Thoughts on Markets

Tuesday, January 26, 2010

Strange Market Today, But Potential Buying Opportunity

Weird action on the markets at options expiration and delivery for metals. In the case of both silver and gold, we are seeing a very strong upward move from a "V" bottom. This shows the potential of a short turn around in the price of the metals. The day is young and it will be interesting to see how this turns out. As mentioned in the email earlier, I have been buying Hecla Mining (HL) around $5 this morning and was glad to get it at that price range. It is now trading at just under $5 again. I suggest that you consider this, but make your own decisions based upon your portfolio and risk tolerance. Also, consider Silver Eagles or Maple Leafs at about $19.


From The Daily Pfennig: "I will say something here that might tick a few writers off, but I don't care... One would think that given the problems of Greece, and a nascent, at best, economic recovery, the euro would have lost more ground VS the dollar... I'll let you in a on little secret that these guys that are calling for a collapse of the euro don't know... "The euro is the second most liquid currency in the world, behind the dollar. And right now... liquidity is in!

It certainly appears that the euro's decline/ correction has been "tamed"... And the reason? Traders are now preferring liquidity over economic performance... Now... This doesn't mean that the correction can't go further, pushing the euro and other currencies lower VS the dollar... What it says is that if traders really want to see the euro lower, they are going to have to work at it... Harder..."

From NetRightNation.com:

Time to Bring the Federal Reserve to Heel

Sometime in the next ten days the U.S. Senate will vote on whether or not to give Ben Bernanke a second term as Chairman of the Federal Reserve. The only honorable and right thing to do is to reject his nomination.

Depending on your political point of view there can be any number of reasons for removing him from his post. Conservatives can fairly lay much of the blame for the constant "bubbles" that have erupted as a result on his policies squarely at his feet. His interventions into the market place to pick winners and losers have been the very antitheses of a free-market economy and the cause of so much of our misery today. I could not agree more, and you can read it HERE.

From Reuters.com:

SEC mulled national security status for AIG details

NEW YORK (Reuters) - U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.

The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the emails.

The emails from early last year reveal that officials at the New York Fed were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that "special security procedures" would be used to handle the document. Read it HERE.

From Guardian.co.uk:

Chinese dig deep to join the gold rush

(See the picture on the site)

The assistant pushed the red velvet sacks across the counter discreetly. The customer quickly slipped them into her bag. With a brief, nervous look around, she walked briskly from the shop, already clutching her car keys.

Few people feel comfortable lugging around a kilo of pure gold bars. But that doesn't stop Chinese shoppers from thronging to Caibai, the number one place for buying the precious metal. The Beijing store's 5,000 daily customers are at the forefront of a new gold rush. Read the whole story HERE.

From Ed Steer's Daily Gold and Silver Report: "It's a busy week this week... options expiry, first day notice for delivery into the February gold contract, $166 billion treasury auction, State of the Union Address, Little Timmy Geithner goes to Washington to answer questions regarding AIG... and I'm sure I've forgotten something. Anyway, unless some earth-shattering event occurs, I'm sure that the U.S. bullion banks have already received their marching orders... and will keep both gold and silver in check [or worse] for at least the rest of this week."

Here is a look at the action of Fortuna which has been a steady miner in our portfolio. It has been on a longer term steady upward move, albeit slowly moving with sandy spots along the way. It has held rather well during this correction in the metals, as well:

In looking at the Hecla Mining graph, I see hope for an upward move in the near future. I could and often am wrong, but the graph is beginning to give me confidence of an upward move. It is not a real encouraging graph at the present time; however, the MACD does seem to be 1/2 way through its downside move and, hopefully, the negative volume will be decreasing.
Here are the miners from Scottrade.com:
Here are the currencies from Kitco.com:

Here are some current prices: FVITF 2.26; BYDDF 6.95; HL 5.08; DOW up 33 to 10229; Gold 1098.10; Silver 16.64.

We must all take a long term view and rest in the Lord who controlled the past, controls the present, and is moving all in accordance with His will for the long term good of His people. We rejoice and rest securely in King Jesus. After all He is THE way, THE truth, and THE life. All is in Him. Praise Him daily.

Best, Doug



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