Gold, Silver Technical Update

Super Force Signals
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Morris Hubbartt
Weekly Market Update Excerpt
Mar 11, 2011
US Stock Market
QQQQ  (Nasdaq Proxy) 6 Month Chart
QQQQ Chart Analysis

  • On Feb 15th I issued strong a sell and short sale signal  for SPY, the S&P500 proxy.  Today I want you to look at the Nasdaq, which Jim Rogers is shorting.  The Nasdaq is the momentum/action sector of the general stock market.
  • Take a close look at the huge number of distribution days.  Distribution days are my early warning system, and on this chart, the siren is wailing “danger”!
  • I recommend you short the SP500 to protect your gold stock portfolio.  This week, as the general stock market took another hit, the decline also did indirect but significant damage to your gold stocks.  I would urge those of you who have not yet taken protective action by shorting the SPY or QQQQ, to do so as I issue my sell and short sale signals.
  • The stock market correction is only beginning, and is going to do much more damage than the crowd is anticipating.

UUP (US Dollar Proxy) Chart
UUP (USD Proxy) Chart Analysis:

  • I have been warning for months of a panic sell off coming in the dollar. When I look at the longer term technical picture, the condition of the dollar is miserable, if not terminal.
  • I am looking for a weak volume rally in the dollar, prior to a horrible panic coming later in 2011.  The best way to protect yourself from the incredible damage caused by this panic is: physical Gold and Silver.  This size of the panic is going to catch not just a few, but most of the world, completely off guard.

Gold and Precious Metals
SGOL (Bullion Proxy) 6 Month Chart
SGOL 6 Month Chart Analysis

  • On March 1, I issued a Super Force Profit Taking Signal for SGOL traders.  It is important to separate the short term risk from the long term monster move up that lies ahead for Gold.
  • Short term: My short term outlook is you are going to experience a painful correction that could see Gold fall to 1325.  I recommend you engage in substantial buying in the 1350 area, because in every correction, central bank buy programs, led by Asia, are going to put higher and higher support floors into this market.
  • The central banks can act in the market without announcing their intended buys, adding to the difficulty in predicting exactly where the ultimate bottom occurs.  The global central bank buy programs could halt a fall in the gold price well before any technical support level or target price is reached.
  • Long Term:  Some of your serious assets must be in physical Gold.  Store it outside the banking system.  My view is we are firmly into leg 2 of the Gold Bull Market.  The fundamental long term outlook for Gold is supreme.   My long term target is unchanged at $4000 per ounce.  What will the US Government’s debt picture look like at $4000 an ounce?

SGOL 14 Month Chart
SGOL Chart Analysis

  • My recommendation on all precious metal positions is to hold some positions that you will not sell.  My core position recommendation, which I apply to myself, is 65%.  Think about the phrase, “Deep Underground Storage”.  It’s time to act on that thinking.
  • I have used every major Super Force Buy signal to add to my own physical position, for many corrective cycles.  As Gold goes higher and higher, you should be trading less of your position and holding more and more as a physical core.  Your number one investment goal should be:  Enlarging your physical gold core position.

Gold Juniors GDXJ Chart

GDXJ Chart Analysis:

  • I issued a Super Force Buy Alert for GDXJ at $36.80 yesterday.
  • Short Term: I see the next great buying opportunity in Gold juniors  now in play, while the US stock market sinks in a serious down move.   My work is suggesting a major correction is coming in the general stock market, far bigger than the 10% feel-good number currently being bandied about, by the CNBC talking heads.  For many analysts, 20% down earns the market a label of: BEAR MARKET.  This is a serious situation.  The correction could take the stock market down by at least 15-20%.
  • So, unfortunately, I am projecting a hard hit for juniors, well beyond the serious discomfort most of you are already feeling.  The good news is the move down will be followed by an up move on huge volume, taking gold juniors to record highs.
  • The flight to quality US Dollar trade will be broken to pieces on that move higher in Gold, and from then on, the flight to quality money will go to Gold and Silver.
  • The sound strategy now is to buy GDXJ (or your favorite individual juniors) as it corrects in price, and buy aggressively right down to the strong volume supported zone, which I have highlighted on the GDXJ chart as the $34 price area.  This move down is probably the last great buying opportunity of your lifetime, for gold juniors!
  • Long Term.  My SFS Gold Stock Ratio projects a $75 one year price target for GDXJ.  Beyond that, the target is an incredible price of $200 per GDXJ share!

GDX 6 Month Chart
GDX 6 Month Chart Analysis

  • On March 10 (yesterday) I issued a new buy signal for GDX, at $56.60.  My buy signals are created mainly through combining the technical action of my SFS oscillator, weak price, and soft volume.
  • Short Term:  My indicators are warning of a dangerous general stock market decline, and this will create a vicious tug of war for GDX.  I see GDX (and most senior/intermediate gold stocks) falling initially as the general stock market falls, but then, while the general stock market keeps falling, GDX rockets higher!
  • Long Term:  The GDX performed decently in the last year, rising a respectable 30%.  The story that I repeat to readers on a daily basis is that like the juniors, the senior and intermediate Gold stocks are drastically undervalued.  Gold bullion’s performance has far exceeded your Gold Stocks, at least for most investors.  Before this Bull Market is over, it’s going to be your Gold Stocks that are drastically outperforming your bullion.
  • GDX has strong volume support in the $55 area.  Price could easily go back to 55 in this stock market correction, but when looking at the next 12 months and beyond, GDX could double in price, and more!

SIVR (Silver Proxy) 6 Mth Chart
SIVR Chart Analysis

  • On Feb 23rd, I gave you a profit taking alert for SIVR, at $33.26.  My suggestion is that for every dollar you invest in silver stock, at the same time buy one dollar of SIVR or physical silver.  This strategy is an ideal way to build wealth over time, and is exactly what the richest people in my circle are doing.
  • Owning the physical product is an absolute necessity.  As I get fresh buy signals in silver, I put more money in physical silver.  My latest buys are at $28.  Use my buy signals to buy SIVR, and to add to your physical Silver inventory!

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The SuperForce Proprietary SURGE index SIGNALS:

25 Super Force Buy or 25 Super Force Sell: Solid Power.
50 Super Force Buy or 50 Super Force Sell: Stronger Power.
75 Super Force Buy or 75 Super Force Sell: Maximum Power.
100 Super Force Buy or 100 Super Force Sell: “Over The Top” Power.

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Our SuperForce Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building.  We are two business owners with excellent synergy.  We understand risk and reward.   Our subscribers are generally successful business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.

Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.