With the war in the gold and silver markets continuing to rage, today one of the wealthiest and most street-smart pros in the business spoke with King World News about why the U.S. dollar is in trouble and gold is headed much higher.

….continue reading HERE

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This week will very likely be one we look back on as a big inflection point. We will see that the bears are coming back.

It appears the market is forming a head and shoulders topping pattern. There are a couple different ways to trade this pattern depending on the level of skill and aggressiveness.

One can wait for a closing bar below the ‘neckline’ on the time-frame in which you have identified the pattern. By operating on a closing bar basis you significantly reduce the risk of entering on a ‘false’ breakout. Entering prior to the close of the bar increases the risk of becoming part of the wick of a reversal candlestick should it close back above ‘neckline’ support.

Another way is to try and time the right shoulder and short into the bounce or pause just before you think a neckline break is about to occur.

Both, have then pro’s and con’s, which is better, that all depends on the overall market conditions and that of the trader making the trade.

Take a look a couple charts below so you can see where I feel the stock market is within this pattern.

iViewMarkts.com Bullish Sentiment Indicator: This shows active traders have been very bullish and are just now starting to become bearish. As more short term traders start to sell their long positions and build up short positions this will put downward pressure on stocks and likely start the new trend down.

SP500 Bullish Percent Index: This chart is telling us more stocks are starting to form bearish price patterns after being overbought the last couple months.

Head & Shoulders Pattern: This is the pattern I speak of showing where most traders enter positions for this price pattern. There is always a possibility that the market does not do a Kiss goodbye (retest of breakdown). The strongest moves to the downside will not retest the breakdown in most cases so playing the breakdown I think is vital.

SP500 Head & Shoulders Pattern:

That is a quick snapshot of the market and where it stands…

Get My Trade Alerts In Real-Time: www.TheGoldAndOilGuy.com

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Dow Breakout of Danger Chart

Editor’s note: Successful crisis investing boils down to one skill. The ability to go against the crowd to buy beaten-down assets that have been left for dead.

Few people know as much about this subject as Jim Rogers. Jim is a legendary investor and a true “international man.” He has earned millions investing in crisis markets.

In the interview below, Crisis Investing editor Nick Giambruno speaks with Jim about this idea. It’s a fascinating discussion we think you’ll enjoy…

Nick Giambruno: Thanks for joining us today, Jim. First off, tell us what you think it means to be a successful contrarian and how that relates to investing in crisis markets throughout the world.

Jim Rogers: Well, there are two aspects of it. One is being a trader, being able to buy panic, and nearly always if you are a trader or an investor, if you buy panic, you are going to do okay.

Sometimes it is better for the traders, because when there is a panic—a war breaks out or something like that—everything collapses, and some people are very good at jumping in and buying. Then, when the rally comes, the next day or the next month, they sell out.

Now, the people who are investors can also do that, but it usually takes longer for there to be a permanent rally. In other words, if there’s a war and stocks go from 100 to 30 and everybody jumps in, it may rally up to 50, and then the traders will get out, it may go back to 30 again. I’m trying to make the differentiation between investors and traders buying panic.

As an investor, nearly always if you buy panic and you know what you are doing, and then hold on for a number of years, you are going to make a lot of money.

You also have to be sure that your crisis or panic is not the end of the world, though. If war breaks out, you have got to make sure it’s a temporary war.

I used to work with Roy Neuberger, who was one of the great traders of all time, and whenever stocks would panic down, he was usually one of the few buyers, because he knew he could get a rally—if not that day, at least maybe that week or that month. And he nearly always did. No matter how bad the news, especially if there’s a huge drop, it’s probably a good time to buy if you’ve got the staying power and your wits, because you will likely get a rally. In terms of panic buying or crisis situations, that’s normally the way to play.

Now, it’s not always easy, because you are having everybody you know, or everybody in the media, shrieking what a fool you are to even try something like that. But if you have your wits about you and you know what you are doing, and you know enough about yourself, then chances are you will make a lot of money.

Nick: What is the story behind your most successful investment in a crisis market or a “blood in the streets” kind of situation?

Jim: Certainly commodities at the end of the ’90s were everybody’s favorite disaster, and yet, for whatever reason, I had decided that it was not a disaster. In fact, it was a great opportunity and there were plenty of things to buy. In 1998, for instance, Merrill Lynch—which at the time was the largest broker, certainly in America and maybe the world—decided to close their commodity business, which they had for a long time. I bought. That’s when I started in the commodity business in a fairly big way. So that’s the kind of example I am talking about.

Everybody had more or less abandoned or were in the process of abandoning commodities, and yet, that’s when I decided to go into commodities in a big way, because of what I considered fundamental reasons for doing it, but the fact that Merrill Lynch was getting out buttressed in my own mind anyway that I must be right, because, you know, everybody was out. Who was left to sell? There was nobody left to sell at that point.

