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The bloodletting times
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Harry Schultz snippet
Aug 22, 2005
 The following snippet is from Harry Schultz'
current GCRU, of Aug 17, 2005. Gold Charts R Us: sent
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Welcome to GCRU #173 on Aug 17, 2005 (in our
4th year).
Unless I'm looking through
the wrong end of this telescope, the Big Picture for gold
stocks is pretty easy to describe this week. At least easier
than usual. The consolidation led to an upside breakout, as I
said was barely starting to happen as I wrote the PS lastime,
& as I shorted the US$ & bought the euro on that pending
mini-trigger. Thereafter, gold did indeed break out from the
440-445 holding zone, raced up to 455 (basis Dec futures) &
began evolving into its new stature. Which is: the bloodletting
times are behind us for gold shares (thank heaven) but not fully
evolved into a new & major bull leg. Yet, that seems an almost
bankable assurance.
••• Gold is
testing its peak of last March at 456-459. All such tests take
time to evolve, so we use this moment to plan our strategy, "knowing"
that the wind is starting to catch our sails. We can loosen our
stops a bit to give stocks a bit more breathing room. We can
buy into mini dips (via individual charts) & plan to double
up on breakouts of either patterns or resistance price levels.
This is a no-stress moment, which we richly deserve.
•••• Yet
it doesn't mean we can let our guard down entirely as U can see
from the Schultz Gold Stocks Advance/Decline Line which
amazingly shows continued sideways action! The sun doesn't
shine on flowers in the shade. While the robust golds are rising
& looking good, a lot are not rising, meaning the average
gold is simply standing still! That's why we keep deleting the
underperformers in GCRU & adding (or bringing forward
from the back pages) those that perform nicely. That's part of
what U pay for in case U didn't realize it. And if U continue
to hold weak stks, then don't expect a brilliant bottom
line. It's easiest to prune by gradually selling off chunks of
the weak & putting those funds into the better performers.
•••• Our
Keeper of the Spinner keys, Paul, says: "Most Spinner
lines are in a steadfast bull mode, with blue confirming lines
rising above zero, but red timing lines at or nearing overbought
extremes - which opens window for backfilling/shorterm consolidation
phase." So there!
••• The Schultz
Gold Index (SGI), gold's Nasdaq, indicates higher highs possible
but unlikely to see mega moves while the SGS A/D Line remains
in sideways drift. But I don't think that will last much longer.
•••• Silver
needs a rise over 7.40 to underpin gold's breakout move. A close
at 7.25 would probably bring in preemptive strike buyers.
••• To cover
all bases, I must say: this evolving moment must see gold hold
over 438-430 on dips to maintain its bullish momentum.
•••••
Non-US$ currencies are all of a different hue! 3 Their overall
color is yellow to green. Euro broke up, now pulling back a touch.
Ditto SwFr, maybe will make a R/H&S. £ raced to 181.60,
will probably move sideways for 2wks to make a right shoulder.
Yen broke out, shocking all the shorts, looks positive, may dip
a hair to .91. C-$ broke out of R/H&S, headed much higher,
is best of the pack. A$& NZ$ both in strong uptrends but
now face overhead supply If A$ tops .775, could streak to the
moon. Even Mars. And the US$ index itself is correcting upside
from its recent 3 wks fall. Is a short or re-short on rally to
88 +/- IMO. This is not a currency advisory letter, but I throw
these comments in to give U the flavour of the forces that affect
gold.
••• CRB is correcting,
probably to 307-308.
•••• I
covered my 10-year note short at nice profit & now searching
place to re-short.
••• Copper to
new high.
•••••
Merrill Lynch's 8/15 Precious Metals Calendar quality
analysis says "Gold stocks valuations are pricey,
but not excessive in view of likely higher bullion prices ahead,
longterm" which they foresee. They say: "Since July
18, the S&P/TSX Gold Index has risen some 11%, on the back
of a 6.0% move (to a 5-month high of $446/oz) for bullion. Gold
equities have traditionally enjoyed a period of 'seasonal strength'
from mid-summer to mid-autumn (with average returns of 24% &
9.4% for gold equities & bullion in 15 of last 17 years)."
••• Best looking
golds in the glitter beauty contest: Anglo American again, Cameco
maybe, FNX-T maybe, Gammon Lake, Meridian Gold, Rio Tinto again
& forever (?), Teck Cominco maybe, Virginia Gold again, Yamana
maybe. With so many good contestants, U can see why I say the
gold Big Picture seems clear, & rosy. Certainly no
ocean of top patterns as we saw in the dark ages, months ago.
So eat (healthy stuff) drink (bottled water) & make merry,
for 'tomorrow' we may see the kingdom of $500 gold & beyond.
·
•••
Oh, one last thing. My friend Chick Goslin [email
:: website]
confirms what I have long said here, but not lately, so worth
reiterating & getting his take. He analyzed his own trading
for last year & found he had made profits of over 7 figures
(over a mil) but that the overwhelming majority of trades were
via taking profits of only $1000 to $1,500 per futures
contract (in crude complex have to adjust this number up). Is
risky when U try to maximize profits. Or using the area
of 100 to 150% of margin profit works out very well. Many times
when I do this, price will keep moving after I get out at this
profit level, but when I hold onto a token number of contracts
to try to maximize profits on those, am surprised by how
many times I will end up getting out at same or worse profit
than those where took profits at lower levels." This applies
to stocks as well as futures. Take modest but acceptable profits
as U go. An alternative is moving stops up VERY tight
after U have reached that minimum profit target, & keep moving
up. I tend to take the profit, via a fixed order price, which
sometimes is an intraday high not seen again. Or I sell at the
open if I liked the closing price & fear it may not hold
there. But U can use a mixture of tactics, not the same in all
situations.
•••• See
U in the PS.
Bye from here.
Uncle
Harry
COMEX Gold
Yamana Gold
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[In this weeks
issue: Agnico (NYSE & Tor) - Anglo American
(Nas) - Cameco (NYSE & Tor) - Coeur D'Alene
(NYSE/Tor) - Cvs Corp (NYSE) - Eagle Plains (Toronto)
- Fnx Mining (AMEX & Tor) - Gammon Lake (AMEX/Tor)
- Gold (NY) - Gulfmark (NYSE) - Lihir (Sydney
& Nas) - Manitowoc (NYSE) - Meridian (NYSE
& Tor) - Newcrest Mng (Oz) - Newmont (NYSE
& Tor) - North American Gold (Tor) - Novagold
(AMEX & Tor) - Orezone Res. (AMEX & Tor) - Perseverance
(Oz) - Rio Tinto (NYSE) - SGI - SGS (A/D line)
- Sierra Pac Res (NYSE) - Teck Cominco (Toronto)
- TREND INVESTORS - USD (NYBOT) - Viceroy Explor.
(Tor) - Virginia Gold (Tor) - Yamana Gold (AMEX
& Tor)
All charts created with TradeStation
by Omega Research 2000.
###
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 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 team are Chief Market Analyst, Paul Griffiths, and Research
Editor/geopolitical analyst Gordon Frisch. Loyal HSL and GCRU
subscribers in 90 nations are much more than simply names and
addresses; Harry and his team consider them part of their cherished
global family.
Harry 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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