June 26 2009

Right when we thought we had it, 940 is forced out of our grasp. Although at 11:16 am gold desperately holds onto 940 + pennies, the moral was stolen from us. Gold stocks are not liking this one bit as the HUI index falls a bit, but maintains above its original inverse head and shoulders break point at 350. Its not at all uncommon to watch it retest lows before its real explosion. The index is probably one of my favorite and valuable tools to watch for investor's "mindsets". It's rated based on the strengths of different gold mining companies and there influence on that part of the market. Goldcorp is the most heavily rated company on the index, as well it should be. Followed by Barrick, Anglo Ashanti (that one I can't explain...) and Newmont. Agnico is not far down that list from their and neither is Iamgold, which is a stronger rated stock than even Yamana or Harmony (which is dead last). If you took my advice and bought Iamgold last week or the week before you probably picked it up anywhere from the low 10's to the low 9's and are most likely either in positive territory or very positive territory. This company is an unrealized monster. If you kept up on the news, they purchased 17% of a junior gold company called Oromin. (which was like 14 million shares at .60 a share and is now .90, so they basically turned 9 miliion dollars into about 14 million in one week.) And increased the reserves on both there Esskanna project in Ghana opening next year and the Westwood project in Quebec opening in 3 years. They also increased there expected production from 880,000 oz this year to 920,00, edging closer to the million mark. Some of my colleagues believe that a 100% increase in Agnico Eagles credit limit, and the fact that there flagship mine LaRonde only 2 miles down the road from Iam's Westwood, will cease producing its expected amounts in the near future means a possible buyout or merger between the two. Anything is possible, but don't try to plan mergers. If it happens and you own the stock when it does great, but don't buy it cause you think somethings in the works, cause even if your right (and few ever are, these things always come when you least expect it) It will almost certainly not be on your time scale. Buy I am gold because it will be worth $14 in a matter of weeks, not because you want to make a quick buck on a takeover.

We have 2 more trading days left in June... 1000 is now looking like it won't happen this month, but don't rule anything out. My revised expectations is still very soon July will make the diffrence. The dollar is dying. Commodities always go up in weak currency situations. The more money we print/throw at our problems that we dont have to begin with, the more the buying power of the cash in your pocket decrease. Protect yourself. Gold will outperform all, and oil will be second, although in contrast it won't be much of a close second. Oil you produce and destroy. gold can never be destoyed and will ALWAYS be money.

Tick tock tick tock. Keep the faith and pateince (and positions!) It's comming soon
-J

Warm greetings from NY

Monday morning markets opened for gold across the board rather luke-warm. In Asia gold traded at 930-935. Europe, 930-935. Then to NY where they push gold down to 920 and below. The fact that the rest of the world agrees that 930 is the common price per oz in US dollars, should tell you something. Are we more in tune than they are? Or is it more of just an utter hatred for gold? After all, If gold goes down, it means more people are believing this recovery. Except one problem... The DJIA is down almost 180 points as I write this so there is some form of uncertainty here. Gold is not being sold at 920 because people are taking profits, Paper gold contracts are shorting the living hell out of it to scare you out of your positions. A piece of paper is being used to drive the price downwards. Be it either on the Comex shorts, or the "dollar rally", a piece of paper is being used to scare you.

And yes, I know, I said gold would not fall below 930, and it has significantly. Well, nobody is perfect. Like I said before these prices are just too low for gold at this moment, and will not be sustained. I would expect a rejection of these prices and a rally back into it's now normal trading range of 930 very soon. (say tomorrow or Wed.) I also said It would reach 1000 by the end of this month. That is coming. By the end of the month is still very possible, more likely this may extend into mid July. I'd rather be 2 weeks to early than 2 seconds too late. This consolidation is getting ready to explode and it will happen soon. just imagine trying to compress a spring, the more it compresses the further the "launch".

Hold on to your positions. I have not steered you wrong. All that is to come will be here soon.

-J

Told ya so...

Gold did close even below 930, but as I explained to you the price of gold at 926, which was the low yesterday, would get rejected, and prices would move higher. Today that theory was correct. Why? Perfect 50% Fibonacci pullback? Immense support at the 930 level? Inflation/ Technical analysis on gold verses today's diluted dollar? People have many ways of figuring on what things will do and when. None of them work all the time. Fibonacci is a great method, but sometimes its 33% 50% or 62%. If you hold out for 50 and it turns out to be 33, you missed the boat. chart reading is great but you have to have some basis for why things will move higher. Chart patters fail all the time. Wait till everything technical and chart wise start to compliment each other when the pegs fit, you'll know. In the case of gold is a 33 50 or 62 % pullback likely? Yes. Is today's inflation and dollar strength (or lack there of) well enough to support gold below 930? No? Where's the support lines? Which line is strongest? What retracement level is that closest to? 930, dead on at 50%. You really want confirmation, where are the stocks at? At yesterdays close most of the major gold stocks where at the bottom of their trading bands, and closed way low and little volume. One last flush before people realize its not profitable to sell companies at these prices, their worth much more.

