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Gold Technicals & ETF Inefficiencies

Morris Hubbartt
Weekly Market Update Excerpt
posted Dec 10, 2010

Gold and Precious Metals

SGOL 6 Month Price Chart

Super Force Gold Bullion Analysis

Gold has a solid Super Force Buy Signal as of Friday Nov. 12th.

• Gold is the only one of the precious metals sector that did not get a sell signal from me, issued on my daily chart surge system on the major risk market assets, after the recent blast to up to almost $1430.

• Gold should be the most valued asset on the Globe. Gold will be dramatically higher. As more and more debt is piling up around the globe, Gold will gain more and more in value.

• Honest Ben Bernanke appeared on 60 Minutes this last week, stating there is no inflation and QE is not money printing.

• Honest Ben needs to look at the consumer sectors of the economy. Take a look at the rising moves in cotton, wheat, corn, soybeans - just to name a few. This action must translate into higher consumer costs across the board. Do you think rising food prices have a correlation with record numbers of food stamps being handed out? The “Bernank” doesn’t want you to think about that possibility. See the recent youtube cartoon on 321Gold about “The Bernank” if you haven’t viewed it for a horror lesson on what QE really is all about.

• Ben’s claim that QE is not money printing is laughable. This is a man who is known, even amongst the establishment, as “Helicopter Ben”. QE2 is what I call low key money printing. He is buying Bonds in the open market with printed money. What would you call that, “non-printed” money purchases? I see another writer has referred to Dr. Bernanke as “Dr. Pinocchio”. I think the moniker is accurate.

• When a government can’t pay back debt, printing or default are the only strategies employed as so-called solutions to inherent structural problems with government itself. Companies go bankrupt, governments print.

• How pathetic! A government has power to tax and print, yet the debt is so large it will never be honestly re-paid!

• How does the above related to you in the market? I said a week ago in this space to you, ”In my opinion, Bonds and Currencies have a terrible future.”

• Note the activity in the Bond market this week. It doesn’t appear the Fed's actions are helping all that much, whether by design or just as a failed strategy. Either way, Bonds have taken it on the chin.

• Here is my key point: I think the QE “project” has a lot more to do with currency devaluation than economic liquidity.

• QE is not working. The plain fact is that unemployment is higher now than it was when QE started!

• The debt and the liabilities in the US alone are staggering, but the US is not alone in this growing quagmire. Note the headline from The Telegraph newspaper:

  EU rescue costs start to threaten Germany itself
  

  The escalating debt crisis on the euro zone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.

• This all boils down to dramatically higher Gold and Silver! I think it is all just around the corner so all corrections now in the precious metal sector should be bought. Buy with extreme aggression. I’m going out on a limb here. I think we’re on the edge of a major paper money devalutation.

• As you all know, I take every trade that I give you, every buy and sell alert, myself. I don’t think any other writer can claim that kind of “putting my money where my mouth is” confidence. So, I have raised my core positions in all sectors in precious metals.

• I have introduced Super Force Signals video on my website and in those I advise using all corrective actions from this point forward, as the last possible chance for you to get these assets purchased!

• Volatility could bring prices lower in Gold and, in particular, Silver. When this chapter of World History is written, people may not be so keen to sell their metals for Government paper money. There is growing distrust of the currency markets in many nations. What if the growing distrust turns into a panic? Compare any currency to Gold over five years. Gold has already won!

SGOL One Year Price Chart

• Note the circled area on the above chart. This is good action. I wanted to see less volume in this pullback and we are! The last time price was pulling back in this area, there was much heavier volume. This is very good news for you, for the gold community!

• At superforcesignals I’m in charge of all buy and sell targeting. It’s a job too important to delegate. I set buy targets and accumulate all the way down to those targets. That’s why, while most were experiencing some big draw downs this week, my Super Force portfolio was again hitting new highs!

• I am a price predictor, but my goal is to make myself money first and pass on exactly what I’m doing, to empower you to make the same money.

Gold Bullion Weekly Chart

• Gold is having corrective action again this week. Above is my Annotated Gold Weekly Chart. This chart uses high weekly RSI reading to predict corrections. We have been in this area for a while. I see a possible ultimate downside to the 1260 area. If we go into a deeper correction this is perhaps the ultimate and final major buying opportunity for Gold before some kind of terrible events in the US dollar. One must be prepared for such an event as 1260 with capital ready to buy.