Nick: What about a particular country?

Jim: I first invested in China back in 1999 and then again in 2005. The market at those times was very, very bad. I invested again in November of 2008, when all markets around the world were collapsing, including in China.

So I have certainly made investments in countries with crisis markets, and I’m getting a little better at it than I used to be, because I have had more experience now. That’s why I keep emphasizing that you have to know what you’re doing. And by that I mean paying attention to and doing your homework on a stock or a commodity or a country. If you do that with a crisis market, then chances are you can move in and make some money.

Nick: Doug Casey and I were in the crisis-stricken country of Cyprus a few years ago, which is also a pretty hated market, for obvious reasons. While we were there, we found some pretty remarkable bargains on the Cyprus Stock Exchange. Companies that are still producing earnings, paying dividends, have plenty of cash (in most cases outside of the country), little to no debt, and trading for literally pennies on the dollar.

Jim: When I saw what you guys did, I thought, “That’s brilliant, I wish I had thought of it, and I’ll claim that I thought of it” (laughs). But it was really one of those things where I said, “Oh gosh, why didn’t I think of that,” because it was so obvious that you are going to find something.

It’s also obvious, after what happened in Cyprus, that it’s a place where one should investigate. Whether it is right to buy now or not, you are certainly right to look into it. If you stay with it and you know what you are doing, and you do your homework, you are probably going to find some astonishing opportunities in Cyprus. It’s the kind of thing that I’m talking about and that you are talking about.

Nick: Speaking of hated markets that literally nobody is getting into, I heard that you managed to find a way to get some sort of exposure to North Korea through bullion coins. Could you tell us about that?

Jim: Yeah, you know, it’s illegal for Americans to invest in North Korea. It’s probably illegal for us to even say the word “North Korea” (laughs). I look around to see which countries are hated. In North Korea there is no stock market, and there is no way to invest, especially if you are an American, but sometimes you can find something in a secondary market.

Stamps and coins were the only ways I knew of that one could get some sort of exposure. This is because you are not investing in the country, obviously, because you are buying them in a secondary or tertiary market. That said, I think the US government is going to make owning stamps illegal too.

There were people once upon a time—and maybe even now—who invested in North Korean debt. I have not done that, but it may be another way that people can invest in North Korea. I don’t even know if North Korean debt still trades, but it was defaulted on at some point.

Nick: Another hated market that actually does have a pretty vibrant and dynamic stock market is the Tehran Stock Exchange in Iran. Have you ever taken a look at this market?

Jim: Yes, at one point I did invest in Iran, back in the 1990s and made something like 40 times on my money. I didn’t put millions in because there was a limit on how much a person could invest. But this was over 20 years ago. I would like to invest in Iran again, but I don’t know the precise details on the sanctions and the current status of Americans being able to invest there. But Iran is certainly on my list.

Nick: Jim, thank you for your time and unique insight into these fascinating topics.

Jim: You’re welcome. Let’s do it again sometime.

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Jim Rogers – Currencies, Agriculture and Government Incentives

A preferred share dividend with some unique, very, very attractive features. “It’s a real opportunity” say’s Neil McIver of Capital Management. Paying between 4 1/2 – 5%, equivalent to 6- 6 1/2 percent interest because of the dividend preferential tax treatment. There’s more too….

Michael Campbell’s main guest John Johnston of Davis Rae. Johnson, called the Canadian Dollar exactly right all the way down, then recently all the way up to the 80 cent level. Michael Campbell asks where we are going next, plus gets some recommendations on the critical US Dollar

Where Now From The Man Who Called It Right

There next down swing in small cap stocks could get very messy.

Using readtheticker.com Hurst cycle tools we can see that both in Small cap stocks and Crude oil may be swinging down over the next few months. The easy money has been made on the up swing, yes there may be little more to go on the up swing, but not much! When the cycles works is a good idea to keep an eye on it!

Small cap stocks is a good measure of Risk On vs Risk Off. Remember true accumulation sees the reduction of volatility, so far we have not seen this, which suggest distribution is the main theme of this consolidation, and lower prices normally follow.(…go HERE & double click for much larger charts) 

Investing Quote…

…”By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and what point the greatest resistance is to be met”…

William D Gann

..“Because of the extreme challenge, one must commit full attention to it.” Market speculation is “no different than trying to be a successful doctor or lawyer … you simply must devote yourself full-time to the study of your craft”…

Bernard Baruch

..”The first rule is not to lose. The second rule is not to forget the first rule”

Warren Buffett

..The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell”..

John Templeton

..”Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected”..

George Soros

– See more at: http://www.readtheticker.com

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The 45-Year Record of Gold & Silver Ratios