GOLD and SILVER – Is the Bull Exhausted Yet?

05 Tuesday Oct 2010

Posted by jschulmansr in banking crisis, banking crisis banks bear market bull central deflation depression economic trends economy financial futures gold inflation crash Markets precious metals price protection recession safety silver plati, banks, bear market, Bernanke, bonds, bull market, central banks, China, commodities, crash, Credit Default, Crude Oil, Currencies, currency, Currency and Currencies, deflation, depression, dollar denominated, dollar denominated investments, Dow Industrials, economic, Economic Recovery, economic trends, economy, Euro, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, GLD, gold, Gold Bubble, Gold Bullion, Gold Investments, hard assets, How To Invest, How To Make Money, hyper-inflation, inflation, Investing, investments, Japan, Jschulmansr, Latest News, Make Money Investing, market crash, Markets, Moving Averages, oil, Options, PAL, Paladium, PALL, palladium, physical gold, platinum, PPLT, precious, precious metals, price, prices, Quantitative Easing, recession, risk, Risk Reversal, run on banks, silver, SLV, sovereign, Sovereign Debt, spot, spot price, stagflation, Stimulus, stock market, Stocks, TARP, Technical Analysis, The Fed, Treasury, U.S., U.S. Dollar, U.S. Government unfunded Debt, U.S. Treasury Dept

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banking crisis, banking crisis banks bear market bull central deflation depression economic trends economy financial futures gold inflation crash Markets precious metals price protection recession safety silver plati, banks, bear, bull, central banks, crash, Currencies, currency, deflation, depression, derivatives, economic trends, economy, Euro, Eurozone, financial futures, FXE, GLD, gold, gold to silver ratio, hyper-inflation, inflation, market, Markets, precious metals, price protection, printing press, QE2, quantitive easing, recession, safety, silver, SLV, SPY, UUP

Maybe…. Depending on who you are talking to. Today’s rally took me a little bit by surprise, thanks to Japan. The market totally shrugged off Moody’s potential downgrade of Irish Banks and Ireland.

The recently released report of the causes of the “Flash Crash” showed that derivatives actually was one of the major causes of the crash. Well guess what? Right before the collapse of Lehman, and the ensuing crash and crisis; banks were holding all time record levels of derivatives. Currently once again, banks are holding all time record high levels of derivatives!

So today’s rally can be totally attributed to Japan’s central bank. The Japanese Central Bank while slashing interest rates to basically 0%, also announced that they would be buying Japanese assets (Bonds, Reits, Mortgages, Equities), thereby fueling speculation that the Fed would do the same thru QE2 here in the United States.

However, I think it’s about time for a correction in the GLD, SLV, FXE, SPY, UUP.
Looking at the charts this has all of the appearance of an exhaustion gap. Not that I don’t think that we have a real shot a $1500 Spot Gold by the end of this year.

So even though I was stopped out of my GLD puts this morning I am seriously thinking about jumping back in and buying more GLD and SLV puts. I will let you know on stock talks (Seeking Alpha), when I do.

That being said, I don’t think the correction for GLD and SLV will be more than 5-7% before resuming their march to $1500 (Gold) and $25 (Silver). Another note: I expect Silver to perform even better than Gold. The gold/silver ratio is approximately 60/1, if we see a return to what used to be the norm of 30/1 gold/silver ratio; then Silver could potentially run as high as $35-$50/oz.

Finally, as they do another quantitative easing (QE2) here in the US (currently not official QE), this continues to put pressure on Europe and Japan to devalue their currencies and keep the printing presses running. Long term this is going to create a very hyper inflationary climate long term. So being the Gold and Precious Metals Perma Bull that I am, I think that you should be buying and stockpiling (bullion, rounds, coins; as much as you can get; to lock in the value of your money now. Events are truly starting to line up and set the stage for a potential worldwide collapse and depression.

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– Trend Analysis Revealed –

Substantial moves like the ones that we have recently witnessed present opportunities to succeed or fail in the markets.

Traders who stayed on the correct side of the trend were rewarded substantially.

Serious questions effecting your portfolio still remain:

– Have we seen the Indexes bottom or top?
– Is a reversal in the near future?
– Is it too late to go short?

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

Response To a Trader III-Where is the Euro and US Dollar Headed?

14 Friday May 2010

Posted by jschulmansr in banking crisis banks bear market bull central deflation depression economic trends economy financial futures gold inflation crash Markets precious metals price protection recession safety silver plati, Crude Oil, Currency and Currencies, dollar denominated, dollar denominated investments, Euro, gold, Gold Investments, oil, Today, U.S. Dollar

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banking crisis banks bear market bull central deflation depression economic trends economy financial futures gold inflation crash Markets precious metals price protection recession safety silver plati, Euro, Eurozone

Here is another question and answer from a trader on Seeking Alpha.

Between jschulmansr, CKachi

CKachi May 14 at 4:54am

Hello Quick Question

I admire your will to teach others and your strong support for the precious metals, oil and your currency plays.

I noticed you have a support number you are sharing for UUP at $24.60 and I wanted to know your technicals, or psychology…simply your reasoning for this support level.

Your input would be greatly appreciated.

*Also one side note question. There is rumor or speculation I shall say of a rally of the Euro before it reaches parity with the dollar. That’s a prediction I’ve been hearing. What do you think about it?
What price point you think we can see this pull back for UUP… ~$27 maybe since that was last year’s peak?

Regards,
Chris K.

Reply:

jschulmansr May 14 at 10:01am
Chris;

First Thank You for your kind words! For the $24.60 as support, what I did is take the low of the gap and subtracted 25 cents for my stop. My actual support level is $24.80 and then $24.50. The dollar could get to $27 especially if the Euro hits $120. (see next)

For the Euro, yes there will be a bear rally after we test the low at $124.88 which we are doing today. If it does not hold here then I’m looking for a bottom for this thrust somewhere between $120.00 to $122.50. The currency sharks are testing the will of the Eurozone to support the Euro. They will probably at $120 and then here will be a vicious short covering rally to I think around $130.

However with all of these trades be ready to turn on a dime so to speak if the market starts going against you. You have to be unemotional and realize that sometimes everything lines up for a market to go a certain direction and still go the opposite way.

Hope this helps and message me anytime!

Good Investing!

Jeff aka jschulmansr