Gold, Juniors, Gas: Technical Thumbs Up!

A substantial debate is emerging around the Gold $1315-1424 zone. Is Sir Gold overbought and due for a big fall?  Or do you ride your holdings above 1424 on a new leg higher!

2.   I guess if you used the marked to model numbers of the OTC derivatives (OTCDs) for your calculations, you could, maybe, make an argument that gold is overdone.

3.   On the other hand, if you audited the Fed, marked the derivatives to market, and brought back the founding fathers to mark the current “we’re here to help” congressional model penguins to a market pricing of…”into the clink you go for treason”, maybe the “chart” says Sir Gold is actually… drastically undervalued.

4.   The value of gold is in the range of $50,000 to $100,000 per ounce, if the OTCDs are marked to market, and arguably so even if they are not, by some calculations.  It’s unlikely (but it is possible) gold goes to atrading price of $50,000 or higher in this bull market, but that is, here and now, the actual mathematical value of your Mighty Metal.

5.   The Gold Market is the ultimate market, so it makes sense you approach the ultimate market with the ultimate strategy.  Gold and food do battle for title of the world’s lowest risk investment, and in a page out of the bizarre and surreal handbook, Elmer Fudd Public Investor believes these two items are the most risky investments.

6.   I absolutely believe with my heart that the world’s most risky investment is: listening to anything Elmer Fudd Public Moron has to say about anything in the investment arena.  Listening to Fudd, or worse, following him on his crazed multi-year price chases, is your ultimate investment risk.  Not buying food or gold.  Fudd is a pathetic failure in the markets, and the twisted banksters have maniacal plans, in play now, to send him to a real breadline, just as they did in the 1930s.

7.   Gold is the ultimate investment for many reasons, one of those being that Gold is portable.  If you are a farmer, you have to either fight or negotiate with despots (Govt Gman?) when under siege.  With gold, you can run with what you have.  It’s a little more difficult to put a farm in your car and drive off.  So while the door is open for food to claim the title of world’s lowest risk investment, the world’s ultimate investment is the one, the only: Gold!  The runner ups are all way behind Gold, really out of sight.  That’s your golden reality.  The list of reasons why gold is the ultimate investment is very long indeed.   If you really feel you may have to run, diamonds are an absolute must-own, the ultimate in portable wealth with some liquidity, albeit less than gold.  Silver is good for small amts of wealth transport.

8.   Gold and diamond jewellery can be insured and jewellery is  much more legally portable than a “loot sack” you forgot to declare when on the move. Many safe deposit boxes forbid storage of gold coins but allow gold jewellery.  If you think the Gman might be moving in for the kill, Indian jewellery is at the top of your gold foundation shopping list, your gold and diamond shopping party list.

9.   Fudd buys a new TV with a 500 button remote control and a high-depreciation mini-van, with a loan from the banksters at the end of the bond bull market.  You buy some 10 ounce 22 carat gold necklaces, (with a few diamonds studded on there), call the insurance people, and store some in the safe deposit box, some with private storage, and bury some on a piece of property you have somewhere.  Who comes out ahead at the financial grocery store this week?  My bet is… you do, but it starts with action, not talk.  The crisis is accelerating, not ending.  Are you accelerating your protective actions, yes or no?  Bond put options vs Gold Jewellery is the story of Good Drugs vs Good Concrete.  Build your gold house foundation in the morning, then roll the bond dice in the casino at night.  Play later, work first.

10.          Gold Market Tactics: I believe we rise over $1424 rather than taking out 1315, but my buying into the $1315 lows is not based on that view.  I don’t care if we start a new leg over $1424, or drop into support at $1225, or (something few have thought of) just trade sideways in a 1320-1424 range trade for awhile.  Of paramount importance is you want to be booking wins and be comfortable with your positions, in whichever of the 3 possible scenarios ultimately materializes.

11.          Look in the financial mirror.  Is that you?  Are you standing there with a smile thinking about the 3 scenarios, or is perhaps a little sweat starting to drip on the bigger down days as you wonder what is taking so long for gold to make a move?  Perhaps you see Dr. Greed standing there in the mirror, who “knows” the future so you are leveraged 20 times over to make all the “beeg mownee”?

