for the bugs .. gold strategy-sinclair

  1. dub
    33,892 Posts.
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    Hi bugs,

    Here's Sinclair's latest. Following it, I've reprinted his five keys for gold's rise. You can see it in colour and graphs and everything on Puplava's FSO.


    Sunday, 12.29.2002

    V.I.P. Noise Box Tech Review General Q & A Tech Q & A TA Lessons Editorials Precious Metals

    Let's Talk GOLD STRATEGY

    First, we need to clean up an item of establishment media disinformation that has found its way into the community. Yes, gold’s strength has an ingredient from the potential Iraq conflict and now from the saber rattling by North Korea in their announced nuclear intentions. However, that is NOT the reason for gold’s bullish trend. Gold’s major uptrend is a product of the Five Golden Keys which are the Five Fundamental Reasons for a long-term gold bull market. These fundamental factors transition their price influence to gold through their affect on currency relationships. Gold was not decommissioned in the past twenty-two years. In fact, during the long twenty-two year bear market in gold, it performed perfectly. Gold’s perfect performance was its inverse relationship to the US Dollar.

    I have strongly suggested to the community that during the sideways chop of gold (305-330) selling 1/3 of the core position at key TA points in order to maintain a positive psychological outlook quality trading gives and increased profit overall.

    Because of recent currency developments, which I will outline in this review, we need to readdress our GOLD DEALING STRATEGY. We are no longer chopping sideways in gold, but are now trending higher. Gold will, in my opinion, reach the predicted $372 level and trade above $400 in 2003. You have seen my willingness to book up to $100,000 in wagers with our Prechter friends. My wager is that gold will reach the Prechter point of no return on their $200 prediction by trading at least $401. It is in light of my firm conviction that gold will better $400 in 2003, that I need to be very careful in my guidance to you for gold trading.

    My friend Kenny Adams (IMO, the world’s most talented technician now or ever) feels that from the point gold hit is $354.50 bid - $355 offered, the reaction to follow would ideally take eight trading sessions in which replacement of the sold positions could be possible. There are two possibilities. The first is a quick reaction into the $330s. The second is the sideways chop I envision in the high levels presently being experienced. We have witnessed a reaction in gold but so far it was blitzkrieg to $341.50 and then back to $351.50. We therefore have ideally until the Monday after New Years where repositioning is possible assuming one had sold 1/3 of their position into the $354.50 hit.

    My challenge in the chop in gold between $305 and $330 was to give you accurate and exact places wherein selling was wise. Next, my job was to keep you long and not sell on that move which would record the breakout above $330. Now my job is to guide you by keeping you totally long through the best part of this leg of each gold move. It is for this reason that I issued the Christmas to New Years Heads Up.

    We have five more sessions in which there is a technical possibility of reaction. However, IMO, gold will move to $372 and possibly above $400 on this leg of the gold bull market.


    The dollar has broken below both 104 and 103 on the USDX early. Charts are where you find them and it is a good discipline to do chart work on newspaper chart illustrations. The chart I have offered here is from the Saturday, December 28, Financial Times, carried in an article on the Euro. It is the Euro defined in US Dollars. The bottom formation which makes up most of the Euro’s trading history SCREAMS OUT at you. This SCREAM says I am a formation which is, IMO, best interpreted as a completed Reverse Head and Shoulders bottom formation. It has a measured move of $1.20 - $1.23. Since gold has moved in a tight inverse relationship with the dollar, this chart means a great deal to gold. It means that gold will go to $372 and possibly all the way to over $400 soon.

    Therefore our STRATEGY now is to be sure we replace the 1/3 sold, not in laggards, but rather in the front running leaders in the gold shares field and of course bullion. Our goal now is to stay fully invested to maximize each leg of the gold bull. Be assured I will do my level best to help.

    If you want the Heads Up and VIP messages in your incoming email box as a service to Financial Sense members let me know.

    Gold share investors no longer will put up with management that speaks “spin city” to their shareholders or changes their accounting methods to hide derivative losses. Gold share traders know how to add, so if you hang out a shelf offering that so exceeds the need for registration of new warrants, don’t expect your shares to be front running any more. Gold share investors are getting smarter and will refuse to stay in a gold share -- be it a major producer or a junior -- that pumps and dumps on the shareholders via insider stock options. When the management of a junior has a stable of other public juniors all these stable members public companies will fall into the tank. Gold share owners now demand ethics, total focus and good management both from the majors as well as the junior gold companies. The age of stupid investors is over. This gold community knows what it is doing and what they do not know, I do.

    Note on Silver: Change the key level in silver now to $4.89 which would signal a significant change in the intentions of silver to positive and probably positive violently.

    and from a Sinclair/Schultz editorial -- of 17.6.02

    The 5 Keys to a Long Term Bull Market in Gold

    The US Current Account must be in a Deficit position and growing. Yes, this is a present condition and shows no fundamental signs of reversing for a significant time. This is the account that measures the amount of US dollars in the hands of non-US entities. It is usually invested primarily in US Federal Debt instruments.

    An intact negative trend in the US Dollar overall must exist. It should have the characteristics of a bear market. This is in fact true for the US Dollar today. We have a classic long-term top called a Head & Shoulders formation, which was subsequently confirmed by price and volume action. Even the dollar bulls now are looking only for the dollar to stabilize at lower levels. This criterion is in place for a long-term bull market in gold.

    Higher commodity prices. The general commodity market is showing in many ways, both fundamentally and technically, that it is in a base formation from which one can expect higher prices. We shall discuss the technical characteristics further to sustain that this ingredient has begun to support gold long term.

    Trust in paper assets must be waning for gold to assume an investment role internationally. We see the recent decision against Andersen, the comments on GE & IBM accounting practices and Enron as examples of causative items, which have turned investors away from the absolute belief, in existence from 1980 until now, that paper assets were storehouses of value. We believe this ingredient is in favor of gold’s long-term bull market.

    The momentum in the appreciation of the bond market must be decelerating. We see this ingredient as positive now to a long-term bull market in gold.


    In Paradise Regained Milton says - "They also serve who only stand and wait" ... I'm sure he was talking about the gold bugs with this.

    He also said "There are none so blind as those who will not see" .... gold bears for mine.


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