Aug 18 2010 4:02PM
Gold Readies For A Major Price Thrust To $1,325-$1,375 This Fall
This is the time for real action by real men. Instead we have a bunch of stupid, wimpy, inexperienced, academic children playing with matches and gasoline. There is zero leadership, so get ready to run.
Technically, weekly gold is supported at $1,207 and capped at $1,265, (chart below) the former recent high price. However, by using more elaborate and technical charts (not shown) we find the new gold support on December, 2010, gold futures to be $1,175. Seasonally, gold should sell mildly once more to that projected number and then rebound in a new fall rally taking prices much higher.
Other more dominant market forces in bond credit and international stock markets could create unmeasured mayhem depending upon the ability of central bankers to keep things under control. These people are riding a bucking bronco and we think they are about to get tossed-off this horse. If in fact this occurs, our $1,325-$1,375 gold forecast could just be a door-opening beginning.
There is really no way to measure Black Swans, particularly when a whole flock is now flying in large formation. It only takes one slip like the Long Term Capital (LTC) multi-billions mistake back in the 1990’s. That mess scared the wits out of a lot of people as the Big Black Nasty Bird was an unexpected failure in Russian Bonds. This time the stakes are much higher on several fronts. No one can tell me Chopper Ben and Timmy “The Kid” Geithner really have a grip on this mess.
This markets’ dilemma is an impossible dream. The manipulators still have tools and they will do anything legal or illegal (Witness Former Treasury Secretary, Hank Paulson’s TARP Robbery) to keep it all glued together with bubble gum and bailing wire.
As we have said so many times, when the bond markets renounce Chopper Ben’s bond Games, it’s all over. In our view, we are very near to that date but of course cannot pin-point it exactly and neither can anyone else. As they say, this is when the rubber meets the road. This is the time for real action by real men. Instead we have a bunch of stupid, wimpy, inexperienced academic children playing with matches and gasoline. There is zero leadership, so get ready to run.
Be very careful in any stock or bond market. We like physical gold and silver, select senior and junior precious metal shares, very specific property locations (by nation) and top flight management. Further, they better not be under any severe pressure to raise more operating capital in this weird credit environment.
For trading, we are recommending gold and silver spreads, grain, and certain other futures and options spreads. For the primary stock market there are several select choices among more than one country for going short and staying short. Remember, it can take weeks or months climbing up the hill on the long side. But, coming down on the short side it’s many times faster and much more exciting.
To put it bluntly, we think bonds of all kinds just stink. Can they be traded, you bet. However, you better be a very fast screen watcher with your hand on the mouse to avoid getting ripped. We think this kind of trading is for the pros and there are easier ways to earn money without a heart attack.
Watch out for faster markets, more volatility and surprises in all directions. One example: We think the Euro is a goner but China is shedding US Dollars for Euros. Obviously, they think the Euro is safer than the dollar for now. We think the opposite is true but the Chinese own way too much US currency, bonds and bills.
Both gold and precious metals shares (XAU) are squeezed in triangles. Before price hits the triangles’ apex, we suggest they both break-out through top channel line resistance and take-off in new fall rallies from the end of this month to nearly Thanksgiving. After that holiday, expect even more buying after a normal, technical, profit-taking pullback.
Note the end of summer gold rallies just before the “O’s” for October many years in a row.
What ever happens to foreign economies, credit and banking along with the American vote in November… could be a major turning point in world affairs affecting all citizens world-wide. This is a generational changing series of events. It might be prolonged but we think not. Prepare for several smashes and crashes from later in this month of August through nasty springs and falls all the way to 2012 when I predict World War III begins over energy, economics and settlement of several old grudges; some of them being 5,000 years old.
The US Dollar and American standard of living shall be cut in half over the next few years.
Now, more than ever, it is important to take the immediate necessary precautions to protect yourself and your families and friends. Traders and investors should be buying precious metals and select shares right now. In our newsletter we have a great list of trading and investing ideas for you. Meanwhile, you can never go wrong buying physical precious metals and holding them for security. We’ve had a constant run of nearly ten years in gold rising 15% per year so this remains a good trade. In the last twelve months, gold rallied over 34% and is going ever faster.
It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this offers a chance, arriving only once in 25 years on the historical cycles. Good trading! -Traderrog
Editor Trader Tracks Newsletter
The Jay & Rog Blog at webeatthestreet.com
Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See webeatthestreet.com for more information
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