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Gold & Gold Stocks: Major Buy Signals!

Morris Hubbartt
Weekly Market Update Excerpt
posted Jan 21, 2011

Gold and Precious Metals

UUP (US Dollar Proxy) Chart

US Dollar Analysis:

• The Dollar decline on soft volume over the past few days has given me a buy signal. I use our US dollar signals to play the dollar, and to coordinate your Gold and Gold Stock purchases.

• Let me be clear; the move up here in the dollar is nothing more than a dead cat bounce, so don’t play it too big. When looking at the decline in the dollar from July through November, the dollar dropped nearly 15%. The most troubling sign I see for the USD over the longer term is the distribution in the ensuing rally in the Nov- Dec time frame. The dollar is in a major bear market, and rallies in bear markets tend to be sharp, and can end long before they are “supposed to”.

• The performance of the US Dollar over the last ten years is pathetic. The dollar has lost massive purchasing power against almost every single other asset. Consider: Crude Oil is up over 250%, and the Commodity Agricultural Raw Materials Index is up 57%. Many other commodities are up over 200% against the dollar, in the same timeframe. Why has this happened?

• The answer is: Debt Accumulation. Debt is growing, so the fundamental causes of the dollar bear market are also growing. The financial crisis is not ending. It is getting worse.

• The Federal Reserve and the Administration want a lower dollar to offset these huge amounts of debt, and to issue even more debt. This is the ultimate tool of redistribution of wealth. The founding fathers called it robbery. Some call it… treason.  

• The government and the banks are stealing money from Americans' bank accounts through this continued and somewhat invisible deterioration of the dollar.  

• Unfortunately for the dollar bulls, my technical work indicates big price declines in the Dollar in 2011. That means higher commodity prices, which will continue to act as a drag on the economy.

• Traders can play the dollar rally, but investors should use any rally in the dollar to exit USD, and buy more gold and commodities, because the government’s “game” of making people poorer so they can borrow more money is not ending, but accelerating!

SGOL 6 Mth Chart

• I issued a Super Force buy signal for SGOL yesterday, Jan 20. I still expect a move to $1260 for gold, and further weakness will likely gives us higher intensity signals. The current signal I have classified as a Super Force Surge 50. We can get even stronger buy signals going forwards.

• I urged Super Force subscribers to add more shares in the gold sector in the last week. The most successful investors in the history of the business have consistently traded a part of their positions and built a larger and larger core. That is precisely what I do for you with Super Force. Lower your costs and enlarge your positions, in the entire Gold sector.

• Most analysts are nervous now. I like the sector better now than I did just a few weeks ago. Use the current correction in Gold to buy assets that will continue to appreciate over the course of your lifetime.
  

• I continue to see Gold working its way lower towards my $1260, yet we are making good progress at eliminating the excess bullishness in these markets. The COT report released last Friday actually makes me wonder if my 1260 target will even get hit. The bottom line is, market losers pulled their gold positions, while the biggest and smartest investors were on the buy. This COT report is bullish for gold in the extreme.

• Put me in the Gold Bull column. Not a “back up the truck” Bull any point in time, but the kind of bull that is more than glad to diversify into Gold, over lower price. As price goes lower, I buy bigger, and I’m doing it now.

SGOL 14 Month Chart

• Note on the 14 month chart that my middle trend line shows price had been marching up, but has failed to hold. My target remains 1260, and I’m incrementally buying all the way down to that point Whether we ultimately hit it or not, nobody knows, but I think we will.

Gold Juniors GDXJ Chart

Gold Juniors Analysis:

• I issued a Super Force Buy signal yesterday on Jan 20th at $34.30 for GDXJ. This signal is a Surge Index 75 Buy Signal. This is a fairly intense buy signal.

• GDXJ continues to make excellent correction progress. Note the MACD in the bottom of my chart. Now is the time for you to be a very aggressive juniors gold stock buyer.

• Volume may be petering out on the downside. It is a little early to issue a full volume-based buy signal, but volume on declining days this week has been petering out. This action is something I am watching very closely on almost an hourly basis.

• GDXJ is an asset headed dramatically higher in the next few years. Weakness in here is a gift to you. My buy target of GDXJ $34 was tagged on Jan 20, yesterday. Price could possibly go down to $32. This is another phenomenal long term buy at $34, and more so at any price under $34.

GDX 6 Month Chart

• The GDX ETF also has a Super Force surge 75 buy signal on it as of yesterday Jan 20. As of now, I have more money in Senior Gold Stocks than any other holding other than Gold. GDX is a phenomenal long term buy right here.

• We are seeing panic selling in GDX, beginning last Friday. I have been a heavy buyer in the current correction, and I bought more Gold Stock on Thursday Jan 20 than any time since the July Bottom. I urge you to do the same. We are in some of, and approaching more, of the absolute best buys of the year.

• The Dow is up 16% from August, while the GDX is down 16% through this correction since Dec. While the Dow is overbought (and over-loved), GDX is oversold and under-loved. That’s a 32% price disparity, making gold stocks very good value against the Dow.

GDX Massive Breakout On 3 Year Chart

SIVR (Silver Proxy) 6 Mth Chart

• Silver’s performance is impressive. A year ago when precious metals corrected, Silver lead the way lower. Not now! Silver continues to act well, in this correction.

• Volume is petering on price declines and MACD is approaching the bottom of the channel. Bullish!

• I bought more physical silver Monday. I am extremely bullish on silver!

• I have been building Super ARB short positions in large cap stocks. My web person wanted the long weekend off, so I’ve re-set this week-end as launch date for Super Arb Trader. Quality signals and failure to properly track the underlying asset by leveraged ETFS give me a solid footing in an area of the market where people typically don’t win. I can make you the bookie, rather than the gambler, but with gambler-type potential rewards! This plan is a winner!

Friday, Nov 29, 2024 Super Force Signals Unique Introduction For 321Gold Readers: Send an email to admin@supergoldsignals.com and I’ll send you my free “Inflation Thunder Now!” gold stocks video report. I’ll also include 3 of my next Super Force Surge Signals free of charge, as I send them to paid subscribers. Thank you.

Stay alert for our Super Gold alerts, sent by email to subscribers, for both the daily charts on Super Force Signals at www.supergoldsignals.com and for the 60 minute charts at www.supergoldsignals.com

About Super Gold Signals:
Our Surge Gold Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building. We are two business owners with excellent synergy. We understand risk and reward. Our subscribers are generally successfully business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.

Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.

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