Thursday, July 23, 2009

A Couple of Charts.

I was looking at the S&P 500 chart last night (courtesy of, and noticed that there really is still room to run in the upward rally from a purely technical level.

I honestly had thought that this rally was near exhaustion and reversal a couple of weeks back but it appears that there is room to run. So our long positions are doing very very well (for example, Teck Cominco, which I purchased back in December for less than $5.00 is up over $25.00 / share today!). I am still intent on holding my precious metals producers for the long term as there is just too much upside potential (despite the fact that most of the are up 300% or more already in less than 6 months).

On that note I will disclose that I am liquidating my Tck.b position today. Give me a sec.... okay, done. $25.81 / share at 11:46am. Given that the entry point on that trade was $4.83 / share I'd say we made out pretty nicely on that trade.

I think there might be a bit of upside on this stock in the very short term but I am totally uncertain how the market is going to react going into this fall and winter and I'd rather lock in my 520% gain instead of hold out for more to a bit of greed. Besides, it's trading right around Net Asset Value and it's not paying a dividend right now so I'm selling something I got at $.20 on the dollar for $1.00 on the dollar. This powder I will be keeping dry for the next leg down in this bear market so I can scoop up some other companies for the same discount.

Also I am still keen on Migao Corporation and Hangfeng Corporation, but am still waiting for a good entry point. I'll keep you posted on that.

Oh yeah, almost forgot - here's the S&P500 chart.

Keep in mind I'm using weekly candles and EMA's to paint an even longer-term picture.

And another chart I'll throw up is an update on one I posted a few months back. The famous Dow:Gold ratio chart. Remember that in all of the major recessions in the past the Dow has traded down (and gold up) to a level of 2:1 or less (It was 1:1 in the 1970s recession). Even though the Dow has broken the 9,000 level (and could run up over 10,000 if this insanity keeps up for much longer), we should begin to see a significant run to gold within the next 12 months as all of this highly (translate: Insanely!) inflationary activity by the Federal reserve robs the dollar value of all you hard-working savers out there.

Once gold gets to a certain price point it will be out of reach for a lot of small investors. Where do they turn? Silver of course! I personally have a much much heavier weighting of physical silver in my savings than of gold for this reason. Also the fact that there is actually 1/6 the amount of purchasable, physical silver for investment compared to gold. This is because silver is so widely used industrially.

Anyway, that's it. Here's the Dow-Gold chart for all of you chart-o-philes out there :)

Feel free to flip an email if you have anything you'd like a second opinion on! Cheers!


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