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Graham Summers’ Free Weekly Market Forecast (Gold Breakout Edition)
On January
24 I published an edition of my FREE weekly market forecast telling investors
to view the corrections in Gold and Silver as buying opportunities. At that
time I wrote
I want to be clear here. I am SUPER bullish
on both precious metals in the long-term. But right now, both are posting
extremely ugly, bearish technical patterns. However, rather than seeing this as
something to worry about, I view it as
phenomenal buying opportunity for both assets.
Since that
time, Gold has rallied 3% while Silver has EXPLODED 18% higher. Indeed, Gold is
now testing resistance and on the verge of a serious breakout:
If Gold
breaks above this level this week, we’re going to new highs in short order.
This is the
current scenario I’m favoring given how strong Gold was during its recent
correction. The precious metal didn’t break into the gap below with any
conviction. And it didn’t get anywhere NEAR major support at $1,250.
The same
story is playing out for Silver in an even more dramatic fashion. Indeed Silver
not only bounced at one of its closest lines of support, but has since broken
through multiple lines of resistance to new highs:
There is a
potential inverted Head and Shoulder pattern here, though it’s not an
especially clean one. However, since we’ve already broken the “neckline” I’d
like to mention that the target for this pattern is roughly $35 or so.
And if the
US Dollar doesn’t start rallying soon, Silver (and Gold) could go a whole heck
of a lot higher than that:
As you can
see, the US Dollar has dropped AGAIN and is on its way to test its multi-year
trendline. We are literally approaching the “bounce or die” moment for this
currency. If the US Dollar breaks below this line it’s GAME OVER for the
currency. We will be seeing an inflationary collapse followed by potential
hyperinflation.
The one
thing which could potentially reverse this situation right now is the political
elections in Europe.
When we talk
about “solvent” Europe we’re largely talking about Germany which is currently
in the process of seven state elections. If the first, in Hamburg, is anything
to go by, the German people are sick of both the bailouts and the European
Union and want to ditch the Euro entirely.
Indeed,
current German Chancellor Angela Merkel’s party got completely trounced in the
first election in Hamburg over the weekend taking in only 20% of the vote.
Merkel now has a choice, stick with the Euro and commit political suicide or
ditch the Euro/ demand the less solvent members leave.
If Merkel
opts for the second choice, then the Euro in its current form is finished and a
collapse will begin. Seeing as the Euro currently accounts for over 50% of the
US Dollar index, a collapse there could result in a sharp US Dollar rally, NOT
because the US’s financial position improved, but simply because it’s the
Euro’s turn to collapse first.
However,
once that process ends, it will be the US Dollar’s turn on the chopping block.
The markets are already preparing for this with inflation hedges exploding
higher across the board.
Prepare NOW!
Graham
Summers
PS. If
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http://www.youtube.com/watch?v=pEdoLKknCi0
Deutschland über alles
one thing you notice when watching all the old Nazi & Soviet propaganda is that the Nazi stuff usually just shows themselve in a great and wonderful light and all the Soviet ones show Hitler/Nazis as seedy terrible villians. You never see any Soviet propaganda on how great they viewed their people...
Why not Bolsheviks?? not too hard to figure out
And off we go to buy worthles subscriptions! The Euro will eventually subside but not becaue the germans will want to ditch it! Merkel has 6 more elections and the biggest and most important one in her CDU stronghold, baden-wuerttemberg, 2nd most largest state! germans want to get rid of many things but the euro is the last one on their list! for now they have more advantages from it, they are big exporters folks!
As to the current mania, gees, there will be many more "scare them and take their money" events in the middle east, no need to become melodramatic!
the FEDs wont let anyone spit in their game, ya think benjie will just sit and watch his "strategy" being pumeled by some "oil traders and PM hugers"?
never underestimate your opponent!
All will tank if onyl the "smallest rumor" of a rate hike leaks! PMs are no different! Stick with Physicals, screw the paper ones! If not yet owned, get a gun permit, stack on food and tangibles!
No need to buy a subscription for COMMON SENSE!
Especially, this kind of spike in silver doesn't end well.
I like precious metals, but usually spikes end with tears not smile.
contrast the thirties/forties with the seventies/eighties: with former, gold and, more, gold stocks up a lot and never give much back nominally, although other stocks wildly outperform gold stocks in the forties. in latter, gold stocks and, more, gold go up a lot and give back a lot in the eighties.
now is more like the thirties with ww2's monetary and fiscal policies moved effectively into the early thirties. so kind of a hybrid but it began as a deflationary depression, although the bernank, et. al. are writing a new play book/making it up as they go along.
Too much at stake for Merkle to abandon the EZ, but who knows........my best guess is in the interim the PWG will be intervening shortly in the price of OIL.
A sustained break over $100 brings no good news for the Fed and its politicans.
1.) It may not be her choice. The decision is being made for her right now.
2.) Asia is opening down after big drop yesterday (today). Hang Seng down over 2% in first hour...almost 500 points. Nikkei opening ugly again, too. Down almost 2% already.
It will be an interesting week.
As i speak now, Silver and Gold r in red
yes, what's that about? neither are down on the day, eastern standard time; both up handily. but, say, kitco on turd shows down from the gold rebound above 1400 and the new nominal record since 1980 for silver. is this based on london time?
Blythe just having her period.. resume silver fuckin that witch
The death of the Euro would NOT mean any kind of real "US Dollar rally", but would merely mark an uptick in the artificial and all-but-meaningless US Dollar Index, which has become little more than a prop used by the Establishment to deflect attention away from the constantly-depreciating dollar.
Dude if stock markets tank, they will take precious metals down together.
Traders either want te be out or need cash.
"past results are no guarantee of future performance." i agree the collapse in precious did happen in 2008--i have more than just serious doubts about "this crisis being the same." it is a crisis however as any super spike in oil by definition is.
very apt quotation. during the stock decline from '29 to '32, gold rose in many currencies (the dollar was late with the appreciation/confiscation officially in '33) and gold stocks rose a good deal more.
and the underappreciated kicker with p.m. stocks is that they often go up in the general equity bear market of a deflationary depression and really, really up when the turn finally comes (like summer of '32) when very few have the guts to buy. and you don't have to either because you never sold.
Up, up and away, once again...