The dollar is desperately trying to hold the gap up it made yesterday to start the day at 80.40 for its close on the 12th at 80.20 area. Now, about gaps...their overrated, and at some point in time they will have to be filled. For the dollar its big "bullish" gap up will most likely be forfeited by the end of the day today or tomorrow. That fall might give gold enough juice to take on 940.

The gears have ground to a halt, and the transmission is thrown in reverse. Things are gradually going up again on light volume. I'd not be sure I'd by it either if I didn't know what I know. The volume will increase and things will start moving higher and faster. If you didn't believe me, here's your confirmation. We all need to eat, if you must trade don't leave your money out for long, or you stand to miss out. It's still not too late to buy in, things a relatively low.

And so it continues...
-J

12 days left...

If gold is to reach my prediction of 1000 by the end of June, it has 12 days left to do it (counting today). If, your paying attention though, the current price is 933, and so far we have not fallen below it. I ask of you to take my predictions within reason. I'm a gold and gold stock annalist not Miss Chleo. When I so simply put that gold will not fall below 930, what I mean in a more explained way is that under today's conditions, if selling pressure on gold drops it to say 925, the price will be overwhelmingly rejected by the gold community. Any more selling of gold, will not be stood for and frankly will not profit many at those prices, and will be pushed back up again by the bulls. We may see intraday, or even a close below 930 in the the single digit numbers. Pennys. It will not last long, I assure you. Likewise, 1000 by the end of the month is dependent on buying confidence and strength. If it's not as much there as I think, it may take into the 1st week of July to unfold. Either way, It's coming, and soon. I personally would rather be too early than too late.

For those of you waiting for that Fibonacci 50% retracement, its now 11:13, and you just got it to the penny. 927.50. It won't be much longer now. Let me ask you chartists something. If the a daily chart spanning 6 monthes forms a cup and handle, than the target price and time for that pattern to unfold would be 6 monthes at a price of depth of cup + height right? So if the depth is 130 from the height at 990-1000, then your looking at a target of roughly 1120-1130 by the end of the year. With that being said...http://stockcharts.com/h-sc/ui?s=$GOLD
check my work for yourselves...

For those of you following IAG, they are at bottom of there trading bands, which is a great buy signal, and on top of that just announced there new mine in Ghana set to open next year is ahead of schedule and on budget. They also upped the estimate of proven and probable gold in reserves on the property by 8% to a nice 1/4 million oz. If you believe in gold, you shouldn't need to think about this one, especially now that its in the single digit mark. That too won't last long.

You buying time is at an end.

-J

Mixed Feelings

Today is interesting. Dull as hell, but interesting. Gold is up by just about everyone's standards (even CNBC's) but its barely doing anything meaningful whatsoever. As for the gold stocks, the volume is just not there. It's less than not there, it's less than pitiful even. This may be looked at as bad but on a day where gold itself is only up by a few measly dollars, I'm fairly encouraged. This could be a situation where the smart investors are already in, and are just not going to sell anymore, therefore leaving no action for them whatsoever today. The calm before the storm perhaps.

I'm encouraged to see the dollar fall off of its high from yesterday by $.50. A blip or so in the upwards direction might be all it has left. At this point it's best offense is a good defense. (ie: hold on to support levels for dear life cause otherwise, it's a long way down)

For you fibbonaci fans out there there could be an arguement that this will be the big retracement of up to 50% of our gain from the bottom at 865 to our top at about 989. That would be 124 dollar gain and a 62 dollar retracement at 50%. Bringing us to about 927. (Or perhaps 930? Another reason why I stick to the "gold will not fall below 930" argument.) This could very well be the case. An argument for only a 33% retracement is also quite valid, in which case we should already be in the process of turning now. Which one is right. Who knows even if either is right. If your trying to day trade right now, the best financial advisor I can recomened for you is God. If you get ahold of him be sure to let me know what he says. Other wise, I'm going to invest soley on what I know, and that is that gold will not fall below 930, and will rise to 1000 before the month is over. If your upset cause you haven't brought in any money for the last few days, what you make as a whole for this month will make up for it. Patience. It's
comming.

-J

The end is near...

