Gold Ready to Move Towards $1850- Stewart Thomson

Today is election-day in the United States, and so far, the winning candidate is… gold!  Gold is up nicely today, and showcasing an ideal technical situation; the green demand line and the green supply line are parallel to each other. 

Whether you use the recent minor highs or the recent minor lows to draw your uptrend and return lines, the result is the same.  My interpretation of this chart suggests that gold will now rise towards $1850.  Fear must be professionally managed.  To do that, it must be compartmentalized.  The good news is that the next phase of this market probably won’t require you to compartmentalize any fear.  As gold blasts over $1805, it will be greed that we all must manage, and I think you all would agree that a little greed right now, is just what the gold price doctor ordered!

Submitted by Stewart Thomson

1.   In the world of technical analysis, assets can be in uptrends, downtrends, or sideways consolidations.  Minor trends are typically 1-3 weeks long. In contrast, intermediate trends usually last for a number of months.  Primary trends are the biggest trends of all, and they can continue for many years.

2.   Within this context, today I want to address the concept of a technical return line, and define the purpose it serves.

3.   A return line helps infer where the asset might encounter resistance or support, and potentially reverse direction.

4.   A return line can be drawn in an uptrend or a downtrend, or even in a consolidation.  The current GDX chart provides a superb example of how to use return lines in an uptrend.

5.   Since bottoming in May, GDX has been in an “intermediate term uptrend”.  Please click here now.  You are looking at the GDX daily chart, with one trend line drawn across the minor trend highs.  Those highs were created in June and September.   That trend line is a supply line, and we use it to draw the return line.

6.   Please click here now.  You are looking at the same GDX daily chart, with the return line drawn in there.  This return line is a demand line that is drawn parallel to the supply line. 

7.   The purpose of this return line is to suggest a price zone where the current GDX pullback may end.  It is a place for swing traders to buy the market, with modest risk capital.

8.   If there is no HSR (horizontal support & resistance) at the point of projected impact with the return line, the amount of risk capital deployed should be extremely small.

9.   To see if there is any HSR present in the area where GDX may hit the return line, please click here now.

10.            Professional investors and institutions tend to be leery about buying anything, if there is no HSR in play. You can see that there is some solid HSR in the $49 area, making it highly likely that serious players are now ready to buy gold stocks in size.  Once the election is over, they could engage in very heavy buying. 

11.            In the biggest picture, GDX and related gold stocks are very low priced, and offer tremendous value to investors.  It’s easy to let a minor trend decline convince you that price is going much lower, and will “never turn up”.

12.            I don’t think you will build any wealth by trying to avoid price declines.  You build it by setting realistic price zones where you will buy a little bit of stock, and GDX is approaching one of those key zones now.

13.            My long position in gold stocks is currently 15 times bigger than my short position.  I’ll make it even bigger if GDX arrives at $49 today.  Don’t be afraid of any number on the GDX price grid.  I’d like to see the gold community look in the mirror, and show the banksters that no negative price event will shake you from your positions.

14.            Predators in the market want you to be afraid of price declines, so they can take your holdings from you.

15.            Is there a return line in play on the GDXJ chart?  Yes there is.  To view it, please click here now.

16.            I highlighted HSR in blue in the $22 area, and that roughly coincides with a possible point of impact with the return line.  We can’t know whether the price of GDXJ will arrive at $22, or not.  We can prepare our buy orders now, to take action if it does.  My buy orders are already in the market, and I hope you get yours in there today.

17.            Because there was so much damage done to individual junior stocks over the past 2 years, I think a price of GDXJ $50 is required to undo most of that damage.

18.            Technically speaking, GDXJ has been in an intermediate term uptrend since May, and appears ready to move higher again.  GDXJ $50 is a realistic number, but it will take some time.

19.            You can make it happen “faster”, by lowering the average price you have paid for your junior resource stocks.  Take action on the buy-side, in the $22-$23 area.

20.            Do it professionally with very modest risk capital, rather than with a heroic turn call and loans from the banksters.  If you can apply a little capital to this market, perhaps GDXJ $45 becomes your “I’m restored!” number.

21.            Today is election-day in the United States, and so far, the winning candidate is… gold!  Please click here now.  Gold is up nicely today, and showcasing an ideal technical situation; the green demand line and the green supply line are parallel to each other. 

22.            Whether you use the recent minor highs or the recent minor lows to draw your uptrend and return lines, the result is the same.  My interpretation of this chart suggests that gold will now rise towards $1850.

23.            While I believe the odds are 70% that gold will trend higher, I’m prepared for the possibility of substantially lower prices.  I don’t think the worst fears of investors (gold going to $1000) will be realized.  If “everything goes wrong”, and gold plummets, I believe you have no choice but to bring the required intestinal fortitude to the table.  Endure, and profit from the situation.

24.             Fear must be professionally managed.  To do that, it must be compartmentalized.  The good news is that the next phase of this market probably won’t require you to compartmentalize any fear.  As gold blasts over $1805, it will be greed that we all must manage, and I think you all would agree that a little greed right now, is just what the gold price doctor ordered!

 

Special Offer For Website Readers: Send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Greed, Fear, and Me!” report.  Learn professional tactics to manage your emotions on the major asset price grids, in the midst of this super-crisis!

 

Thanks!

