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Your Enemy Is Your Price Rocket Friend

By Stewart Thomson      Printer Friendly Version Bookmark and Share
Feb 28 2012 2:03PM

  1. Ancient wisdom says, “your friend is your enemy and your enemy is your friend”.  In the gold & silver market, this ancient wisdom may be particularly valuable for investors today.

  2. Gold plays the role of punisher in this crisis, and punishes the debt-a-holics.  The crisis is enormous, and could go on for decades, but just because the crisis may have decades to run doesn’t mean that gold rises forcefully, all the time. 

  3. The economy can have enormous bouts of strength while slowing disintegrating, and you have all seen the shockingly bullish economic reports pouring out, in recent months.  Analysts continue to under-estimate  the economic numbers. 

  4. Something has got to give here; either the analysts are correct and economic numbers are about to nose-dive, or the economy is surfing a much bigger up wave than the analysts comprehend.  

  5. Click here now to view the current gold chart.  Note the small head and shoulders top pattern in play, and the broken uptrend line.  I personally couldn’t care less about the microscopic fall in price implied by this technical action.  I’m only interesting in buying price sales of $100 or more.

  6. My interest lies with the divergence between gold and silver, and why that divergence may be occurring.   Silver investors should click here now.  I’ve talked about the importance of silver investors holding your ground against “big sister gold”.  Life as the little brother can be frustrating at times, but this could well be your time to shine, but not because silver is “poor man’s gold”.

  7. Last night the price of silver ripped thru its right shoulder high, and the price action is beginning to resemble the action of the Dow, even more so than that of gold.  Click here now to view the Dow “chomping at the 13,000 point bit”.  Silver’s price action in the $36 area is very similar to the price action of the Dow in the 13,000 point area.

  8. If we are on the cusp of an institutional capitulation, one that acknowledges that a much bigger recovery has started, then silver, platinum, and palladium could all out-perform gold. 

  9. If not, then silver is likely to resume its role as “gold’s sidecar”, and still fare pretty well.  Platinum and palladium may not fare as well as silver if the crisis accelerates dramatically.

  10. Gold appears to be silver’s best friend, but if a shocking economic revival is just around the corner, perhaps it is the supposed enemies of silver, the Dow and real estate, who will become silver’s friends, at least for a period of economic time.

  11. How big of an economic surge am I talking about?  To view the shocking super-rally in real estate that I am predicting, click here now.

  12. That’s the IYR-nyse real estate ETF from ishares, and I’m predicting a near-immediate rise in price to my $100 price target, a scenario that will cause 99% of the gold community to do the ultimate “double take”.

  13. There’s an enormous head & shoulders pattern on the monthly chart, and the daily chart also looks extremely positive.  Click here now.  Note the position of the Stochastics oscillator, and the solid support in the $58 price range.

  14. Both real estate and the Dow may add surprising fuel to the silver rally, but that doesn’t mean you should buy today.   Bullish price patterns reveal where price might go on the upside, but they are not buy signals.

  15. It’s critical to understand that surprise is the theme of this crisis.  It’s equally critical to understand that the markets are a fight more than an investment.  You don’t really have “fellow investors”.  You have opponents that you need to ravage and destroy.  You can face that fact, or be destroyed by those who live the markets in fight-mode. 

  16. You can’t buy silver after it has skyrocketed, because you will be buying it from strong hands, and doing so alongside weak hands.  If you don’t feel morbid when you buy, don’t buy. 

  17. What’s better, to feel morbid when you buy, or morbid when you sell out at a loss?   Buy in the morbid zone and sell in your personal party and analysis zone. Those who want to feel good both on the buy and on the sell are likely living a pipedream.
  18. If we are entering a period of shocking economic growth, albeit growth printed out of an electronic photocopier machine, then perhaps silver and other industrial-precious hybrid metals will substantially outperform gold for a period of time.

  19. If real estate joins the Dow in ravaging the dollar, then gold stocks could also join silver in outperforming gold.  I’m fully aware that most of the gold community is highly invested in gold stocks, with many in the community owning no gold bullion at all. 

  20. While the policy of holding no gold bullion is a bad mistake, that doesn’t change the fact that it could be your time to shine, if you are all-in on gold stocks.  Real estate and the Dow, the gold stock community’s “enemies”, may soon become your trusted friend, for at least a period of time.

  21.  Click here now to view the GDX chart.  I’m an immediate buyer at the $55.50 and $53.50 price points.  Note the action around the $58 price point.  GDX is attempting to blast over the red trend line.  If the Dow surges through 13,000 and the IYR rips up through $61.68, I think GDX could experience a “price flash” to $70.

  22. The incredible 35% rally in gold junior stocks, via GDXJ, has been all but forgotten, and with good reason.  Most gold junior investors are 50-70% underwater, and more so in some cases.  Just because the Dow investors of 1929 were wiped out didn’t mean the Dow couldn’t rise from the ashes, and it is the same with junior gold stocks. 

  23. Click here now to view the asset class most likely to continue the out-performance that it began two months ago.  GDXJ has entered an uptrend channel and is showing light volume on this decline. 

  24. You should be an immediate buyer of GDXJ at $27.16, if you are lucky enough to see price go there.   If you like gold junior stocks, stare hard into the copper, real estate, platinum, and palladium charts.  Those asset classes look set to blast higher and may drastically outperform gold!  


Stewart Thomson
Graceland Updates

Written between 4am-7am.  5-6 issues per week.  Emailed at aprox 9am daily.

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

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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:  
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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.