Talking Up The Dollar

Just when you thought it was safe to jump back in the pool the dollar bulls come alive and down goes gold in a major dump as the greenback squeeze and dollar bull calls coming from far and wide. I have to admit I was deked out some by golds bottoming action then up move and thought we had the possibility to at least hold the $1100 area but that looks to be a dicey proposition.

After a $120 dump on gold the spec longs are going to be very weakened and if there is any serious "intervention" to dump gold further then now is the time before it can gain some strength. There is alot of shorts who will take profits before year end which exasberates the problem. I am returning to my mid $1050 - $1075 call from a week back. It may still take several days to play out as once again gold is back up $9 overseas.

One important item is some of the juniors are holding in well and not getting totally wiped out as usual in a correction like today. That will bode well as major money can still be made mining at $1000 gold and $16 silver. Part of cause of this action was todays jobs numbers so called "disapointment" of 7000 more jobs lost. Are we talking McDonald's burger flippers here or what ?

On top of that Bernake claims no chance of interest rate hikes anytime soon yet more Fed related types are verbally warning they could go up sooner than expected. Yes we have heard that before too many times the past month with no effect but now it matters ? Unless it is a major move in one shot, a 25 basis point raise will have a short lived effect on the US dollar. There is too much paper out there and todays action is a sign of the "talking it up" effect by the FED to keep the dollar from tanking. Signs of desperation to me.

Trader Psychology

One of the hardest parts of trading or investing is keeping our emotions in check when buying and even moreso when selling. I can easily still find myself sitting on a winner knowing I should take profit then watch it fritter away back to ground zero where then that trader now reluctantly becomes a long term holder.

Nothing worse than new found enthusiasm being quickly eroded into complacency and false reasoning why it's a home run, only to possibly end up even losing on what was originally a winning trade. Happens to the best of us, that is why I am way more focused now on keeping the emotional side at bay and clicking that mouse when the time is right. ?

But how ? Practice, plain and simple. Make paper trades hundreds of times,even if you just keep a mental scorecard. Drilling home that mental AND verbal command to hit the sell button and then give yourself kudos for pulling it off. It is critical to changing the mindset that you are going to miss out on even more profit which most time you don't. Reward yourself right after with a treat,beer,Canucks tickets or whatever. Sounds like animal training doesn't it ? :)

Practicing is critical if you want to be an active/short term trader,theres no time to waste humming and hawwing. You have to almost take a piece of paper and tape it to your monitor that says " Why The Hell Am I Even Here ? To Take PROFIT !!! " You may find that helps, it does for me.

When we get into these kinds of markets where we are basically flatlining/range trading, it is a good idea to use a couple valuable sites to keep you mentally in the game but not destroy you with information overload. The site I go to in times like these is who I refer to as The Godfather of Trading Psychology, Dr. Brett Steenbarger. The guy is frigging incredible and it is all free. The man is a trading psych machine who provides tons of charts and insight you will find no where else. You will find him at http://traderfeed.blogspot.com . He's on Twitter as well.

The second site I like to go to is Bernie Schaeffer's site for his weekly commentary which never ceases to amaze me on how bang on this guy is with his market insight. When the herd is leaning one way, he will lean the other but back it up the other with facts and stats that are so easy to understand. He has helped me many times when I see uncharted waters ahead. He's at http://schaeffersresearch.com/ .


Hope you find those two sites helpful as education is the key to making money and I love to help others make some cash as well as have some fun at the same time.

Cheers !

Dear Santa...

Coming into the last full week before the markets shut down to a crawl, I have a request for Santa for one last favor for the year....now get your mind out of the gutter. One last push up would be reassuring to the masses that yes, Obama and the boys at Goldman are still running things and they could care less how high gold goes. Sounds like a reasonable request doesn't it ?

We have gold up a ten spot tonite, and the markets overseas flatlining as the US dollar takes a step back. Tomorrow will be interesting to see what happens to the dollar and if the latest rise really has legs. I won't rule out some more volatility but we are due for a bounce here, my indicators show a short term bottom. C'mon Santa, just one more kick at the can.

Uptrend Intact

Came across this excellent gold chart that shows us that as long as we stay above the 50 Day Moving Average at $1099, we will be in fine shape. The Fast Stochastics is looking good and has formed a nice bottom.

I never used TA charts as much til after last years melt down. I am now of the mindset that more money can be made by playing the overbought and oversold TA peaks and valleys than to try and time the moves on basic fundementals alone. Note: I am referring to blue chip stocks with a healthy and steady volumes that gives the chart a true read.

Thinly traded juniors (like what I talk about mainly on here) are a different beast entirely ,and company news events/financings etc is what influences their cycles. Charts are reliable on them when there are breakouts after long periods of dead action.

When I look at the S&P 500 SPY chart I see a choppy range trade that looks very scary yet could burst higher in the new year but that will depend on company earnings. When I look at the gold chart above I can see a decicive line in the sand that helps me make crucial decisions that may ulitmately effect my junior picks as well as any blue chips or options trading.


You can't discount these crucial lines in the sand as all the hedge funds and institutions almost solely rely on them these days more than any other time I can recall. Propriarty trading firms amd black box institutions trading desks live or die by TA charts. It is a must to learn the basic skills and not rely on the latest stock picking site that seem to be popping up on Twitter and Facebook like a bad disease.

My concern with the gold chart is if that $1099 level is busted,what does it say about the state of the DOW and other world markets ? Will the US dollar shoot back like a rocket if this number is broken ? I would bet it would as the flood of dollar shorts covering will be frigging massive. Now is the time to watch the charts closer than ever but I don't expect the risk factor to rise til after Christmas.

On the bright side, the GLD chart I posted last night is showing very close to a bottom so if gold bounces nicely off this critical level, then the precious metals and the metals stocks may be ready to both launch into the next power upwave and take out the old $1220's high and that indeed would be sweet !

Short Term Bottom ?

Today's whipsaw action in gold was most interesting. On one hand it was looking like maybe we had hit a short term bottom with gold up $17 plus at one point. One click later at mid morning and gold was back to even, then down $15. That was quite the drop, a $32 swing, and I have never really found out what was the exact reason but the US dollar did not seem to move any serious amount to effect this.

On the other hand the XAU index was up all day and the metals stocks showed some good strength. This is an important signal if we are to be in a short term bottoming process. As per the chart above for the GLD ETF, the signals are nearing bottom in the next few days. I like to use the 3 month Stockscores chart as it has been very reliable in most cases, especially when looking for overbought and oversold conditions.

With Christmas on the horizon and a slowing market, we'll be bound to have some more profit taking and weaker bids so I won't rule out a couple of more shots to the downside here. Remember that the metals stocks and the metal itself don't always move in tandem but movement in the stocks first after a pullback is a very positive event but it is just one day so don't go all in at first spike.

