-- Posted Tuesday, 8 May 2007 | Digg This Article
A real bummer for sure have been these last few months. Up, Down, Up and back down. I don't know about you, but I've been pretty much fully invested in gold and mostly silver stocks the whole period. This has surely been a whipsaw trading market.
Went back over some of my purchases/sales these last few years, and got a sound comeuppance. I had purchased ECU @.04, SAMEX @.035, HL @ a series of buys all under .70/share. I SOLD SSRI in 2001 @$2.35/share. I've since bot and sold SSRI numerous times since, but at that time I'd accumulated over 4,000 shares! Mercy, where was my head?
In short, I bet I've bot and sold every junior miner there ever was. Problem now is they are no longer "penny stocks"! Even though I made money on nearly every trade, I sold out of fear that after having ridden these downtrodden miners since the mid-1990s it has taken some convincing that we are really in a secular gold bull market.
Besides, I like the challenge and thrill alongside the emotions of fear and greed. As I have to draw down on my IRA each month I've always had this fear of being forced to sell "something" when it was below my buy price.
Anyway, all this preliminary brings us to the chart below. I chose the GDX for its volume inclusion. The HUI appears similar although closer to its 50-wma than the GDX. At each of the tops of these staircase advances we come up against a weekly volume of 4.5M shares. And, even though we've had an abundance of short term pullbacks a glance at the larger perspective shows the volume is ever rising steadily higher also.
I still see the risk of NOT being invested greater than being on the sidelines. If the GDX reverses just below its 50-wma at about 39 it'll still be only a 9% pullback - - no room whatsoever for even the most nimble trader, and that's assuming you sold at the cyclical high of 42.88 and buy back in at 39. If this next power surge finally breaks out above the 46.45 from last May, Katie-bar-the-door. The Aden sisters have pegged the 65-wma as a signpost to disintegration in the gold bull if that is penetrated. As you can see it's done that on several occasions, but come right back. Because we've been trading sideways for nigh onto a year now, I regard a pullback possibility to the 200-wma as nearly nil. Even still the 200-wma has advanced from its low of 19.86 in May 2005 to 29.62 where we are today. Would you be content with a 49% gain in that period?
It's been said somewhere on many occasions that the golden bull will capture 50% of its total appreciation within the last 2 months of the bull...or, something like that. Since there is no clear picture of when we've reached the end of this secular bull, I can wait for the public's stampede to accelerate us into the parabolic mode.
If you choose to invest "new" money, go ahead buy at these moving average markers, but keep what you buy, and patiently await the BIG BANG!
Happy member of the Red Sox Nation - - Believe It baby!
- - CV
-- Posted Tuesday, 8 May 2007 | Digg This Article
