Dear Member,
Shortly after yesterday’s Fed meeting, fears of higher interest rates hit the gold market, taking gold below important short-term support at the $1,351 level. This morning gold is down hard.
Per this morning’s issue, you should have been stopped out of yesterday’s position in SPDR Gold Shares (GLD). Not to worry, that’s why I kept the position light and with a tight stop. Gold is still bottoming and downdrafts are to be expected.
If you did not act on that recommendation, do NOT buy GLD now. Cancel that order.
My models have signaled a continued decline. Therefore, this morning I am recommending reversing to a bearish position in both gold and silver.
Recommendation Specifics
I recommend you purchase the inverse ETFs: ProShares UltraShort Gold (GLL) and ProShares UltraShort Silver (ZSL). Both are double-leveraged ETFs designed to increase $2 for every $1 move down in gold or silver.
I recommend allocating 10% of your available Gold and Silver Trader (GST) funds to each trade.
Here are the recommendation specifics, where “XX” equals the number of shares you would buy based on using 10% of the funds you have available.
Note that I am setting a price limit below current prices for both ETFs. Reason:
I am expecting a bounce in gold and silver, and a pullback in the prices of these ETFs. We want to buy them on a pullback.
Please stick with the limits and do not chase the market. You may not get filled today. If so, we’ll look to get filled next week and I’ll adjust the orders as needed. Do not, I repeat, do not chase the market. Please also note the protective stops recommended for each position.
For gold:
I want to buy XX shares of ProShares UltraShort Gold, symbol GLL, at a price of $93, or better. When filled, I want to sell XX shares of ProShares UltraShort Gold, symbol GLL, at $84.88, STOP. This order is good till cancelled.
For silver:
I want to buy XX shares of ProShares UltraShort Silver, symbol ZSL, at a price of $96, or better. When filled, I want to sell XX shares of ProShares UltraShort Silver, symbol ZSL, at $86.09, STOP. This order is good till cancelled.
Go ahead and act on these recommendations as soon as possible.
Now, on to Q&A from subscribers
Questions have been edited by me for purposes of clarity and brevity.
Q: I have Bank of America shares that are up 70%. Is that a stock you’ll be recommending we buy or should I sell to make cash available for GST trader transactions?
A: Unfortunately, as the editor of a newsletter, I cannot render individualized advice.
Q: In your “Welcome to Gold and Silver Trader,” you referred to your special report “A Revolutionary New Way to Seize the Profit Potential of the Precious Metals Markets!” I cannot find it or a link to it.
A: You should have received it as part of your complimentary membership to the Hard Asset Trader. If not, here is the link.
Q: Canadian brokerages only allow stop loss orders on board lots and do not allow stop loss orders on options. If one cannot follow the market closely during trading hours, would it be better to round up (or down) your recommendations to board lots or just check the closing values each day and pray for the best?
A: Round out your order to allow use of stops. As to options, we will not be trading options.
Q: The manual says you will recommend actual quantities to purchase or to purchase a percentage of available trading funds. How will we know?
A: I will only be recommending percentages of your available funds to trade for this service. That way, everyone can adjust the quantity of shares they are trading for each recommendation accordingly.
Q: Can your trading recommendations be traded in an IRA? If so, can you recommend several brokers that have IRAs that can buy or sell your recommendations?
A: Yes, they can all be traded in an IRA. I like Interactive Brokers, but there are many others.
Q: What’s the advantage in trading bullion? Storage fees alone seem to be an unnecessary cost for trading.
A: Correct. The advantages only come in sidestepping the big swings of several hundred dollars. Which I do intend to help subscribers with.
Q: What would you suggest for investors who own GLD & IAU at roughly $1,600 gold and GDX and GDXJ with a 65% loss?
A: Unfortunately, I cannot render personalized advice.
Q: I read that you see a surge in gold coming due to a break down in the euro zone. From my perspective, I see relative calmness in Europe, compared to 2011 and 2012.
A: Calm before the storm, in my opinion. My work is based on what my models tell me for the euro. And indeed, just yesterday we saw a frightening plunge in the currency.
Q: You have said gold and silver will definitely go down some more. Recently you have advised selling half of GLL and ZSL in your Real Wealth Report. What are the chances that we have reached a bottom?
A: The metals are in a bottoming process, and from a long-term point of view, it does not make sense to try and pick the exact bottom. From a short-term trading point of view I intend to make hay from up and down moves with no biases.
Q: You did not mention SVM as one of your stocks of choice.
A: Mining shares have NOT bottomed, so please wait for my signals.
Q: Regarding allocation of funds, what percent in equities, what percent in gold, what percent in bullion?
A: 100% of your funds for Gold and Silver Trader (GST) should be allocated to short-term trading. Bullion recommendations are via your complimentary subscription to Hard Asset Trader and the funds you allocate to those long-term recommendations should be considered separate from GST.
Q: I have $40,000 to invest in metals. Will our first approach be mining stocks that you recommend?
A: No, mining shares have not yet bottomed.
Q: Would you let us know which mining companies are “untouchables?”
A: At this time I would not own any mining shares; they have not bottomed yet.
Q: Larry, will you be using calls or puts in your trading strategy? Also will you be giving us ETFs that can be executed by most brokers?
A: No, options trading is not part of this service. As to ETFs, I will only be recommending the most liquid, highest volume ETFs, so most brokers should indeed handle them. If not, I suggest finding a broker that does.
Q: If I use the 800-291-8545 telephone number that you list in your email and other communications, you will incur the cost of that call. Is there a non-800 telephone number that I can use?
A: Don’t worry about the cost of calling. It’s on us!
Q: I’ve only $45k or so to invest. Would you advise even a small-timer like me to set up an account with the Hard Assets Alliance?
A: I believe everyone should own some physical metal for the long-term. But the funds you earmark for it should exclude the funds you trade GST with. GST is best suited with a minimum of $25,000. Base your decision on that.
Q: I joined the Gold and Silver Trader. When I access the site, I find no archives, portfolio positions or one-year trading history. Is GST just starting?
A: Correct, GST is a new service.
Q: While I believe that the storage feature included in the Hard Assets Alliance program is very convenient, do you think it justifies their larger storage costs?
A: Compared to other storage options, the convenience and security of their storage programs, the locations they have available for storage, yes, I believe it is well worth it.
Q: What sort of brokerage account should I open for GST?
A: Any regular stock account will be fine, with any number of big, reputable brokers. You do not need a margin account or options trading.
Q: I have been eagerly awaiting your signal on purchasing gold bullion. But I would be investing through my Profit Sharing Plan. Can you offer any insight on this?
A: You cannot act on my recommendations in a profit-sharing plan or company retirement program. GST is for funds you have available to manage yourself.
Q: I have allocated $100,000 to the Gold and Silver Trader. I also have an account set up at Hard Assets Alliance. What percent of the account will be allocated to bullion?
A: In Gold and Silver Trader, zero percent will be allocated to bullion. Your complimentary membership in Hard Asset Trader (HAT) is simply to let you know what I am recommending in the physical market on a long-term basis. Whether or not you act on those recommendations is entirely up to you, but if you do, you should use funds not earmarked for GST.
Stay tuned and best wishes,
Larry