It Was 29 Years Ago Today...

Hard to imagine that today is 29 years since John Lennon was mercilessly gunned down and not a year goes by where one wonders what magic we were denied. The possibilities are endless when you let your mind wander. You can bet he would have continued to be an outspoken person against war and many other injustices in the world as well as creating more timeless music. Always a moment that I remember where I was when the news broke. Not many people other than one's immediate family have that kind of power to most of my generation these days.


On to the markets. The gold correction continued in spades today closing down another $28 breaking thru the $1135 first support area. There is no doubt the shine is off the metals bull but I did notice some of the popular junior stocks are holding up fairly well with some closing up today albeit in the few perentage points and that could change if gold keeps getting pounded.

The GLD chart tells me we have a few more days to go still before it bottoms out and builds for another run. With Christmas coming I doubt we will get much of a rally off the bottom with the market thinning out on the risk taking long specs.


The fundementals and the technicals need to come back into alignment as this was just too much too fast. In the meantime, sit back, play some Lennon tunes,chill out, and stay warm, this precious metals bull has a very long way to run and lots of money to be made.

Gold Bear Coffee Break ?

My prediction of a nasty follow through started out looking bang on til someone named Bernake opened his mouth and as usual things started going the other way. With gold down $24 bucks, our market savior teased us with more comments on no interest rate hikes anytime soon, and an improving economy is upon us. It's these kinds of events one cannot predict and gold responded by rallying to down only a $1 before closing down in the $5 range.

Is this it for the gold/silver correction ? I am not convinced yet, though gold is up over $7 tonite. We still had one big nasty sell signal on Friday with record volume on the GLD and today being another down day. So before the charts can give us a new buy signal we will have to see a nice $20 plus gain to bring back the spec players who will be very cautious after Friday's power dump.

I hope to bring some new trade ideas to the blog soon in the blue chips as we move into a possible Santa rally next week. If this fails to materialize, I will be adding some of these ideas into the new year for sure, as well as my current penny plays and some daily top trader as a possibility too. Be cautious out there !

Golden Bear is Lurking

Friday's crushing of gold and silver answered the proverbial question of "when will this bull run cool off ? ". Well it's here in my opinion but is a much needed pause to allow things to settle down while the dollar shorts cover their winnings then wait to reload for the next step down.

As we speak the markets are open overseas and gold is down $9 which tells me tomorrow is day 2 of a possible 3-4 day nasty correction. Considering the record levels of shorts I will bet that somewhere in the range of mid to upper $1050 range could be the true bottom. It's always quicker on the down side than the up and what we have witnessed the past couple of weeks is not usual behavior and the long specs are going to get killed as they always do buying at the top.

So in other words "everyone out of the pool". I am bullish long term for gold and silver but the higher we go, the more volataile the swings will be so we best get used to it and watch those stocks that are able to withstand the selling.

I would much rather be a bear in the woods than a "tiger" these days anyhow. ;)

Tax Loss Presents

As much as the markets are flying high, not all stocks are following suit due to various reasons in their development cycle. Thus they can be victim of the notorius tax loss selling season and provide some true gifts to the nimble investor.

Those who are impatient sell and take the loss/gain or just need the bucks to pay for Christmas. They're also selling with the intention/hope to buy them back after the 30 day selling rule for the same price or less. I look for stocks that won't be on sale long and the New Year will bring news flow to their sectors, primarily the precious metals sector and the junior tech/biotechs that meet my criteria.

Below is a list of stocks that "may" be in a position in the next 30 days to pick up on sale and make a nice present for one's portfolio.

Note: I may or may not own shares of these companies and may trade in and out so please don't take my list as investment advice and do your own DD as I am not responsible for any of your decisions, they are yours alone.



#1 AHC - Artha Resources, naturally my number one favorite precious metals stock. Not sure how much cheaper it will be getting in here as today there was some true gifts in the 16 range. I see stocks with less trading for 2-3 times right now so this is a steal where it is.


#2 EMG - EmerGeo Solutions has already been on sale the last few months but I expect better things in the New Year. Yesterday their financials came out with a 100% revenue increase to over $1 million for the quarter and margins rising to 36%. A specialty emergency disaster software company with explosive potential for 2010, it's been a long time coming.


#3 CA - accumulating land in Colombia near VEN but a bit expensive for where it is in it's exploration cycle. I would be buying in the low 30's,can trade a little thin so use the stink bid.


#4 TNG - software gaming deal with Intel, say no more. Anything back in the 70's would be a deal.


#5 PRX - a prostate drug for those dudes with BPH. I am hearing good things on this one and looks like it could be big if the next results prove up. Bio's are always highly risky but they seem to on the right path. Anything back to the upper 50's to low 60's would be a good spot to focus on.



Don't forget to use the major markets as your guide before diving in,they can be a bigger cause of selling than just for tax loss reasons.

Happy shopping !

Dubai Dust Storm

As we all well know now,there's some trouble in paradise but how deep this goes still has some ways to play out. Some of the media reports have varied but overall calm hit the markets today as it appears some of the scariest debt will be taken care of. The question remains how many other Dubai's are lurking out there and has the US taken care of the worst of theirs ?

As far the internet goes, the stories can appear to be valid, only to discover they are written by some anti-elitist types telling tales of intimate connections to the highest powers of the US government and certain currency events that are close to happening, but we see these stories nowhere else on the net,hmmmm.

Best to keep a level head, realize we are in an overbought,range trading market that is searching for some levelling off zone. This will hopefully remain through Christmas along with the precious metals finding a new base level in here without any nasty corrections so many are calling for. Aren't these the same people who called the top the last six months ?

The precious metals prices are here to stay in my opinion. Canaccord just upped their peak gold and silver prices to $1300 and $21 respectively. Those are very nice numbers to work with going into next year. Got Artha ?

More AHC News !

The news machine keeps rolling for Artha as they came out with some very excellent results on their ground exploration program. Hopefully I can help discect it for you into some laymans lingo over the next few posts.

Each of the zones sampled have their own exciting results and is why I was attracted so much to Artha when they first got the option rights. In a nutshell they are finding the indicator minerals that you need to find when hunting for a mineral deposit in the hottest stretch of land in South America.


Key statements:

Phase 1 reconnaissance mapping and sampling program have confirmed the potential for discovery of precious and base metal mineralisation

Noelia Breccia prospect adjoining Pirquitas shows geochemical and geological signatures suggestive of the upper levels of a Au-Ag low sulphidation epithermal system

A broad, 6km by 2km contact zone on the Vallecito property (40km east of Pirquitas) between sediments and dacitic intrusives suggest potential for skarn replacement mineralisation


Results from this first phase work have clearly demonstrated that a number of high priority targets exist with geological, geochemical and structural indications consistent with both low sulphidation Au-Ag epithermal systems and large skarn deposits similar to the Aguilar mine approximately 100km south of Artha's properties


On the Vallecito Property:

The evidence suggests that this might be an IOCG type deposit but also has potential for an iron skarn deposit linked to contact metasomatism.