I will be the first to admit the fact that I was dead wrong in my interpretation of Armstrong's date. Most of the day I thought it was more than possible, but the "reversal" took it far away from my projections. This, my friends, is why I'm not, nor do I advise you to, be invested in the Dow. (or why I should make interpretations or predictions on its behalf for that matter.)

The dollar rally is done. (not to the minute or day, I've been off a few times now, so I don't want to be slaughtered by email if things don't turn in 10 min) Its out of steam and WILL turn very soon from now. What happens tomorrow, not sure. But buy while you can I can't stress this enough. At most 23 days till a definitive 1000 an ounce.

I repeat, THE TIME IS NOW!!!
(Yesterday even)

-J

Martin Armstrong

For any of you who may be paying attention to his reports from his prison cell in Fort Dix NJ, today is another date in the Armstrong Economics weekly pi formula. (in one of the recent articles he released he not only broke down the 7 major turning point dates in the 8.6 year confidence model, he also broke the lesser dates down into monthly and weekly.) On his weekly model the last date was to be an "up" move,(top) May 18 2009. On that day, the Dow Jones was up 250 points. From there it was a slide down to the next day June 8th 2009. May18 could very well be as Jim Sinclair translated it, "The end of the green shoots". On Armstrong's previous "top" (up move) on April 20th, the DJIA fell 300 points.

Regardless of your feelings on Armstrong, no body can (successfully) debate his brilliance at timing. He may have his opinions on a lot of other things which may be right or not, regardless I believe there worth paying attention to. If for any reason I found my own predictions or opinions, in any way contrary to an Armstrong prediction or confidence model "key" date, I would either seriously consider changeing my opinion, or keep my mouth shut about what it is. His dates are right on point, there interpretation is up for grabs however. He seems to focus on world markets, and the major moves in his dates have been them. His "waterfall" effect has been variously interpreted. I've heard that the "waterfall" will be the US dollar. I must disagree. My reasoning is this: I believe the dollar will follow more of a "free fall" as it rapidly declines, and secondly, Armstrong's focus has been mostly on the world markets. The 90's was the NASDAQ, 87 was the S&P, and 29 was the Dow. All though I believe they, as well as Nikkei and Hang Seng will follow, All eyes should be on the Dow right now. This is it's moment. What it does will be crucial for many other things.

My Armstrong prediction interpritation: The Dow will close down at, or in excess of the 200 point mark. 8550 perhapps. Lets wait and see.

If you still aren't buying in. You may be looking at your last chance right now. Gold is down Dollar (looks) strong. We will reach 1000 by this month, that doesnt leave much more time for down days. If you miss your oppertunity, I warned you.

-J

Rebound

It's good to see that the support at 961 held up. This was a very important number and a push below it would seriously affect the bulls morale. Gold broke through some necessary resistance to regain a good chunk of yesterdays losses. It now rests close to the next major resistance back into the low 980's at a comfortable 977. Silver has seconded that motion by rising back to the 15.60's. This eases my mind, as recently silver has been a big influence on gold. The two will not seem to make any major moves alone, and silver has been a good leading indicator. As much as it tried early this morning, gold could not gain any serious footing until silver joined the party.

In never ceases to amaze me the critical errors in markets that so many people fall prey to. (Including even myself) The worst of which, emotions. Whenever gold is down the overwhelming mentality that gold is going to continue plummeting forever is mind boggling to me. The prices that people will so easily get shook out of holding a position on is just plain stupid. I bet the guy who sold IAG yesterday at 10.18 is kicking himself today. That still will not be as badly a kicking though as he'll inflict upon himself in a week or two. And of course, gold could make up the losses inflicted 100% the next day and the stocks will regain only 60% . Now everyone is treading lightly... oy...

Gold is in a much better place but stock prices still remain low. If you didn't buy yesterday, your opportunity isn't over yet, but it will be soon. The dollar has just now started to fall off its 79.50 mark again and was caught at the 79.35 range. this was not the first time today it did this before going back to 79.50 and higher. If it breaks again 79.25 is the target and we can worry a little less about a return above 79.50 again.

Pay attention to whats happening but don't try trading yet. Just keep a watchful eye.

-J

Ekk...

This was a necessary correction. We should welcome it, its healthy for the gold market. Nothing goes straight up, remember that. Straight up moves are reserved for the short term in bear market rallies, as things generally fall downwards in the long term. Likewise, the opposite is true in bull markets. This was a correction I expected for a while to occur (although not quite as volatile) for the last few days, but I did begin to doubt it was coming. Not to hide my head in the sand to obviousness, of course, but gold was due for some long overdue gains, and I, like a lot of people, began to think things just weren't quite done yet. If your down some money today, your not alone.

