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The gold and silver markets and gold indices after peaking in early May with a nearly parabolic rise have given us many opportunities for re-entry through the summer and fall months and even now are perhaps giving us one more great opportunity to get on board this bull market in the precious metals and commodities stocks. Our observations and our gut feeling is that this baby is ready to blast off. We are just building up steam and when it blasts off in the coming days or weeks you best be on board. Many of our investments are up substantially in the last several months even with this consolidation especially with many of the uranium stocks. Our readers, at this stage in the market cycle are sophisticated investors and should be taking advantage of very opportunity the markets give us by making good decisions on additional investments. Ourselves, we prefer to invest in the small Canadian mining and energy companies as well as the long-term warrants on those companies. Buy right and sit tight. In essence, patience and good decisions and we believe we will be greatly rewarded in the coming months. So where are we today in the big picture? Let’s look at a few charts below of gold, U.S. Dollar, and the widely followed gold indices, HUI:
What we take away from the above charts is that the U.S. Dollar has experienced a very short term bounce and is once again in over bought territory and will no doubt head back down soon. Gold having climbed to the 655 area and then retracing to support at 615 has given us a great entry point and the short term technical indicators are indicating we are over sold. Basically the same for the HUI having advanced to 360 and consolidated back to 335, the technicals are over sold. With respect to gold and the HUI, frankly we needed this consolidation so that we once again will not get ahead of ourselves. True, in consolidations, we give back some of our paper profits, but we encourage you to view the consolidations as a gift (perhaps a great holiday gift) and a time to accumulate more of your favorite stocks or long-term warrants. There are no guarantees in this business, but believing we are in a long term bull market, we take advantage of very opportunity the markets give us to accomplish our objective and goals. Take some deeps breaths and enjoy this consolidation and look for those remaining opportunities to put in your holiday basket. Wishing the best of Holiday Seasons to our subscribers and readers, Dudley Baker
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Statement: The opinions of FSU contributors do not necessarily reflect those of Financial Sense |
