Issue #2
Dear Member,
Again, welcome to Gold and Silver Trader. I’m excited to have you on board as a member.
It’s time to kick off our trading, so let’s get right to it!
I believe now is the time for you to get your toes wet and add a small long position in gold. Today’s Federal Reserve announcement that it will continue to buy bonds and print money is a factor, but I see three major reasons that are more important:
First, I am seeing a subtle but important change in gold’s trading pattern. Namely, both the dollar and gold are showing signs of rallying together.
This could be a very significant change in the relationship between the dollar and gold. I believe the reason for this is …
Second, my models show that the euro currency is in danger of collapsing. Despite the euro’s recent strength against the dollar, it is very overbought and extremely vulnerable to a sharp decline.
In addition, Europe’s economy is sinking badly, and there are a number of European financial institutions that are teetering on the brink of bankruptcy. My timing models show that Europe could start to crumble at any moment, and that the next several months will be especially volatile and worrisome for Europe.
If my models are correct, this is likely to send European capital scurrying for safety. That in turn could prove to be bullish for both the dollar and gold. Hence, the reason why we are seeing a change of character in gold’s trading pattern, as noted above.
Third, technical support is firming up. There is now solid support at the $1,358 level, followed by $1,351, and then the April low of $1,310.
Please note: Today’s recommendation is what I call an “anticipatory” buy. That means I am recommending buying in anticipation of an important low forming.
“Anticipating a low forming” also means that I do not yet have confirmation that the low has been made. Thus, the reason I am only recommending a small buy right now.
If I’m right and we subsequently get a confirmed low, then I will become more aggressive.
In addition, please note that …
A. It is not yet time to start buying mining shares or mining warrants. They are underperforming for several reasons. But stay alert, we may soon see a bottom there as well.
B. It is also not yet time to buy silver. Silver remains vulnerable to another downdraft, even if gold holds current levels.
Recommendation Specifics
Buy shares in the SPDR Gold Shares, symbol GLD, using 15% of the funds you have available for trading this service. For instance, if you are trading $25,000, you would dedicate $3,750 to this trade.
With GLD currently trading at $132.19, that means you would purchase 28 shares for every $3,750 in capital you are allocating to this trade.
Place a protective sell stop, good till cancelled (GTC) at $127.17 to help reduce risk.
Here are the recommendation specifics, where “XX” equals the number of shares you would buy based on using 15% of the funds you have available:
I want to buy XX shares of SPDR Gold Shares, symbol GLD, at the market. Then I want to sell XX shares of SPDR Gold Shares, symbol GLD, at $127.17, STOP. This order is good till cancelled.
Go ahead and act on this recommendation as soon as possible and stay tuned.
Best wishes,
Larry
