You Got The Silver ?

"You got the silver you got the gold"
Richards/Jagger


Well after much DD, here is my new silver/gold play pick. It is V.AHC, Artha Resources. More silver than gold at this point but is dirt cheap and is prime silver country,right smack next to Silver Standard's silver mine,one of the top few largest open pit mines in the world. Do your own DD as I am not responsible for any losses but I believe this is an easy double from here.

Good luck !

Oil and Gold Show Update

Just thought I would update you on my last post re: US Oil Dollar dump story. Since then the Arabs,Russians and Japanese all denying any "secret meetings" to dump the US dollar. I didn't want to jump to conclusions when I first read it but it was taken as fact by the markets one had to comment and be aware. One part that did concern me that it may not be fact is the article stated this supposed switch was supposed to be implemented over nine years. Now that is a long time and if the US recovers by then and retains it's world power status then what ? Egg on face ? I have seen some sketchy to outright fraudulent articles in the UK papers over the years so until I see more concrete evidence this "meeting" even took place then I call bullshit.

What we are seeing is lack of faith in the US dollar,no doubt about that, but we are also seeing one mother of a gold short squeeze as the commercial shorts were short HUGE at just over $1000 and they are covering like madmen. When will this end ? When the big players say so and the dollar hits the 72 cent range is where I figure which will put gold around $1150-1200 range. No denial here the US dollar is in bad shape but printing stories without facts and then to see vehement denial from the key players tells me there is some serious market manipulation going on here.

I am sure the Chinese may have brought it up and someone jumped on it but this subject has popped up many times and the process to pull off such a currency switch is no easy feat. So I rest my case for now.

Gold is flying as the shorts get squeezed, and the US dollar hits the 75 cent level. I do smell some sort of move by the US but whats left other than an interest rate hike ? Bond sale at 10 AM,should be interesting.


Here's the take from Jon Nadler at Kitco:

http://www.resourceinvestor.com/News/2009/10/Pages/Separating-rumor-from-fact-in-the-runup-in-gold.aspx

The Oil And Gold Show

As per my previous post,the gold action at $1000 as it bounced back and forth was unprecedented. What is causing this resistance to the typical pounding back down by the gold shorts ? Oil, or make that oil and the US dollar.

A report from the link below has some startling if not earth shaking news that Russia,China, Japan,France and the Arabs are in plans to shun the US dollar for trading in oil dollars. Is this article true ? Since it came from Peter Grandich's site I will believe there is truth to it for the time being. Will the US protest this move if it happens ? You bet your bippy they will. This is one of the most crucial events that could happen to the US$ as it is has been on the ropes for awhile now but always managed to make it another round.


What could change this direction ? Raising interest rates drastically as in a one point increment which the FED stated a week ago was a possibility. The US has been "pleading" with China to let the Yuan rise and they say "screw you". I see no other alternative for the US,maybe not right away but in a month or so if this continues. Money would flood back into the US dollar and gold would tank along with oil prices. Or would it ? Gold is held against inflation as well so there is a serious support for gold right now like no other time I have experienced,the action proves it.

Gold is currently kissing $1040, a record high,silver is up over $17 but not close to the old $20 record and oil is above $71. Something is cooking here folks. And I will soon have my gold/silver pick for you,just waiting on some confirmation of my DD process. The junior explorers could get very hot here if you are in the right place,as we now know it is the right time.

As far as the DOW goes, as of 9 AM the DOW is up the second day in a row with earnings season kicking off tomorrow with Alcoa being the first big boy to report. So hang on to your hats,this may be quite the ride.

Important update: I just received a report on this from Custom House and they stated the Arabs are denying this but no mention on the others.

"Just as quickly as the report hit the wires, a speedy denial from Saudi Arabia followed, with the central bank governor stating that the rumours are completely false. While the quick rebuff from the Saudis may in fact indicate that they are not looking to diversify away from USD, the same cannot be said for China when speaking about the destiny of the Greenback’s reserve status. From China having taking major stakes in energy and commodities, and from Chinese officials having stated their displeasure with the USD, it’s clear to see that China has already taken steps to branch out from under the Greenback’s wing. While the dollar’s fall from grace surrounding its future as “the” reserve currency has been well documented, the simple fact that there are currently no alternatives available suggests that the decoupling from the USD will be a very slow and arduous process."


http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Blowin Off Some Steam

Believe it or not that is a British Steam Jet Car that can do 225KMH on the flat...amazing.

On to the the markets. The S&P 500 did what I predicted this week and blew off some much needed steam and traded down the last four days straight. How far will this go ? Depends on several factors. We are now heading into the beginning of earnings season again in 2 weeks and this will be the biggie. Will they show improvement ? will they be flat or will they suck bigtime ? I think the former is the only one the markets are like. Mediocre will not cut it.


On top of that we have a serious battle going on between the US dollar and the price of gold. Never have we seen such a battle at $1000. Tim Geitner is talking up a strong US dollar with quotes by Feds that any interest rate moves will be swift and hard if needed, and a full point move would not be out of the question and to be expected. You can imagine what that would do to the bond and mortgage market. For the gold bugs,thems fightin words.


Over the last months the US dollar has been transformed into what the Yen was the past decade or two, "The Carry Trade". This is where Yen is borrowed cheap and invested,now the US dollar is replacing it and the implications are very scary on how this effects us in Canada and our loonie. Will the US want a carry trade for much longer and raise rates soon to attract investment ? or do they even have a choice in the dollar dropping due to massive borrowing ? It's a fine line and one has to be on their toes and use the charts and expect the unexpected.


