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1. You have just watched the “gold punisher” administer an
incredible eleven day beating on
the US dollar. From about $1478
to $1610, gold has now risen 11 days in a row.
2. Click this gold
chart link now to view the beating, and to view the four buy points you
need to be prepared to respond to, if price declines to those areas. In particular, the approx. prices of
$1595, $1578, $1560, and $1535 are where you need to be prepared to buy
“enhanced” amounts of gold, with US dollars.
3. Use horizontal support to
decide when to buy, and all other technical analysis to tweak how much you buy. If you try to use oscillators like RSI
& MACD to decide when to buy, you will be financially destroyed
over time.
4. Will today be a twelfth up day in a row for gold? I can’t answer that
question, but I will say that investors who have tried to “flip
trade” their way through this crisis have generally turned their
trading accounts into hamburger meat. There will be many more such
beatings delivered to the dollar by the gold punisher, yet the mass obsession
with calling intermediate rallies in the dollar just won’t die.
5. Those who sold their gold and gold stocks because of coming “seasonal
doldrums” now look totally ridiculous. Can you imagine somebody telling you
how they tried to trade the long side of the Dow through the crisis of
1929? In this even larger dollar
crisis, if you buy the dollar against gold in size repeatedly, you stand to
be financially exterminated.
It’s only a matter of time before it really happens. What does it take for the amateur
investor to really learn?
Obviously, the answer is… more pain.
6. Speaking of pain, those of you who have endured the gold stocks gulag
are starting to see some sunlight!
As most of you know, I began adding gold stocks to my anti-dollar
weapons stockpile into the 2008 crash, and stepped that up again in the fall
of 2009, as the ETF known as GDXJ (gold juniors) was born.
7. My 2008 buy program almost broke me emotionally, but it was “no
cigar” on that front for Mr. US Dollar, and now he is the one who is
broken! Most investors thought
they could make big money in gold stocks, then trade
that for the safety of bullion.
That was a mistake.
8. Never go for reward before managing risk. Start by managing the lowest risk
investments first, and then use profits from those lower risk plays to fund
higher risk equity speculations.
9. Click here
now to view why I am “amping up” my
gold stocks allocation on all price weakness. I believe gold stocks (via GDX) have
completed an imperfect head and shoulders bull continuation pattern, and the
stocks are now consolidating just above the neckline of that price pattern.
10. What
seems to be generally ignored by investors is the depth of this
pattern. It is about $40
deep. The pattern engulfs the
entire $15 to $55 price area!
While the technical target is slightly below $100, I have labelled the
target as $100 because that is a significant round number.
11. I
believe that price will surge far above $100, but even at that level some
individual junior stocks could go “stratospheric”. A substantially higher gold price
could send GDX much higher than anyone anticipates. The bottom line is that the gold stock
prisoners (you) are about to break out of the gulag and lay one serious
beating on the dollar bugs!
12. A move
above $64 on GDX could cause the banksters to order
the hedge funds to reduce their crazed short positions on gold stocks, or
face forced liquidation, and that action could send gold stocks upwards with near-vertical price action. No market moves more violently to the
upside than gold stocks fuelled by loss-booking on short positions!
13. Click this shorter term GDX
launchpad set-up chart now to view your GDX
“buy points at hand”.
14. Remember that 93% of gold analysts were
bearish at the recent lows for gold and GDX. They
were all wrong.
Investors who sold gold stocks into the lows and bought the dollar are
now in some serious trouble. The
temptation is to try to buy back in, right now, but after this two week surge
in price, what could happen is that price then promptly falls, and they
(you?) sell at more losses.
15. Don’t
let that scenario become one you partake in. You should have bought into the lows
of $51 and now be booking small profits as price moves towards
$61. Those who totally failed to
buy anything on the way down from $64 risk being left clutching a roll of US
dollar toilet paper while the rest of us drink gold stocks champagne. Those who sold out for dollars
look like beached whales, impaled by massive golden harpoons shot from the
punisher’s warship!
16. I’ve
personally raised my core position allocation in my gold stocks accounts to
an unprecedented 70% level. In
plain English, what that means is that 70% of the risk capital I’ve
allocated to buy gold stocks is now invested in them, and will not be traded
out regardless of what happens to my stocks on the price grid, in the
intermediate term.
17. Tactically speaking, should gold stocks
decline from here, I will only increase that 70% number, while nothing short
of something near the $100 GDX number will see me chop it.
18. A week ago I told the gold community to
get with the gold program, and many of you have, but thousands of you
unfortunately drank the dollar elixir peddled to you by the banksters.
You tried to counter-trend trade your way to wealth, and that
can’t work. It didn’t
work yesterday. It won’t
work today, and it won’t work tomorrow.
19. I
mentioned wheat and corn recently taking financial baseball bats to the
dollar, following the explicit instructions of the “gold punisher”. Sir Corn and Sir Wheat are back again
this morning, taking turns bashing the dollar. Click here
now to view the three “buy points at hand” for you in the
wheat market. Does anyone really
understand just how much more powerful an asset wheat is than the US
Dollar? Try not eating for a
month, and you will understand the incredible stupidity of the dollar bugs
who call wheat “risky” and their photocopied hero a “safe
haven”.
20. We just tagged two of those
points. One of the reasons I
invented my pyramid generator (PGEN) is to manage the price action around HSR
(horizontal support/resistance) lines.
In an uptrend, price often doesn’t pull back all the way to the HSR
line that sits below current price.
21. The
PGEN systematically allocates risk capital into these support areas so that
if price turns before hitting the HSR point, you still put some capital to
work. On the other hand, if price
blows through a number of HSR levels on the downside, you have not blown all
your cash reserves.
22. As
many of you have learned the very hard way, price can stay below your price
entry point for years, or even decades.
If you can’t be a “player”, you start to break down
mentally and emotionally.
Financial destruction quickly follows in most cases, in a frenzy of
loss-booking.
23. Over
time, you learn that the most wealth is built by buying into price areas that
you never believed could or would happen. If you focus on trading smaller than
you “know” is rational most of the time, the rare occasions when
price does decline massively will see you allocating your largest
amounts of capital, while most investors are liquidating and booking huge
losses. You can’t know
predict when those times occur with any consistency, but you can respond to
them as a professional investor, on the buy.
24. Options
players need to be on “gold alert” right now. I like 70% call options and 30% put
options on GDX. You may have your
own favourite gold stocks vehicles.
I’d be looking to go out towards late 2012 (preferably longer)
for the calls and late 2011 for the puts. If price declines from here, cover off
some of the puts. If GDX goes to
$100, well, call the wheelbarrow company!
Special Offer For Website Readers: Send me
an Email to freereports4@gracelandupdates.com
and I’ll rush you my new “Thunder Down Under” free
report! Learn which Australian
gold stocks might be poised to rise like rockets if GDX makes its way to my
$100 marker!
Thankyou
Cheers
St
Stewart Thomson
Graceland Updates
Email: stewart@gracelandupdates.com
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