The Answer is a “No Brainer”

Stewart Thomson
email: stewart@gracelandupdates.com
email: stewart@gracelandjuniors.com
May 10, 2011

1. The smartest millionaires of 1913 watched the Federal Reserve being formed with great interest. They sold a million paper dollars and received 50,000 ounces of gold.

2. Today’s paperbug millionaire of 2011 barely knows what the Fed is, let alone what an ounce of gold is. If he sells his million US dollars today he gets about 666 ounces, based on gold at $1500 an ounce. A very interesting number indeed.

3. I’d like you to tell me whether you would rather have 666 ounces of gold, or 50,000 ounces of gold.

4. If you want to build major wealth, you need to understand that you don’t have a $100 million algorithm trading computer system on your desk. While I understand the gold community is fairly concerned about the recent rally in the dollar against gold, the fact is that you are not going to compete with the best hedge funds by attempting to trade counter trends, especially with size. Do it for fun (or to stay sane). Use put options and leveraged ETFs to play counter trends.

5. For the bulk of your wealth building, only the power of the biggest primary trends will work to make you seriously rich.

6. On that note, there is no primary US dollar uptrend. I own the UUP (bull US dollar) fund, as a tactical trade. Owning UUP, or any counter trend play, is often more of a mental tactic than a financial one.

7. You should hold 100 times more risk capital in metals assets than in UUP. I do. The time to buy the US dollar in size is when interest rates are already sky high, not now in a counter trend play. Buy UUP to strengthen yourself mentally, so you can step into the discomfort zone and buy more gold in size.

8. I want you to read these next two points many times, because they are absolutely critical for serious wealth builders. First, the odds of a near-term rally in the dollar against gold are higher than the odds of a near term decline in the dollar against gold.

9. Second, and much more importantly, note that when the odds of a near term counter trend asset rally are high, but the odds of a collapse of that same counter trend asset are sizable and real, the wealthiest investors will not take that counter trend trade. Are you taking it in size? If so, you are making a grave error. It’s only a matter of time before those tactics destroy you financially.

10. The bottom line is that the dollar could rally, but you are not going to build any serious wealth selling gold to play that rally, and it could turn into a collapse that wipes you off the financial map.

11. Have the patience to wait for a collapse in the bond market, the backing of the dollar in some way with gold, then buy the dollar and the bond in size. That time is many years away.

12. Gold and food go together. Both are extremely low risk assets, in terms of the odds of them going off the board. The lower they go, the more of them you should want to buy. I have a $100 target for the DBA-nyse agricultural ETF. Click here now to view the weekly DBA chart.

13. I have little to zero interest in up and down trend lines. When you look at the weekly flyer from your grocery, do you get a ruler out and draw an uptrend line across the weekly sale prices? Do you say, “look, the uptrend line on bread broke, I better not buy any even though it is on sale!” No. If price is on sale, you buy.

14. Click here now to view the daily DBA chart. DBA is “10% on sale in the $32 area and the oscillators are indicating we could spike higher. You will not make it to DBA $100 with your core positions intact if you disintegrate mentally into a world where all you do is look in the mirror and ask how much lower price could go after you buy. Don’t worry, people are going to keep eating!

15. Click here now to view the daily gold chart. The gold price meanders between the green Keltner lines, like a river bounded by its banks.

16. Note that price has only come close to the lower “river bank” about 3 times in since September! The decline into $1462 has been analysed into oblivion, and bought by almost nobody. I called the gold market “out of control” on the day of the $1462 low, and urged you buy anyways.

17. Now price has soared $50 an ounce, and the short term oscillators suggest much further upside is possible, basis this daily chart!

18. Click here now to view the 30 minute gold chart via the comex gold trust fund, IAU-nyse. I’ve drawn in five blue HSR (horizontal support/resistance) lines. Those are five beautiful profit booking areas.

19. Note that price has risen to one of them, at $14.70. Only if you bought into your own feelings of panic are you now able to ring the cash register. While others guess whether the market will bounce or fall, you get richer!

20. I have begged, urged, and come close to using expletives to “encourage” you to get richer by building ounces, rather than staring at the dollar valuation of a fixed amount of your gold. You need more gold, more silver, not more marked to model valuations courtesy of Ben “Dr. Pinocchio” Bernanke’s photocopier machine.

21. Click this 30 minute gold to silver chart. This is a method of getting richer by building more ounces of both gold and silver, keeping yourself at least partially isolated from the world of the US dollar paperbugs. Note that I am using SGOL for gold and SIVR for silver.

22. That chart is just days old, and at the time I suggested it was time to sell some gold and buy some silver. Now, I would suggest it is already time to sell some silver and buy gold. Silver has jumped strongly against both gold and the dollar over the past few days, but focusing on the dollar isn’t going to get you any more ounces of silver, or gold!

