Floyd's Opinion on Gold/Silver

With the recent sell off in Gold subscribers are pleased with the huge profits we've had, pleased that we've kept some of each Gold position, made a new recommendation (AU)and continue to be enamored with Gold. Despite the sell off, Gold remains in a long term bull market and we think a great hedge against inflation. People are fearful of all big government, and currencies will become the question, as the guarantees all the countries make in securing the funds they need to build their country. We are all unsure, and Gold, Silver, are sure, and remain up to 15% of our portfolio.

Volatility isn't strong enough for option trading yet on GLD, but continuing to build your positions on downturn in AU, CEF, and GLD are sound investments.

The Early Warning Signal, and ...what will happen

January’s first five days act as an “Early Warning.” It's theory that how we perform these first five days defines how the market will perform for the year. And, it is just that.

Theory.

We believe we'll see potentially an overall pattern of down, up and down again and that 2010 can be slow and steady gains, or there could be large declines in the fall.

We base the tight movement we saw for the month of December as the market "preparing itself for a large movement". These "sideways patterns" of flat ranging are very frustrating for the trader,and are like a momentum that is building.

At the same time other chartists see a K Wave formation that would repeat the final bottom of the Great Depression, in 1934. Theorists here believe we will repeat this cycle, with another strong downward movement within the year, and depression potential occurring in 2011.

Okay, several theories. Add in Floydian Logic:

Every country is borrowing and loaning in their currency, based on their primary asset base for their GDP, and oil seems to have the ability to rise to $100 before faltering with demand dropping, and each country is in need of one another. The U.S. NEEDS CHINA and JAPAN. They fuel our Treasury bill confidence, and fuel our "fake money growth". But don't worry, EVERY other country is doing this too, and every business is, either on purpose, or simply not understanding the laws. It goes to ......a rock is not hard. None of this money we fuel ourselves on, anywhere, is real, and at some point there will be a reckoning and worldwide default. If this occurs, the entire basis of the economy would change.