I will reiterate; this is a buying week!!! Whether we fall further to support in the 940's or we take off again from here is not important. The one, and you will be "down" some money for only a few days. DAYS!! The other and you make back your losses in a few days. Why sell out now when the end result for the month is is higher prices than you have seen in years? Emotions and markets don't mix. This is a brain game. Don't get scared. I will not promise you much but $1000 an ounce for gold by the end of June is one of them. But what if you buy now and things go south some more? Then your in the same situation every investor has found himself in many many times before. If any one told you you can make a steady income doing this, my friend, you've been "had". If you buy now and things go down, OK. Your still down less than those of us who bought in yesterday. But if you wait to buy later expecting a further decrease, you may not get it, and if you then try to get frantic and buy in on an up move, that's getting emotional... greed... "Gotta make some money! Can't miss it! Here and now, today!" He who hesitates is lost. I can assure you, you will make money, when the day for making money comes, but that day was not today.

The dollar is just off of it's high. If it is to rise any more it's next logical move would be to 79.80 I expected the support at 79.50 area but when it plummeted far beyond this a began looking for further support. I didn't expect a return to this region. It's good to get surprised every once in a while it keeps us human. However a give on this would bring us back to 79.25 area and then to 79.05 so we'll have to see. I'm not making any calls for tomorrow, at least as of yet. Check back through the day's trading, if something serious looks like it's about to happen, I will not hold out on you.

Pick your self off the floor my friends, what's done is done. Tomorrow will be another day...

-J

Market Opening June 3rd 2009

Gold was still in "break even" status by 7am EST this morning, until it finally gave way to negative numbers and was soon followed by silver (which found its way into the $16 mark) an hour or so before the market opening. If your paying attention to the ever so crucial dollar index, this should not surprise you. Today's text-book bull market correction in gold is solely due to the text-book bear market rally in the US dollar. (Bear market rallies are defined as sharp upwards movements after a long steady decline. If the dollar was up $0.20 a day for 2 weeks I'd be concerned, but I am obviously not.) The dollar had broken through a top at 79.05 and climbed up all the way to 79.25 minuets before the market opening. This move was overwhelmingly rejected within the first 10 minutes of trading here in NY. The rejection formed a clear indecision in the price seconded by the tops trailing down and has started tumbling back down. As I write this, the dollar has found support on that previous top at 79.05 and is attempting a move back up. It's fight to break above 79.25 may succeed but attempts of reviving the dollar will be seriously thwarted at the significant resistance it holds between the 79.50 to 79.70 level. The resistance at that level should hold the dollar below it. 79.05 will be the major support for it for today but even that may give out before the day is over.

Gold has found its needed support at a high spike in price in the wee hours of yesterday morning's trading around the 973.50 mark. Silver similarly found it's support at 15.75 at its own early morning trading on Tues, but gave way only to show a complete rejection of those prices and a rise up to 15.80 again. These numbers should hold for the day and provide additional support in the future should there be another decline to these figures. Again, I must assure you, the price of gold will never return to below $931, so don't fret. (*Editor's Note at 12:12pm- Support at 15.75 for silver violently gave out. It now rests on crucial support at the 15.46 level. Should this give way, the next support level is 15.26. Gold followed suit and broke 973.50 all the way down to the next level of support at 963 to 962.50 level. If this gives way 961 will be the next strong support line. Although I was wrong about the support lines holding through today, I do not believe the price will fall below 961. Should I be wrong, there a many various supports in place from 957 to 931 which in itself is a very strong support. This dive may be short lived... Let the dollar have it's day. It will be few and far between for it anyway. As I said, this is a buying week.)

As for my play on IAG, I'm still extremely optimistic. My original buy target for them was at the 10.50-10.70 mark, which I began to think was not going to be possible, but today that target price has presented itself. IAG like the rest in the industry is down today, but is doing fairly well compared to some of it's peers. It's finding support at the 10 day moving average, as is some of the other senior miners like Newmont, which is very encouraging. The play remains the same. When it breaks resistance at 11.50 its next target of 11.83 will be in its sights. That too will give way in a relatively short period of time. This is not a "guess", but a promise. This week will be a buying week. Do your own research, find a company that suits your investing strategy. I suggest IAG because they are relatively unknown in the industry with very good prospects, smart management and an exceptional record. The added benefit to IAG is the price. At the near 11 mark they are cheap enough to afford a decent amount of, as well as shelter you from some of the extreme volatility on the downside of stocks like Goldcorp, Newmont and especially Agnico Eagle.

