Exposing Ideas to the Envelope of Serendipity

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Monday, June 8, 2009

The Gold/Silver "Play"

I don't think this is a time to hurry into positions in silver or silver miners (or any PMs).
But, be very alert because this breif pullback maybe over sooner than you think and you might miss the train as it leaves the station.

Today I bought EXK, but only because it is a company I follow closely and currently have contacts with management. Furthermore, today's action in this stock lead me to purchase the first of three trades. The stock is highly erratic and volatile so I am position size accordingly. The position will need to be carefully managed over a long period of time.

Honestly, with a bull market such such as Gold/Silver, we have only just begun folks. This market will mirror the parabolic rise of oil, which if you recall, started out very quietly and stealfully for the most part. Getting in to this market at any price prior to rearching $1000/oz in gold will reap rewards later imo, if you can stomach the volatility. If not, then wait for a better entry point.

I was banging on the table at Tim's slopeofhope last October/November when SLW was just 2.75/share. Look at it now, having recently touched $11/share.

For those with shorter time frames, I would consider initially entering PM stocks when RSI(7) is under 40 on any mining stock ,from my list of PMs, on the Daily time table. If we are lucky and get to fall under 30, I would be a buyer when it rises from below 30 to above 30.

As mentioned recently, we are right now begining a possible new "theme" in the markets where the rising yields, strengthening dollar, and a pullback in commodities (oil , coal, etc) but what may be a surprise is that Gold and SIlver may be able to rally when yields lift. Oil, Coal will also negotiate with rising interest rates, but I think the macro picture has to be stronger for that to happen. Until it does, Gold and Silver will be the parade leaders.

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