Longer term charts tell the tale and block out daily trading noise. This weekly chart with a hugely bullish, inverted head and shoulders forecasts a major gold buying event later this year. This would be consistent with our forecasts of smashed stock markets after Labor Day 2009. We cannot tell for certain how high the Dow and the S&P 500 might recover between now and September 15th. We do know this: Numerous information, technical interpretations, and other data signal a largely broken fall, 2009 stock market and a corresponding rally in precious metals. This is our prediction.

We’ve all been patiently waiting for gold to breakout through strong resistance levels between  $1,007 and $1,032. When the price has closed firmly and decisively over $1,032.50, we should expect $1,050, $1,150, $1,250-$1,260 and a potential for $1,375. These have been our previous gold price support and resistance forecasts expected for the December, 2009 futures contract highs.

It is very important to understand that once these higher numbers are achieved it is not the end of this gold rally.

Rather, once new loftier highs are posted and reasonably held, we should see a new and higher sequence of buying. Our very old gold high forecast of years ago was $2,960. As of today, we hold on that forecast for a minimum but are in fact expecting prices way beyond this figure.

As markets move forward and post higher highs in certain commodities and especially gold and silver, we can technically determine what’s next. Somewhere along the trading trail in the next few months, precious metals shares will breakaway from the influence and attachment of other stock markets. We are not there yet but we have seen some tiny signals telling us this is coming.

Should gold be inflation adjusted today to its proper price, gold would exceed $2,250 in our view. If we say our minimum is $2,960, these two correlated prices are not all that far apart. What I want to figure out next is; where is gold going after $2,960? This can be determined when other related new market prices and techncials are established in crude oil, credit, silver, and grains.

When gold goes on a rocket-rally, silver being more volatile will amaze on the upside. There should be no surprise that silver has some futures trading limit-up days in the months ahead. Despite worries by some silver analysts (including us) that silver might smother under the weight of dying commercial depression effects, we say silver changes itself from a mostly industrial metal into a newly recognized currency. We have seen some smaller, sympathetic communities using silver “rounds” or commemorative coins for local trading and commerce.

They are not real currency but those trading them for local services and goods clearly understand their intrinsic value. Meanwhile, the failed California state government who cannot control their drunken spending is preparing to dive into total failure July 15th and issue script or “play money” as they are plumb out of cash and credit.

Adios California; Arnold can run to the Prez and Timmy for a nice credit-bond guarantee. The New York Banksters will give them the money as they get an ironclad repayment note voucher from the Federal Reserve and US Treasury. How can us broken taxpayers get such a payment? Not a chance.

We received a notice today from our broker advising some nonsensical senate subcommittee released a negative report regarding excessive speculation in wheat. You really do not want to know our opinion on this one except to say it’s probably the product of some bureaurat pinheads casting dispersions on traders with little, or no knowledge of what they are talking about. It’s just more useless bad information. Markets should be left alone. If these dolts cannot monitor the Federal Reserve and Treasury’s antics on derivatives, credit, bonds, mortgages and the stock markets, what makes them think they know squat about wheat?

Wheat traders have been doing quite nicely since the 1740’s when the first historical commodity records were kept. Markets and trading are about price discovery. They do not need childish meddling by people with no experience. This is dangerous to the global food supply and inherently disruptive. For another example on this look what Enron did when government fools changed the trading rules just for them so they could originate their own little special trading platform.

Here is a new forecast: Chopper Ben’s term expires in January, 2010. After the fall markets’ crash, we think Benny loses his job and becomes an administration scapegoat for all of their instigated problems. It really doesn’t matter as they will replace him with another similar yes-man taking his orders directly from the banksters.

Markets are nearing a peak in precious metals shares that generally follow primary stock indexes. As the current stock market peaking descends into the tardy Sell in May, PM shares normally follow. With each cycle we think gold and silver shares might sell less posting higher lows. This could be decided on the shorter term by how low our S&P’s trade. We expect 800 to 850 with 800 being more probable. One of these days PM shares will disregard all broken markets and rocket rally. Not yet.

Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now. My dire fall prediction might surprise us and arrive earlier. Time is short. By the way, we bought more silver today.

Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog

Roger Wiegand
Editor Trader Tracks Newsletter
The Jay & Rog Blog at webeatthestreet.com

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Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See webeatthestreet.com for more information

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