Cheers

St

 

Stewart Thomson

Graceland Updates

 

 

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

 

www.gracelandupdates.com

Email: stewart@gracelandupdates.com

Comments

  1. Bottom line: Gold is going to go up, don’t need any detail analysis to tell me that.

  2. undeRGRound I got your wordpress message and will answer it the best I can.  I don’t know the 401A but any restractive plan that is ruled by some self appointed trustee is probably not to be trusted. 
    My quest to get out of paper involved using a service to take our IRAs into a self directed IRA.  SDIRA for short.  Doc was working hard to have this service too but the legal counsel seemed to indicate that the IRS did not have a well defined policy on how to store the PMs.  We both read the rules and I interpreted the IRS indicating that I could store the SDIRA PMs in my segregated home safe. But the gray area that I could live with was one that others would not want to advise on.  I took the chance and thus far we have not had any issues.  So both my IRA and my wife’s are safely stored at home.
    The SDIRA is a legal process using an Limited Liability Corporation (LLC) formed to hold a specific selected asset and then buy the asset once the IRA funds were moved to the LLC. You could buy rental properties, hotels, PMs, financial assets and other items. PMs pose a risk since the IRS probably does not trust the holder so they prefer a bank safe deposit box to make sure the LLC owner is on the up and up.  You know my opinion about SDBs   
    Before I was able to secure the processing service for the SDIRA I did take a chunk of IRA money and bought silver earlier this year.  This was done to start the process of removing our retirement funds to safe harbor, take the tax hit, and then basically bury the phyzz from prying eyes like the Fed and the government who want our retirement plans to balance the budget.
    The taxes were not steep and since we extracted the IRA funds in the first place we would certainly have the funds to pay taxes whether it was now or later when we retired. 2012 tax rates are pretty certain to be lower than 2013 or further into the future.
      Living in Nevada, a state with no income taxes, we calculated that our tax hit would be less than 20%. We ramped down our taxable income to below the poverty level so the hit was endurable.  Considering that we started filling the IRA back 10-20 years ago when our tax bracket was 50%, this was acceptable.  But the difference with us is our retirement funds were through our business and we controlled those funds, not some off-site manager who had no interest in our wellbeing.
    That said, I asked Doc to find the letter posted some months ago  on Ann Barnhardt’s site that proposed to their trustee a hard ship reason for extracting their funds directly from the 401k and placing it within their control, taking the tax hit and being done with this scheme.  I don’t know how well it went with Ann’s writer but it could work for another person.
    The trouble I see is one that has been stated many times on Silver Doctors and that in one of being able to control your retirement fund destinies.  If you start taking your ‘retirement’ early and incrementally extract the funds over a period of years, like Ol’ Ford Truck did a few years ago, your tax burden could be spread over a few years and the increase in the tax burden in not excessive. You may even be able to negotiate with the IRS to extend payments over a period.
    My fear earlier this year was a concern about Fidelity Investment, counterparty risks, rehypothecation of my funds, the potential Ghillarduci 401k annuitization of your retirement plans plus the concern about the worldwide financial crunch I saw coming.  It is not occur this year, sort of, but 2013 could be a telling year.
    I hope this helps with your decision.
    Most likely you would have to bite the bullet on the extraction particularly if you can’t direct the trustees to invest in something like bullion with a ‘trusted’ bullion bank. Even those are suspect.  Erik Sprott’s PSLV and other funds seem safe too but those would be a last resort of you could not remove your funds and get them into your hands.
    Always bear in mind that the hand that giveth also taketh away. As you get your tax benefits through the deduction of your 401A you will eventually have to pay the taxes when you start taking the funds. I think the IRS did some back of the envelope calculations and found that the tax rates in the future would be much higher and figured they would get more money from you once you started extracting in the future. They certainly knew that the highest earning generation in history would rotate out of their businesses and day jobs and stop paying gigabuxs into the system. This was the government’s way of making grandma and grandpa could still be counted on forfeit their funds and wealth to the Fed coffers in their golden years. sarc on.

    • Thank you so much @AGXIIK for posting this again. 
      I’m in uncharted waters with this 401A, but once it is released from their grasp, I have a clear path. If I have to take a tax hit just for a rollover, I might keep it liquid.  The LLC is a great idea for holding the SDIRA. I have so much to do, and I have dealt with the “lawyer” they have on staff for the board. Unfortunately, he will say anything true or false, if it serves his purpose. Real sleazeball.
        

    • @undeRGRound

      See that networking at it’s finest!

      And thanks AG your tops in my book 

  3. lol Check that vertical line up… I don’t know how long it is going to last, but it is surely a beautiful sight. 

    • oh yeah, that is beautiful. Probably short covering, seems strange for them to do that today. Do they know that voter fraud / chaos is going to be a BIG issue tomorrow??

  4. Heck the article says UP and Maybe might see it go Down. Lol One way for an analyst to cover his or hers butt.
    Just keep stacking and enjoy life. Lol

  5. Charts mean zero while the cartel is still in play. Buy when you can and sit on it.

  6. Yes, gold will sure go up soon because the US dollar is losing values every year and since Obama is reelected, Bernanke will stay as the chairman of the Federal Reserve which means that QE infinity will continue to steal the purchasing power of people holding the US dollars by printing more dollars.

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