I will get more into this news over the coming days but this is an important news release for Artha and clearly shows they have multiple hot targets that will keep them busy, and us excited for a long time here. I have stated this before but I haven't been this pumped about a grassroots exploration company in a long time. The potential is clearly showing through now.


Here's the link to the news:


http://www.artharesources.com/s/NewsReleases.asp?ReportID=374006&_Type=News-Releases&_Title=Artha-Announces-Pirquitas-Properties-Update

$1200 Gold In Sight

"There's something happening here
What it is ain't exactly clear "
- Stephn Stills, Buffalo Springfield



Once again the gold and silver market chugs higher in leaps and bounds while the US dollar broke through a crucial technical support line at 75 cents. Where this goes from here is anyone's guess but I sense from the power of the buying it may be a swift move to the $1200 - $1250 range.


There is too much negative news out there from Geitner secretly wanting the dollar to go lower and make the US more competive or the Russians today buying up more Canadian dollars. News like this is not everyday stuff. What's exactly happening here beyond a currency crisis is the mystery that has long been read of but we are now witnessing.



On the flip side there are many top callers out there who if right,we will be seeing a very swift move down as this rise has been extremely fast. The charts are screaming "overbought" but this current move may make a few chartists looking foolish as the bull stomps higher busting every short to pieces as they are forced to cover ASAP.


Personally what I think is happening here is a mass short squeeze that the media seems to not want to mention and are playing the US dollar side of things. It may well be a combo but remember it was only a couple of weeks back the COT report showed a record amount of shorts. Were they all sucked in for the gold bear slaughter ? me thinks so.

But how long this lasts til the market takes a breather for awhile is my next big question. This bull move is like none other we have ever seen and has some serious legs behind it. We all know one never wants to stand infront of a runaway train.

1980 Time Warp

Let me take you back...way back. All the way to 1980 when all sorts of crazy stuff was happening. The US Olympic hockey team upset those hated Russians, The Rolling Stones released "Emotional Rescue", The Police and Sugar Ray Leonard were all the rage, while inflation reared it's ugly head like never before.


Along the way gold prices had spent the previous year in the $400 range and spiked to above $850 by mid January only to be taken down in tremendous fashion to the $500 range by mid March. For those who bought junior explorers in the previous 5 years, they were rewarded in spades. Back then the media did not track/publicize the junior stocks like now let alone noticed by a young buck like me who though was aware of the price of gold.

We never had easy access to any of the stocks we can today, or the advice of wise men who had been there,done that. To even invest with a broker was a major deal and alot of hassle plus you had to have some serious bucks before you got any decent advice. It was like a closed shop for the young and inexperienced....my how times have changed.

For your entertainment,here is a sample I found showing just what happens in a true gold/silver mania. Obviously something comparable to the tech mania in the early 90's if you ask me. Can't happen you say ? But what if it does ? and what type of company would you want to invest in ? You know my answer.




Name 1975 Price 1980 Price

Lion Mines $0.07 / $380

Bankeno $1.25 / $430

Wharf Resources $0.40 / $560

Steep Rock $0.93 / $440

Mineral Resources $0.60 / $415

Azure Resources $0.05 / $109

Sunday Night Gold

Just a comment on gold action tonite. Though the COMEX has been open only a few hours, gold is up $10 already which is very unusual for this time of night. I think all the talk of gold being overbought is from those that don't understand the fundementals of gold and the US dollar.

The US dollar is on the ropes and unless some sort of interest rate/intervention by the FED,there is nothing stopping the precious metals. Silver is also up tonite an identical .8%. Nothing big in terms of percentage but very big in terms of timing of this. I think tomorrow could be a big day for the precious metals, something is up with the world currencies and the shakeout of the dollar will continue.

One more note, if you have ever looked back when gold went to $800 back in 1979 you may be too young to remember that there were many penny precious metals stocks that went from a dime or less to $300-400 per share on a half decent hit on results. That's no bull. I was just a teen at the time and it was incredible to hear of massive fortunes being made. I have one family member who made $2 million on just a couple of good ones, getting in early like with AHC. $2 million back then was like $10 million now.

I will find that list for you as not many will even fathom what can happen in a true metals mania. AHC is one I believe will be one to seriously consider when looking for the undiscovered gem witht that type of potential. These guys have found mines before and they will again. Always invest in those that know how to walk the walk, not talk the talk.

AHC News - Part 2

One other area that must be noted from the news release is the Pirquitas South Prospect for the shear fact alone that it contains the same geology as the Pirquitas mine. As stated in the news :

The Pirquitas South Prospect is a stockwork system in the same Ordovician sediments that host the Pirquitas Mine. The stockwork sits within the intersection of a NW and NE structural system and contains a hydrothermally altered zone with moderate to strong argillic alteration and veinlets of quartz and iron oxides. The size of the main alteration halo is approximately 1.6km x 1.4 km with two smaller halos mapped to the south and south west.


That is a second target zone with a phenomenal size of prospective land both within 2.5 and 5 KM respectively from the center of Silver Standard's mine. I'm not sure of any other junior trading at 20 cents that is this close to such a major deposit with this many prime drill targets and experienced management capable of hitting paydirt.

From the company's PR they also state they will be carrying out some areo magnetic testing in the new year which will help zero in on more precise drill targets. I also expect to see some sort of ground sampling results in the coming weeks. Optomism is abundant here as they also state they expect to find more exploration targets in the coming months next to one of the worlds largest open pit mines.

If you have missed my previous post, you should do yourself a favor and check out Silver Standard's website and view the video with the 3-D look at the Pirquitas mine to really grasp the enormity and how close Artha is to this beast.


http://www.silverstandard.com/projects/pirquitas-mine.htm

AHC News - Multiple Drill Targets

Artha Resources came out today with some solid insight into the key property areas they plan to drill target. The map above shows us the magnitude of the major land holdings all around Silver Standard's Pirquitas mine and multiple targets. So what's our odds of them hitting anything decent ? No one really knows til the drill bit speaks, this is the true nature of playing the grassroots stocks.


But when you break down the areas and define some of the geological terms, several provide some clear evidence that our odds increase,especially when the words " along strike " from the Pirquitas mine appear. Not only that, it is the size of the area. The Noellia Breccia is 1.7 X .8 KM in dimension,that is one nice sized chunk of land ! If we get some decent sniffs on the ground sampling then AHC will attract mucho market attention.