23. Now click HERE to view a freshly annotated version of the gold to silver chart. The 30 minute chart is absolutely ideal to move back and forth from gold to silver, and vice versa.

24. What sounds better to you; spending your trading day staring at the dollar valuation of gold or silver, or building more ounces of both? I’ll dare to suggest the answer is a “No Brainer”.

Thank you
Cheers
st

May 10, 2011
Stewart Thomson
Graceland Updates
website: www.gracelandupdates.com
email for questions: stewart@gracelandupdates.com
email to request the free reports: freereports@gracelandupdates.com
Tuesday May 10, 2011
Special Offer for readers: Send me an email to freereports@gracelandupdates.com and I’llsend you my GDX to GDXJ currency report! As with gold and silver, I’ll show you how to sidestep the US dollar and build bigger positions in both gold juniors and gold seniors! Thanks!
Graceland Updates Subscription Service: Note we are privacy oriented. We accept cheques. And credit cards thru PayPal only on our website. For your protection we don’t see your credit card information. Only PayPal does.
Subscribe via major credit cards at Graceland Updates – or make checks payable to: “Stewart Thomson” Mail to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 / Canada
Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.
Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:
Are You Prepared?

Gold Stock Tactics: The GDX Sanity Chart

Stewart Thomson
email: stewart@gracelandupdates.com
Oct 19, 2010

1. Do you want to make serious money in the gold market? The large money in gold over the next 12 months is going to be made in gold stocks.

2. Gold bullion at $1000 back in 2008 on the first touching of that key plateau was not the same “gold stock rocket fuel” that it is now.

3. The world view of Gold has changed since 2008. Many of the mining companies have moved forward with their projects, advancing them roughly on target.

4. September/October is not only Indian Jewellery demand season; it is drill results season. It has been a magnificent August and September for Gold Junior stocks.

5. If you have difficultly differentiating between gold stock core positions and gold stock trading positions, I urge you to consider using multiple brokerage accounts to create a clear segregation of those items. Send me an email to stewart@gracelandupdates.com if you require further explanation of the difference between a trading position and a core position.

6. This, the ultimate Gold Stocks bull market, is too important to see any one of you take yourself with inadequate market tactics, particularly at this critical point in time.

7. Click here now to view the GDX Lucky 13 Daily Chart. Note the 13 corrections within the power up move from the late July lows. I’ve clearly highlighted each of those with a blue line. Thirteen opportunities to buy, thirteen opportunities to establish core and trading positions in the gold stocks market. Thirteen opportunities to get richer. Who says thirteen isn’t lucky?

8. I was a buyer into yesterday’s GDX lows, buying approx. every 40 cents down. Did I get the exact bottom of 56.51? No. I have zero interest in plopping vast sums of capital into a fool’s gold lotto ticket. My lowest fills were in the 56.80 area.

9. How much risk capital should be allocated to gold stocks tactical buying? If you look at each correction from the July lows, you’ll notice that the average correction is about 2-4%. The Gold Stocks Group are declining, on average, by about 2 to 4%, then rising to a new high.

10. A 1% allocation of total risk capital is reasonable on that amount of weakness.

11. What almost nobody in the gold community understands is my concept of pyramid buying. While I’ve been a buyer of these sell-offs, the monster money is made in responding with a pyramid formation of buying into monster weakness.

12. At some point, the GDX is going to sell off more deeply. When it does, those who are now throwing vast sums of capital into the gold stocks on these 2% corrections, and I’m talking about allocated numbers vastly beyond 1% of risk capital, are going to find yourself on fire again, just as you did at 1156, 1045, 905, 860, 680, and the myriad of previous gold market corrections.

13. Worse, most are not even buying any of these 2-4% “snack packs”, but, horrifically, are actually buying the peak of each 4-6% rise.

14. You are burning money if you are engaging in those tactical actions. Look again at that GDX Chart. Here’s a magnification of the later portion of the chart, using 60 minute bars. GDX 60 Minute Chart. Look closely at each peak. Now look at each trough. In terms of both time and size of the move, you are costing yourself substantial money and piling on risk, by chasing price and buying these peaks; many of the peaks are only barely above the previous one, while they are 4-6% above the previous low.

15. The reality is there was almost a loss of sanity that occurred into the lows of 1156, as there was at every previous correction. You have to buy your personal loss of sanity in the gold stocks market, rather than listen to that insane voice telling you to stand aside or liquidate.

16. Another type of sanity loss occurs on dramatic price strength. That time is now. Or should I say…it just occurred over the past 4 weeks. As many of you begin to grasp the ramifications of what I am telling you, you will realize you have just made a number of severe tactical errors, with percentage of risk capital allocation into gold bullion and gold stock buying at the very top of your error list.

17. Remember my words: Just Say No To Drugs. When price soars, or feels like it is soaring, investors begin to think like drug addicts, drugged into a stupor of crazed action, hooked on the price chasing drug, the ego drug. Here’s a look at the GDX Sanity Chart.

