From the Desk of Nick Nicolaas – (FDNN)

Alert #86

Follow up to January 21, 2012 FDNN letter on

Silver and Gold

and

Deflation and the Mining Shares

Dear Friend:

Please Note: I am not a registered advisor and do not give investment advice, my comments in my FNDD letter are an expression of my opinion based on studying Martin Armstrong’s forecasts (www.martinarmstrong.org) and his special reports that I am receiving as part of my attendance at the 2-day Philadelphia Conference on December 3 & 4, 2011.  This summer Marty will again be starting up his per access service subscription to his regular forecasting and computer generated reports.

As Marty says “the outlook for the year look cloudy at best” (a very volatile year) and Gold and Silver are still in a long-term trend.

The Outlook for Gold:“We are in a 2 year consolidation going into 2013 and the blast thereafter going into 2017” and with regard volatility in Gold, “back to back directional change targets in February and March (this year) implies we may see some choppy transience just ahead”. 

This Friday, January 27 Gold closed above $1,731.00 on a Weekly close indicating a Bullish Reversal.   Please note that the Weekly Timing and Turning Point ahead takes place during this week of 01/30.

“ Weekly Reversals: Major Bullish 1731.0 1763.0 1917.5 1925.0”

“ Daily Reversals: Major Bullish 1788.4 1799.7”

END

The Outlook for Silver: “The intraday low has been $26.18 in September 2011. We also warned that long-term support and a MONTHLY closing would be found at this same level while support for the year-end closing would be found higher at $28, which we warned was the critical area to watch for year-end. A closing BELOW this level will signal a decline into 2012.  Indeed, 2011 closed at $27.96. This warns that we can still see some further downside before a major low has been reached”; and “While silver remains highly volatile, it by no means indicates a prolonged bear market lies ahead”.

Although Silver bottomed on Sept 26, 2011, it is in a neural position and Marty warns that a further correction is still possible.  The resistance in 2012 is at $53.00.  The breakout in Silver could really begin once silver exceeds $54.00 at least on a weekly basis.

Friday, January 27 Silver elected a Minor Weekly Bullish Reversal above $33.61.  Silver closed the week at $33.97.  This together with the daily closing above $30.25 during the week of January 16 signaling that, for now, a temporary low was in place plus the Weekly close on January 20 breaking Resistance of $31.40 makes the Immediate-term for Silver looks very positive.

Martin Armstrong: “There is ONLY one analyst that is never wrong – that is the market itself.  The key to successful trading & forecasting is to learn how to let the market speak to you and go with the flow. It does so in both TIME as well as PRICE.” 

Yes, that is what we are trying to do here with the FDNN letters so that we may Look over the Horizon by listening to the markets - - - in both Time as well as Price.

Deflation and Mining Shares

Right now we are in a Deflationary period which will last as long as people prefer cash above assets and the preference is cash today.  House prices in the USA for example have come down measurably but who is buying, yet people are in cash.  There are trillions of dollars sitting on the sideline worldwide so, people prefer to be in cash rather than assets.  This probably will not change until interest rates start rising.

When gold traded in around the $850.00 price range the XAU gold index was trading at the same level as it is today with gold trading over $1,700.00 and it is also clear that Mining shares (which are Hard assets) are totally oversold.    I wish we had the crystal ball to be able to tell you when Mining shares will explode to the upside but we can’t (It is very frustrating) but they will.   We are in a long-term Bull Market and that trend has not changed therefore you stay with it until the trend changes. 

In the meantime I am staying positioned in the Gold & Silver explores and Gold mining companies we represent (see: www.mininginteractive.com) because you can’t accurately predict when the upward move will take place.

We should be cognisant that the markets are not stabilized yet and a lot of volatility up and down is still ahead of us.  As I stated previously “The Future is Immune to Accurate Prediction but, we will (must) try.  Having said all that, I still go by my mantra: “you’ve got to be in it to win it”.

More next week after we see how the Monthly close on Tuesday so that we may have a better look at February Turning Point due for both Gold and Silver…for ! 

Enjoy life with family and friends. 

Cheers from Vancouver,
Nick L. Nicolaas
Direct: +1 (604) 657-4058
Fax:    +1 (604) 685-1631
Skype: nicknicolaas
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