Graceland Updates 4am-7am

Oct 16 2009

1. Do I think gold will correct from here? Answer: Yes.

2. Do I think the dollar will rally from here? Yes.

3. Do I think the professional investor or those of you who have made significant progress buying weakness and selling strength should change your tactics one iota here? NO!

4. Have I built a fair number of dollar long positions into this dollar weakness? Yes.

5. How far could the dollar rally? If I had to bet money on it rallying from around this point (and that’s the last thing on the planet I would do) I would bet it takes about 3 microsteps forward and then KING GOLD takes a nuclear powered chainsaw to the dollar’s HEAD.

6. I’m a buyer of the dollar into this weakness, yes. With SMALL money. It’s also a technique to book profit on my gold without selling my gold, like shorting gold, only better, because I’m buying an asset, not placing a bet with unlimited risk. The dollar can only go to zero. Gold can go to infinity, and believe me, where gold likely IS going may not be far from there…

7. Those of you betting large money on a COUNTER TREND usd rally, betting “the dollar has to be near a significant low, I know it!”, are going to be DESTROYED. You’ll be destroyed as much by the 100% ONSLAUGHT of terrified institutions bashing the dollar every DAY on Bloomberg after the rally fails, as you will be by the actual losses.

8. Those who are naked shorting gold with leverage are going to make the dead dollar longs look like master traders.

9. The dollar rally will start out ok. I think the media will quickly say, “maybe this is like the stk mkt rally, it will be bigger than people thought it could be!” The banksters are MASTERS at getting into YOUR MIND to make you ACT stupidly in the market.

10. NOW is the time to use any and all short term weakness to widen the increments on your sell points in your pyramids. Not condense them! Don’t waste your time guessing where gold might go in the short run. The head and shoulders pattern calls for tweaking your pyramids on the side of reward.

11. The gold bullion bull market could END within 24 months or less. It could go on longer, but I wouldn’t bet money on that. 2010 is not 2009. Everything that didn’t happen for the gold bugs in 2009 has a 90% chance of occurring –in a shorter time frame- all condensed into 2010. The 2009-2010 action in the gold market was turned into the “2010 show”, by the decision of the banksters to tank Lehman. Focus on the GOLD SHOW. Not the “micro mini pop in the US dollar” show predicted by all the bustouts standing in front of Jim Sinclair’s farm screaming “I lost everything shorting gold at $900 but now I know too many people see the head and shoulders pattern so therefore it’s a mirage. My pretend insider connections say so!”

12. The only mirage I see is… THEM. They will learn a whole new meaning of the term “fried to a golden crisp”. Markets climb a wall of worry. And one of all-out stupidity. Those who think “the OTC derivatives, oh that, everyone knows about the otc derivatives so therefore the market has already priced it in, it’s not a factor”….well, PREPARE TO BE ESCORTED TO THE BREAD LINE.

13. The facts are the facts and the facts are THESE: The biggest market WINNERS I know amongst YOU are emailing me that gold is going HIGHER, WAY HIGHER.

14. I see one well known silver writer says he recently sold ALL his mining stocks after, in his words, “losing bigtime”. He closed down his paid newsletter to “look at my portfolio”, which had obviously become “look at my jugular spew like a firehose”. Nobody likes to see anyone else in the community go down for the ten count, but it happens. My view is he sold all his junior mining stocks, which was all his stocks portfolio was, just when he should have initiated a massive BUY program.

15. Now he’s got the bulk of his assets in SILVER BULLION. His next masterplay. Unfortunately for him, this is the era of GOLD. Not silver. If somebody has a star trek time machine and can transport all “silver is better than gold” players back to 1978, the era of GREED, please do so.

16. This is the era of FEAR. Not greed. And the biggest fear is dead ahead. The public is about to get a beatdown like they’ve never IMAGINED. Use strength in silver to move into gold to a ratio of 70% gold, 30% silver. With 30% as the MAXIMUM amt of silver. Those of you with no gold and all silver had better be the best market timers in the universe, because what the banksters have planned for the end of the commodity bull mkt is going to be the horror show of all time, with the exception of GOLD. Silver is great for pyramiding, not for bagholding. My prediction: The newsletter guy will be wiped out in silver bullion worse than he was in mining stocks, and then he’ll put that carcass into gold. But at that point, the GOLD bull mkt will be over. Gold won’t fall, but the banksters will inflate away the VALUE of gold for years. It won’t be a happy ending for those who have the bulk of their bets on silver during the greatest financial crisis of all time.