As the PR states:

Follow-up field work lead to the identification of a large tectonic breccia with dimensions of 1.5km x 0.6km. The breccia is hydrothermally altered and is aligned along a NW structural system with NE cross-cutting secondary structures, consistent with the major regional structures which host many of the known deposits in the area.


Considering the dozen or so historical mines since the 30's that dot the area around Pirquitas it would make sense that Noellia has decent potential to host something of value. As noted in the PR, a Priority #1 indeed !


If the map pic does not work, please use this link and see the press release below and there is a map at the bottom that can be blown up.

Over the coming days I will disesct the other drill targets but this is enough to digest for one day.

One more note. As much as the share price action has lagged on this news, I think it is just a matter of time til the Artha story becomes more well known. For those that have followed me over time, you will know I have been very keen on AHC for awhile now and is the most exciting exploration stock I have been invested in for a very long time.

Got Artha ? Stay tuned !


Artha News : www.artharesources.com

Precious Metals Rock'n Roll Train

So much for the range trade idea,this precious metals train is leaving the station here with the continued demise of the US dollar. Gold and silver exploded upward again today peaking at all time highs of $1140 gold and and $18.49 silver. To put it a in better perspective, gold was up 1.2 % while silver rocketed over 5.7% ! Silver is a smaller and tighter market with a much larger short position than gold and has been lagging gold for awhile now. I smell some fireworks.


You can now see why I like Artha Resources so much for it's silver potential. Not to downplay their gold potential though. They have updated their website and there are two noticable mentions. One is for large tonnage,low grade gold potential on their Davcha 2 & 3 proprties and a mention of potential copper vein system/deposit on the main Davcha 1 property seperate from the silver/tin/zinc.


This has expanded the company's options huge here,not to mention the Wyoming uranium properties they are holding. Multi dimnensional company or what ? When hunting for a junior explorer AHC has it all in my books,not a single red flag in sight.


Where does the precious metals market go from here ? No one ever knows, but as one metals trader stated today : "This is not a market to stand in front of." Enuff said.

Range Trade

Another positive week behind us after Monday's pop set the tone. What has followed that pop is the setting up of a familiar pattern known as the "range trade". Look at any of the charts on the Dow or gold and you will see that rise off a bottom with a rounding top pattern followed by a levelling off for a week or so,then a dip as the market finds it's bearings.

The last few months have been repetitive so don't be surprised to see a mild dip this week or next as the market lets off a bit more steam. This is healthy and will allow the markets to move higher the more we see continuing signs that the worst is behind us and new numbers show the recovery is in process. How long that process will be is anyone's guess but as long as the governments are still in there til middle/late next year I expect the volatility to remain pretty calm.

Not to mention the gold/silver bull market that is tracking the Dow etc to a tee. The US is trying to talk up the dollar while in China but barring some major switch in policy/interest rates it isn't going to happen. So party on metals bulls, the time is nearing for the juniors to ramp up, it's inevitable with the majors declining production as Barrick is not shy talking about.

One For the Boys

In Flanders Fields By: Lieutenant Colonel John McCrae, MD (1872-1918) Canadian Army


In Flanders Fields the poppies blow
Between the crosses row on row,
That mark our place; and in the sky
The larks, still bravely singing,
fly Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved,
and now we lie In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die We shall not sleep,
though poppies grow In Flanders fields.

Starving Bear

By the looks of this pic,the bears will be waiting awhile yet to load up like last winters feast. The Dow,Naz, and TSX are looking strong with the past weeks rally and TA indicators show we have some room to run still but we are hitting a resistance line on the SPY at 110. Who wins out should be known by weeks end but I am betting on a continuance higher regardless of the low growth signals being given out by the economists.

The market and economists are two different beasts, and with the US dollar on the ropes I don't see much to make it move higher therefore the market bulls feed off this, especially after the IMF's announcement that the US dollar is overvalued. Can you say long term carry trade and higher gold and silver prices ?

At the same time the easy money has been made and it's become a stock pickers market,so buy them low when no one knows is my motto.

The markets are taking a breather this morning but that is to be expected with the huge gains of late. If we range trade here down a hundred points or two I would not be too worried.

Sorry for the lag in posts the past few days, the flu bug has bit me bigtime but like Ali in his prime, I am bouncing back off the ropes and slowly on the mend. And no, I do not have any sudden urge to roll around in a pile of mud.... I'm oink free. : )

Artha News - Appoints Geochemist to Advisory Board

Just a heads up on some Artha Resources news out this morning. They have appointed a highly experienced geochemist to their advisory board. His name is David Cohen and his credentials are second to none.

This is a very positive sign of a strong exploration company being built here when people like this are brought in at these early stages.

Here's the press release :

Wednesday November 04 2009 - News Release

Mr. Todd McMurray reports

ARTHA APPOINTS DAVID COHEN TO ITS ADVISORY BOARD

Artha Resources Corp. has appointed David Cohen to the company's advisory board. Mr. Cohen has 20 years of experience in pure and applied exploration and environmental geochemistry research based in Australia, Europe, Asia, the Middle East and North America. He is president of the (international) Association of Applied Geochemists, head of the School of Biological, Earth and Environmental Sciences at University of New South Wales and was previously chair of the Science Faculty at UNSW.

Mr. Cohen's current research projects include sampling and analytical methods for exploration and environmental geochemistry, environmental geochemical baseline surveys and multivariate data mining.

He lectures in environmental and exploration geochemistry, economic geology, geological data processing and statistics methods, and supervises a number of postgraduate research students in geochemistry. He has been a technical consultant to a number of industrial companies and government departments, and has published over 40 papers, book chapters and major government reports.

Gold Bull Marches On

Just when you thought the record gold shorts were about to take gold back down to earth, out came the long awaited news of IMF selling 200 tons of gold to India for $6.7 billion. As well there is rumours the Chinese will be buying a second 200 ton lot.

It was a slow response to this news and one that had been felt may be a negative on the gold market. When the price did start moving it moved hard and fast , doubling from $7 to $14 within half a minute and seriously squeezed the shorts all the way up to $25 range where it closed solid.

Silver lagged the gold move by an hour or so but then closed up at $17.21 up a decent 70 cents or so. There is a much larger short position out on silver and if gold keeps this up then look out silver bugs, we could be over the critical $20 very fast and the junior silver stocks like my fave Artha Resources, V.AHC will come alive.

The most amazing part was the US dollar was up half a cent which as we know usually means lights out for gold. Should make for some interesting action the rest of the week to see who has the biggest pair to risk waiting out any higher moves or if the sellers will step in at any failure to break $1100.

Strap on the seat belts, should be a wild week.

