Graceland Updates 4am-7am
Email: s2p3t4@sympatico.ca
Oct 8, 2009
1. There’s no question that I’m writing the letter over the past 3 days from my hospital bed; I’m being treated by Dr. Reality for my case of GOLD FEVER. It’s real. I’ve got the fever. You stand to see strength in this gold market like no other in history. And corresponding weakness that feels like a bankster threw you off a five thousand foot cliff. The fever starts as a temptation, and transforms into a confident analysis you know price is going higher, and finally morphs into a boiling fever featuring mindless delusions that Gold will rise every day forever. “Just one buy, I promise that’s all I’ll do!” is how it starts. Then the investor is overwhelmed by a MOUNTAIN of rationalizations. Look at the gold sites today. What do you SEE there?
2. REMEMBER GOLD 905.
3. What did they say THEN? They told you to LIQUIDATE YOUR GOLD. Do they really KNOW what they are telling you now when they say BUY? How would YOU feel today with NO gold?
4. Wake up! That’s why these idiots are buying NOWl! They have NO gold ! They sold it all at 930-905!!! They are freaking out!
5. The word “will”. A new sub sent me something from Ron Rosen, who I believe is a well-known Elliot Wave timer. Some Elliot people think a gold C wave will carry gold down, possibly to new lows below 680. That would be a bit of a “downer” for those who just bought-a lot- at 1060 from us as we sold- a bit. Other Elliot people, like the Aden sisters and Alf Fields, think gold is also entering a C wave, but a C wave ADVANCE that will carry gold much higher. That would also be a bit of a shocker for those who liquidated all their gold at 1000 and are awaiting a “correction”, liquidating when Ron originally drew his chart pointing down below 680. Ron, unfortunately, uses the word “will” “at will”, if you know what I’m saying. Those who know where gold WILL go have their name spelled “G.O.D.” not “R.O.N”. Writers, including myself, know where gold “could” go, where it “should” go, and where it “would” go. Not where is WILL go. When you use the words “I know” or “it will go to price X” too loosely, it can come back to haunt you. Mr. Rosen thinks the US dollar is about to soar. I should mention that he thought that in august when gold was a HUNDRED DOLLARS LOWER.
6. Those of you who have built businesses understand the dangers of assumption. You assume you are correct, so you ignore the risks of being wrong. In the markets, the grand plan for risk management touted by the golf ball advisors is: Hold Stocks for Time. In the long run, most stocks go OFF THE BOARD. They go to ZERO. When coupled with the fact that major bear markets last in cycles of 10 to 30 years, the odds of Mr. and Mrs. Investor making money in the stock markets are very small. The other plan touted, this one in the gold community is: Stop Losses. I call them: Take Losses. In the hands of a real professional timer, (the few that exist), stop losses are a superb tool. In the hands of the regular investor, it’s like handing a chainsaw to a kindergarten class and saying “go for it”.
7. The continuing higher COT short levels in the gold market are not a sign the market is “about to turn down”. They are not a sign “the banksters are about to blow up, the comex is finished, gold is going to infinity!” Those cot numbers are a sign to BOOK…SOME….PROFIT into the current strength in a systematic fashion. A signal to take a modest portion of your trading positions off the risk table. The OPPOSITE of the recent situation at gold 905.
8. You can buy gold right now. You could buy at $1800. Provided you set your pyramids to manage risk. If you are unsure of how to proceed, send me an email. Make sure you send me a REMINDER email if you don’t hear back from me in 24 hrs. I APPRECIATE those reminders. Send me another one if you still don’t here back from me.
9. The Rogers Commodity index, trading around 7 dollars, offers investors one means of playing the hyperinflationary horror show. The media has done its job scaring institutional investors that the US dollar is in major trouble. It has done its job convincing the gold community that anything “anti-dollar” is ethical. Gold is anti-dollar, gold is good, so therefore ANYTHING anti-dollar is also good. Including a world communist government. Interesting logic. The global currency is a means of controlling the world’s citizens. And taxing them. The global tax is coming. It will put an end to the world’s tax havens. There will be NO escape from the taxman. It will start like the US income tax act did, probably in the 1-3% range, and morph into something that makes the current US govt financial situation look SOUND.
10. It is US dollar’s decline, not inflation from a “recovery”, that will likely fuel the major commodities higher. At $70 a barrel, Alberta’s oil business is tanking. This $70 price was supposed to be “a dream come true”. Don’t focus on your dream too much; it might come true! Many workers have been unemployed for a year. Higher oil will produce a WORSE global economic situation, not a better one.
11. The bankers are playing a dangerous game. Dangerous for us, not for them. By beating on the US dollar with their money printing and blackmailing the govt into spending crazed amounts of money they don’t have, they have severely damaged the US dollar. But that wasn’t enough action for them. They have added to the beat-down by terrorizing the institutions who had just loaded up on US dollars as a safe-haven over the past year. Terrorizing them with the calls for a global currency because the US dollar is in so much trouble. They are creating a worldwide selling panic in the world’s largest market. The DANGER is that there is a VERY fine line between the current level of the US dollar and….ZERO.
12. Hyperinflations occur very quickly. The institutions are going to wake up one morning with an axe in their head as an alarm clock. The axe will say, “There is no recovery, it’s a wipeout, it’s all out of control and they’re printing tens of trillions more. Everyone is bailing on the US dollar, you better just pull the plug too.” Mr. Institutional Fund manager will pick up the phone to the trading desk and say, “take me out, it’s over, there is no bottom”. Soon the US dollar will look like a MONSTER version of the gold market, where the ONLY real support for the dollar into intermediate bottoms comes from the banksters. Should they decide NOT to buy in size, meaning buy what the institutions and global Gmen are bailing on, the price of the USD could go into free-fall.
