Gold Charts R Us
Welcome to GCRU #87 (last GCRU was mislabeled as #85; plez correct your copy to read #86). Bullion fell $10 since lastime we talked. Gold shares, on balance, held their high ground; the Schultz Gold Share Advance/Decline Line was only fractionally lower. But some shares fell sharply & a few moved higher, again illustrating the need to dump weaker sisters, trade best Relative Strengths. ••Overbought conditions were wiped out or slashed for almost all hands. But front-running sweetheart stks are far above their M/T uptrend lines, so protective action is justified, as a fall to their support lines is too big & unnecessarily painful to ride down. Hopefully U took profits last wk, as I screamed at U to do! If U didn’t, do it now, if profits remain. •Strategy: wait for signs of renewed strength in sweethearts. Eg, Golden Star, Eldorado, Compania de Minas, Bema, Nevsun. Let some super strong ones (RioNarcea, Inmet) cool off. But the bargains may lie in stks building B/O (breakout) patterns from consolidation ranges (eg, Randgold, Glamis). ••A Dec bullion close under 370 would be a black cloud over the shorterm climate. ••Some say gold has a double top at 390. That won’t have meaning unless it closes under the low price between the peaks, ie, at 370. If it does, a theoretical target could be 350. •• I wrote the following paragraph last wk, just before gold fell $10, which is an ironic coincidence: “Personally, I find it risky to take a short or medium-term view of the gold mkt. It puts your profit picture in danger. Why? Because none of us are that good, at determining where gold will be next wk or next month. How often have U said to yourself (for example): I think gold will rise $20 (or will make $400) shortly? And therefore I won’t sell anything. And then find gold fell $10 instead, & the profit U had in Goldream fell to a breakeven or a loss. I find it safer to grab every profit I see above $2,500 (assuming modest positions). If U have larger or smaller positions U may set diff profit goals. It is the exception, not the rule, that after I sell, the price roars ahead. But so what? I’m happy to leave some on the table for the next man. Not greedy. I took my “pay check” for the day & I bought back into something else the same day that wasn’t overbought, which should pay off. Taking a VIEW re price & time seems like U are relying on your crystal ball instead of playing it safe. U know where the price is going & when? Don’t fool yourself. If a man keeps ignoring profits, letting them ride (he hopes), profits may ignore him.” End of week-ago paragraph. ••As promised, I again delete underperforming stks from GCRU. Agnico Eagle reported a loss & the stock collapsed. So, sadly, I must delete its chart from GCRU, although it will still be covered at the end of these pages without a chart. CEO Sean Boyd tells me they plan cost-cutting & retargeting byproducts, which will bring profits back. When it does & the chart shows it, the chart will return. ••I‘ve replaced AEM with Rio Narcea, a Canadian co. I often trade it; has good chart. ••My hunch lastime that “gold will hit a brick wall at 401” proved pretty prophetic. Though it happened at 393. It came $8 earlier because too many dentists tried to get through the small exit J. ••Gold has risen for 6 of the last 7 months. But it rose only 10c in Oct. Time for the pause that refreshes. ••I’ve been warning to watch for $ strength, & it’s here. It may only rise to 95 or 96 (96.49 says friend Geof Payne) but only 20% of $-shorts have covered so the 80% overhang threatens a $-surprise. Shows U, there is no such thing as a sure thing in the investment world. Buy&hold is less appropriate in gold than any stk group, IMO. Trading makes Treasure. ••Which brings us to suggestions coming in from readers. Lastime I suggested Profitscoopers might be a better word than traders. HSL lifetime & GCRU subscriber Larry Adams suggests: Plum-pickers -. Not bad! •••I see no point in focusing on the gold price, except as a background frame of reference. What matters is what our indiv gold shares are doing! When we have a nice profit, we sell. We also buy. What the gold price does is important but not crucial. To be mesmerized by numbers like $400 & $500 is not just a waste of effort but distracts U from watching the only thing that matters, ie, do U have a profit plum to pick? •••I’d like to retract my tentative hesitancy lastime re world stk mkts. Am back to neutral-positive. Trouble is, there are several bullish & several bearish sectors. Indexwise, if S&P can push over 1070, the rally gains strength. Below 1040, back to neutral. Under 1015: dubious future. Under 980, game over. Yield will give us early warning. See HSL for game-plan. •••Bullish Concensus on gold: 70%, down 4, only slightly overbought. US$: +5, slightly oversold. ••Ex VOY stockholders got Spectrum & Viceroy Exploration shares, both of which were unlisted til a few days ago. Spectrum is now traded, has rocketed from 2.20 to 4.25 since Oct 27. J. ••Final wisdombit: if U R misfiring with your buy/sell procedures, try (not always pos) to place a buy order at the same time U place a sell order. That’s not only pragmatic but focuses the mind in ways that will amaze U. ••Fond wishes from your kindly gold guru profit-grabbing alchemist, Uncle Harry
Schultz Gold Index (SGI) – daily chart – line & bar (11/04/03): Bull
cue: on strength after dip that holds on/above 11.50-11.85 or 2-day close over 13.00. Bear cue: S/T: 1-dc below Oct 3 uptrend. M/T: 1-dc below 11.50; again below 10.50. Comment: loss of upside pressure in Oct 3 uptrend. Spinner in crosscurrent bull mode. Deeper dip towards 11.85 breakout area possible. Megaphone top completed (risk of sharp dip?).
Schultz Gold Share Advance/Decline Line (SGS-A/D) daily chart L/O/C (11/04/03): Bull cue: buy on (Spinner confirmed) strength after dip that holds on/above 5075-5093 support &/or buy on 2-dc over 5177. Bear cue: S/T: 1-dc below 7/16 uptrend. M/T: 1-dc below 5075 & 5030. Comment: negative cross in Spinner. Consolidation probable but Aug-Sept support expected to hold downside if higher highs to follow S/T