Freaky Friday

As I Twittered earlier today, "the market giveth and the market taketh away". Just when we think it's safe to dip back in the water out come the bears with a vengence on some lower consumer spending numbers out of the US. As the story goes, US dollar bounces up and the stocks get smoked.

What was remarkable though was gold's resilience. It was only down around $10 at the lowest point and even with the DOW down over 200 points and the US dollar up .40 of a cent it roared back to up $1 then closing down $1.40. We have never seen this play out like this before.

Something is happening here when gold survives that type of onslaught. In the past it would have been smoked $25 easy. The longer gold stays above $1000 the more confident I get long term on the precious metals.

Artha Resources News

My number one precious metals pick Artha Resources, V.AHC, put out some news after the bell. They have hired a new PR firm for Investor Relations.


http://www.artharesources.com/

Bull Fights Back

Was that a rebound or what ? So much for the Goldman GDP call, the numbers surprised by 3/4 of a point to the upside and the market acted accordingly. Short squeeze was an understatement,there was some nasty odors of burning shorts out there as the DOW and TSX bulls kicked some serious bear butt.

Gold,silver and oil all fell into place moving up in grand fashion as the US dollar did a perfect TA bounce off the top of the downtrend channel line. This bodes very well for the precious metals and commodoties moving forward, as the so called bottoming US dollar media stories are a little premature in my opinion.

The chants of the ending recession are now ringing through the hallowed halls of Wall St. but we will keep a cautious eye with an optomistic heart. A Christmas rally would be sweet and after this past year we deserve it.

Blowing Off the Froth

Haven't made many TA predictions lately as it seems every call for a serious pullback when on the ropes winds up with much egg on one's face. But I will say that I saw this one coming as we trade in what I call a "longer term/bear rally since March/ uptrend with range trading gyrations". How's that for stock terminology ?

I could see last week that this market was running out of steam and needed to blow off some of the froth built into higher than expected earnings that sooner or later had to disappoint. Toss in some declining US consumer confidence numbers,Goldman Sachs calling for a lower GDP number (how do they always know ? hmmm),and month end profit taking and you have a correction in a hurry.

We all know the script now, a rising US dollar when on the abyss sees gold,oil prices and stocks get whacked til the buyers slowly step back in.

My main point here is my charts that I use on www.stockscores.com are showing another day or two more of a pullback on the SPY as the TA signals begin to touch the bottom. 102 looks like the next support line.

The question will then be whether or not we tread water sideways for awhile after this froth has been blown off. Barring some geopolitical event, I am thinking we will flatline/range trade rather than any further moves down as the upside expectations seemed to be maxed out for the time being. But as always one has to expect the unexpected as tax loss selling season upon us.


http://www.stockscores.com/quickreport.asp?ticker=spy&x=13&y=15

Strategy

One thing all stock trader/investors have to keep focused on is what is their strategy for making money in this game. Without the master plan you can get lost in a hurry,especially in the venture stock arena.

It's so easy to get thrown off course in these kind of markets and start hop- scotching from one hot play to the other. The problem with the hot stocks is usually by the time you find them they already did most of their run and any remaining profit makes the risk so high that it is not worth it.

That's why I try to stick to a simple plan of searching for companies that are "underfollowed" but more importantly "undervalued" based on the DD of new company developments on the horizon. Once you find all three elements then usually you will make some decent profit if general market conditions are in place and the coinciding sector is also in market favor.


What I try to do is keep my focus on 4-5 stocks max, all with potential to make 100% to 400% profit over a period of 3-6 months. If I can do that once a year then I will be in the drivers seat. If I even make on 2 of them I will still be doing decent.

Not to say I won't play a blue chip, or an option play along the way, but my focus is getting the ducks lined up, planting the seeds and being patient and watching them grow. No brain surgery involved or high priced newsletters here,just solid hunting and digging for those gems laying in the weeds ready to explode when the time is nigh.

Most important is to learn to trust your research. As long as the company's plan is still in motion, then eventually your profits will come. If it changes,then you have to make a decision....but that is for another blog post.

Hi Yo Silver !

Just another boring up day for the precious metals. Gold ended on the upside once again after testing the $1045 low for a $15 swing closing at $1060. Silver had a 68 cent swing closing at $17.61 but is the one metal I believe is going to surpass gold in percentage terms when all is said and done. It is still off it's $20 high last year but the interesting part is the supposed massive short position that could propell it much higher and faster should the US dollar downdraft ramp up.


My past experience has told me that in a precious metal bull market you want to own an explorer in a prime area, near a big mine, and with strong experienced management that knows what they are doing.

This brings me back to my #1 precious metals pick, Artha Resources, V.AHC. They have a 55% option on a piece of land that surrounds three sides of Silver Standard's Pirquitas silver mine in Argentina, as well as some choice exploration properties in the near vicinity. You could not ask for a better situation being next to one of the big boys.

Nothing is ever gauranteed in the junior exploration game but in this case your odds sure went up being in this neighborhood.


www.artharesources.com

EmerGeo in the News

One of my top fave picks had an excellent article in The Province yesterday on the front page of the business section on their connection to the 2010 Olympics security. You can access the article here :


http://www.theprovince.com/sports/2010wintergames/Mapping+trouble+spots/2091557/story.html


This a very well written article and explains how EmerGeo's niche software saves lives and property by improving communication to all Emergency Response teams from fires,to earthquakes to terrorist events.

The ability to look 3-D into a building is very cool and shows why they are the leader in this niche sector and are a possible take over target down the road. I look forward to the next few months as their clientele list expands,this is a no brainer stock at these dirt cheap prices. Under-followed and under-promoted makes for EmerGeo a great buy before the masses discover it.


www.emergeo.com

Bernake's Shot Across the Bow

You just knew something had to give with the US dollar as the week went on. Reeling on the ropes, with every pundit predicting the dollar's demise including suspicous Euro oil dollar stories denied by many,somewhere another magical FED rabbit will be pulled out of it's arse.


All the market needed to hear was the remote possibility of an interest rate hike will happen when the time is ripe and respond they did. The US dollar popped,bonds were driven lower,the ten year note $TNX index leaped a point and some in the knee jerk fashion. Even RBC raised mortgage rates which rattled a few in Canada I am sure where housing is being bought and sold like BRE-X and Nortel shares at their all time highs.


Gold got hit $10 or so but recovered to only down $6 so the COMEX players aren't buying it quite yet the dollar will spike. Gold is acting very strongly here and if inflation is coming, the shiny stuff will be there to act as a hedge. Next week will be very important for gold. Any more interest rate hike talk may take an edge off as the shorts are maxed and a few stop loss hits and down gold could go but not for long in my opinion.

Bernake indicated no hikes til the economy improves but just the impression it will be happening may give those in control of the Forex markets a reason to hold the fort and play any short term squeeze on the dollar shorts as it is very oversold.