13. Just as they REALLY damaged the US dollar, the bankers will create the REAL possibility of the US dollar going into hyperinflation mode. That could occur in a period of a few WEEKS time. Not years. When I bought the Dow at 6500 and said, “at the same time I’m taking money out of the banks and hoarding it, there’s a very real possibility ALL banks and ALL markets worldwide could close”. Now we have the government of England announcing the banks were just hours away from closing on that DAY without a handout of HUNDREDS OF BILLIONS within hours, and Bernanke saying there would be a MASSIVE run on US banks if the names of the bailout recipients were revealed, never mind an actual audit of the Fed’s actions.
14. Forget about predicting any “gold correction”. That’s a wet noodle fantasy pumped by failed traders. The fantasy is, “gold has broken out in a nice uptrend, I’ll by the next correction, and then price will turn up from where I buy.”
15. Wrong. When a REAL correction comes, it will MANGLE those who buy it with a price plop. If you want to place large money, wait for the pain zone. If you aren’t thinking, “this is horrifying, I’m finished, it’s all over for gold!”, then you are buying at the wrong time. 905 was the LAST pain zone in this bull market. Don’t worry, you may have forgotten about Dr. Pain. Well, he hasn’t forgotten about YOU.
16. In the meantime, the sell-offs will likely be fast or shallow or both. The gold community wants a textbook gold correction handed to them on a platter. Nice Fantasy, I’ll give them that. The gold community has the best looking pipedreams.
17. Back in the real world: Goldflower is going to spend some time over the next few days backtesting gold’s action throughout the entire head and shoulders pattern, via a couple of pyramid programs. I’ll give you the results numbers as soon as I have them, should be ready by Wednesday…
18. Booking profit on your gold by BUYING the US dollar, I think, is a spectacular strategy in this new phrase of the gold bull market. The reason comes back to the fact that gold is leveraged to the US dollar. Gold should rise VASTLY more on a percentage basis than the US dollar falls. IF the banksters have decided to play the hyperinflation card in FULL, your EXISTING gold will rise to mind-boggling heights, making and USD losses irrelevant.
19. On the other hand, if gold is taken down by some unknown strategy, it can’t be hyperinflated like the US dollar can, so any “losses” will be minimal.
20. I’ll repeat my warning that NAKED shorting of gold from here on in is MADNESS. So, I’m recommending that further profit taking on gold be done by either selling it outright in a pyramid formation, or via a pyramid of US dollar buys.
21. A rule of thumb I use is to unload 2% to 5% of my gold into a $50-$100 upmove and increase it in a similar way on a meltdown. I’m more conservative than many players, but I believe this phase of the bull mkt calls for MORE conservative action, not the more aggressive action that the 905 bustouts are currently flaunting in the banksters’ faces. “Look at me, I’m the king of the gold price chasing castle on massive margin, and the banksters are the stupid rascals with 10 trillion in cash booking profit on a bit of their gold winnings.” -80% of the gold writers you are reading now.
22. Trader Dan Norcini echoed my words yesterday that he’s SHOCKED by the extent of the “bash the dollar” mania that has appeared over the last week. You need to make certain mental preparations to handle booking profit in gold via buying the US dollar. Your account is going to likely show losses as you buy and the dollar declines. Meantime your physical bars/coins are just sitting there. This takes TIME to handle. The overwhelming thought for “first-timers” is “I’m losing!” The gains on the physical metal should be put on a scoreboard in front of you, so you are watching your TOTAL net worth GROW, not staring at USD position losses getting demoralized.
23. Also, some of you are playing the USdollar here as a range pyramid. So am I. Remember to stick to your price and dollar allocation points. EXACTLY. If your pyramid ends at a certain price point, and price drops below there, don’t just think, “It should have bottomed at my last buy point! I’ll keep buying, the bottom has to be here soon!” THAT is what some of you did in natural gas, and left the discomfort zone and entered the PAIN zone. Real PAIN is for the TOP GUNS of the markets. As they say in the gambling casinos, “know your limit, play within it.”
24. My banker friend has been buying the USD against the Canadian. Unfortunately for him, he has no physical gold that he’s booking profit against. I’ve noticed he’s been making new statements that indicate he’s acting outside of his pre-set plan. That’s DANGEROUS. He manages 1.5 billion dollars. If HE can lose control…so can YOU. Make sure you are in CONTROL of yourself and your buy orders. If you are using a range pyramid, the last buy ends where you ORIGINALLY set it. Not at your “new analysis” bottom call point. You can start a new pyramid, yes. But my suggestion is to take some TIME, plan the capital you will allocate, and set the peak of it down a fair bit lower.
25. I posted an “hour of Power” report on the site last nite covering the 60 min charts. I’ll be posting part 2 around lunch time.
26. I’m going to make an effort to post a lot of gold stocks you are invested in on the site with some commentary about them. So email any in that interest you. Try to limit them to 1 or 2 for now, I know some of you own ALL the gold stocks that exist. That’s a bit much for me to handle…
See you on the site, and later this afternoon for the all-important COT report, which I’ll send out by email.
Cheers,
st
Graceland Updates
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