JUST LETTING YOU KNOW
Today is September 11th and I am simply amazed that it has been 11 years since that day. I remember exactly where I was and exactly what I was doing at the time.
(Editors note: On his show Gary then had a moment of silence to honor and remember those who lost their lives that day.)
Gold and Silver
We’ve been talking a lot about Gold and Silver recently. As you know, there has been a theme and a thesis that we have been thinking about. We’ve told you many times that in the late-70’s the final gargantuan move in the Gold bull market was a 4-fold move within about a year and double within weeks, leading to a climatic run into $800 level for Gold, which ended up topping in January of 1980, ending the secular bull market in Gold that started many years before.
15 months ago on my radio show, I outlined for you that I thought we were going to get a climatic move…but I didn’t know when. We went back to the charts of 1970s and noticed an uncanny likeness between the action now and then. And I told you 15 months ago that if we were going to continue to follow the template of the 1970s, we would go into a bearish phase for Gold and Silver that would last about 18 months. At least that’s how long it lasted in the 1970s.
The other part of the equation was that there would be a significant drop. Well Silver dropped 40% to 50%. But Gold only dropped about 20%. And I’m thinking to myself, why would that be?
Because right now, we’re in thought process, notwithstanding pullbacks which can happen at immediately because we’ve come straight up over the past 3 weeks. What would make Gold not go through a bigger bear market than it has…oh that’s right…massive printing of currency by not only the U.S. by by Europe.
So I’m just letting you know the way I’m looking at this. We don’t predict. We don’t know. But I’m going to treat Gold and Silver like this is the start. And what do I mean by that? I’m going to treat it like everything else I do. If it gets too extended — I sit. If it pulls back to a buyable place, I’ll add more. Right now, it’s ridiculously extended and I suspect that at any moment in time we could pull back.
That said, we’ve got the Fed on Thursday.
Now let me be clear. If the Fed surprises the heck out of everybody and does not print new dollars in order to buy bonds or mortgage bonds or anything else they want to buy – Gold will drop pretty hard. The market too would drop pretty hard if he doesn’t.
And I’ll be even more PO’d at him if he doesn’t because he’s basically telegraphed that he’s going to.
But I’m just letting you know that if Gold decides to go to 5000 from here, I plan on having a big, big position.
No I’m not predicting 5000. But for sure, there’s got to be repercussions for all this printing of money that is in circulation.
How do go about this?
Well, you’ve the GLD and the SLV that he ETFs for Gold and Silver. On top of that, you can buy individual stocks. But the problem with individual stock is that you just don’t which one to buy. so if you want to spread it out on the stocks, you go buy the GDX, the Gold Miner’s Index.
But listen again…
I wouldn’t buy Gold and Silver right here. They’ve got to sit. They’ve got to pull back. Relax. Take it easy.
But that doesn’t mean it doesn’t keep going higher. We just pick our spots here…specific spots where you can just jump in.
I’ll let you know if they get in range.
I’m saying this because, except for a bigger move down in Gold, this has played out almost perfectly. And do thing there’s the difference of the money printing that’s going on right now.
I’m just going to be watching for higher volume up – and lighter volume on the pullbacks.
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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.