I hope to have some more stock updates this week. My SPW.P announced their oil deal is not happening but will announce another deal shortly so stay tuned, I think things are beginning to heat up with all the Closing Bell's picks.

You Got The Silver ?

"You got the silver you got the gold"
Richards/Jagger


Well after much DD, here is my new silver/gold play pick. It is V.AHC, Artha Resources. More silver than gold at this point but is dirt cheap and is prime silver country,right smack next to Silver Standard's silver mine,one of the top few largest open pit mines in the world. Do your own DD as I am not responsible for any losses but I believe this is an easy double from here.

Good luck !

Oil and Gold Show Update

Just thought I would update you on my last post re: US Oil Dollar dump story. Since then the Arabs,Russians and Japanese all denying any "secret meetings" to dump the US dollar. I didn't want to jump to conclusions when I first read it but it was taken as fact by the markets one had to comment and be aware. One part that did concern me that it may not be fact is the article stated this supposed switch was supposed to be implemented over nine years. Now that is a long time and if the US recovers by then and retains it's world power status then what ? Egg on face ? I have seen some sketchy to outright fraudulent articles in the UK papers over the years so until I see more concrete evidence this "meeting" even took place then I call bullshit.

What we are seeing is lack of faith in the US dollar,no doubt about that, but we are also seeing one mother of a gold short squeeze as the commercial shorts were short HUGE at just over $1000 and they are covering like madmen. When will this end ? When the big players say so and the dollar hits the 72 cent range is where I figure which will put gold around $1150-1200 range. No denial here the US dollar is in bad shape but printing stories without facts and then to see vehement denial from the key players tells me there is some serious market manipulation going on here.

I am sure the Chinese may have brought it up and someone jumped on it but this subject has popped up many times and the process to pull off such a currency switch is no easy feat. So I rest my case for now.

Gold is flying as the shorts get squeezed, and the US dollar hits the 75 cent level. I do smell some sort of move by the US but whats left other than an interest rate hike ? Bond sale at 10 AM,should be interesting.


Here's the take from Jon Nadler at Kitco:

http://www.resourceinvestor.com/News/2009/10/Pages/Separating-rumor-from-fact-in-the-runup-in-gold.aspx

The Oil And Gold Show

As per my previous post,the gold action at $1000 as it bounced back and forth was unprecedented. What is causing this resistance to the typical pounding back down by the gold shorts ? Oil, or make that oil and the US dollar.

A report from the link below has some startling if not earth shaking news that Russia,China, Japan,France and the Arabs are in plans to shun the US dollar for trading in oil dollars. Is this article true ? Since it came from Peter Grandich's site I will believe there is truth to it for the time being. Will the US protest this move if it happens ? You bet your bippy they will. This is one of the most crucial events that could happen to the US$ as it is has been on the ropes for awhile now but always managed to make it another round.


What could change this direction ? Raising interest rates drastically as in a one point increment which the FED stated a week ago was a possibility. The US has been "pleading" with China to let the Yuan rise and they say "screw you". I see no other alternative for the US,maybe not right away but in a month or so if this continues. Money would flood back into the US dollar and gold would tank along with oil prices. Or would it ? Gold is held against inflation as well so there is a serious support for gold right now like no other time I have experienced,the action proves it.

Gold is currently kissing $1040, a record high,silver is up over $17 but not close to the old $20 record and oil is above $71. Something is cooking here folks. And I will soon have my gold/silver pick for you,just waiting on some confirmation of my DD process. The junior explorers could get very hot here if you are in the right place,as we now know it is the right time.

As far as the DOW goes, as of 9 AM the DOW is up the second day in a row with earnings season kicking off tomorrow with Alcoa being the first big boy to report. So hang on to your hats,this may be quite the ride.

Important update: I just received a report on this from Custom House and they stated the Arabs are denying this but no mention on the others.

"Just as quickly as the report hit the wires, a speedy denial from Saudi Arabia followed, with the central bank governor stating that the rumours are completely false. While the quick rebuff from the Saudis may in fact indicate that they are not looking to diversify away from USD, the same cannot be said for China when speaking about the destiny of the Greenback’s reserve status. From China having taking major stakes in energy and commodities, and from Chinese officials having stated their displeasure with the USD, it’s clear to see that China has already taken steps to branch out from under the Greenback’s wing. While the dollar’s fall from grace surrounding its future as “the” reserve currency has been well documented, the simple fact that there are currently no alternatives available suggests that the decoupling from the USD will be a very slow and arduous process."


http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Blowin Off Some Steam

Believe it or not that is a British Steam Jet Car that can do 225KMH on the flat...amazing.

On to the the markets. The S&P 500 did what I predicted this week and blew off some much needed steam and traded down the last four days straight. How far will this go ? Depends on several factors. We are now heading into the beginning of earnings season again in 2 weeks and this will be the biggie. Will they show improvement ? will they be flat or will they suck bigtime ? I think the former is the only one the markets are like. Mediocre will not cut it.


On top of that we have a serious battle going on between the US dollar and the price of gold. Never have we seen such a battle at $1000. Tim Geitner is talking up a strong US dollar with quotes by Feds that any interest rate moves will be swift and hard if needed, and a full point move would not be out of the question and to be expected. You can imagine what that would do to the bond and mortgage market. For the gold bugs,thems fightin words.


Over the last months the US dollar has been transformed into what the Yen was the past decade or two, "The Carry Trade". This is where Yen is borrowed cheap and invested,now the US dollar is replacing it and the implications are very scary on how this effects us in Canada and our loonie. Will the US want a carry trade for much longer and raise rates soon to attract investment ? or do they even have a choice in the dollar dropping due to massive borrowing ? It's a fine line and one has to be on their toes and use the charts and expect the unexpected.


The next several weeks will be the most interesting and unnerving of the year. I do reflect back to early July when all were predicting crap earnings and the charts teetered on a few key levels. We all know what happened then. Upon looking at my SPY chart this week I see the identical set up on RSI and Stochastics, and the market has blown off enough steam to bring these down to bottoming levels as back in July.


Will we have a repeat ? Who knows, but if we don't then things could get very ugly once again and very fast. If we do ? Then be prepared for a major short squeeze as I bet there is way more short money out there in both the markets and it is a known fact on gold and the pop could be huge. Stay tuned !

Crossroads

I went down to the crossroads, fell down on my knees
- Robert Johnson/Eric Clapton

Time once again to disect this market and see what our risk/reward ratio is like. As you know we have been at some mind bending levels since last winter but each time we seem to hit these levels the mindset quickly turns bearish only to be made to look stupid as it roars higher.

