April Commentary

April 26th 7:30am after that sharp gold rally you may be thinking I have lost the plot. I hope to lighten up in the funds today and hope some confidence returns to the sector and buying lights up the board. I will want all the money I can muster however I do this calmly never sell during the blood bath these capitulations are short term buy opportunites for traders and they use them.
Goldman Sucks telling people “stop shorting gold” can you believe them? Personally I have no trust and think they should not be allowed to trade and make calls in public.
Intra-day systems are telling me gold can drop back from here. The fall was 1616 down to 1320 a magnitude 300 drop and now we have bounced 50% back up to 1470. Gold is running in a rising channel and near the upper line. The bottom line (short term support) is approaching 1410 now. I will add this chart to the report I am working on. Another 300 drop on gold would now land us in the 1150 to 1180 range in this violent ABC correction. Will this eventuate is the question?
The XGD fell from 4594 to 3130 a drop of 1454 or about 33%. The RSI on the XGD is still negative so if we bounce enough I will lighten cautiously. We may bounce to the next Gann (62.5%) or Fib (61.8%) levels on gold.
10:25am update sold 10k RRL av 3.99 both Funds A&B. May close gap above so holding the rest at present. Looking at other opportunities.
10:38am update Great rally here at last a decent bounce but don’t get carried away – that is my opinion. I sold RRL there because it was overbought on intra-day RSI levels. If 1320 was the bottom for the next few months I will be relieved as exit opportunities and trade opportunities will present.
11:52am update my view is of concern to a very astute client so I thought I would share my answers:
RRL RSI 23.9 on 18th – lower than Feb low was at 24.3
NCM 21.5 RSI early April and 20 on 18th April
XGD 22.2 Feb 21st, 21.7 on 4th April , 18.958 on 18th
I may be wrong but not on my systems and even though HUGE risk to my business I am telling it the way I see it and not easy to do that. But I see huge risk and could not live with myself if I did not share that view.
I think we can consolidate here before further falls. Beware of everybody living in hope and talking their books. I could be wrong but look at the Funds – still exposed with a foot in both camps – just want cash if it is going lower which my research and systems are telling me it will.
OK, I am still holding gold stocks in case I am wrong but selling where prudent to lighten risk and allow additional purchases if I am right. I have to follow my own systems as a matter of discipline and it is extremely hard at times especially against the view of colleagues and probably clients as well.

23rd April 3:48pm I have worked out exactly where we are at last. The answers have emerged from the shock of the severity of the fall and I can now present the path ahead for you all. Gold will pause maybe for a few more days and then proceed to the 1181 area before consolidating for many months in a range. Some time next year it will break the coming support into the final low. I had suggested we may need to diversify – and this is now proven. The Funds A&B will claw back any capital I can and use this to invest in deep lows on gold and also the yield stocks at key points. I will know the broad areas in time closer to these events but I have worked out how Armstrong figured this out and not by copying him either. I am working on a Newsletter to highlight this and will try to have it finished in the coming days.
The gold stocks are not bouncing as investors try to figure a way out, there are few buyers the liquidity is just not there. FML will fall after breaking 1.7c unless DT pulls something amazing out of his hat. Only low cost producers will be worth looking at for a trade at the coming lows. The second half of the gold rally will be stupendous so if you are down do not fret this is a time to keep a level head.

22nd April we got the bounce in gold to just below that 1427, it hit 1424.8 and then failed. I am lightening up where I can to retain additional money into the bottom to but the low cost producers. Armstrong thinks gold might even probe $900 and soon. There are few companies able to make any money at that price and the share prices would tank. A panic may be coming. There will be some opportune (but wrong) bargain hunting early this week if we are lucky. Coming to May there is no point buying WOW or any stock. I will be sitting on any cash I have and if RRL even heads higher I will exit that last position so I can buy it back cheaper soon.

16th April 9:54am newsletter brief out in a few minutes just getting loaded. All my views and comments in there. I believe a short term bounce into tomorrow will eventuate from a new low on the XGD today. For the nimble only. We should see serious capitulation today and I will be buying, perhaps on the open or by 11am. Only the intra-day charts can show you that. Overall we are rushing at the bottom and the end of the gold rally is a smoke screen – it is NOT here.
17th April 7:19am gold hit 1401.9 last night a rise of $80 intraday and is now settling back. I stated this would happen in the newsletter and so yesterday was a great trading opportunity. I expect we will remain highly volatile into the bottom which may be reached sooner than many expect. With gold likely headed below 1200 it is possible we will see silver under 20 for a short time. Bullion purchases would best wait until then. I will do my best to identify the low for members.

