1.President Obama gives his State Of The Fiat Union speech tonight.While I hope he takes the opportunity to
recommend that Americas citizens purchase a bit of gold, somehow I dont
think that will be happening.
here now. You are looking at the Bank of Japans balance sheet.More and more central banks are jumping onto the QE
bandwagon, which is highly inflationary.
3.One member of the
Japanese government is demanding that the Nikkei (Japanese equivalent of the Dow)
rise to 13,000 within two months.Please click
here now.Thats the monthly chart of
broken out of a drifting rectangle (highlighted in blue), there is enormous
overhead resistance in the 14,000 area.Its not quite as simple to print a stock market higher as the Japanese government would have you believe.
5.Too much money
printing can cause a currency panic.That would be
followed by institutions pulling out of the country altogether.
6.The reason I want
own to gold is because governments are attempting to print their stock
markets higher.Gold and resource stocks will
drastically outperform the global stock market indexes like the Dow and the
7.The period of
drastic outperformance should have come earlier, but it didnt, due to the implosion
of Lehman.Gold and gold stocks were beginning to go
parabolic in 2008.
8.While the Lehman event
delayed the parabolic move, it also made the crisis bigger, and probably
greatly increased the size of the ultimate move.
here now.The HUI
index of gold stocks peaked against gold in 2003.Ten years later, gold is
much higher, and the stocks are still languishing, but so is the Nikkei.
10.Note the tightening of the Keltner bands on that HUI:gold
ratio chart.The tightening indicates that gold
stocks should be accumulated with some profits from gold bullion holdings.
11.Governments are determined to reflate.The problem is that they are launching the
reflationary actions from a platform of enormous debt, rather than from the floor of
a 1929-style collapse.
12.The refusal to cut the size of the debt
opens the door to cost push inflation (CPI).CPI opens the door to soaring
gold stocks.It will take several years for QE to
create CPI, although it could happen more quickly in Japan.
13.In America, the Fed believes in an
approximate 8 year business cycle.The last cycle
ended in 2007, and the next one will probably end in 2015.As growth fades and
CPI grows, your gold stocks could rise much more dramatically than they did
during the 1970s and the 1930s.
14.I realize that a lot of investors in the gold community are
disappointed with yesterdays price action, but gold moves from periods of being
overbought to oversold quite regularly.Hoping for
CPI to envelop your gold stocks now is not realistic.
here now.You are
looking at the daily chart for gold.Note the action
of the 14,7,7 Stochastics oscillator that I use.
Momentum-based rallies tend to occur when the oscillator flashes a buy signal
in the 40-60 zone, but such signals are quite
16.While we all hope for a momentum-based rally at pretty much all
points of time, most rallies tend to occur when a crossover buy signal occurs
after the lead red line touches 20 on that daily chart.
17.The bottom line on that front is close, but no cigar!. Having said
that, gold is much closer to being oversold than overbought.Cheer
for momentum-based buy signals, but buy only value-based ones, with the Stochastics in the 20 zone!
here now.Thats the most-recently
updated chart of the US Central Banks balance sheet.Its
surging.Maybe President Obama ordered the ESF
(exchange stabilization fund) to short gold, so that his fiat speech goes off
without a hitch.Maybe gold just wasnt quite oversold enough
at $1680, to start a trending move higher.Those are
19.The big issue for gold investors is the Feds
growing again.If you want to essentially take the
other side of the overall central bank position on gold, you may not fare
here now.You are
looking at the daily chart of the US T-bond.A
bullish wedge is beginning to form.Gold and bonds
will continue to move together, until cost push inflation is widely
21.Bond prices have stopped declining, and
the 14,7,7 Stochastics oscillator is flashing a
crossover buy signal, after going under 20.Thats good news for gold!
22.Silver fans should probably click
here now.Thats the hourly bars chart.We all hoped silver would break out upside, but it didnt happen.The target is about $30.
23.Focus on what the silver asset is.Its
a great asset.Think of it like the ocean; the tide
goes in and out, but the ocean is still there.Sometimes
silver is overbought and sometimes it is oversold.Dreaming
that the ocean is going to jump up and walk on the land is not realistic.Likewise, dreaming of silver at a thousand
dollars an ounce, while selling it on a $1 dip in price in a panic, is
here now.Thats the daily chart for silver.On the daily chart, bonds are the most oversold,
and gold is close behind.Dont worry, silver is in very good hands, and soon the wild one will be oversold too, and ready to surf the rising
Fed balance sheet, to higher prices!
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