June 18, 2010

1. Gold blasted out of the ascending triangle I highlighted this morning right before the breakout.
2. GOLD ASCENDING TRIANGLE
3. Gold blasted off leaving a crowd of top callers and gold worriers behind. The target of the triangle is 1320. The worst traders I know are pretty much out of gold.
4. The reality is that some big name gold stocks are making new 52 week highs, and this is the beginning of what I call, "the great gold confirmation".
5. The gold community has focused on what is generally perceived as a non-confirmation of the GDX.
6. (see chart here: GDX Daily Chart) The view is that because GOLD has made a new high, but gold stocks have not, something is "wrong", or at least it is disappointing. The bears thought it meant gold itself would crash, and the gold stocks themselves would basically be obliterated.
7. My argument has been that this is the greatest financial crisis in modern history, and the fact the gold stocks are almost at a new high while the Dow languishes, is a major positive, not a negative, for gold stocks. You can't expect stocks to recover from a 90% loss in a year just because gold went to a new high.
8. Now some of the stocks are starting to go to new highs, at least to 52 week highs. The GDX is on the cusp of doing so itself, and I'm personally ecstatic with the performance of the gold stocks.
9. Here's a look at the GDXJ in a video report I just did.
10. Click here now to view the GDXJ video report
11. The GDXJ represents the gold juniors. This is a chart poised to rise to the Fibonacci 161% retracement line around $36, and that is fits with a possible target from the zone of consolidation that has built over the existence of the GDXJ itself. Again, I see absolutely nothing negative on the gold stocks radar screen. Nothing is wrong, nothing is broken. The only thing "wrong" is that the gold bears will have their financial backs snapped it half, by the bulls. If you see that as wrong, well, I don't.
12. Silver is perhaps the post explosive entity in the gold community right now, and I'm going to make one of my rare market calls. As most readers in the community know, what I do is use a highly disciplined system of buying weakness and selling strength in a pyramid formation with a literal army of market orders, all the way to zero, in the major markets, including silver.
13. When gold began its "head and shouldering" process, as I termed it, on the weekly gold chart, I issued a rare "attention gamblers, the time is now to buy!" campaign as gold rose up from the $980 area. Here's a look at the silver chart via a video report I did today:
14. Silver Rocket update for Jun 18
15. Most writers in the gold community focus on the fact that silver tends to outperform gold in the later stages of a move, but the focus is more reactive, than predictive. I don't think very many investors in the gold community who are silver buffs really understand what has just transpired in the gold and silver markets.
16. First off, gold has exploded from what I labelled a "michaelangelic" head and shoulders pattern and targets 1320 or higher, the same as the small ascending triangle. Second, silver has yet to make a new high. Again, the bears see this as a non-confirmation. Again I say, wrong. Quantitative Easing is accelerating and George Soros is pounding the table that the crisis is just getting underway. Just starting. Not ending.
17. Third, the bears have built themselves a horrific track record and are making fools of themselves while George Soros and Jim Sinclair are putting their own monster money where their mouths are; gold is going higher, not lower.
18. In my view, silver has a bull head and shoulders continuation on the 1 and 2 year charts, and the kitco charts show it better than most. Is it as good as the gold pattern between 680-1033 was? No. Is it powerful? Yes. Silver appears to be making a run at the neckline. If it is successful, I believe the silver price will become so volatile that it becomes virtually untradeable to those with no core position.
19. So my words to you gamblers out there are: Your time is now to take action. Silver action. That is, "Hi Ho Silver!", not High Ho let's buy Junk Bonds and wait for the banksters to maul us!" The worst case scenario is you own one of the world's greatest assets as the theme of the crisis becomes the banksters' attack on paper money itself. If price were to decline in dollars per silver ounce, is that such a disaster? I think the risk/reward is skewed massively towards reward, as is the timing.
20. Kitco Silver Chart This chart tells you all you need to know about what is coming to the metals bears:
21. Obliteration. They already look like clowns telling the gold community that paper money is less risky than gold and silver. That statement alone, which is arguably the single stupidest statement in the history of markets, illustrates the horrific understanding of risk and reward that these people have, and their obsession with making you live your market life by the exception, not rule. The massive bull continuation pattern on silver bullion has a target of around $30-33, and gold could easily leap to $1700 while that occurs.
22. Again, if you are a gambler, the time is now to act in silver. Look around you (and maybe at yourself) in the gold market. How many people took my "gamblers take action now" call when gold broke rose up from 980? They are MORBID now. Stunned. Worse, they are now in "audience mode" as the banksters unveil their next leg of their attack, on paper money itself as an ENTITY.
23. Do not repeat the same crazed actions in silver now, that you did with gold then. Remember the stories that because so many people knew about the bull continuation h&s on gold, that it couldn't be real? You'll hear the same stories now with silver. The only non-confirmation in the gold community that I see is the non-confirmation of the bears with REALITY.
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