15th April 8:06am I went digging for Armstrongs supports around this level and below. He talks of a directional change in May / June and possible lows (final) at 1465, 1380 and 1150 with no preference for which will be the final support level. He did also mention a support at 1427. Therefore we may get a bounce soon, the size of the liquidation was extreme so volatility may require a large rise within days so wash out the late shorts.
If you must sell do it on a bounce and retain the capital for lower levels, we will be there to pick this. Gold is now in a rush to hit the bottom and this will shake out weak hands. Armstrong clearly states gold is going much higher so if you are caught (like I am in FML for instance) then you may elect to hold through this as I have seen some investors do with a full return of capital within 12 months. I tried to assist one investor who had mental health issues and sold at the bottom in 2008 (before he came to me) – a sobering thing to remember if you are going to hold over the coming months you might be better no to even look.
This is why I have been advocating caution and the lower cost producers, they will NOT go broke.

13th April update I awake to a shock at the magnitude of the liquidation of gold overnight. Remember the sky has not fallen in, the the fundamentals have not changed for gold. The correction is going lower and it appears to be in a rush now to get to the bottom. This is actually good for the gold bull and painful at the same time.
Now you will understand why I have been so concerned and only looking for a bounce here and there. Now you will understand why I have been directing you all to Martin Armstrong – here is what he said on the 1st January 2013 it is important:
“We have a very serious problem. In gold, everyone is loaded to the gills expecting hyperinflation that will never materialize and governments are getting outright nasty. We have THREE Monthly Bearish Reversals that have now lined up in gold at 15470, 15413, and 15323. We have a huge gap from there to 11589 and this is not real good. Gold closed 2012 higher than it did for 2011 on the 13th year up. That is by no means good at all. If these reversals are elected, look out below. We may have to clean house before gold can resume the uptrend.”
There are other support levels above $1158.90. However low it goes it will happen quickly now. We might even see the low before the end of April this year – this month. When we look back at this correction in a year or two we will wonder what the fuss was about.
I will not be selling in panic and the Funds A&B will take advantage of those that do. I feel sorry for those who are leveraged as they will not have that option. I am personally invested in a few goldies; RRL still very profitable right to the bottom looming, FML (bit stuck like many) but has loads of cash so will not fail – quite the opposite, will be opportunistic during this event, and RMS also 50% cash and will take advantage. I will cover RMS this week for you all.

11th April 9am The Fed “accidently” releases discussion on the continuation of the stimulus and gold gets wacked. Classic manipulation as Goldman Sucks needs to unwind more gold shorts – they do the bidding of the Fed and are TBTF – too big to fail. So we are volatile and not out of the woods but I think this will come in waves of ‘gold up’ then smash the stop loss positions. The action is like the bottom last year still. We shall see how the stocks react today. Sorry research taking longer than expected on this Newsletter but I will have it to you by tomorrow at the latest.
Did you notice the lower cost producers moved the most??

8th April 9:02am well Friday was clearly ‘stabilization’ and Friday night the shorts were bought back in gold’s offshort trading pushing up the price from the 1540 support. We did not test 1530 (yet) and I do not like the XGD daily failing to print a buy divergence. Having said that the bounce I have been expecting is finally here.
9:55am the stocks that bounce hardest (if this comes to pass) will be the lower cost companies.

4th April 8:40am the rush of cash out of Europe is pushing up the USD even as numbers in the USA fail to meet expectations. Non farm jobs came in less than expected and even crude oil inventories went up. My inside month chart failed to play out we have just pushed lower. We are soon to test the 1530 level on gold by the look of it and our AUD is staying high because the RBA is too stupid to see the huge writing on the wall and drop our OCR. Things are NOT all better but the spin is powerful and people are being herded in the direction the media what them to go! The bargains will be stupendous when this bottoms as gold will resume its bull run but where is the bottom? I will look at deep supports for the gold stocks – anything can happen here.

3rd April 9:47am gold still following the same pattern, I am finishing off a newsletter for you today and a chart set in the next two days. The XGD can still print a buy signal however we need to see muted selling to reduce the fall on the RSI. We are at a critical level so I will stay in close contact with you all this week. I may even start buying.
2:28pm update this day correlates to the end of the first stage of the Mercury retrograde period. This is just a curiosity to me and I had mentioned this was a potential (?). More importantly the XGD just hit 4000.3 which was my target support.
Bought 10k RRL @ $3.88 FundA and 10k @ $3.89 FundB, note I also purchased some RRL at $3.88 personally. This may not be the bottom I am still holding some cash but this is very deeply oversold now and ready to bounce.

2nd April 8:56am hope you had a safe happy Easter. The XGD needs to pull up and reverse with the RSI in a strong divergence here. That would generate a buy signal if it occurs. Important support is the 4000 level. Europe has not generated fresh interest in gold as yet but North Korea might provide some demand if push comes to shove. A new leader looking to prove himself is not a good omen. I am running my ruler over SAR this morning on important historical supports in this area. Trading below asset value as gold stocks get punished.