The next several weeks will be the most interesting and unnerving of the year. I do reflect back to early July when all were predicting crap earnings and the charts teetered on a few key levels. We all know what happened then. Upon looking at my SPY chart this week I see the identical set up on RSI and Stochastics, and the market has blown off enough steam to bring these down to bottoming levels as back in July.


Will we have a repeat ? Who knows, but if we don't then things could get very ugly once again and very fast. If we do ? Then be prepared for a major short squeeze as I bet there is way more short money out there in both the markets and it is a known fact on gold and the pop could be huge. Stay tuned !

Crossroads

I went down to the crossroads, fell down on my knees
- Robert Johnson/Eric Clapton

Time once again to disect this market and see what our risk/reward ratio is like. As you know we have been at some mind bending levels since last winter but each time we seem to hit these levels the mindset quickly turns bearish only to be made to look stupid as it roars higher.

This time may be different as we have several factors at hand. One is the usual time of the year warnings but the biggest in my mind is that it is time for the stimulus money to show its hand in spades. Existing home sales were down,the Cash for Clunkers program helped somewhat but durable goods orders were down as well so how much is all this cash helping ? We can't forget about RIM and the BlackBerry as earnings disapointed huge and the share price was crushed on Friday.

We have had four straight down days on the DOW and the TA charts have relieved a lot of pressure without tanking the market and that is positive. We also have some serious terrorist threats popping up and the Swine Flu about to hit in a big way which will really test our health systems. If the hype lives up to the expectation this will in turn effect the bottom line in all of the economy.

Gold has had it's ass handed to it once again but I won't rule out a one day large move back up here but it has to happen soon as the US dollar seems to be showing some life and you know what happens to gold when that happens.

Oil also got whacked on supply levels and an economy peaking out on the stimulus.

So what do I think ? I say the DOW blows off another hundred points or two then settles down going into October. With this threat of Iran's nuke plant surprise, oil and gold will still be in play and as long as oil stays over $60 then stocks will be fine. If it dips below that level then we could get a 10% correction very easily.

Ultimately I ask myself, would you buy Apple at $180 ? Not. So stay diversified and be defensive but use your stock picking abilities based on underfollowed companies with new developments that will attract the risk money out there... sleeping dogs coming awake is the place to be.

Flim Flam Man

Pssst ! Yeah you .... c'mon over here man, have I got a deal for you !

As I posted earlier,this gold price rise will and has created the potential for the scam artists of our lower dredges of society to relieve you of your hard earned money. Apparently sleepy little Victoria has witnessed a connection to the latest Canadian version of a Bernie Madoff scam. According to David Baines of the Vancouver Sun there is a company and individual who touted the "gold mine" scam to unsuspecting sheep at "get rich quick" meetings. You can read the article below then visit the site and make up your own mind but I say since the guy has closed up the office for a "holiday" when the gold market is busting loose says this is just the beginning of another interesting Ian Thow type scene but with many scamsters with shady records attached who have been banned in the past.

Play safe kids,they want your money.



'Wealth coach' serves up gold bars and snake oil"

http://www.vancouversun.com/business/Wealth+coach+serves+gold+bars+snake/2023020/story.html


http://www.wealthbydesign.com/index.php


http://www.webmechanic.com.au/IFFL/index.htm

Admiring The Abyss

What a sight to behold isn't it ? Here we stand at the top of the largest bear market rally, enthusiasm is high,risk is back in vogue and Vancouverites and Victorians are buying houses like crack addicts down on Hastings and Main. The question is how long can this last ?


From the fundemental angle the jury is split. Some are screaming from the tops to watch out for another crash, especially with October looming. On the other side we have the bulls who are kissing the earth each day this roared back to save their bacon and are preaching this is a new bull market. I do not want to see a crash, a correction yes, but not a crash. Corrections allow for second chances wether it is oil stocks,tech stocks or gold stocks. Crashes end that dream for all.


But then we have a real estate market in BC that never really corrected,it was a blip that was so short lived it won't even register in the history books. I cannot for the life of me figure out how people will cheap out over buying a pair of pants, or drive around for days pricing out how to save a few bucks on the big screen TV but will throw away tens if not hundreds of thousands of dollars in insane bidding wars on a house when they are so clearly overvalued. The word "disgustingly" overvalued comes into play here.

But the clincher is the attitude one receives who dare says a bad word about this subject, as if acting unpatriotic, as if they stomped on our flag or some treasonous act of the like. Most real estate owners do not get the word "overvaluation" but they will be in the next year as this schizophrenic behavior cannot continue. Bizarre is all I can say.


Psychology is a funny thing and the stock market shows me everyday that sooner or later the law of averages,the ebb and the flow, the ying and the yang all come home to roost,all that is needed is patience.

Therefore ,the point of my rant is that technically speaking,stocks seem poised for a correction here as well as with gold stocks. My charts tell me so,the SPY has peaked, gold is correcting in baby steps,oil is trading within a large converging triangle that should play out one way or the other within the next few weeks. As well the talking heads on CNBC are even divided,so that usually spells a small correction at the very least. I can live with that...just don't crash please. The last look over into The Abyss was not a pretty sight.

Still positive on my three picks, EMG I hope to see something soon,as well as COO,both a real deal. SPW is still a month away so be patient in the meantime if you like the junior oil plays. Still working on one gold/silver play in particular,it will be a beauty. Stay tuned and play safe !