Apr 16, 2011

1.   Each week seems to build in intensity.  The surprises come out of nowhere.  Those new to the gold shares market don't understand the agony of most of the gold community. 

2.   Goldlion, the world's greatest juniors trader, believes approx. 75% of the gold community has engaged in some sort of capitulation selling (towel throwing) recently.  He noted that 90% of his juniors were in the red on Friday, while gold blasted towards $1500! 

3.   Watching gold, for all practical intents and purposes, trade at $1500 yesterday, while gold shares as a group are below not only their 2008 highs but below the 2006 highs, has turned the ultimate gold shares dream, literally, into the ultimate gold shares nightmare! 

4.   Once again, the market IMPOSSIBLE has become the market REALITY.

5.   Gold shares "should" be trading at multiples 10-20 TIMES where they are now, as a group. There are of course exceptions.  The scummiest analysts will boast how their only super juniors are rocketing, while everyone else is underwater.  Another 200 diluted and failed juniors in their market closet are not mentioned by those same analysts, while they tout their 1-10 big winners. 

6.   If GoldLion is feeling heat, believe me, almost EVERYONE in juniors land is feeling SERIOUS heat and DEMORALIZATION. 

7.   The only question is who can admit it and take it, and who crawls to the usd photocopier button for a hand out of flaming toilet paper, courtesy of Dr. Pinocchio.  While the banksters take another load of juniors off team bailout, and vault them.

8.   There's no point hiding from reality or pretending you are the supersonic exception to the gold stocks rule.  The exceptions are lotto winners, not genius investors.  For every gold stock that is rocketing, a bucket load look like plants in the sun with no water.  The gold bullion sun is shining, but the gold stock plants are drooping.

9.   Why such horrors in gold shares?  Well, when somebody asks me a question, I ask myself a 2^ndquestion:  Is their question going to make them any money?

10.          The question "why are gold stocks underperforming" is a major THEME.  The answer is not as important as the VOLUME of that THEME.  The volume is beginning to THUNDER. Gold coming close to tagging $1500 has brought the gold shares underperformance issue out of the closet and into the open.  Some investors have had enough of the "bullion to the sky while my juniors wilt and die" show.  Thursday and Friday this week were the breaking point for many, at least emotionally. 

11.          Many wrote in and while not liquidating, expressed their honest tremendous frustration. It's normal to want answers when something that should be making you 1000% or even 10,000%, is instead under water by 10%-90%. 

12.          While there are many factors affecting the bullion to shares "impossible action", the reality is that the final trades for GDX took place close to 8pm last night.  I've never seen GDX trade that long on a Friday nite, albeit with micro liquidity, but that is one positive note to end the week.  The pgen rolls on, buying and selling like a robot, while another battalion of gold share worshippers throw in the towel on their "10,000% gains for me in a crisis" fantasy.  If 1% is all that the market offers, that is all you can take. 

13.          The answer in the end is liquidity flows. There are more sellers than buyers.  The reality is you had minor weakness in most gold stocks this week so you flowed minor liquidity on the buy side into those stocks.

14.          Asking "why" doesn't make you any market profits.  Flowing liquidity professionally makes profits, and nothing else does.  Flowing a bit of liquidity on the buy side by market winners, and flowing a bit on the bail and fail side by market losers, generally speaking, is the correct answer as to "why" the gold stocks did what they did this week.

15.          Only a LIAR talks about how wonderful the gold shares sector did this week, but the charts still look to me like an astroblast for the group could occur as early as this coming week.  It could be months away, but the possibility of an astroblast now is definitely real, especially when the EXTREME emotional frustration with gold shares is factored in. 

16.          Some stocks ARE blasting higher, albeit few of them.  The gold bullion sun is shining on the gold shares plants, now all you need is the liquidity flows water!  Those liquidity flows must come from outside the gold community.  Because most shares are underwater, and because most investors bought mostly in plops at highs years ago, they don't have the cash to flow liquidity into the shares now, even if they had the faith to do it.