Gold Juniors – GDXJ Chart

Super Force Gold Juniors Analysis.

• I issued a Sell Friday Dec. 3rd. This is a Surge Index 25 sell signal. If further weakness comes into this market, it will intensify the signals.
  
  
• In the Gold sector, the juniors continue to be leaders. That’s a great bullish development in the overall precious metal Bull Market. This is very important. The Juniors leadership phenomenon is evidence that there is a shortage of Gold. Future Gold will come from the Gold Mines and in particular from the Gold Juniors, where future exploration comes from.

• Take a look at the volume on my juniors chart above. It is interesting to note, the pullback is coming on much more shallow volume than the beginning of the correction on Nov. 9th. This has to be considered Bullish!

• I said a week ago; “I actually want a pullback at this point, for both core positions and the continuous trading reload opportunities I highlight for you in my superforce60 60 minute chart trading service.”

• The pullback is exactly what I ordered and exactly what you got. We got two reloads in both GDX and GDXJ on Wednesday! SF60 Trading Service subs also got the classic POWER 2 RE BUY on China’s stock market. Since mid October the bottom line is Super Force 60 has booked 49 wins and 0 losses.

• Your Motto should be:

“I invest in real assets, therefore I don’t book losses!”

Positions in the SF60 program can also be part of your Core Positions Portfolio.

GDX 9 Month Chart

GDX Massive Breakout On 3 Year Chart

Super Force Gold Stocks Analysis

• A Super Force Sell Signal was issued on GDX at $62.73. A stunning win.

• Although that “sell signal” is in play, my Bullishness on this sector is growing. I like GDX more now that it is down in price. Gold Stocks have come down since the sell signal. I have started reloading and so should you!

• The story that has to be repeated here is the 2008 market crash that smashed Gold Stocks. This is a critical factor to making money now in gold stocks. The Market Action in 2008 and the continued rise in Gold, have created a situation where stocks are at least 40% behind and possibly up to 100% behind Gold’s price. These stocks should have been leading Gold, and in a normal Bull market, that would be happening!

• These are not normal times, this is the worst crisis in a long long time. Gold Stocks will catch up because of one plain and simple fact:

• There is not enough gold! The only way to get more, is to mine it!

• Bottom line: There are signs the correction has resumed. At the same time, note all the positives I highlight for you today. Couple that with the special undervalued situation surrounding the Gold Seniors, especially now that they have pulled back. Gold Stocks headed much, much higher.

Silver Chart

• Silver. I issued a sell alert to you at $29.15. The big picture fundamental story couldn’t be more bullish for silver than it is, and silver is known for volatility.

• Silver is an asset. I hold a large core position, and it is likely going much higher. I added to positions of physical silver locked in at the spot price of 25.00 the low, so far.

• A look at my silver chart identifies your key buying zone. The silver market rallied 68% from July to its peak, this month.

• Your key buy zone would be a 50% retracement of that 68% upside move. I don’t know if we’ll get back there or not. I want you to be prepared for such an event.

• Particularly for those who don’t have any allocation of silver at all, focus on the buy on all further price weakness.

• What I see on the Gold and Gold Stocks volume patterns is evident in Silver as well. This could be a very short lived correction!

Short the leveraged S&P etf SSO

• Look at the above US stock market chart. I introduced a new unique trading program: “Short The Leveraged Long ETF Stock Market Index ETFs”. I also apply it to other markets and use a unique arbitrage technique for those who are interested in the more advanced part of that strategy.

• The main ETF shorting strategy takes advantage of the structural inefficiencies of leveraged ETF vehicles. The more leverage, the more inefficient these traded funds are.

• Have you ever traded a leveraged ETF and lost money? There’s more than just timing as a monkey wrench. The losses are also because of volatility and the time holding a structurally imperfect investment. Rather than fighting harder to get the timing perfect, or just complaining about the “bad ETFs”, use their inherent structural failures to make yourself consistent profits from that very structural failure!

• As always, I place every trade myself too, and you don’t book losses. Only gains! Even if the American stock market doesn’t top out here, you could still make money with the structural inefficiency strategy!

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.

website: www.supergoldsignals.com
email: admin@supergoldsignals.com
email: admin@supergold60.com

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