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- As I
look out my market window this morning, the question "Is natural
gas actually going to zero?" comes to mind. If you are brave
enough, click this natural gas chart now.
- I'm
not sure how any investor can be heavily long a major asset from higher
prices and stay sane, while enduring this kind of price action.
- Nobody
escapes price destruction on quality assets they own. In this crisis,
endurance of severe discomfort is the rule and the norm, not the
exception.
- The
commercial traders often hold a physical/dealing position on the long
side, and short against that position in the futures markets. The retail
investor needs to re-think the viability of a long-only strategy, given
the ongoing bizarre and surreal price action exhibited across most asset
classes.
- I
would probably consider checking into the looney
bin, if I was carrying a long-only natural gas position, and no cash.
Carrying tactical short positions against a larger long position brings
emotional gains as well as financial gains.
- It
doesn't matter if natural gas is going to $20 from $2.50, if you bought
it at $5 and sold out at $2.75. Holding tactical short positions is how
you maintain your larger foundational long position.
- With
natural gas this morning, I find myself hoping it rises, so my long
position makes me large profits, yet I also find myself hoping it falls
"a bit more", so I can book off some more profits on my
tactical short position. Give some serious thought to contrasting how I
feel this morning, with how most long-only investors are feeling.
- Loss-booking
and cursing supposed " market
manipulators" is not how to endure price destruction. Carrying
a tactical short position, and a big wad of cash, should be front and centre on your list of realistic actions. Do whatever
it takes to maintain a positive mindset in the market.
- Just
because an asset is cheap doesn't mean it can't get cheaper, or stay in
the cheap zone for a long time. If you are already past discomfort and
into the pain zone, then you probably need to get a short position on
your market table.
- Most
of you own a lot of individual gold junior stocks, mostly from higher
prices than where we are now. Shorting GDXJ, GDX, or NUGT (the triple
leveraged version of GDX) is how you manage price destruction on those
stocks, and manage time in the " gold
stocks gulag". In a real gulag, the prisoners look for tiny
games to play where victory can be theirs. You must do the
same, in the market.
- You
can buy the bear fund DUST, but keep in mind there is substantial slippage
involved with most leveraged funds when you hold them from the long
side, for time. If you short NUGT, you benefit from the failure of NUGT
to properly track the action of GDX over time, and your benefit from
that slippage can be substantial.
- Please
remember that you do not put on a tactical short position to profit from
your prediction of a lower price. You do it to ensure you don't blow out
your much bigger long position when a surprise move, not a predicted
one, brings severe price destruction to your long side core positions.
Few understand, so few will endure, and even fewer will profit.
- A
week ago, I told you the technical set-up was in place for a big rally
in gold stocks. That rally is underway now.
- GDXJ
is acting like a champion here, compared to GDX, but I like the action
of both, against the dollar, since they bottomed. Click this powerful looking GDX chart now.
- That's
a 30 minute chart, and you can see that after blasting from about $55 to
$61, GDX has pulled back to support in the $57.50-$58 area, where I'm a
buyer. Notice the beautiful little wedge pattern that could propel GDX
right through the pathetic army of dollar bugs trying to defend $61.
- From
the lows of about $54.77, GDX rallied about 11%, to a high of about
$61.01. From there, GDX declined by about 6%, to about $57.51, which is
yesterday's low point. The action is bullish.
- Try
to think less about making dollars with gold stocks, and more
about beating up on the dollar bugs. The market is a battle, and if you
focus on getting more of the world's most powerful assets, when the
loss-bookers put them on sale, you will be focused more on destroying
your dollar bug opponents as price rises. Wealth building is good.
Destroying your opponent is better, whether you want to face that fact
or not.
- When
you carry a tactical short position, it gives you a degree of control
that the average investor does not have. Control is power. Seek power,
and destroy your opponent, on the market gridlines. If price rises, you
are in control. If price falls, you are in control. Is the market
about....you?
- Click
this GDXJ chart now. GDXJ has outperformed GDX.
From its low of about $26.75, GDXJ rocketed almost 15% to about $30.76, and
since then has corrected by only about 4%.
- Both
on the upside, and on the downside, GDXJ is "taking it to"
GDX, and even more so, to the dollar bugs!
- Congratulations
to the many investors in the gold community who are embracing the Dow in
this epic battle against the dollar bugs. I'd like to see a new " I refuse to be a dollar bug"
wave spread right across the gold community, like a golden wildfire.
- View
the Dow as your personal gold stocks friend. I've indicated that a move
over 12,250 on the Dow could ignite a gold stocks super-rally.
Click this Dow battle chart now to view the fight in
progress for the key 12,250 number. One head technical analyst for a
major US bank just turned from bear to bull on the Dow. From a liquidity
flows standpoint, it's a solidly positive event.
- What
I don't think most analysts understand is the truly enormous amount of
price action that the Dow, GDX, & GDXJ are discounting, in
regards to the European crisis. The declines that occurred are truly
miniscule, considering that Europe almost went off the financial map.
- Click
this 30 minute Dow chart now. Note the similarity
of GDX & GDXJ to the Dow in the basing area, but note also that
there has been almost no correction from the highs, despite approaching
the 12,250 zone, and that is very bullish technical action. Most of the
gold community put "only" about 10,000 times too much hope in
the central bank propaganda about saving Europe last week, and now are
in financial shock. Stay focused on the " steady
as she goes" central bank gold accumulation programs, not
propaganda about gold parabolas and pipedreams in the sky. I'm locked
and loaded for GDX to rip through the $61 highs, like a chainsaw going
through dollar bug butter, and the only question is, are you onside?
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Thanks!
Cheers
St
Stewart Thomson
Graceland Updates
Email: stewart@gracelandupdates.com
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