12.            You want to see “Sir Comfortable” in your current Gold price mirror.  The tactics to maintain that solid image are these: lots of gold, lots of cash, you have been a buyer into 1320, and you are prepared to sell- a modest amount- into 1424.

13.          You are prepared to buy down to 1225 with a block of risk capital. You are not afraid to do the occasional valuation of your net worth in ounces, and understand that a strong argument has been made by one of my subscribers (who has BOTH a Harvard MBA and a medical doctorate degree) that valuing your worth in ounces, not dollars, over your lifetime, is the better approach for you. Are you selling gold on strength, or actually buying cash?  Be careful how much cash you really want to buy, here and now.

14.          It could be argued that dollar-based accounting is really marking your assets to Govt model, whereas ounces based accounting is marking your net worth to market.  Models work, yes.  Until they don’t. Until they blow up or turn into an endless wet noodle.

15.          Even though gold stocks are my “super theme” now, that doesn’t mean you should hold zero physical gold.  The answer as to when you should hold zero physical gold is:  Never in your life.

16.          Here’s a look at my “triple pgen play” on the GDXJ.  Click here now to view: GDXJ Triple Winner Chart

17.            Look at the move upside from the base of the middle pyramid formation.  Price has moved from the $36 area to the $39 area.  You are, or should be, already booking wins on what you bought into 36, while you are also comfortable holding a lot of cash for a move to GDXJ 32, if it happens. The sells into 39 have freed up some more cash, while the outer core (swing) positions and inner core buys are rising in value.  You are, unquestionably, in a solid position.  You are a market winner.

18.          Here’s a screenshot of the placement of $100,000 in cash into that middle range risk capital allocation pyramid:

GDXJ $43-36 Risk Capital Allocation Map

19.          I believe we blast thru the $43 upside ceiling, a Golden Apollo Rocket going thru Hot US Dollar Butter, but I don’t know that for sure. Respect and accept the future as unknown.  Here’s a video look, providing more detail for you on how to play the GDXJ with the tactics asset allocation “map” above. Click here now to view:

GDXJ Risk Capital Map Detail Video

20.          I don’t like losing, in case you didn’t notice.  So I don’t.  I don’t book losses.  I book wins, and when I get IN to something, I’m not there to take prisoners or play tiddly winks.  I told you that the natgas asset would eventually outperform oil and the natgas glut is a bearish ant pipsqueaking on the ground, on the cusp of saying hello to a hyperinflationary steamroller.   Price up 4 days in a row.  Here’s the daily chart. Click here now to view:

Nat Gas New Highs for the Move Chart.

21.          The weekly chart is what I would term dramatically bullish.  I’m aware that my competitors are telling you to avoid this asset while Jim “Mighty Man” Rogers pours risk capital into it.  You decide what you should be doing.  A look at the weekly chart shows NG has now “sealed the deal”, technically, on marking the recent lows I’ve denoted with a blue circle, as a legitimate chart line point.

22.          Now we have a wedge formation on the chart that appearsexplosive to me.  The monster short positions, particularly in UNG-nyse, like to talk about contango.  Soon these bustouts are play my game.  It’s called:  constrangle.  As in: strangle the bears by the neck, say goodbye, and leave them blubbering for mommy.  Click here now to view theawesome weekly chart for natgas:

NatGas Weekly Upside EXPLOSION Chart

23.          When you get into asset accumulation to build wealth, there is no backing out.  The price goes down, the buys continue.  Gas now, is gold at $400.  End of story for the bears, beginning of the profits story for you.

24.          Paid subscriber GoldLion calls the silver chart liquidity flows picture, right now, the most bullish he’s seen since the exact low point of Oct 2008.  The gold community knows both he and I called gold and particularly gold stock raving buys into the lows of the summer at 1156 while most doubted.  Does anyone know how insanely bullish the liquidity flows picture on silver is?

Special Offer For Website Readers: Send me an Email and I’ll rush you my new Flying Five Silver Stocks report!  Unknown to most in the gold community, it is the banks in control of the longs in silver now, and silver stocks look set to go ballistic!  Silver is Gold’s favourite toy, and silver stocks come with huge risks, which makes professional capital allocation critical!  Thanks! st


Stewart Thomson

Graceland Updates


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

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?