This time may be different as we have several factors at hand. One is the usual time of the year warnings but the biggest in my mind is that it is time for the stimulus money to show its hand in spades. Existing home sales were down,the Cash for Clunkers program helped somewhat but durable goods orders were down as well so how much is all this cash helping ? We can't forget about RIM and the BlackBerry as earnings disapointed huge and the share price was crushed on Friday.

We have had four straight down days on the DOW and the TA charts have relieved a lot of pressure without tanking the market and that is positive. We also have some serious terrorist threats popping up and the Swine Flu about to hit in a big way which will really test our health systems. If the hype lives up to the expectation this will in turn effect the bottom line in all of the economy.

Gold has had it's ass handed to it once again but I won't rule out a one day large move back up here but it has to happen soon as the US dollar seems to be showing some life and you know what happens to gold when that happens.

Oil also got whacked on supply levels and an economy peaking out on the stimulus.

So what do I think ? I say the DOW blows off another hundred points or two then settles down going into October. With this threat of Iran's nuke plant surprise, oil and gold will still be in play and as long as oil stays over $60 then stocks will be fine. If it dips below that level then we could get a 10% correction very easily.

Ultimately I ask myself, would you buy Apple at $180 ? Not. So stay diversified and be defensive but use your stock picking abilities based on underfollowed companies with new developments that will attract the risk money out there... sleeping dogs coming awake is the place to be.

Flim Flam Man

Pssst ! Yeah you .... c'mon over here man, have I got a deal for you !

As I posted earlier,this gold price rise will and has created the potential for the scam artists of our lower dredges of society to relieve you of your hard earned money. Apparently sleepy little Victoria has witnessed a connection to the latest Canadian version of a Bernie Madoff scam. According to David Baines of the Vancouver Sun there is a company and individual who touted the "gold mine" scam to unsuspecting sheep at "get rich quick" meetings. You can read the article below then visit the site and make up your own mind but I say since the guy has closed up the office for a "holiday" when the gold market is busting loose says this is just the beginning of another interesting Ian Thow type scene but with many scamsters with shady records attached who have been banned in the past.

Play safe kids,they want your money.



'Wealth coach' serves up gold bars and snake oil"

http://www.vancouversun.com/business/Wealth+coach+serves+gold+bars+snake/2023020/story.html


http://www.wealthbydesign.com/index.php


http://www.webmechanic.com.au/IFFL/index.htm

Admiring The Abyss

What a sight to behold isn't it ? Here we stand at the top of the largest bear market rally, enthusiasm is high,risk is back in vogue and Vancouverites and Victorians are buying houses like crack addicts down on Hastings and Main. The question is how long can this last ?


From the fundemental angle the jury is split. Some are screaming from the tops to watch out for another crash, especially with October looming. On the other side we have the bulls who are kissing the earth each day this roared back to save their bacon and are preaching this is a new bull market. I do not want to see a crash, a correction yes, but not a crash. Corrections allow for second chances wether it is oil stocks,tech stocks or gold stocks. Crashes end that dream for all.


But then we have a real estate market in BC that never really corrected,it was a blip that was so short lived it won't even register in the history books. I cannot for the life of me figure out how people will cheap out over buying a pair of pants, or drive around for days pricing out how to save a few bucks on the big screen TV but will throw away tens if not hundreds of thousands of dollars in insane bidding wars on a house when they are so clearly overvalued. The word "disgustingly" overvalued comes into play here.

But the clincher is the attitude one receives who dare says a bad word about this subject, as if acting unpatriotic, as if they stomped on our flag or some treasonous act of the like. Most real estate owners do not get the word "overvaluation" but they will be in the next year as this schizophrenic behavior cannot continue. Bizarre is all I can say.


Psychology is a funny thing and the stock market shows me everyday that sooner or later the law of averages,the ebb and the flow, the ying and the yang all come home to roost,all that is needed is patience.

Therefore ,the point of my rant is that technically speaking,stocks seem poised for a correction here as well as with gold stocks. My charts tell me so,the SPY has peaked, gold is correcting in baby steps,oil is trading within a large converging triangle that should play out one way or the other within the next few weeks. As well the talking heads on CNBC are even divided,so that usually spells a small correction at the very least. I can live with that...just don't crash please. The last look over into The Abyss was not a pretty sight.

Still positive on my three picks, EMG I hope to see something soon,as well as COO,both a real deal. SPW is still a month away so be patient in the meantime if you like the junior oil plays. Still working on one gold/silver play in particular,it will be a beauty. Stay tuned and play safe !

Golden Rope-a-Dope

It was another Ali-like rope-a-dope day for gold. Sellers/profit takers pressured bigtime this morning down to $991 and looking like it was lights out for gold, then bit by bit it clawed back with a right cross and and an upper cut closing at $1009 with a strong finish.

If you have watched the action on gold the last several years you have to see that this time this may well be "it's different this time". I am what you call a "cautious gold bull", as so many times gold has gotten smoked once above $1000 but the ability to bounce back a few times now is what has me thinking this time $1000 in a couple of weeks will be the support line the longer this type of buying action keeps up.


Of course on the downside risk there is the record high spec longs you have to be highly concerned about, but with all this Chinese trade wars and massive debt that there just may be some international support for gold maybe not as an alternative, but as a "just in case we're screwed" insurance policy.

Bernake says the recession is over, did the inflation threat play in as well ? So many mixed opinions on inflation, but something has to kick in down the road and that may be what's triggering the gold buyers as they can be very forward thinking.

One final caveat, " COMEX Commercial Traders Have Taken the Largest Net Short Position Against Gold & Silver Ever on Record". Usually a very strong sign of a sell down coming but the longs are record too and greater than the record shorts according The Aur Report :



"It is not unusual to see commercial traders go heavily short when gold makes a big run, but they have effectively gone "all in" this time with their total net short position setting a new record. These are presumably the most well-informed traders or "smart money." While this news is usually very bearish and a preclude to a massive sell off, it is interesting to note that the commercial net short position increase was actually less than the increase in total open interest. In other words, despite taking record short positions against gold, they were unable to absorb all of the buying pressure."


Some of the quotes from Goldessential.com were interesting:

"The trader pegged resistance ahead of $1,015 an ounce, the COMEX December gold high from February. “Above that could launch us towards the all-time high of $1,060 an ounce”, he added. "


"A COMEX floor trader added that “this is the second consecutive session that the contract [December] managed to post a settlement above the figure, which seems fairly constructive and still implies the potential to run higher”.

"He added that “there however seems to be a strong hand that is buying any dips. It looks too concentrated to come from various players”."




As always, caveat emptor !

