March 2013 metals preview

 I'd be very surprised if gold has a daily closing price below $1530 this month. At any rate, I'll be looking forward to taking long positions with any dip below $1560, and more aggressively the lower beneath that it may go.

I figure the average trading price for gold this month will be > $1575, perhaps >$1600. Given that the average price has fallen for 5 months straight, a more dramatic low would be absolutely unprecedented for this bull market. Of course, "this time could be different," and anything can happen, but I prefer betting against such possibilities, especially with the fatuous bearish sentiment permeating the PM markets. In fact, there's a lot of idiocy permeating all "markets" these days - an idiocy painful to bear, in the same way that Stockholm Syndrome is disturbing to witness. Plainly, if you don't see the financial markets as primarily a vehicle set up so that clever sociopathic parasites can steal your money with impunity, you're the proverbial sucker at the poker table.

Though I'd be surprised if there's a violent sell-off this month, I still don't think the post-2011 correction is over. These "three line break charts" (for explanation, see last week's post) should give us a clue when the correction may have ended. In short, keep your eye on the mining stocks. The weekly GDXJ ratio with the Dow Jones Industrial Average has displayed a three line break to the upside right at every good upswing since pre-QE2. (Note that GDXJ was first offered in late 2009; I would know, as I bought a shit ton from $22-28 for my core stock portfolio when gold had just broken $1100. I haven't sold a single share, so I'm sitting on 40% losses, though gold has averaged well over $1500/oz over the past 3 years. Go figure.)

My theory on the miners is that they're just about the only sector that the Exchange Stabilization Fund (a.k.a. the Plunge Protection Team) isn't pumping full of hot gas. So they are performing how lots of stocks would be performing in a deflationary environment. That's why their ratio with other stocks appears to have some significance.




Interestingly, the GDXJ:GLD ratio tells us when to buy and sell silver. Note if you bought and sold the three line breaks, you would've entered the 2011 upswing in August 2010 and sold the very day before the May 2 "We killed Osama!" crash. Since then there have been a couple of failed silver breakouts, but using this approach, you would have limited your losses a good amount.


If I may also add a word about Jim Sinclair. He has plainly lost it. If the gold bull market is officially over, his recent ramblings will be seen as an obvious tip off, since it is not in the nature of this world that unhinged prognostications ever come about. If his guarantee that gold will break out after his birthday (March 27) did not suggest to his friends and family that some kind of intervention is necessary, his latest post surely must have:

You must join my Comet Gold Resistance Movement, a golden militia armed with courage to do just one thing. Do nothing, stand still in positions in gold without ant debt, and ignore the enemy of fear within and gold banks without ... Join my Comet New Normal Gold Resistance Movement, a true non violent but armed militia. This is the way to protect yourself and thereby get to the other side still holding the preeminent currency.

In two weeks I will have printed certificates signed for you representing membership in the Resistance, but without your name or other identification. There will be no meetings, no charges, not even expenses. When you are long your good gold companies, mining money, and your physical gold at a sound $4400, protected from the inflation we are already experiencing multiplied by a minimum of 25, you will know your Resistance membership and your mindset will have gotten you there.