher in each case.
13.You cant know exactly how the current Stochastics
set-up will play out, but its clear that in this price area, some buy-side
risk capital should be applied to gold stocks.
14.The biggest weapon held by gold stock bulls, is the central
bank of the United States, and over the next two days, the banks
open market committee engages in key policy discussions.The
meeting culminates with the release of a statement to the public, at 2:15PM,
New York time, on Wednesday.
15.To understand why the central bank is the greatest
ally of gold stock investors, please click
here now.For all
practical intents and purposes, you are looking at the primary driver of the
gold price.It is the balance sheet of the
central bank of the United States.
that balance sheet stops growing, the price of gold bullion stops growing.Gold enters a trading range, and gold stocks
here now.Thats another look at the HUI
chart.You can see that stocks topped out, as the
Fed balance sheet stopped rising.
recent breakout on the Fed balance sheet chart.I
highlighted that with a gold arrow.For some reason,
I like that colour, gold!
balance sheet is starting to grow again, which means it is highly likely that
the gold price starts growing again, too!
here now.Thats the daily chart for gold.I predicted a hard sell-off would occur from $1700,
likely forming the right shoulder of a bullish h&s
bottom pattern.That sell-off did occur, primarily
because George Soros made statements in Davos that bonds could fall later
agree with his statements, but I think it gave those who shorted gold at
$1700 a way to cover their positions at a profit.
current Stochastics positioning on the daily gold
chart suggests that gold could move in either direction from here, but
note how orderly this supposed panic sell-off has been, from the $1800 area.
23.While Ben Bernanke could surprise gold investors,
temporarily, by saying something negative about future QE, tin a practical
sense, can the Fed really stop growing the balance sheet at this point in the
here now.Thats the daily chart of the
March T-bond.A rally seems imminent, which is good
news for gold.
think the Fed plans to grow the balance sheet to well over $3 trillion in the
intermediate term, which would create a new intermediate bull leg in the gold
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investment, it is imperative that you consult with multiple properly
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advisors and get numerous opinions before taking any action. Your minimum
risk on any investment in the world is: 100% loss of all your money. You may
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