The Gold COPS Have Arrived

The bearish sentiment in the gold market has become almost surreal.

Jim “mighty man” Rogers believes the current bearishness in gold and silver is surpassed only by the bearishness insugar. 

That’s the daily sugar chart.  I’ve covered almost all my short positions, and now I’m betting that sugar surges towards the 20 cent area.

While sugar is a key food asset that I’ll own for life, the main reason I show you this chart is because it can be a leading indicator for silver.

If sugar can rise above the red supply line on that chart, it could attract hedge fund momentum players, in both the sugar and silver markets.

You are looking at the daily silver chart.  Note my stokeillator, at the bottom of the chart.  The red lead line is at about 18, and the blue line is near 22.

When the lines cross, a technical buy signal is generated, but traders should try to anticipate the signal.  By the time the lines cross, the silver price is usually rallying already.

I like to use my “PGEN” (my pyramid generator) to buy silver & gold, when the lead stokeillator line goes under 20 on the daily chart.  The PGEN systematically allocates capital, in any price range chosen by the investor.

That’s the daily gold chart.  The lead line of the stokeillator is at about 18.  The blue signal line is near 28.

Gamblers in the gold community should buy gold and silver now.  It’s unknown whether the metals stage a big rally as the stokeillator lines cross, or whether they just drift sideways. 

If gold can rally to HSR (horizontal support & resistance) near $1320, sell those trading positions. 

My GU Trader gold and GDX day trading service is interesting.  We’re well in the “black” since before the April crash occurred, even though most trades are on the long side.  If you are a gambler with interest in day trading, send me an email to [email protected] and I’ll send you the details.  Thanks.

The bond market is probably in serious trouble.  That’s the weekly T-bond chart.  There’s a huge head and shoulders top pattern in play.

A rally to somewhere between 141.44 and 145.81 is possible.  If that happens, I plan to short bonds fairly aggressively.

The April “TIC” report showed a shocking drop in foreign ownership of US government debt.

Interest rates normally rise as business conditions improve, and money flows from bonds into stocks.

If the economy is strengthening, as Ben Bernanke suggests it is, then US stock markets should rally as bond prices fall. 

That was happening, but now money is pouring out of both bonds and stocks, and the dollar can barely rally at all. This is quite concerning. 

That’s the weekly chart of the Dow.  While it could probably rally a bit in the short term, I’d like you to note the “oscillator train wreck” that is in play on this chart.  The 12,26,9 MACD indicator series looks particularly gruesome,and it is followed by a lot of institutional traders.

Over the past two months, every member of the gold community has been literally inundated with bearish gold and gold stock price targets.  The good news is that none of the statements of the gold bears carry any shock value now. 

You’ve heard it all.  There is no lower gold price that you haven’t heard about, and bashing gold now seems almost as common as cheering technology stocks was in 1999.

That doesn’t mean “The final low is in, and now it’s parabola time!” for gold, silver and metal stocks. What it does mean is these investments offer good value to investors.

Bank analysts tend to “go with the flow”.  When the gold price rises, they issue higher price targets.  When gold falls, they issue continuously lower ones.  I’ve noticed a change at the banks.  The analysts are starting to focus less on bearish technical analysis, and more on bullish fundamental analysis. 

The “COP” factor is coming into play; the cost of producing gold.  Gold is currently trading below $1300, which is quite close to the cost of production.  Fundamental analysts at the banks believe the supply of gold is going to decline now, while demand remains stable, and that will put a floor under the price.  I agree with the bank analysts.  In my professional opinion, the COP factor, not QE, is what will attract thousands of institutions to gold stocks in 2013 – 2014.  Somebody knew gold stock investors were being robbed by the naked short hedge funds, and they have dispatched the gold “cops” to the rescue! 
 

Special Offer For Gold-Eagle readers:  Send me an Email to [email protected] and I’ll send you my free SRT report.  Silver ratio traders need to be on the alert now.  I’ll cover the basic rules of ratio trading for you!  Also, while gold has really gone nowhere over the past 6 weeks or so, my long-only GUTrader intraday gold trading service has booked about $165 an ounce in trading profits.  All trades are closed out by 5pm each day.  If you’re a gambler that likes intraday action, send me an email to [email protected], and I’ll send you the details of this email-based trading service.  Thanks.

Stewart Thomson

Graceland Updates

Note: We are privacy oriented.  We accept cheques.  And credit cards thru PayPal only on our website.  For your protection.  We don’t see your credit card information.  Only PayPal does.  They pay us.  Minus their fee.  PayPal is a highly reputable company.  Owned by Ebay.  With about 160 million accounts worldwide.  

www.gracelandupdates.com

[email protected]

Rate Sheet (us funds):

Lifetime: $799

2yr:  $269  (over 500 issues)

1yr:  $169    (over 250 issues)

6 mths: $99 (over 125 issues)

To pay by cheque, make cheque payable to “Stewart Thomson”   Mail to:

Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:   
Are You Prepared?