Gold Stocks
Introducing LatestDiamonds.com!
I would like to thank all you people here reading my opinions. I really appreciate it.
I would also like to thank you for making my latest... sites quite successful as well.
There are now 4...no 5 latest... sites:
and...
Yes, since I think that the diamond sector will become more and more popular over the coming year(s), it was a no-brainer for me.
There are currently 41 diamond stocks that are being tracked. This is about 1/3 of how many Uranium stocks are being tracking and about 1/2 of how many silver stocks exist right now.
In my opinion, that means that there is much room for growth in the sector.
Contest Coming Soon!
I recently heard an interview with Bill Murphy of GATA and he really impressed me with his passion and belief that the Gold price is manipulated and currently very underpriced.
He explained many of his arguments well but he said if you were still not a believer, to order his Gold Rush 21 dvd.
This was a conference that was held about a year ago and was organized by Bill Murphy and GATA. They gathered a good selection of gold manipulation believers and recorded the whole thing.
Basically the Gold Rush DVD is the conference in digital recorded format. I noticed that they offered discounts when buying more copies so I decided to order 5 copies. 1 for myself and 4 to give away in StockBullz contests.
Now I am still working on the logistics of having a contest with 1000+ entries so please give me a bit of time to organize the setup.
I have been very busy recently so I have only watched about half the Gold Rush DVD's. They are very good so far and I will ensure to do a proper review soon as well.
Where's the Market Heading Next?
This correction we've had for a week or two now has really begun to unveil some nice bargains. Many stocks are down 30-50% from their highs. Like I said, I think we might have a bounce this week but will go lower and/or sideways until around august.
Let me now highlight some other people's opinions:
The action on Friday was characteristic of a reversal and it was sector wide with Reversal Days showing up in the charts of the gold stock indices and many gold and silver stocks. The action in the metals themselves was less convincing, with silver looking like it had bottomed, at least for now, but gold itself looks rather ambiguous.
Even before they started to head south in earnest, Precious Metals stocks were seriously underperforming gold and silver, and as soon as the metals broke down, stocks caved in. The flip side of this relationship is that we can expect PM stocks to hit bottom ahead of the metals, and, when the time comes, we should be on the lookout for this as a great buying opportunity. On a trading basis we appear to be at a buy spot now, and some of the stronger stocks may not drop below the current lows. We should remain aware that while the metals are likely to drop to lower levels after a near-term bounce, stocks may not drop below current levels, or if they do, not by much.
Tough Times
Just like our price run-up in the market was perhaps overdone, it looks like our downturn will also be overdone.
The markets are never rational and I have a feeling we still might drop quite a bit.
The fundamentals of our commodity bull market haven't changed one bit but the emotions have.
People are beginning to panic and they just want to get out of all their resource stock as soon as possible.
It looks like we might have another period something like October 2005 which was a scary time to be holding Oil & Gas stocks in particular.
However, the patient and cool investor who did not panic profited very well if he just stuck with his positions as all the stocks rebounded very well as soon as October was done.
The one positive thing however will be that when this correction is done, there will be substantial gains to be made by buying some great companies at bargain prices.
So make sure you have some cash ready to buy in when the correction finishes. I still don't know when that will be, but I will try to be using charts and following the media. When the media turns unbelievably bearish on the market, gold, commodities etc, that will be the perfect time to get in.
Lightened Up My Positions A Little
I used this morning's rallies in NUC, CS, SVM to lighten up my positions in those stocks.
It looks to me like we might have further downside for a period of time that I can't predict yet.
But I have more cash right now so when I feel the right time has come, I will be able to get into some beat down stocks at great prices.
Here is a possible scenario for Capstone:
I we could get a crossover and a double bottom, I think that could be the sign of the end of the downtrend. If Capstone bottoms at $1.28, then it's forward P/E would be around 3.1.
The hard thing to judge right now is when the markets will turn around. It's all about psychology and everyone was very bullish for a long time so it could take some time, maybe even a month or two to get everybody thinking the bull run is over.
Looking over the SVM charts, it doesn't look great right now. We're about 25% off the tops so I am sure some people's stop losses will be going off.