17.          My statements that there will be no public entry into the gold market can further demoralize gold share investors, almost like a nail into a gold share investor's coffin.  There is massive positive light at the end of the gold share tunnel for you, but first an aside:  

18.          While the gold community (GC) might be broke, underwater, and living the "bizarre and surreal" gold at $1500 with stocks underwater theatre, as a group the GC hates DEBT, while the public worships debt and the photocopier.  The public is in a far worse position than the GC.  They are soaked in debt, bonds, and wearing their "house market recovery is near" hats faithfully.  In a debt crisis, the debtor is king, yes, because his debts are devalued, but the banksters forgot to mention that it is the GMAN debtor who gets to be king, not the public debtor who becomes the BAGHOLDER for the gman's debts.  While his own debts get devalued, Elmer Fudd gets bolted to the ball and chain of the Gman's debts, and that sends him to the breadline.

19.          Here in Canada, a large crew of Elmer Fudds bought US real estate for cash, like they bought Nortel at $90 as a free money super-bargain.  The end for the real estate bargain hunters will be the same as it was for team Nortel.  A wipe out.  Soon the Canadian real estate market will join the US market in a downturn, as the bond implodes.  The cranes might be revamped into huge power of sale [(foreclosure)] signs.  They won't be used to build anything.

20.          If you hold core positions in gold shares, you are not going to see your trading pgens move your whole portfolios higher against the dollar in 5 days of trading, while the shares are in the tank or sideways, but you are going to be in a lot stronger state emotionally, and a better one financially, than those who are just sitting there holding a 2006 and 2007 bag of impossibly underwater gold shares.

21.          I've spoken of the importance of keeping core positions in one account and trading pgen positions in another.  This week was a major lesson in taking that action.  Financial advisors should also consider doing that for some clients. Investors tend to blow out whole sectors or even whole portfolios when they see some stocks dragging down the portfolio.  That is a major error and only isolation of investments can prevent that action.  When an investment is a "drag" on your portfolio, move it to a separate account, like the banksters move their losing trades to the taxpayers to baghold.  You can't move your losers to the taxpayers, but you can move them so you don't attack them with the sell button like a vampire sucking your own financial blood.  I look at "diversified portfolios" and what I see is nothing but an unorganized price-chased and price-plopped blob of clutter.  Don't diversify.  ORGANIZE.

22.          What WILL move gold shares higher?  The answer is institutional liquidity flows.  In a crisis, the rule is bullion first, shares later.  As the dollar catches fire, the next wave of massive institutional liquidity flows will commence.  The power and glory of the gold punisher will be revealed to all.  If you are in an EARTHQUAKE, do you listen to somebody saying, "I'll predict the next vibration!"  No.  When gold goes BALLISTIC, there is no time or ability to predict "corrections". 

23.          There is only GYRATION.  Only the pgen can manage gyration.  The dollar is on the verge of free fall.  That will create a gold ballistic missile that GYRATES and a general stock market gyser to the UPSIDE.  Sadly, for team general stock market, the gyser ends with a CRASH that destroys most business owners who buy the market near the end of the gyser, while for TEAM GOLD (YOU), the gyser ends with a LOCK to a high level.  Many of team general stock market will kill themselves when it happens.  This is the REAL DEAL and the banksters are not taking prisoners.  Fudd gets locked to the breadline, and the austerity programs begin and stay for decades while Fudd the slave builds the next boom for his bankster masters to take later from his grandchildren.   

24.          New subs should review the PGEN BASICS video I posted on the site last night.  While I could make money selling you a pgen book or white paper, YOU won't make any money from it.  This week's charge of bullion towards $1500 and silver TO $43 at 7pm last nite, was totally overshadowed by the gold shares wet noodle show, and the parade of the lobotomized wiener brain silver top callers show.  No white paper or book could have forseen that action.  Various market themes present themselves and affect your emotions and liquidity flows DRASTICALLY. Many of you were thinking you needed to build cash positions in case gold and silver fell down. That's added fuel to the bull case, not the bear case.  Check out my CIGARS FOR YOU posting I just put on the website.  It tells you what investing is ALL ABOUT, in about 200 words.

Thanks

Cheers,

St out