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