Ride the Golden Bull

I am very impressed with gold's resilience this week, it looked for sure that the mid week selling pressure back to the 980's was the classic dump job hitting stops all the way down to the 960's and would clean out all the bids in one fatal swoop. But it was the opposite and this was most impressive a comeback to close at an all time "weekly" high. All other attempts over $1000 never ended the week above. Shows the power from when it touched $1033 once. Someone is supporting it not like any other time that I can recall.


Speculation on the buying can be from many places, the Chinese ? or the IMF, who wants to dump some gold in a huge way would want the best price wouldn't they ? Maybe they need a closing average to keep things kosher and $1000 is a nice round number. Or is it the dreaded gold cartel via Barrick/Goldman manipulating the price at their whim ?

At any rate, it makes for interesting weekend pondering of possible conspiracy theories of major proportions by key players of the world as well as the ruthless. I can just imagine how many gold stock scams are brewing in the planning stages right now just praying gold moves higher and forms a base well above $1000. Then the big "Game On" light will be lit for the next investing mania and one has to be extremely careful not to get scammed.


Still fine tuning a couple of gold and silver picks. I think they should be in everyone's high risk portfolio.... but there are some tricks to find the 5-10 baggers you want for the level of risk in the mining game. Next week will tell the tale for gold, and I think $1200 is not out of the question by Christmas into next year. Beyond that is a crap shoot.... in the meantime,buy cheap,buy quality,make money....it's that simple.

The S&P Rock 'N Roll Train

So far so good,the first two weeks of September have yet to show it's historical fangs. The SPY Index is making year highs as well as 8 month highs as glimmers of a bottoming process keeps the S&P 500 train just rolling along fine.

We all know this is a government based recovery so far and the big question remains : what happens to the train when Obama pulls his train out of the station ? Barring some out of control world terrorist events I wouldn't expect to see them pull out any time soon until they see what is going to happen with the US dollar and the health care bill get passed.

There are so many opinions out there right now that it makes it hard to even read them all,let alone honestly form any solid opinion on where this is all going so I will stick with the charts and play stockpicker. In the meantime the VIX shorts are getting smoked,the gold bulls are still alive by their short hairs watching gold swim just under the $1000 surface and the market pros are keeping a finger ready on the sell trigger as overbought levels are all over the place but nothing there to spook it... yet !

Gold $1000 Close De-nied !

It was quite the whacky day watching gold bust through $1000 and then the shorts/bears/conspiracists or whoeever you want to call them,slowly and methodically played rope-a-dope in pure gold cartel style working the price down step by step,deflating the goldbugs balloon once again. It was inevitable that $1000 would be breached by shear emotion but now we have a classic setup for gold to be once again denied any solid footing above this critical threshold.


There are a couple of caveats in all of this. As John Nadler on Kitco pointed out,there is a 600 tonne long position. How long will they stick around with a full load if gold can't clearly bust through and show some real support above $1000 ? That will be critical.

And number two, there was a comment by GFMS yesterday that there were some "clumpy" trades that possibly had something to do with this latest push to a grand.

But what is most interesting is Barrick,the Bady Boy/cartel-related gold company, released news after the bell that they are eliminating all their hedges as they see gold going much higher but in the process will take a $5 billion write down.

You have to think if this was not the real deal for gold to head up higher then why would the bad ass of the gold bizz do such a thing ? Not to say we may not pullback here but if we do,it will be time to reload. My spidey senses tell me it is gold's time to shine,not just because of all the US debt,but because the hedge funds have run out of big move style plays. With the S&P maxed out there isn't many games left in town and with this Barrick news it only solidifies the next move up is not "if" but "when".

September Blues

We now come to one of the best and worst times of the year depending on where you are in your life stream. September can bring a beautiful time for making changes to your direction in life, and open up doors to new beginnings. For a sports nut like myself, it is one of the best as we have the baseball pennant races heating up as they come down the home stretch as well as hockey training camps beginning, and NFL season kicking off.

On a sentimental/emotional front we have 9/11 coming up that always reminds us in spades of how fragile our system is.

On the financial/investing front it can be dowright scary,especially after last years total collapse and all eyes will be focused on what the big boys will do come Tuesday. The historical odds are a bit over 50/50 to a bad month ahead and those odds are not bad considering what we have just witnessed the past 12 months so I will expect to see some selling but not the wipeout many are predicting.

Yes we have massive debt in the trillions, yes the rise of the markets has been based on mainly stimulus money but as I have repeated many times,I will not underestimate the power of the bank money and funds that have sat on the sideline.

Once we get through a couple of weeks of fretting we shall have a better glimpse of what lies ahead. I truly believe we peered into the abyss and it wasn't a pretty sight and the powers-to-be will not want to see that sight again either. Rough times and slow recovery for sure, but I will be shocked to see us collapse back to the March lows. 500-1000 points is clearly a possibility on a correction but I think we saw the lows for a long time. Companies have gotten meaner and leaner and profits are what counts and that's all the DOW cares about.

I reiterate my stock picks for the month, EMG, COO.P and SPW.P later in the month. Still working on some silver and gold picks so stay tuned.

Gold breakout ?

As I have been mentioning, gold and silver have been on my watchlist for a while here and today it made a nice breakout move up $23 with an hour left til the gold market close. I was really taking notice yesterday when gold did not drop when oil did and the overall markets, which are wakeup signs of a possible disconnect,especially when the US dollar went up.

There is some big talk out there for several reasons why gold popped.

1. It's the seasonal time, Indian wedding buying etc.

2. But the second is a biggie and that is the Chinese who have taken massive hits on derivatives have basically told the 5 or so major banks they owe to shove it, we're not paying because you never told us how dangerous they were. In other words they say they got sucked in to buying useless paper and they are stiffing them. What happens when you stiff Vegas for betting big ? Hmmm... well not maybe the same ending but even if they pay up half the losses in the end,it could take much time and debate,not to mention the losses show up on the banks bottom line.


I may be out in left field here but I think this has been building behind the scenes much longer than we have been aware and could be one reason why gold has been so resilient the last couple of months with no major $50 swings down. There must be some major support to suddenly put a halt to that type of market action which has been going on for years now.

So what does one do to profit here ? As a master trader tells me, it is best to wait out the breakout and see how high the next step goes then see if it blows off some steam and reloads.

The other important part is to see if it can break the old highs of $1000, to me that is the ultimate signal. I am scouring for good cheap gold/silver plays and are eyeballing a couple but not ready to pull the trigger quite yet.

Also make note that in Canadian dollars gold is trading at around $1055 and the old high back in March was $1247 so there is about an 18% or so difference of room to work within before any thoughts of missing the boat if this turns into a major gold bull move to $1200 US as many have thought.

One final note,we had the Loonie and the US dollar move down today,now that is concerning but may be the currency intervention the Bank of Canada has been threatening to do. But how long can they keep it up ? Not long is my thinking.