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- 1 There seems to be a contest going
on in the gold community. It’s a contest to see who can make
you the most afraid of owning gold, silver, and gold stocks.
- I love competition, so I’ve decided
to enter the contest. Click this ultimate fear chart now. Why draw miniature fears on
the chart when you can have the big enchilada?
- What is your biggest risk in the gold market?
Your biggest risk is that gold goes off the board against the
dollar.
- Face that risk, or consider selling out
and going home. I’m interested in sending the dollar bugs home. This is a war, and you need to get
stronger. Stop thinking and start fighting. In the gold war
against the dollar bugs, you’re a solider.
- “I’ve looked at 10,000 charts, but I
have never spoken to one person from India about gold, and I can’t
figure out why the price of gold makes me so terrified when it falls
down against the dollar” – Not you, hopefully,
Jan 10, 2012.
- If a government has brought in
significant austerity programs for itself, a case for the benefits of
deflation can be made. When a government continues to expand
itself, general price deflation only harms the citizens,
because the government itself then expands its powers
dramatically, as you saw in the 1930s.
- In the case of this crisis, serious
deflation would close the financial system. The system is already
bankrupt, but it remains open.
- Money printing and gold revaluation are
mechanisms that buy the government time to implement serious austerity
programs. Serious deflation will likely occur after those
austerity programs are put in place, and that could be many decades
away.
- Think like a winner, rather than a
fear-generating machine. Silver is a winner, and it just broke out
from a head and shoulders bottom formation early this morning.
- Click this silver blast off chart now. Keep a positive attitude, and
keep fighting.
- Some of you know there are two seasonal
events for the stock market that I take very seriously. Unlike
most of the gold community, I view the Dow as one of the “good
guy” assets. The dollar is the stock of government,
and is the “bad guy” asset, in my view.
- Having said that, I take “crash
season” very seriously. I define it as the months of August,
September, & October, and I like to largely stand aside from the Dow
during that time period, because the worst crashes in history can offer
the Dow at incredible sale prices.
- The other ultra-important seasonal event
that I focus on very intensely is the “January
indicator”. I define it as the first calendar week of the
year. The Stock Trader’s Almanac defines it as the first 5 trading
days of each year. The basic idea is that if the first
week of trading sees the stock market rise, then it is likely that you
see a positive market for the entire year.
- I’ve looked at the Dow from its
inception, and assigned an approximate 80% accuracy rating for my
January indicator. Stock Trader’s Almanac says that their
version is now 87% accurate basis the SP500, using a timeline from about
1950.
- Whether you use the calendar week ending
January 6, 2012, or the first 5 trading days of 2012, the bottom line is
that the stock market has had a positive week to kick off this
year. Click this Dow January indicator chart now.
- Does the Dow look afraid of the dollar
bugs? No. Does the Dow look afraid of you? No.
For 2012, I think the Dow, gold, silver, commodities, and gold stocks
deliver a mind-numbing beating on the dollar bugs. Don’t
fight the Dow with dollars, or you may not be financially around anymore
by the end of this crisis.
- Click this gold fight chart now. Does gold look afraid of the
dollar this morning? No. It seems that it is the
dollar bugs who are really afraid of gold,
silver, commodities, and gold stocks, as they should be. The big question is, are you onside?
- Iran’s government has just issued
the death penalty for an alleged American spy. There was an
earlier incident with 3 hikers that was fairly serious. This is more serious.
- World War One was started over an
assassination. This person served in the US military and it will
be much tougher to convince the Iranian government to let him go.
- It’s probably impossible to predict
how the Iranian situation plays out, but it doesn’t look good for
any citizen living in the region. Click this Oil to the sky? chart.
- Look at the head and shouldering
action. The right shoulder is itself a head and shoulders pattern, and price has already burst up through the
neckline. Do you think a soaring oil price is going to have any
effect on the gold market?
- Some analysts argue that there is a
geo-political “premium” built into the gold and oil
price. I would argue the opposite is true. I think most
analysts are treating the entire situation with kid gloves. I
don’t think most oil or gold investors are fully pricing in the
seriousness of the Iranian situation.
- They may be forced to price it in on a
Saturday or Sunday when most markets are closed, and those who are
shorting oil and gold may not like the experience, to put it mildly.
- There are elections in many countries
this year. Geo-political issues are heating up. The January
indicator is in bullish play. The wheat crop is dealing with a
growing rust disease, and the solution seems years away. There is
a big head and shoulders pattern in play on oil. Silver has a
flag-like pattern on the long term chart. I’ve never seen so
many bullish factors in play for gold and related assets, while so many
investors are so terrified. The gold billy
goat is climbing a Mount Everest of worry, and loving every step of the
climb!
Thank-you
Cheers
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