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Gold
Charts R Us from Harry Schultz, Feb 28, 2003
Welcome to GCRU #52 (Happy Birthday
to GCRU, age 1) on Wed, Feb 26, 2003. It was a Wed-to-Wed wk of generally rising bullion & sliding gold shares. Bullion rose from a wk ago Wed low of 341 to this wk Tues high of 360. But U wouldn't know it to look at any of the gold share indices, including our own Schultz Gold Index (though it held far better than HUI & XAU). What happened? Two groups attacked the shares: 1. Certain hedge funds are long bullion & want to hold that position (their core) elected, again, to short the shares as a hedge, not a quaint action for a hedge fund! Some saw gold at 380 was 15% over its 200 day mvg avg, highest premium in 15yrs, so prudent to hedge. If they're lucky, they'll profit on both positions - if they cover before the turn appears obvious. 2. The Gold Cartel put their boot in, shorting shares, hoping to create a negative climate, so bullion would also fall. It didn't work, until yesterday, Tues, when bullion finally caved in, fell back from its 360 Tues high. In all this to&fro action, the gold indices formed small toppy chart patterns, & all 3 fell below a kind of neckline, targeting a lower price. Not deep in price but deep in nervous-making for weak holders. ···The fascinating querk here is the difference in behavior of individual gold stks. Eg, Royal Gold slumped badly on disappointing earnings. But AgnicoEagle rose from a bullish wedge pattern. Some, like Eldorado, Glamis, Newmont, Viceroy & Iamgold were up fractionally. Others, like Goldcorp, rose, then lost the gain. HighRiver rose to near prior high. Meridian (which I deleted from GCRU) collapsed. Ditto Novagold. RioNarcea rose nicely. TanRange was the star performer, raced to new peak. ··What to do? Core position: stay put. Trading positions: if fully invested, hold still but reduce positions if bit over-invested &/or uncomfortable. If under-invested: place buy orders at possible downside targets for these pesky toppy patterns. See guidelines inside. ··But always feel free to upgrade parts of your core holdings. If U just hang on to XX because it's core, regardless of its relative performance, then your end results will clearly suffer. Eg, sell Meridian & buy TanRange with the proceeds. ··New GCRU members may hold derivative hedged stks. If so, switch out quickly, eg, Barrick & Placer. ··How big should your core position be? Rule of thumb: 2/3rds of total. But U may prefer only 50% core or 40%. Trade the rest. But upgrade core. ··I'm often asked for a list of stocks in the Schultz Gold Index. Sorry, but we feel it would be a mistake to do so as it would let the hedge funds & gold cartel know which stocks to zero in on with their short selling, in order to undermine the validity of SGI. They know SGI contains the prime gold stks. ··Final thought: treat gold shares as individuals, not a group who all move together. Some are at year highs, some at year lows. Birthday bye from your alchemist
guru, Uncle Harry. ... NOTES: H = unchanged. Betwn = between. Ystdy = yesterday. H&S = head & shoulders. RS = relative strength. 1dc = 1-day close. 2dc = 2-day close. Australian mkts are 1 day ahead of US time. GCRU - Gold Charts R Us (18 gold charts each Wed, with buy/sell guidelines) - from Harry Schultz - sent weekly by Email - $US100/mo for 3, 6, 9, or 12-month subscription periods (fax +$120 per 3-months) - you can subscribe here. ### Who is Harry Schultz? Chevalier Harry D. Schultz, KHC, KM, KCPR, KCSA, KCSS, is the highest paid investment consultant in the world at US$2,400/hour-US$3,400/hour on weekends (International Edition Guinness Book of Records 1981-2002). To keep in touch with developments around the globe, Harry draws from correspondents in many countries, plus mountains of international newspapers, magazines, and other data. At the top command posts of Harry's elite HSL team are Chief Market Analyst, Paul Griffiths, and Research Editor/geopolitical analyst Gordon Frisch. Loyal HSL subscribers in 90 nations are much more than simply names and addresses; Harry and his team consider them part of their cherished global family. Mr. Schultz is regularly quoted in books, articles, and interviews and by other newsletters (the "alternative press"). Arthur Hailey, a longtime personal friend and HSL subscriber, based his character Lewis Dorsey in the bestseller The Moneychangers, directly on Harry Schultz. Harry has lived for extended periods in 18 nations, and shorter periods in many others. Knighted five times, Harry is a man for all seasons and a true citizen of the world. Contact: E-mail:
HSLmentor@racsa.co.cr
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