Stewart Thomson: A Glass Of Golden Bubbly- Miners, Gold, & Silver Set to Explode in 2013

imagesSubmitted by Stewart Thomson:

On the last trading day of 2012, a watershed event occurred.  Key gold stocks staged superb breakouts, from their weekly chart power downtrend lines.
The gold exploration companies also look poised to rise significantly, and I expect large Japanese and Chinese companies to contact many of them soon, in an effort to secure reliable pipelines of the metals they need, to build their products.
For bullion investors, silver is clearly the metal poised to shine the brightest, in the short term.  To do so, gold must rally.  When you look at my next chart, I think you’ll agree that “Queen Gold” is indeed ready to perform.

I have given a label to the price area above $1800.  I call it the “Green Zone”.  The green zone is an area of tremendous support and potentially represents a place where an institutional buying frenzy could occur, pushing your gold items to much higher prices.

 

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1.   On the last trading day of 2012, a watershed event occurred.  Key gold stocks staged superb breakouts, from their weekly chart power downtrend lines.

2.   To view the significance of this, for your gold stock holdings, please, click here now.  You are looking at the weekly chart for GDX.  To fully expand the chart, please double-click your computer mouse on it.

3.   When I’m looking for serious upside movement in gold stocks, I use this weekly chart.  I want to see a breakout from a short term downtrend line, and that’s in play now.

4.   Along with that upside breakout, I also need to see powerful crossover buy signals flashing on short term oscillators and technical indicators.

5.   Note the green circles on the chart.  All four of my short term indicators are flashing significant buy signals, right now!

6.   Those of you who follow technical analysis may want to make note of the exact parameters I use on each of these important directional change indicators.  To do so, please click here now.

7.   These parameters should be used in isolation only when there is a power downtrend line breakout in play.

8.   Institutional analysts tend to move a lot of liquidity during the first week of January.  This action in gold stocks is definitely going to be noticed by many of them.  I believe that GDX is poised to quickly surge to the $55 area highs, and then to the all-time highs, near $66.

9.   The phenomenally bullish price action is likely being fuelled by short covering.  Many leveraged speculators were sure that mining companies were too low on cash to be able to continue operating for much longer.  They began aggressively shorting these stocks during the recent decline.

10.            The short-side players have probably underestimated the ability of mining companies to raise capital when their backs are against the wall.  They may have also underestimated the amount of liquidity that institutional money managers are prepared to allocate to gold stocks during the first week of 2013.

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11.            That allocation may have started a day early, but somehow I doubt that anyone in the gold community is complaining!

12.            The gold exploration companies also look poised to rise significantly, and I expect large Japanese and Chinese companies to contact many of them soon, in an effort to secure reliable pipelines of the metals they need, to build their products.

13.            To view the very bullish action taking place on the GLDX gold explorers ETF, please click here now.  Make sure you double-click on the chart, to see it in full size.

14.            That’s a daily candlestick chart.  For gold exploration enthusiasts, Dec 31, 2012 is probably going to turn out to be a day that should be logged in your “greatest investor moments” diary.

15.            There’s a fabulous breakout from a textbook bullish wedge in play.  Almost every technical indicator and oscillator is suggesting that the breakout is a powerful one. I’ve highlighted the technical action with thick green circles on the chart.

16.            For junior stock investors, a particularly attractive feature of GLDX is the price.  At $7 a share, it’s something you can sink your teeth into comfortably, without feeling overwhelmed.  It just has a “feet on the ground” feel to it.

17.            If institutional investors get that same feeling, I think GLDX could rise to the highs at $9.41, and then surge to the $12 area.

18.            I own a nice chunk of GLDX now at these levels, and I probably should own a lot more.  Should you be joining me, on the buy?  The chart says yes!

19.            For bullion investors, silver is clearly the metal poised to shine the brightest, in the short term.  To do so, gold must rally.  When you look at my next chart, I think you’ll agree that “Queen Gold” is indeed ready to perform.

20.            I have given a label to the price area above $1800.  I call it the “Green Zone”.  The green zone is an area of tremendous support and potentially represents a place where an institutional buying frenzy could occur, pushing your gold items to much higher prices.

21.            First, gold has to get there, and my 14,7,7 Stochastics series indicator suggests that gold is embarking on that mission now.  To view the key buy signal that was generated on the daily gold chart yesterday at about 3am on Dec 31, 2012, please click here now.

