Thoughts on Markets

Monday, June 07, 2010

Interesting, Challenging Martkets

We are getting very mixed signals on silver. It has moved some higher since the close, but it must break above the 50 Day MA and keep going for a strong upward move.

Gold is showing a better picture, but I remain cautious on both metals. With all the financial turmoil in the world, the precious metals should be skyrocketing, but their moves are not very strong. We need to see more positive action.

The miners seemed to decouple from the general market today which was down triple digits again for a loss above 400 points on the DOW for this week. The general markets seems very fragile as it looks forward to the rest of this year and probably into next year. The miners showed a bit of strength in opposition to the general market.

The picture on longer term Treasury Bonds seems quite strong for the time being. However, one should use caution here, because these "safe" havens may not prove to be as safe as one would think. In fact, this bubble or balloon could burst by the end of the year. One can play the bust using TBT or play with the bonds using TLT. I, personally, prefer to use the options on either or both.

It is a time for caution in all markets. We must be ready to jump in when the time is ripe, so keep your powder dry (cash ready for commitment).

We are in markets which are quite volatile, so they must be watched quite closely.

Let us use caution, but stand at the ready to jump into, particularly the precious metals when the time is ripe.

Only King Jesus knows where the markets will go tomorrow. We can only make "educated" guesses, but realize that they are truly guesses.

Best, to each, Doug

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