Oct 19, 2011
The day begins. You draw in your HSR lines. You set your PGENs in those areas.
You understand that space helmets on means reduce the amt of your existing positions you are selling for short term profits, and increase the amt of those same existing holdings you hold for a bigger ride, due to the accelerating nature of the crisis.
You look out the window, and see those who believe space helmets on means sell your house and leverage your business and put it all in one junior gold that the promoter promises you is going to pluto in the next 22 seconds. You know where that leads to. The agony zone.
Gold stocks staged an epic recovery late yesterday, keeping the minor h&s bottom pattern alive. It's a positive event, not a buy signal. Your buy signal came at your worst moment yesterday, when you knew there would be no recovery.
For a real turn in gold to come, you have to be fully in the mindset that any recovery is totally impossible. You can't just think gold is going lower. You have to know it is going lower with absolute certainty. That's the mindset that you have to buy, if you are interested in really calling turns.
Slowly, but surely, we are building the mindset for such a turn to the upside. Probably 80% of the gold community is now totally mentally broken, and only a surge to well over $2000 will return them to the crazed mentality of buying micro dips on monster strength, rather than big declines after super-monster rallies.
Dennis "the gold market menace" Gartman is back in top calling town. He says there's something "seriously wrong" here in the gold market. I agree, and it's him.
Gold rallies 170% from the 2008 lows without any kind of serious correction, and then corrects 20%, and that destroys 80% of the gold community. Does anyone know what just happened?
There is something seriously wrong, and it's with 80% of the gold community, not with gold. Let's repair what's wrong, and move forward.
Focus on the major HSR lines at hand and, when gold moves up big time, so much so that you know it is getting away, call somebody in Asia and ask them what the word "patience" actually means. It's not in the white boys' dictionary.
You're in the patience zone now, the Asian buy zone. If you are fully invested in gold per your allowable % of net worth, you do nothing but yawn. If you have cash you can realistically put to work, you do so on weakness.
Don't call turns and don't make demands of gold to start rising by some date that you need. Just buy the sale price areas with your pgen in the major HSR zones or with the pure PGEN, and then.... Sit there.
My greatest concern about the gold community is not that gold "might fall down". My concern is that when gold starts rising again, they go back to buying micro dips on monster strength, with massive risk capital plops, because....
This time really IS different. The economy sits on a trap door. Ben Bernanke is softening you up for interest rate rises and the end of the bond bull, with his statements about asset bubbles. In the parabola zone, a lot of the gold community is going to be financially destroyed. The jobs and businesses are at risk, and the old ability to pour money from biz into the market is going to come to an end, for a lot of people.
The monies in the mkt will have to stand on their own, and that's a whole different ballgame, as a huge percentage of the gold community is going to learn the very hard way.
I personally think that Ben Bernanke crossed the line yesterday, from patsy to criminal. To insult the American public about "preventing asset bubbles" after the stock market bubble of the 1990s, and the real estate super bubble of the past 60 years, takes him into the devious zone. He's starting to act like a full bankster.
Americans are lying on their financial backs while he talks about asset bubbles? He should be fired this morning. End of story. He walks up to a man lying on his back holding popped stk and R/E bubble asset carcasses, and tells him how he's going stop any bubbles? Ben is turning into a maggot.
He capped off his all-disgusting speech with the statement that the Fed's dual mandate should be to "fight inflation" (translation: crank rates after creating inflation with money printing and destroy everyone financially), and to....pump money into the banks. "Pump money into the banks" as the official mandate of the Fed as official Fed policy? In English, that mandate is translated as: robbery.
Ben is now a full criminal. He's a robber. He's made the full transition from academic innocent and jerk, to street-smart gang banger. Congrats Ben, you're now a made-man bankster. If Ben saw an orphaned child with cancer, and the choice was to print up one dollar with his magical photocopier and give it to the child, or give it to his bankster masters, you all know what his decision would be. He's now 100% criminal. A made man. What a day of horror, for all of America.
On the good news front, GDX surged a stunning $3 off the lows yesterday. The Dow top callers thought they had the top in for sure, as the Dow melted 400 points at one point but...no! It was the dollar bugs that got toasted, as King Dow reversed and took a flame thrower to the dollar bugs. Oh well, top call number 457,000, turns to charcoal. There's still a chance the dollar bugs get lucky, with top call 457,001.
It's nice to see more of you facing "decision time" and siding with corporations that build things, versus photocopied toilet paper clutched by Elmer Fudd Public Clown Investor, on the market battlefield. Fudd and Ben Bernanke's photocopied crap will not defeat King Dow. An eleven point pgen, buying the Dow at 1000 point intervals, from 11,000 to zero, is the simplest way to glide your way to Dow empowerment, and hence, wealthbuilding. Tack on a 30% shorting pgen, using the same 1000 point increments, and you could build wealth in yawn mode, and have fun shorting the Dow, instead of getting roasted time after time.
Share the wealth. As youngsters grow up, they enter the gold market professionally, in a few cases. They need opportunities to buy, even if YOU are fully invested. Drawdowns give them that opportunity. The gold market isn't only about our accounts rising every day. Does anyone mind if new entrants can buy a 20% sale on gold, after a 170% rise?
Seasonally, gold tends to pop upside, a little, near the end of October, and then drift lower through November. In a crisis, anything can happen, to the upside or downside. Are YOU prepared? Click here now to view the highlighted section of the gold seasonal chart, for Oct/Nov.
Click this daily uranium chart now to view the HSR profit booking lines at hand. There's a small h&s bottom evident, like on GDX. As with silver, HSR resistance sits just above the supposed "breakout point. I would view the bigger HSR at $5.80 "as the neckline" of that pattern. Notice that some of the HSR lines are pink coloured. Those lines are drawn across highs, not lows. Highs can offer resistance, but they are weaker action points than lows. Still, when there are big gaps between one HSR zone and another, the investor can break mentally if price reverses before reaching their "super sell target", so you need to work to manage that situation, and that's the point of the pink HSR lines. I have substantially increased my uranium holdings on this Japan-fuelled price sale.
Gridtime! YOU are 25 legs up on the rest of the gold community, because you are using this correction in gold, after a 170% up move, to focus on building emotional and mental fortitude, to manage yourself in the much more difficult zones of play that lie ahead in the gold market, ironically at vastly higher prices. On the top of your must-do list is the battle against buying micro weakness after macro strength, with size. Second on your must-do list is embracing drawdowns as natural, especially in a crisis. Rather than fighting surprise, embrace it, and you become "one with the crisis", rather than trying to outsmart it. For those of you who trade only gold, I'll be posting a compartmentalization technique on the site for your purchases that may interest a number of you.