18. This GDX Sanity Chart is the most important chart in the world right now, because it provides a crystal clear picture of the Dr. Jeckyll and Mr. Hyde conundrum that dominates the personality of every gold market investor, and every investor in every market. The GDX peaked around May 11 at a price of $54.63. More than five long months have passed, yet yesterday the GDX traded at $56.51, a microscopic gain of $1.91, which is only 3%!

19. If you bought each 1% decline in price in the GDX using a pyramid formation of buy orders, you are sitting on substantial gains on your core positions, and substantial booked profits on your trading positions. Almost all of the 13 corrections in price from the July lows have produced solid gains, just within the ensuing days following those lows. Almost all of those individual moves produced greater gains than the entire Gold Stocks move over five months, from May to the present date in time!

20. If you bought into the lows of the selloffs in May and July, you are sitting on gains of over 20% on the GDX alone, never mind the GDXJ where you have gains of 50% from the lows you bought. Should I mention the individual junior situations, where those you followed me on the buy in July have gains of 50%, 100% and 200%?

21. Look very hard at the GDX chart. Notice the point I labelled “Gold Community Loses Sanity Here”. It is now 4-6 weeks since the “loss of sanity buy frenzy” began. 4-6 weeks since the gold bullion and gold stock investors “lost it” and began to chase price with tactics devoid of logic, devoid of reason. Four to six weeks since gold market investors became price chasing drug addicts. Worst of all, 4-6 weeks of making peanuts (or nothing) is the payoff for taking all those drugs.

22. If you have unknowingly allowed yourself to become a price chasing drug addict in the gold bullion and gold stocks market, you need to look at how bad your personal situation might be. The key lies in your ability to withstand draw downs. If you sold into past weakness, odds are high you will do so again, particularly if you are now carrying extremely low or even negative cash balances in your gold market accounts, and chased any price in the rise since May.

23. If that is you, and you are now coming down from the price chasing high slightly as you look out your price chasing window this morning and see 20 banksters in financial battle tanks aiming their main unlimited liquidity guns directly at you, you need to understand the reason you are coming down from the emotional high, is because price has stopped going up. The chemicals inside your brain and body are responding to that loss of upwards momentum, and fading in power as well. First the high fades, then a blistering hangover sets in. Are You Prepared?

24. As you think about the 1% of risk capital that I have allocated into Gold Stocks on the current sell-off, and you look at the 50%, 100%, and even 1000% numbers that many of you have allocated on nothing more than a drug addicted price chase, you will soon learn your next gold market lesson; the banksters of China are no different than the American or European banksters. They are part of the global bankster cartel with unlimited money and you are the very last person who will benefit from their actions. The Chinese banksters are not your friend. They look at you as dogmeat. The Chinese Gman is sitting on 2 trillion in cash, while millions of the people he stole it from are in a state of desperate poverty. The Gman and the banksters do not exist for your benefit. They exist to rob you. Regain your sanity. Gold is tanking down to $1352 basis December futures this morning. The GDX will likely blow thru my next buy orders in the 56.50 and 56 area. My buy orders are larger at each pre-set buy point going down, but if you fell victim to the gold market’s price chasing Siren On The Rocks, you are now a helpless cork floating helpless to act, in a state of acute nervousness, unable to respond professionally on the buy to price weakness that threatens to turn into a global bankster-engineered price rout, with them taking all you price-chased. That nervousness could become terror, if the banksters put down their cigars and start pumping the market with ask orders of size. I told you to be patient, but you had to buy, had to shoot up on price chasing heroin again. Now the banksters are coming to unleash The Rain of Pain on all price chasers and the question is:

Are You Prepared?

Are You Prepared To Buy?

###

Oct 19, 2010
Stewart Thomson
Graceland Updates
website: www.gracelandupdates.com
email for questions: stewart@gracelandupdates.com
email to request the free reports: freereports@gracelandupdates.com
Tuesday October 19, 2010
Special Offer for readers: Send an email to freereports@gracelandupdates.com and I’llsend you my free GDX and GDXJ Precision (GGP) report! I’ll detail the exact buys I have in place and the exact amount of risk capital to allocate to them, so you can start making the kind of returns the Gold Stocks are offering investors, but the banksters are taking for themselves! Bite into your Gold Stocks apple with precision tactics. This is your last big chance to do it correctly, before the Price Volatility Hurricane hits the Gold Community Flotilla! � �
Graceland Updates Subscription Service: Note we are privacy oriented. We accept cheques. And credit cards thru PayPal only on our website. For your protection we don’t see your credit card information. Only PayPal does.
Subscribe via major credit cards at Graceland Updates – or make checks payable to: “Stewart Thomson” Mail to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 / Canada
Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.
Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:
Are You Prepared?