Buy with Both Hands

Source:

Last week I nailed the biggest and fastest gold and silver correction in history. It was the best call anyone has made for 28 years on gold. This week I'm going to predict gold shares are going to explode upwards starting immediately. ESPECIALLY the juniors.

...I spent ten days trying to warn people of an upcoming violent correction. It wasn't popular because it was so contrary to what people think. That's how and why I made it. When you can't buy a silver bar because the demand is so high, you are at a top. When do you expect to run out of silver bars? At a bottom?

We have had our violent correction. The number of gold contracts and silver contracts were at record highs. Before this correction ends, I expect to see those numbers cut, perhaps in half. Most of the damage has been done to gold and silver but another month or so of correction would be about right.

... Last week I nailed the biggest and fastest gold and silver correction in history. It was the best call anyone has made for 28 years on gold. This week I'm going to predict gold shares are going to explode upwards starting immediately. ESPECIALLY the juniors.

Now that's a switch. But here's the logic behind it. If you look at the XAU over gold, it shows a low in the ratio in May of 2005 and another last August. From May of 2005 until the next high in Feb of 2006, the XAU climbed from about 78 to 155. From the low in August of last year to November, the XAU rocketed from 125 to 190.

The juniors didn't participate in the rally since August. Many are the same price they were in August. Some are lower. Jim Sinclair and John Embry believe that hedge funds have shorted the juniors. I don't totally buy that. If there was some giant short position, it should show up. And while short positions in many juniors have gone up, they aren't much above 1%, which is nothing for a NYSE stock. So I'll just say that I'm not totally convinced. But if they are right, those same shorts now are going to have to cover. Gold could easily correct for another couple of months and the gold shares and especially juniors could rocket.

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