NEAR TERM OUTLOOK

Plain and simple: The Junior stocks are near their lows for this Bull Market. That is the first sign that this Bull Market in Gold is only half over. Junior Gold shares usually lead Gold bullion both up and down. Check out their respective charts. The Majors look to me like they too are near completion of their consolidation phase as they will soon be increasing their takeovers of midsized and exploration companies.

WARNING:

If you are already invested and you attempt to trade a GOLD RUSH like you trade any other market, you will be sadly disappointed. You may be lucky enough to pick a short term top that will make you feel smart for a week or so or maybe even a month or two, but then suddenly you will be left standing at the station with your hands in your pockets clutching on to your shrinking dollars and watching as the Gold Rocket Ship takes off and you will not have the courage to jump back in at accelerating new highs. You will sit there waiting for the pull back that we are in now, but will not come again. If that happens to you, be ultra careful that you don’t get sucked back in at or near the HIGH 7 years from now as the front page headlines clamor about the Bull Market in Gold and Silver. If you have been lucky enough to have been sucked or scared into taking profits, and are now sitting on the sidelines, start SCALING BACK IN NOW.

Whenever Investors begin to hate stock, especially gold stocks, the professional traders know it’s time to start buying. The current setup for Junior Golds is similar to the way the overall market was on July 15th and is probably as good as it is going to get and is similar to the setup at the 2001 bottom. Anniversary dates of major highs and lows can often mark major turning points in the market. Last year’s low in the XAU came on August 16th and the market may wait until then before moving higher. Extreme pessimism runs high at major lows and the price relative to Gold ratio measures that pessimism. The current reading is as low as the 2001 bottom and that bottom lead to a 400% gain. Next rally up should be truly explosive. We are 5 to10 days away from the bottom, if we are not already there , so don’t chicken out now!

August 8, 2008

GOOD LUCK AND GOD BLESS

Timing may error by a few days but the message is very clear!

RUF