gold hit me with your best shot

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    Friday, October 03, 2003

    "Hit Me With Your Best Shot"

    Author: Jim Sinclair

    Before we get down to the nitty gritty, you might want to turn on your stereo to the sounds of Pat Benatar’s "Hit Me With Your Best Shot" which seems somewhat appropriate today.

    The long side stops (stop loss orders ignorantly placed in large lots on the Comex by those long with limits that key off market sell orders in gold futures) gained size on the Comex and were sitting at $379.50 to 381.00.

    The floor traders representing the Cartel dealers had been shooting for them all morning.

    When the equity market took a second bullish breath and the long bond broke down below 109 and the dollar rallied, the Cartel made its big move.

    The $385 level was the major "hold the line play" today and running the stops - along with a rumor that central banks were selling gold -completed the play.

    Respecting your opposition is an important criterion for warfare. The Cartel went from desperate to aggressive but will return to desperate before too long.

    If the Cartel bought some comfort, they had better enjoy it because it's temporary IMO.

    Besides, gold's performance was becoming a mental health issue for many of these people and they needed a lift even if the elevator failed to make it to the top floor again.

    Having been more than $20,000,000 short of the long bond, I converted half and am holding out a bag in the gold Calls.

    Regarding how low gold can go, it is my belief that we hit that point in just about one shot today. The mid $360's was, IMO, the maximum downside potential and it may have been satisfied.

    As reported to me yesterday, the Aden Sisters recommended cutting all gold share positions by 50%. So with the exception of Harry Schultz, most gold advisers plowed the way for the Cartel to make their big play today. (With all the stuff they've been shovelling these past few months, the plow probably never got out of first gear).

    Now for those that sold 1/3 of their investment positions, draw your Power Down Trend lines immediately and be prepared to replace your position the moment this key line is broken to the upside or we have a signal from the internal indicator entering into the buy zones followed by an indication of a turn. However, do not utilize margin. It is the killer of killers in gold shares.

    If you ignored my pleas to sell 1/3 of your position when the internals turned weak and share prices were still climbing, FORGIVE YOURSELF and forget about it. You will get many more chances.

    This is a long bull market in gold which is headed above $400 and over $500. For those who were prepared, today was an opportunity not a depressing event.

    Today is just as much a product of too many gold analysts making too many recommendations. Once again, I ask you to select who you believe in and stay with that person. Also, be sure to respect trend lines more than any analyst.

    You will have your chance to be more professional because today's action is a minor road bump on the way to higher prices. But you must be willing to stay the course. Rest assured, I'm not going anywhere and will be here for you in the days ahead.

    Yes, I am tired and spread a bit thin at the moment. But if you need me use the code word "Emergency" and my turbo charger will kick into action.

    As always, if you did not listen to me and are on borrowed money, close out your debt and start again with cash.

    No one can sit with a margin call. I have never met a margin call and will never satisfy one with anything but liquidation.

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