22.            After arriving at key support in the $1650 area, gold has bounced strongly, and generated a great crossover buy signal on the Stochastics oscillator.  Hours after doing that, gold surged over the power downtrend line.

23.            What should you do now?  Well, I suggest you consider pouring yourself a glass of golden bubbly, to usher in the New Year, and to usher in the green zone of $1800 gold!

 

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Stewart Thomson

Graceland Updates

Comments

  1. That was a fun read!

  2. At least I’m armed with the gold and silver components of the investment triad mentioned in this article.  If I was making the “average” salary of $50,000 dollars per year then I probably would buy some mining stocks.  As it is I’m impressed enough with the way prices have performed with holding physical metal.  I’ll stick with PM’s exclusively for now. 

  3. It may have been a fun read 4oz but I’ll stick to my Physical at least I can see it, feel it and weigh it. Lol Plus I’m all in on Physical and still adding to it.

  4. Someone up there likes me.  The ad at the top of this post?  Body armor.  Sweet.  Don’t need any more right now but the price is good.  Good stuff Doc

  5. I’m not sure how the charts can reveal anything other than those who paint the tape want it to read.  As Ted Butler says, JP Morgan’s massive short position has been the best indicator of price discovery so far.  They let it rise and fall when it has been in their best interests up to this point.  To repeat as Izzy would say, that they just may get caught with their pants down.  With the help of the CME’s margin increases, the CFTC’s lack of anything pertaining to silver regulation and enforcement of commodity law, only a physical shortage will put these crooks out of control of price discovery.  According to Jim Sinclair, Jim Willie, Ted Butler and of course our beloved Doc, that day could be close at hand.  What a terrible shame to the CFTC’s disgrace, that free markets don’t dictate silver’s true price discovery.

  6. Is Stewart still anti-Silver? At least he wasn’t speaking his usual double-talk.
    My favorite quote is from a good friend, a strong metal investor, when he says “I’d have done so much better just buying the physical since 2002″ – he means rather than mess with these (manipulated) mining shares.
    I’ll take F.O.A.(from 1999) advice, Jim Willie’s since 2008 and Rob Kirby’s and stick with the physical – they have certainly been right so far.

    • DVD I agree.  In the 1970′s, the mining stocks went red hot but the problem is today most of the volume are super-computers skimming the public for a few cents.  Probably 90% of the people trading in mining stocks would had been much better off just buying the physical. 

  7. Hey Bug-out Guys: We should look this over and get some small production shops making the pieces and assemble 500 of these for Him before some idiot comes along and buys his patent.
    http://www.overunitybuilder.com/lenzlessquale.html
     
     

    • This is the most promising perpetual motion generator I’ve seen so far. It increases power under load! Perpetual motion has been considered impossible but now we know it isn’t. The designs work but someone needs to mass produce them and make them large enough to power a single family home and at an affordable price! 4000-5000 dollar range! These generators should be everywhere already. They require a lot less engineering than a gas or decil generator!

  8. Physical is king. Get the physical. :-)

  9. @DVDBeaver and @PowerBall: The better part of a thou here went to getting an education about juniors. Talk about paying to learn! From what I can see, they’ve also been strangled so the majors could pick them up for very little, not the same game as before.

  10. PM is pretty much the only place to be right now.  PM or cash.  Don’t forget cash.  Cash is temporarily king.  Keep plenty so when things hit the pooper you can back that truck up and play vulture.  When we get a huge smack down, say, 25% or so that means we are super close to the real collapse.  At least that is what i beleive.  

    • You could well be right about that, PK.  I also would expect a last dying gasp and flail from the paper Ponzi scheme as it nears its complete demise.  Don’t know about the 25% figure, though.  Could be more, could be less, but whatever the case, it is likely to be a significantly larger move than is typical for the PM market.

  11. Gotta love the technicians.  With all their charts, graphs, lines, and squiggles (many of which now have names!) I am often reminded of ancient shamans who would gut an animal and “read the entrails” to decipher future events.  lol   Either of these makes about as much predictive sense to me as the other.  ;-)
     
    That said, many have been saying that the price of mining shares was “about to explode” for how long now?  Seems as if it has been YEARS and all they seem to do is get cheaper.  Oh, they have a bump upwards from time to time but on an annual basis, buying mining company shares has not been a very good investment for quite a while now.  Agree with others who only buy the physical metals, although I do dabble in some PM ETFs because it is convenient and profitable (so far) to do so.  The bulk of my PMs are physical, so no rants, please.  ;-)
     

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