m2Submitted by Morris Hubbartt:

As the chart clearly shows,  “smart money” purchases have generally occurred during major price weakness.
We are grinding through a prolonged period of such weakness now, and the commercials have been buying long positions and covering shorts. There are also rumors they are buying physical gold.

The big money in any market is usually made by buying extreme weakness. The latest COT reports may not indicate that the lows are in.  They do indicate that commercial traders believe gold offers tremendous value to buyers.

Gold Eagles As Low As $74.99 At SDBullion!

Gold Eagle 2

 

TLT (US T-Bond Proxy) Chart

 

m1

 

  • From a technical standpoint, conflict is in the air. Volume patterns are decent. This tells me that there is a good chance that a light bounce will likely come, before the bond has a deeper sell-off, towards 116.

 

  • The small rally could complete a small head and shoulders formation.

 

  • After a fall to the 116 area, I’m projecting a huge rally to new highs, which could coincide with a stock market crash this autumn.

 

Gold COT Signals Chart

m2

 

 

  • On this chart, I have highlighted the major commercial buying and selling areas, over the last 6 years.   As the chart clearly shows, these “smart money” purchases have generally occurred during major price weakness.

 

  •  We are grinding through a prolonged period of such weakness now, and the commercials have been buying long positions and covering shorts. There are also rumors they are buying physical gold.

 

  • The big money in any market is usually made by buying extreme weakness. The latest COT reports may not indicate that the lows are in.  They do indicate that commercial traders believe gold offers tremendous value to buyers.

 

Dow Versus Gold Chart

 

m3

 

  •   Note the massively oversold condition of the slow stokes and the RSI indicator.

 

  •   In the case of the RSI indicator, it spiked to above 85, which is an extreme overbought reading.   The Dow’s move higher is likely ending.

 

  •   On this chart, the Dow has risen back up to the area that produced the initial breakdown, in late 2008.

 

  •   The slow Stokes is rolling over.  If it breaks below 80, the Dow could fall pretty hard, against gold.  Don’t rush into the Dow, just because gold is having a rough time.  That could be like jumping out of the fry pan, into the fire!

 

GDX Sentiment Chart

 

m4

 

  • Gold stocks are now sitting near 2008 levels, in terms of investor sentiment.  Unfortunately, that doesn’t mean they can’t get even more undervalued.
  • From a trading perspective, the “new lows ahead” door is open. GDX needs a rally that would fill the gap on the chart in the $32 area.

 

  • If it doesn’t happen soon, new lows are likely.

 

GDXJ Backtest Chart

 

m5

 

  • I am confident that junior gold stocks will perform strongly, over the long term. My opinion in the short term is unchanged; I am waiting for the dust to settle.

 

  • Wednesday’s GDXJ price advance lacked volume.

 

  • Until the red backtest line is taken out on the upside, I would like to see gold stock investors concentrate buying on the senior stocks, where there is less risk.

 

Silver Versus Gold Chart

 

m6

 

  • Silver is down near the key level of 16 on this ratio chart, which served as a launching pad, when silver began the move towards $50 per ounce.

 

  • I like to buy when the ratio is near 16, and sell when the RSI oscillator becomes overbought. 

 

  • Gold is being hit hard in early trading today, but silver is holding up much better.  I like silver much better than gold, at the current price!

 

Unique Introduction For Web Readers:  Send me an email to alerts@superforcesignals.com and I’ll send you 3 of my next

Super Force Surge Signals free of charge, as I send them to paid

subscribers. Thank you!

 

  1. My interpretation of commercials going long is that they are closing mines. Why do you need to short your mine if you have not promised delivery as it is shut?
     
    Just because a commercial suddenly stops being short does not automatically mean that they have gone long. It could mean that no one is buying, no one wants to take a futures delivery, so why would a commercial need to cover his production, just in case he comes up short on stock production.
     
    You get too fixated on a particular type of short, that of a paper short, but most of the commercial shorts are committed by actual mines.

    • Their going long cause their shutting mines wtf geeze hope BP or Exxon don’t shut down cause oil drops 20% or did that happen , I’m gonna go short Danny devito chaching $$$

    • @Casper007 
       
      The word you’re searching for is this:
      They’re
      It is the product of adding they + are together in a conjunction.
      Their is used to describe something someone else possesses. For example: They’re going long because they’re shutting down THEIR mines.
      I hope this helps you.
      PS: The reason i’m even posting this is because you seem to at least grasp the fact that ‘there’ is not the correct word for everything. So it’s possible for you to learn, in my mind. :)
       

  2. @Casper007
     
    You do know about the concept of supply and demand surely? If oil prices go down, then the oil cartels reduce supply, thus increasing the price artificially. Why do you think OPEC and the like exist?…The idea in the oil trade is to keep prices stable. They keep the pumps going, but just store it in barrels, knowing that they control the market, knowing that the price will be what they say is the price. The Demand for oil is constant, the price is elastic, but one thing is sure, from production to consumption, loads of money is made, whatever the current price of oil is. The production costs are low compared to the selling price.
    Precious metals are different. Gold mines especially, as there are more cost implications than just mine it, people will buy it. Mines need to take into account of absorption costs, if these outweigh the current future price of gold plus margins, then mines are stopped, some are shut down completely as they are not cost effective, some are mothballed. The futures market was set up so that mines could set a price on the open market for future delivery, they tend to short against their future price to arbitrage prices.
     
    So what happens when these types of business close shop? the shorts are reduced. 
     
    You getting all this free education Casper?
     
    oh and Their is not the same as they’re
     
    “Their going long cause their shutting mines” — They’re going long because they’re are shutting mines….more free education, don’t you just love the internet.

    • Edumacation tanks dude, now here some edumacation … When you realize that gold is not a commodity like oil than we can talk. The rest of the world all 80% of it view gold as money , only the wise likes yourselves treat it as a commodity and don’t worry the wake up call is coming. oh teacher you think theres no OPEC in gold ? Who controls barrick gold the largest producer in the world ? Gold is money and the dollars #1 challenger. 
      lmao do you get paid to go on gold and silver websites to spew your wisdom? Geeze they should fire your ass

    • @Casper,
       
      I deal in Gold and Silver, mainly silver. What do you do? 
       
      I am telling you how it is, not how you would like it to be. Perception is everything when your selling, causes the metal bugs to go mental. I love these bed time stories, help me go to sleep, dreaming of £100 an oz of silver.
       
      Reality check, Silver and Gold are not money and not currency. They used to be, then they got priced out of being useful as money, so were relegated to commodities.
       
      Yes commodity prices are rigged. They always have been.  OPEC is all about price stability, it has to be a rigged market, but the market is rigged in the interest of the rich, not the poor. Oil prices have been rigged for years, but when the people who control the rigging are above the law, what you going to do? 
       
      Carry on the dreaming Casper, as will I. Keep buying the dream, its a good dream, but don’t let it control your life, its just a dream.

Leave a Reply