My 1st Million At 33 – yes, you can do it too

Many people including me were bearish on PM market going towards Fed meeting. Now the Fed meeting is over, and PM market has zoomed up, what’s up?

Spot prices for gold & silver keep grinding higher, and gold has gone beyond $610 without much resistance. If gold doesn’t stop at $625, then it will probably go to $650/$660. And I expect the same for silver going towards $12.50.

I can’t tell exactly whether www.billcara.com is in or out of this market. Despite his claims that he should be/is jumping in with both hands, he was or still is subscribing to NEM’s CEO of gold taking off after September. By the way, www.billcara.com is an extremely good website on PM & stock in general. His amount of experiences probably are at least 10X of any blogging traders, and maybe 20X of mine. Also, Robert Hugh, the guy who published last Hindenburg Omen, is claiming that there is another BIG dip in precious metals coming at the horizon. I can’t tell exactly where his targets are, but from the chart, it looks like gold would be diving towards $475. My thinking was influenced heavily by his writings and somewhat by www.billcara.com before going into Fed meeting. That was one of the primary reasons that I have not put my remaining 50% cash to work as I should have.

At the current prices of spot & equities in PM, I’m unwilling to put any more cash in, except maybe for spot silver. The market is simply grinding everyone for maximum pain. And I think it’s fairly clear that maximum pain right now should still be short or out of the PM market. The previous big fall of 30% to 40% in PM physicals & equities have already killed majority of the margin players. It’s hard to imagine how anyone survived such a fall, unless the trader was conservatively using margins. Since most people (again, including me) waited for a bigger fall, or a more clear W-shaped double bottom, or a slightly more extended correction closer to the end of June, these people are mostly out of the PM market, or sparingly into the PM market. Market optimized itself for the least amount of trading gains for everyone by cheating people a total of 3 times, making pull-backs that looked more like a serious dip, but went back up higher and establishing a quick series of higher lows.

I think going forward temporarily at least I think gold will be consolidating at around $580 to below $650 range. It’s a range that has no bargain prices for both bulls & bears. I don’t believe that the range will be broken by more than $10 on each side. It will be a range to force you to either take a position and believe in PM, or go looking elsewhere. Despite Robert Hugh’s charting, I don’t buy his words on the alternative scenario this time. If the PM market starts to dive towards $475 right about now, since his target of $610 and timeframe has been reached, the entire general market should be going down too. However, the S&P 500 just closed above 1260 on a monthly basis. I see no reason in the intermediate term for the general market to take a dive. In fact, if gold dives to $475, I will be more than “happy” again to borrow from my own 401K + my 50% cash to buy the dip.

What about silver? I think silver’s recent bottom at about $9.50 should be unbreakable. According to Ted at www.silver-investor.com (June 27 archive by Ted Butler), the 4 biggest shorts in COMEX have not covered their 170 million ounces. I think they are dead shorts. Eventually they will cause silver to spike higher than $20 or even $25. If there is any investment that don’t worry me at all, it’s physical silver. One day physical silver will worth MUCH more than paper silver. Paper silver will have a big discount on all the legal expenses and uncertainty that will involve to recover your physical silver from the paper silver. Maybe physical silver will even be out-lawed for direct ownership. I don’t know when such day will come, if it comes at all. But allocated silver bars or silver coins will be the only forms that cannot be messed up by all the paper trading agency (including ETF). It’s beyond my understanding on why these big silver shorts have not covered all of their shorts yet. Probably way before this bull market ends, they will be run over. Or just maybe, they will hold to the paper loss, until one day they are forced to make a physical delivery of silver. Instead of going to COMEX, silver producers should start to make direct sales of silver to get better prices. Selling into the pockets of these big shorts, you can’t possibly expect that they will give you a good price. If physical volume of COMEX silver dries up, the reckoning day of these big shorts will be here. Yes, their price may be better and lower, but you cannot get any physical silver out of them. What’s up with that, eh? A price tag without any inventory nor any rainchecks available. That price will be as good as nothing. Better to take advantage of the last available inventory and get your hands onto the physical silver.