17. Live by the exception, die by the rule. There are millions of tombstones marked, “I was right, I had the right of way”. The gold cement truck will still going strong, while the guy on the silver bike with the right of way is buried under his silver tombstone marked:

18. “It should have done everything gold did, it could have done everything gold did, but, impossibly…It didn’t”.

19. I own silver. But each time it outperforms gold on a rally, like JUST HAPPENED, I book some profit and buy more gold. If you do it by either shorting silver in the paper mkt or buying US dollars via UUP-n or via the forex mkts, and can handle the red ink on your acnts, when price moves down, you’ll be able to add to your gold positions WITHOUT ACTUALLY SELLING ANY PHYSICAL SILVER. Your gold % is rising, but you still have the same number of OUNCES of silver. One trick is to keep a running count of the total net worth of your physical and your paper acnts together, so you don’t get demoralized looking JUST at your paper losses as you sell into strength, ignoring the much larger GAINS on your physical!

20. This is what the gold community potato heads do with the COT numbers (and today is cot report day, by the way). They don’t SEE the banksters’ physical bullion, so the potato heads make the bizarre assumption, “hey I don’t see their physical gold, therefore I know they have none, they’re all naked short just like me!” WRONG.

21. I try to focus on how you’ll RESPOND to market news and price as much as where price may go. It doesn’t matter if gold is going to $500 if you are buying all the way down there. Predicting $500 is less important than you buying it as it goes there and feeling comfortable with your actions.

22. The head and shoulders is the probable launch pad of gold into outer price space. It is the MARKER of the beginning of the next major phase in gold, and that phase should be UP. Those of you buying the US dollar should be either running a range pyramid with a FIXED final buy point with LIMITED capital, OR prepared to buy it in a huge foundational pyramid, preferably all the way to zero, but certainly with the assumption that a fall to 50 on the index is not just possible, but highly probable.

23. Many of you bet HUGE money on gold as far back as 2005, and are STILL down on your stocks. Don’t worry, that’s about to change. My main theme this week is the gold juniors. You’ve watched a zillion gold writers give their 900,000 gold picks for years. This super deal and that one. Then the banksters hit the Dow and bullion and all the work done by the company is obliterated as fast as you can say “bleepin bankster!”. I’ve covered some juniors that YOU follow, but I’ve never recommended any. Not one. Many of you have sent me “exciting news” over the years on this or that Junior Johnny story. None got me excited. Not because I was knocking the company’s story, but because it wasn’t TIME for the sector to LAUNCH. I’ve tried to give my opinion on the stocks you send me, but then I filed them all in the garbage can after that. THAT HAS CHANGED NOW. I always felt the big money would be made in the “Junior Johnnys” near the END of the gold bull mkt, a gigantic magnified version of what happened in 1979. This time, while gold bullion may stop rising within 24 months or less, I think it could be a fair bit longer before the gold stocks bull shuts down. Obviously, by definition, the best point to add to an existing stock is at its lowest trading PRICE. You had that chance with last year’s meltdown. It terms of price, you don’t have that opportunity now, although anything is always theoretically possible. If you are a gold PLAYER, in terms of the gold MARKER, the head and shoulders pattern, you have an opportunity now to place a small amount of capital, preferably in a pyramid formation, into your existing portfolio of gold stocks NOW.

24. One gold top caller wrote yesterday that if gold broke 1050, it could fall to 1048. Wow, what a call. “If gold is one price, it could move to another price 2 dollars away.” Can I buy a subscription? I’ll pay anything to know such important information.

25. As far as PLAYING the new juniors ETF and/or the current juniors situations out there, my focus would be on the current juniors you already own. If you own quite a few, I don’t think your performance will be much different from that of the ETF, looking at your stocks as a package. When the juniors etf comes out, my own focus is going to be on building a modest range pyramid right away. Then I’ll be looking down the road, patiently. I think there’s ONE more major bear hit in store for gold in this bull mkt, but it’s quite a ways off in time. It will likely come from a price many hundreds of dollars above the $1000 marker. At that point, I’m assuming the Juniors ETF is up and running and maybe even a competitive product. That weakness will be a major opportunity. Click below to watch part one of the gold juniors report. It’s also on the website.

26. Graceland Gimme The Juniors Now Report!

Cheers

Stewart Thomson

Graceland Updates