Gold Charts R
Welcome to GCRU #93 on Dec 17, 2003. It’s
been a yo-yo mkt since last Wednesday. up, down, up, down, up. Monday was
outrageous. On the Saddam news, stk mkts rose sharply, along with the $, &
gold fell. That lasted about 2 hours. Then it reversed. Stks fell, $ lost its
gain & gold cancelled out its loss to close unchanged on day. So much for
the Saddam effect. Zero! ••Many of U avoided the yo-yo & the stressful
Monday reversals by taking my advice last week to sell at mkt in many shares.
One reader, who didn’t sell, writes: "Dear Uncle Harry, Why oh why didn't
I take your advice? When I looked at my portfolio today, I felt sick-I saw
$20,000 in profits disappear like a puff of smoke. Why is it so hard to grab
profits while I have them? I must be greedy. OK, I vow to place sell orders for
the profit levels U recommend. I can't stand to see so much profit vanish like
that. K Berggren." That’s how we learn, by losing capital or profits.
Emotions are the enemy. •••Monday gold was aprox at its peak for the year, but
gold shares were at a different stadium! The spread between gold &
gold shares is the biggest seen in years. Does gold fall to meet lower shares or
do shares rise to meet higher gold? Or some of each? Probably the latter.
••There’s a potential mini H&S top on the Schultz Gold Share
Advance/Decline Line. By press time it should be resolved. Possible H&S
in Schultz Gold Index also. Our Spinner index had dramatic
falls, but the Timing Lines in most stks had up-hooks, which is typical of
bottoms, tho most are deep under the 0-line.
••Strategy? Most of U took profits & have shrunken portfolios. Me
too. U/we can do a bit of bottom fishing. If U sold almost nothing lately,
better lay low til we get tech & price support. ••The glass ceiling at
410-412 prevails & probably will for a while, though overshoots &
pullbacks are likely for some wks. ••It was very encouraging that gold held at
401 on the sharp selloff on Saddam Monday in far east mkt. Likewise is good
that the medium term uptrends from June/July lows are still intact on most
golds, so corrective dips are holding within logical bull mkt limits. ••I keep
telling U that among the reasons for grabbing profits when U can, is the leverage
on declines. U saw this painfully illustrated on Dec 10 when gold bullion
fell only 0.46% but SGI fell 5.46%, HUI 6.03%, & XAU 4.79%. And
that was in just 1-day. In a large gold correction U see that
times say 10-20-30 days. U get wiped out (if u don’t use stops). On Dec 10
Golden Star fell 11%, Iamgold -11%, Kinross 8%, MDG 5%, NEM 4.31, Rangy 8%,
WRM 8%, Afrikander Lease 40%. These falls occurred after mid-day, so GCRU readers
had time to sell at mkt per GCRU recom issued before the opening. Only
1-stk rose on Dec 10 (Inmet). I gave more sell at mkt signals lastime than any
issue since GCRU began. If U acted promptly U got out with gains.
••Unusually, there were almost no hot gold stks in last 10 days of. Inmet was
the hottest. SoAfricans did well due to the weak rand. Rio Narcea held fairly
well. The rest fell uniformly. Even blue chip NEM fell 12% in this period.
••Bullish Consensus: gold 85%, still overbought. US$ 17% still oversold. ••In
light of bank/broker letters going out to US clients that insurance companies
are pulling out from supporting stock accounts, leaving much reduced
protection. U should not keep over $500K in any US account. U should regard
this as a warning of the fragility of the banking & brokerage system. It is
essential U buy more bullion & gold coins & store them variously.
European banks are safer. World’s strongest banks are in Switzerland &
HongKong. Details in next HSL. Plez don’t expect direct email answers to
questions on this. Will reply in HSL. U know what U must do. ••Here’s
another reader letter: "Uncle Harry: Magnifico, mi gran Tio! What an
artist U are. U have read our minds & filled our needs. U must have sensed
we working people rarely check the wkly & monthly charts. By setting
this example, it becomes our standard! We NOW suffer from gold addiction, &
U are defining our practice standards. What a legacy U are sharing! I hope U
& your team truly understand how we, your virtual community, feel
about U. U have become family! Best wishes from your lifetime students, Larry
& Lana Witt." ••No GCRU in Christmas week. Family warmth wishes
from the GCRU team & your Uncle Harry for a mentally restful holiday.
PS: Tax selling
is underway. Means any weak shares may get much weaker til year end. Your
choice: sell quick (even if a loss) or take a chance a stk that is down &
goes lower may bounce back after Jan 1.
(U may even
benefit from a tax-loss sale, tax-wise)
PS #2: Tuesday’s
closing prices for golds were mostly very weak. Spinner reversed to
downside on some stks. Our advance decline line H&S top seems ready
to break down. Outlook not sunny. Hunker down til get all-clear.
Schultz Gold Index (SGI)
– daily chart – line & bar (12/16/03): Bull
cue: gamblers buy a bit on
1-day close over 14.18; more aggressively over 14.86. Bear cue: 1-day close below 12.50. Comment: poss head & shoulder top warns against buying
dip action. Mini bull cue on 1-dc over left shoulder high (14.18), confirmed
via rise beyond head. Break below H&S (12.50) neckline opens way for
sustained negative cycle. Caution!
Schultz Gold Share Advance/Decline Line (SGS-A/D)
daily chart L/O/C (12/16/03): Bull
cue: buy strength only, ie: buy in small on 2-day close over
5204; again over 5240. Bear cue:
S/T: hit. New: 1-dc below 5168. Comment:
Spinner negative. Break below July uptrend & threat of
head & shoulder
top raises odds for deeper consolidation (H&S offers 5090 theoretical
target if confirmed via break below 5168 neckline).
Gold Charts R