1. Market Update
The Brexit vote was a surprise but my alternative scenario for this unlikely
event was a bull's-eye. Gold immediately spiked sharply higher and met some
profit taking around $1,350. Now two weeks later it's even higher and in
a strong uptrend. Gold knows that all these new uncertainties as well as
the extremely unstable situation in the financial markets worldwide plus
negative real interest rates will force central bankers to print even more
money in the coming years.
I continue to believe that precious metals are in a new epic bull market and
will protect you against the coming loss of confidence in our fiat money
system. But I also believe that probably everything else will move higher
too.
The best places to be invested are precious metals (especially silver) & mining
stocks, cryptocurrencies, commodities and Biotech. I focus on these promising
sectors and have some new immediate buy recommendations today (see portfolio & watch
list).
If you have followed my advise to buy the last dip in the gold market below
$1,210 you should already sit on very nice gains. If you have missed it don't
worry and don't chase this parabolic rally. You will get another chance!
Otherwise just let your winnings run.
As I have been saying since December Gold is on the way to $1,500/1,530 -
either directly within the coming weeks & months or until spring 2017.
On the way to $1,500 we might get one or two more dips. But most importantly
$1,500 will be a massive profit taking event and will lead to a huge but
short-lived pullback towards $1,250 - $1,300. This will take time of
course and is more likely to happen towards 2017. As a reference I recommend
to take a look at the recovery
from the 2008 low at $680. Back then gold first rallied towards the $1,000
wall and after reaching it retraced nearly 50% of this rally down to $865!
In the end it's always the same: two steps ahead one step back... Patience
and a plan will pay off. Fear of missing out instead will create emotions
and losses.
2. The Midas Touch Gold Model bullish since 24th of June
Due to the huge "Brexit" spike my model went into bull mode in the early morning
hours of June 24th around $1,310. Since then it has stayed bullish. The model
has never been that bullish since its invention!
Compared to my last public report two and a half weeks ago we have the following
new bullish signals:
Gold in USD - Daily Chart
Gold Seasonality
Ratio Gold/Oil
Ratio Gold/Commodities
Gold in $, €, £, ¥
Gold in Indian Rupee
Gold in Chinese Yuan
GDX Gold Miners - Daily Chart
The new bearish signals are coming from the sentiment and the US-Dollar:
Gold Sentiment
GDX Gold Miners Sentiment
USD - Daily Chart
Right now it will take a gold price below $1,227 to change the super bullish
picture! If you want to get more updates on the Midas Touch Gold Model follow
me on Facebook.
3. Gold - A strong Monday and gold will reach $1,415 soon
Since early June gold is posting a massive rally. There are no signs that
a short-term top is already in place! Friday's price action was bullish.
Now it takes only one more average to strong day to embed the signal lines
of the slow stochastic indicator above 80 and therefore lock in the bullish
trend. In that case gold will reach $1,415 within the next one or two weeks.
Otherwise a pullback is due as gold and silver have become overbought and
sentiment is getting too optimistic. But don't short this baby bull, please.
Everything is possible in this environment. Overall a bull market with a
first target at $1,500 is confirmed and we just need to patiently wait again
for the next cycle bottom to increase our positions.
Action to take: Buy the VelocityShares 3xLong ETN (UGLD) below $13.00 (be
patient, this could take time)
Stop Loss: $10.00
Profit Target: $18.25
Timeframe: 2-9 months
Risk ($3.00) / Reward ($5.25) = 1 : 1,75 (poor ratio)
Position Sizing: Don't risk more than 1% of your equity
Investors should buy physical gold with both hands if prices move below $1,250
again. As well buy silver below $18,00. Buy both metals until you have at
least 10% of your net-worth in physical gold and silver. But do not over
expose yourself neither. 25% of your net-worth in precious metals should
be the absolute maximum. If you want to be more aggressive put 2/3 into silver
and 1/3 into gold.
4. Bitcoin - let your winnings run
Bitcoin is in a new bull-market and we are long since $372. As expected Bitcoin
came under pressure during the last two weeks. Our new buy order got filled
on June 23rd just below $575 and is already up more than 14.5%. Bitcoin might
need some more time to consolidate its recent spectacular breakout and gains.
It looks like a triangle formation is forming.
Overall I think we're going to $1,000 at least! Therefore let your winnings
run and move your stop to $465. We're fully invested and don't need to do
anything else.
Action to take: Hold your bitcoins.
Stop Loss: Move your stop to $465 (end of the day stop)
Profit Target: $800 and $1,000
Timeframe 6 -18 months
Initial Risk($80) / Reward($430) = 1 : 5.4 (very good ratio!!)
Position Sizing: Don't risk more than 1% of your equity.
5. Portfolio & Watch List
All of my five buy recommendations are up nicely.
While with gold and silver we might have to wait a bit longer for the next
dip the biotech-ETF and the grains-ETF are an immediate buy recommendation.
I will also present more mining stocks very soon.
Action to take: Buy the iShares Nasdaq Biotech (IBB) below $265.00
Stop Loss: $240.00 (you're risking 9.4% of your position)
Profit Target: $400.00 and $796.00
Timeframe: 12-48 months
Risk ($25.00) / Reward ($160.00) = 1 : 6,4 (awesome ratio)
Position Sizing: Don't risk more than 1% of your equity
Only if you are an experienced trader you can buy the S&P Biotech Bull
3x ETF (LABU) instead below $33.50.
Stop Loss: $22.00 (you're risking 35.5% of your position!!! very risky!!!)
Profit Target: $240.00
Timeframe: 2-24 months
Risk ($11.50) / Reward ($206.50) = 1 : 17,95 (extreme ratio due to leverage)
Position Sizing: Don't risk more than 1% of your equity
Action to take: Buy the iPath Grains ETF (JJG) below $31.00
Stop Loss: $27.50 (you're risking 11.29% of your position)
Profit Target: $47.50
Timeframe: 6-24 months
Risk ($3.50) / Reward ($16.50) = 1 : 4,7 (pretty good ratio)
Position Sizing: Don't risk more than 1% of your equity
6. Long-term personal beliefs (my bias)
Officially Gold is still in a bear market but the big picture has massively
improved and the lows are very likely in. Gold was able to push above the
January 2015 high at $1,307 and we finally looking at a series of higher
highs. If this bear is over a new bull-market should push Gold towards $1,500
- $1,530 and Silver towards $25.00 within the next 8-24 months.
My long-term price target for the DowJones/Gold-Ratio remains around 1:1.
and 10:1 for the Gold/Silver-Ratio. A possible long-term price target for
Gold remains around US$5,000 to US$8,900 per ounce within the next 5-8 years
(depending on how much money will be printed..).
Fundamentally, as soon as the current bear market is over, Gold should start
the final 3rd phase of this long-term secular bull market. 1st stage saw
the miners closing their hedge books, the 2nd stage continuously presented
us news about institutions and central banks buying or repatriating gold.
The coming 3rd and finally parabolic stage will end in the distribution to
small inexperienced new traders & investors who will be subject to blind
greed and frenzied panic.
Bitcoin could become the "new money" for the digital 21st century. It is free
market money but surely politicians and central bankers will thrive to regulate
it soon.
