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Stewart Thomson

Stewart Thomson

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…

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Gold and Your Blue Pen

Graceland Updates 4am-7am
Aug 30, 2011

  1. Jobs report day is this Friday. 8:30am is when the "big news" gets released. How big this news ever really is for gold, I'm not so sure. Regardless, gold can take a hit going into that report, and then blast upwards after it's released.

  2. Some of you have wondered if the banksters have successfully painted a head and shoulders top pattern on the gold chart. Click here now to view that possible chart pattern, using my OHLC (open, high, low, close) bar chart.

  3. Notice that I've done the annotations in blue. Click here now to view the same chart, but using the daily closing prices. There's no question, if you are obsessed with ants and their movements, that there is a h&s shape apparent on this chart.

  4. The reason I use blue colour to highlight the action is because I want you to think hard about the mindset of the Asian gold investor. Flip trading gold to make photocopied dollars is not the winning ticket in this crisis, to put it mildly. This is a crisis that has barely started, in terms of the total amount of public investor wealth destruction.

  5. The Western world gold investor generally has an overall goal of building dollars with a fixed amount of gold. The theory is that the value of almost everything else will decline against gold, thereby enhancing their relative purchasing power.

  6. In contrast, the Asian investor seeks to use paper currency to build ounces of wealth. Their unending goal is to get more gold. Thus, the blue coloured annotations are geared towards the Asian investor. The question is, are these annotations also geared towards.... you?

  7. In the West, because most investors don't really understand what gold is, real gold sales are met with substantial fear, panic, and even all-out terror.

  8. The investor focused on building ounces of wealth will always vastly outperform the investor who seeks to build dollars of wealth, both in terms of numbers of ounces accumulated, and in terms of dollar wealth valuation. That investor will also sleep better and carry themselves in a much calmer and more rational manner during the business day.

  9. Gold already is the ultimate wealth. Its valuation in dollars is secondary to "what it is". When you treat gold financially, as a sculptor would treat it physically, you can create a phenomenal statue of wealth. When you hack at it like a vandal obsessed with dollar valuation, you may find yourself in "financial jail", which in this crisis means... the breadline. This crisis is fuelled by a quadrillion dollar OTC derivatives implosion. It is like no other.

  10. This crisis can only be ended by a massive revaluation of gold, either directly, or through money printing as the official policy of the US Treasury & Federal Reserve. The bottom line is that the crisis can't be solved, but it can be ended. It ends with the marking to market of the real balance sheet of the world, which means the average person is marked to extreme poverty.

  11. Selling what gold you have now, in size, to "get it cheaper", demonstrates a complete lack of understanding of what gold is, what this crisis is, and is an act of absolute stupidity.

  12. Similar actions have brought nothing but overall harm from $250-$1900, and they will bring exponentially greater harm going forwards, with "breadline time" now on the table as the real downside risk for the world's flip traders who insist on engaging in dollar-obsessed market action.

  13. Now is a time to trade less, appreciate more, and embrace all gold sales. Don't predict a gold sale. Appreciate it when it happens. Warren Buffett is reputed to turn on the stereo and dance when the stock market goes on sale. If he knew what gold really is, when it goes on sale he would probably make Fred Astaire look like a lousy dancer. The bottom line for you is that it's time to throw the red annotation pen in the garbage can, and get onside with a billion Asians who understand the nature of government, and understand the nature of gold.

  14. Maybe that micro shape on the gold chart is a h&s top pattern, or maybe it's just a meaningless shape. What if gold blasts to $3000 in a month? How would you feel with little or none? You've already shaved off some gold into massive price strength. Should you get a sale in price, you buy.

  15. If not, who cares? Not you, because your superb core positions are fully intact. Stop dictating to the Asians about where gold's price might go, and start listening to their actions. They aren't selling any gold in size now in this all-epic crisis, "because it might go on sale later". Don't mangle your gold. Sculpt it. The Asians have thousands of years of experience dealing with destroyed empires, banksters, and government currency gone off the board. Do you?

  16. Would you saw the head off Michelangelo's statue of David? No. Don't saw the head off of your statue of gold. That's why I built my pyramid generator, so you can sculpt your gold wealth, rather than attack it, maul it, and order it around. Most of you are starting to learn that the gold punisher isn't so keen on taking orders from the dollar bugs, and you've only got a tiny taste of her wrath.

  17. Now, let's talk about gold stocks, and how rich they are going to make you! Click here now to view my GDX volume box chart. The chart annotation facility is not accurate enough to clearly delineate each box, but the point of the matter is that on price surges, volume is also surging.

  18. On price flops, volume also flops. The exact opposite situation is occurring in the Dow. Click here now to view the horrific volume patterns on the Dow chart.

  19. We're on the cusp of crash season (the months of September and October) for the Dow, and you can clearly see that each solid down day and minor down move is accompanied by powerful sell volume.

  20. The volume on yesterday's "relief rally" up day can only be described as pathetic. So, you have a few choices. You can buy the Dow now, on the cusp of financial hurricane season, and risk getting destroyed.

  21. You could short the Dow. That's initially appealing to many gold community investors, but what, exactly, are you buying when you short the Dow? That's correct, you are buying the dollar. You're really just buying a bet, rather an asset. Is it really wise to try to build dollars with bets rather than solid assets? No!

  22. The other choice is to buy gold stock assets that are currently sitting on a foundation of a $1700 + gold price, and are exhibiting superb trading volume patterns.

  23. The one thing you don't want to do is throw your gold in the garbage can because of anything you see on any chart. Or, should I say, that's the one thing no self-respecting Asian gold investor would think of doing, and it's something you are going to have to come to grips with.

  24. My suggestion is to come to grips with it, and join these golden masters in market action! Get a blue pen out, highlight where you might get more gold on sale, and if it happens, wonderful! If not, enjoy the ride on towards $2000!

Special Offer For Website Readers: Send me an email to freereports4@gracelandupdates.com and I'll rush you my new "Gimme The Nugget Now!" report. I'll highlight to play the new NUGT-nyse fund, which is essentially a leveraged version of the GDX ETF! Thanks!


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