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Trading Gold's Power Move: Rebuy Every 2% down

Morris Hubbartt
posted Oct 11, 2010

Weekly Market Update Excerpt
Oct 8-11, 2010

Gold and Precious Metals

KEY CHART #1: GOLD via SGOL-NYSE

Buy and Sell recommendations should be added at the recommended price.
The Surge Index System Buys Weakness and Sells Strength

Super Force Gold Bullion Analysis:

• Gold has a Surge Index 100 Sell Signal as of Oct. 1st. This is the maximum Surge Sell Signal.
   
• I am a Long Term Bull as it relates to GOLD. I bought more physical bullion when many were predicting much lower prices and better entry levels back in July. I bought and I'm not selling my physical gold.
   
• I have said in the Sept. 16-17 WU of Gold and Gold Stocks:
   
• "The RSI Indicator for Gold was higher in May than it is now. This leads me to believe we may have more room to the upside in the immediate future, now that the overhead resistance has been taken out."
   
• Since then Gold has continued higher and in the long term Gold will in my opinion be much higher. When Governments create currency out of thin air, Gold becomes more valuable.
   
• That said, this chart has WARNING written all over it; read the analysis carefully. Many traded assets are following the same pattern, which is rising prices and declining volume.
   
• Again the key to successful investing is buying weakness and selling strength. Gold is up significantly and that strength has to be sold. I do not recommend selling any core positions.
   
• I'm prepared for all action in this sector. I want to own more Gold and Gold Stocks. Use the Surge Index System to time your buys.

KEY CHART #2: GOLD JUNIORS via GDXJ-NYSE

Super Force Gold JUNIORS Analysis:

• There is currently a Surge Index 100 Sell Signal on GDXJ as of Sept 8th.
   
• My strategy has been to sell strength and to buy weakness; I set my orders to re buy 3% from the sell price on GDXJ. I was able to accomplish that again this week. This allows me to maintain a large position and still take profits with a portion of my holdings.
   
• Price has had a fabulous move from the July lows. That is when my largest buys were entered. I made note on this chart at the time, stating where additional capital was allocated. GDXJ is up some 44% from those lows.
   
• The Superforce 60Trading Service has logged traded after trade since those lows. This service posts the trades as they happen.
   
• I said a week ago there was churning developing in this sector. Churning is described as heavy turnover without price progress. There was price progress this week, although note the heaviest volume in months occurred Thursday on a hard down day.
   
• A reasonable target for GDXJ is the 30.50 area for a pullback. That represents previous highs. Previous resistance turns into current support. That also is approximately 50% of the move from the lows of July.
   
• As mentioned above, there is a Surge 100 Sell on GDXJ. Although there is a sell, I hold a core position of approximately 50%. When weakness occurs I will enlarge my core position and trading position.

KEY CHART #3: GOLD STOCKS via GDX-NYSE

Super Force Gold Stocks Analysis:

• A Surge Index 75 Sell Signal was issued Aug 31st.
   
• My strategy for Gold and GDX for many weeks has been to take profits and re buy 2% under the sell price.
   
• This strategy has been an effective way to protect profits and continue to maintain nice trading and core positions.
   
• Gold followed by Gold Stocks are by far my largest holdings.
   
• My biggest concern for GDX is Gold itself. Gold issued a max sell on Oct 1. I posted on Chart #1the possibility of an Exhaustion Gap. If bullion starts to correct, this sector will come down. Likewise stock market weakness is likely in the coming days, which also can create down side pressure in this sector.
   
• I have a core of GDX that I will not sell. Longer term Gold and Gold Stocks, in my view, are going much, much higher.
   
• There has been a tremendous run in this sector. A correction can begin at any time. For that matter, it could have started with heavy distribution as of this week.
   
• Follow a proven strategy. Use the re buy program for profits already taken and wait for the Surge System when putting new money to work. It may be tempting but do not chase price, period.

KEY CHART #4: SILVER via SIVR-NYSE

Super Force Silver Stocks Analysis:

• There is a Surge Index100 Sell Signal as of Sept 17th for SILVER.
   
• This is the Max Sell Signal on Silver. In a rough stock market Silver will likely take a hit. It is extremely overbought!
   
• Volume is telling this week. The Volume Thursday, Oct.7th was the largest volume since the move began on a down day. We'll have to see how this plays out.
   
• Again, this is an asset that I hold a large core position in and one likely going much higher in the long term.
   
• In the shorter term Silver is seriously overbought and profits need to be booked on trading positions.

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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.

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