My latest predictions for the month of June will be as follows:

1. As previously stated, the dollar will fall to 77.70 mark before finding any major support before the month is over.

2. IAG will be higher than it ever has been since being listed on the NYSE.

3. Gold will reach the highest price in history! Simply put. This one is a promise! By the end of this month you'll have to shell out four figures for every ounce of gold. Also by then or slightly after, it will reach prices higher than has ever been reached in its entire history!

Buy gold now, everything you can afford. It will not be in 3 digit territory much longer.
Hold on tightly guys, things are gonna get real interesting real fast!

THE TIME IS NOW!

-J
(If for some reason the IAG stock quote at the top right of the page doesn't load right click the box and drag down to see the quote. It is delayed by 15 min.)

June Gold

As the weather heats up, so does gold. At the close of the 2nd trading day in June, gold has greeted this month (so far) with little movement. Since the beginning of May, gold has broken key levels as it climbed from $900 to $980 an ounce where it has closed at today. Anyone with half a brain should be expecting a pullback by now. Well I guess I must be just shy of half, because I can assure you no major pull back will be taking place. As the June contracts expire on the Comex, some were beginning to worry of a possible overwhelm in delivery demands, which would skyrocket prices even higher. So far, It doesn't look like that is going to happen either. As for the metal itself in the next few days, I expect a sideways movement. I'm sure there will be a decline some days and an incline others but by the close, the price difference will be negligible. The price will not fall below $931, and I'd honestly be surprised if it got that low. After a few days of sideways movement, the daily chart might form a very bullish flag or pennant that might be the "juice" we need to break $990. (But this early that would be only a very hypothetical situation) Pay attention to US dollar index as well. Any major key levels broken on the downside could be very strong for gold, I expect it to hold for a very short period of time however, at the 77.70-77.60 mark.

So this week, how should you play gold? Well unless you have a futures account, you can count the Comex out, it wouldn't be very profitable anyway. "IamGold" is mid tier gold mining company I like very much. (see box at top right of page for quote on Iamgold) They have a production of just shy of 1 million oz of gold a year, 100% unhedged (presold for last year's/cheaper gold prices) which although isnt steller, its close to some of the more "senior" miners (Yamana anyone?) They have 360 million shares outstanding which is pretty low for the industry (half that of Yamana and Goldcorp) so you own a bigger chunk of the company and it takes less shares bought/sold to affect the price. They also have 16 million oz of gold in there reserves, which is pretty hefty for an 11 dollar stock. Now, as for why I like it now: Although it is at it's 52 week high, its ultimate high of all time was 11.83 its had an issue now twice at the 11.50 mark, once on Mon. once again today. Its closing price today was at 11.20 which at that or less is a gift in my opinion.

This company is run by some brilliant people who I have had the pleasure of speaking with on many occasions. There doing everything right in every sense of the word. This is a $14 stock (if not much more) right now at today's gold prices.

The play is this: Iamgold creeps up to the 11.50 mark in the next few days and blows it away, giving it a boost to meet it's ultimate high of 11.83 If it breaks it the first time around I'd be surprised, but still very happy. If not, I would expect a pull back to the now support line of 11.50 until it creeps up back to 11.83. It will break the second time around and head to 12.

It's a beautiful play in my opinion. I wouldn't say it if I wasn't playing it myself. Just one thing to remember: DO NOT BE AFRAID TO BUY IT BECAUSE IT'S AT THE TOP! It had to get to that top by breaking the old top. It's not about how high is the top but what is it worth. Charts are great but keep in mind if a stock goes higher than its ever been before, there's no resistance above it! It's chained by no psychological barriers!

So that's my predictions for the next few days and my play to go with it.
Good Luck.

-J

Related links:
Chart of Iamgold
Iamgold's website

Welcome!!

I started this blog back in March, a few months before Alchemy Financial was officially was off the ground. (We officially went into business Friday, May 22 2009 and posted a 14% profit of the company's total capital in the first week of business.) However, now that things have hit the ground running with both the business and the gold market I found it increasingly more important that I revamp the blog, with my latest analysis of gold and stocks as it happens. I cannot stress enough the importants of what I'm saying. It's not so much an issue of making money, as it is keeping from being slaughtered in the aftermath. I will pledge a commitment to Alchemy Financial and this site and anyone who views it, that I will keep my posts updated and as accurate as humanly possible. Please remember that any information whatsoever for me can be sent to me at alchemyfinancial@yahoo.com and I will do my best to get back to you as timely as possible.
Good Luck.

-J
...Oh, and one more thing; although my analysis has been very accurate in the past, I am human, I could be wrong, so don't kill me if I am.