Probably the most critical part of investing is forcing yourself to
remain professional in your actions on the price grids. The nature of human
emotion has not changed for thousands of years.
2. It is highly unlikely
that today marks the beginning of any change in the emotional status quo of
the human race.
3. Unfortunately, I believe
that January 17, 2012 could be seen as a day that marked the beginning of a
new “price chase” in the gold market.
4. Since December 29, the
dollar price of an ounce of your gold has risen strongly. The price has
jumped almost $150, from about $1525 to $1667, basis February futures.
Investors are starting to feel the flow of “emotional juices”. In
the simplest terms, Sir Greed is coming back to gold town.
5. As gold prices soar,
investors are measured by their ability to remain professional in market
action, not by the ability to hold a dance party and wave mine reports in the
air. Those who sold out into the $1500-$1600 price zone lows will today begin
to feel an emotional pull to re-buy their positions, before price “gets
away”.
6. Amateur technicians are
focused on the downtrend line on the gold chart. The theory is that if this
downtrend line is taken out on the upside, it represents a massive buy
signal. My view is that it is a siren on the rocks for price chasers.
7. Let’s take a cold
look at the gold chart, and leave our primal urges out of the picture. Click
this gold
engages the dollar bugs in a battle for $1667 chart now.
8. Some investors will
engage in a debate about whether they should just buy now, because if the red
downtrend line is taken out on the upside, then the gold price could just
“go vertical”.
9. Some of these same
investors knew (felt urges?) that gold was surely going below $1500 and sold
out into the recent lows. They will now have certain ideas (urges?) about
what is supposedly coming on the upside.
10. The sad reality is that
none of us are sure of anything other than death, taxes, and our emotional
urges. In this epic crisis, consistently following these urges with movement
of risk capital could put you into a breadline.
11. Try to focus more on
horizontal price levels (HSR). Horizontal support and resistance allow you to
respond more professionally to the movement of the gold price, rather than making
guesses about where it supposedly must go to from here.
12. As of this morning, gold
arrived at the horizontal resistance level of $1667 and has
“engaged” the dollar bugs in battle. Today is not a day of
victory for gold against the dollar.
13. It is a day of battle,
and you should be a very light seller of gold this morning. Buy and sell gold
with cold professionalism. Today you should be either a seller or holding
your ground.
14. Chasing $200 of gold
price appreciation with buy orders is simply not professional market action.
When your grocery store holds a sale, do you run through the store screaming
at the patrons, “Don’t buy
this sale, it’s a falling knife!”? Sadly, that’s
exactly what happened with gold, in a very big way, in the $1500-$1600 price
zone.
15. What matters most in the
market is perhaps not where the price of your investment is going, but how
you handle the journey to that destination, or the failure to get there.
Operating with as much professionalism as possible is your key to success.
Click this copper
ultra-bull chart now. If you are a copper bull, I would advise you to
look carefully at this chart.
16. You are looking at a
massive head and shoulders continuation pattern, with an upside price target
of at least $8-$10. I have long argued, almost alone, that the Dow would
hyper-inflate as this crisis wears on.
17. The bottom line is that
earnings don’t matter when money printing has enveloped the world.
“Dr. Copper” is arguing strongly now that the Dow should indeed
skyrocket.
18. Click this Dow
Diamonds ETF chart. The same head and shoulders bull continuation pattern
is clearly evident on this chart that you see on copper, and projects that
the Dow could rise to 18,000. I think 30,000 is
possible and probable.
19. Having said that, it
doesn’t matter if the Dow is going to 300 million, if you can’t
endure a 100 point decline professionally. The key to building wealth is not
to project your destination, but to endure the ride to it.
20. Click this shorter
term Dow chart now. That’s a rising wedge pattern. The good news
for the Dow and gold stock bulls is that price has moved quite far towards
the apex of the wedge, weakening the strength of this bearish wedge pattern.
21. Still, the Dow has been
crushing the dollar bugs for quite some time. Stock market prices are
extended in the short term. A negative surprise in the Greek debt
negotiations could see that wedge pattern activate, and rain on the
“risk on” parade.
22. Whatever negative
surprises may await investors in the short term, the longer term
“risk-on” asset charts suggest a huge fall in the dollar is
coming in 2012, and huge rise in almost everything else is coming as a result
of that fall.
23. It’s theoretically
possible that the risk-on assets could rise to the projected targets within
this calendar year. That’s not necessarily good news, as it would open
the door to massive efforts to reign in those prices in 2013. Commodity
futures margins would likely be the mechanism to trip up the risk-on
partygoers. My strongest suggestion is to enjoy 2012 to the fullest extent
possible, because 2013 may not be anywhere near so pleasant, and could make
team “2008 again” think 2008 was a walk in the park.
24. Click silver silver blast-off preparation chart. I’d like to
see price remain above the green neckline of the small h&s
pattern, but silver seems to be prepared, technically, for a substantial move
higher, which is good news for those of you who bought it professionally and
incrementally into this decline!
Special Offer For Website Readers: Send me an Email to freereports4@gracelandupdates.com
and I’ll rush you my free “top 3 silver stocks” report.
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Thanks!
Cheers
St
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