sinclair - just in

  1. dub
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    Re: Chairman's Corner - Wednesday, January 08, 2003
    Heads UP
    Author: James Sinclair
    Monty Python & the Holy Grail: The Battle at the Bridge
    Gold at $354.50

    For you Monty Python fans, you recall the Black Knight protecting the
    bridge from those that tried to cross. When King Arthur approached the
    bridge, the Black Knight stood in his way and said, "None shall pass." King
    Arthur told him to move aside but the Black Knight repeated, "None shall
    pass." The Battle began and the Black Knight was beaten quite badly. King
    Arthur crossed the bridge without any problem leaving a totally dismembered
    Black Knight ("Look, you stupid b*****d, you've got no arms left" said the
    King to the Knight). Unable to launch any offensive, the Black Knight
    yelled at King Arthur, "Come back here and take what's coming to you. I'll
    bite your legs off!" (From Monty Python's Holy Grail "Scene 4"


    Take a look at the 9-minute bar chart on gold I offer you today. This time
    9-minute period is my favorite for trading gold in the short-term. Look at
    the "Battle at the Bridge" taking place at $354.50. We of course are the
    Golden Knights of King Arthur (Gold Bullion). The black Knight protecting
    the bridge for the collection of tolls on our pocketbooks is of course the
    Gold Cartel and the Carry Trade. Let us not put any more pressure on the
    gold producer hedgers as they have a large enough headache tonight. That
    number you know is a mathematical deduction of the average point at which
    all the gold spreads put on for derivative hedging in the last six years
    all are under water. It is a number we developed here and published back in
    2001. We should be complimented that the Exchange Stabilization Fund and
    the Gold Cartel read and followed us. $354.50 is not a technical point as
    such. It is extremely important to the gold derivative hedger community but
    does not possess any technical capability to hold gold

    Gold conclusion:

    I have already suggested that you only need a ruler, a trading platform
    that provides minute charts at your design, and a firm view of what gold is
    going to do to "clean up." Gold is going to and above $400 in two steps.

    There is no serious resistance to gold here at $354.50 and gold will not be
    stopped here at $354.50. $372 will cause gold to hesitate and we will
    determine then for you the character of the market.

    Gold today put on a "Mighty Joe Young" performance, finding its low on GCJ
    @ $346 and trading to $357.30 with a close at $356.00. That's some change
    from the $305 to $330 experience. I therefore conclude that we are in the
    mark up stage of the first leg of a 5 Wave movement in gold, just to
    satisfy our Elliot Wavers.

    Note: NY Cash gold is $355.60 bid at 3 PM EDT

    Here is an excerpt of an article from today's Times (London): "During the
    past few months it is said to have been not unusual to see wealthy
    individuals walking into their local bank and exchanging $ 100,000 cash for
    10kgof gold. Bars of the precious metal are piled into rucksacks and taken
    home, a guard against the vagaries of financial markets and the threat of


    Last evening my message to you was that this reaction was not going to be
    significant in time or in price. For that reason I saw no need to give you
    support prices. I will note them on this evening's chart however, for the
    readers; the major support is $4.81.

    In my opinion, resistance in $4.98 to $5.12, and above that, at $5.37 is
    where silver is going on this leg, IMO.

    The US Dollar: (USDX)

    What makes people decide that all of sudden the dollar is healed? It isn't.
    It cannot be. All the fundamental components of the dollar are negative.

    We are about to give 92 million taxpayers an average of $1,083 reduction in
    tax payable in 2003. This reduces the federal income at a time when the
    economy is already taking a significant cut out of federal income.

    Adjustment of the federal income tax withholding will further reduce
    federal income significantly starting in 2003. The acceleration of tax
    relief scheduled out as far as 2010, now effected in 2003 in the Bush plan
    will further reduce federal income.

    The end of "double taxation" will take another cut out of income. All of
    this means that a huge gamble is in place that reduction in taxes will
    create new jobs. That, however, is unmindful of what it is like to be the
    average US citizen right now. It is quite tough. They have run up debt on
    their home to unprecedented levels because their incomes have fallen. The
    average family is gambling on the economy turning up hard and fast.

    Business is gambling on the family consumer continuing to consume and spend
    and all of the above from the White House to Main Street are looking at
    each other for survival. What a tangled web of mutual dependency and mutual
    despondency has been woven. Little attention is being paid to mindset of
    the nation, which is scared to death about their futures. Those of us
    reading this have some money or a job. Think for a moment of the huge
    number of unemployed who have families to support. It is easy to criticize
    when you have no pain or perspective of a situation. It is really an awful
    situation out there that the foolish talking heads ought to experience
    before they advise the TV world of the good times coming. Roosevelt figured
    it out, but too late, that recovery depends on the mood of the nation. All
    the economics you practice is a waste of time if you are insensitive to the
    sociology and psychology of the situation. A war now is not going to do
    much for the real problem we are facing which is FEAR.

    Yesterday I made the point that the previous application of the type of the
    Bush plan was successful because the Federal Budget was heading toward a
    surplus, the trade position was neutral and the Current Account was
    positive and growing. Without those Prerequisites, all the Bush plan will
    do is cut the federal income and help all tile deficits we now have grow
    larger over the next 12 to 18 months. The common stock of (he US is in
    trouble and will remain in trouble until it is has priced itself in line
    with conditions. Right now that is well below 100, yet as in all markets,
    look at 100 the same way you viewed 104, It is an imaginary place where
    technical strength will surface significantly before it fails and the
    Dollar moves lower as measured by the USDX.

    Click on the following link to view the full editorial including associated

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