Monday, April 17, 2006

No more fence sitting!

Yee Haw! After thoroughly trouncing the 350 level and showing that I can’t make short term predictions to save my life, HUI (the Amex gold bugs index) finished the day at 362.54, up nearly 4%. As I have been watching this key resistance level, I jumped back in with both feet today. Over the weekend I had some exchange with BlueDaze (see comments after the post on investing in gold and silver bullion) regarding Northgate Minerals (NXG). My comment was “opportunities come and go, but the same cannot be said for hard earned money” in view of NXG’s rapid run-up after Jason Hommel’s article. Well, NXG went up over 11% today, as did Taseko Mining (TGB) mentioned by Jack Chan. I’m still a little wary of this being a symptom of excess and certainly will not chase those two from here. I did pick up a junior producer, Northern Orion Resources (NTO, 1000 sh @ $4.95 – low of the day) and Jim Sinclair’s Tanzanian Royalty Exploration (TRE, 800 sh @ 6.87). I have said previously that 390 is a high probability if HUI can overcome the hurdle at 350. My opinion has not changed. It doesn’t mean 390 will trigger an automatics sell, but a trend line break after 390 just might.

The general stock market put in a morning reversal today. I would like to say I foresaw it, but to be “fair and balanced”, the volume did not show any conviction either. I’m not eager to take on the puts discussed in the last post as long as commodity stocks hold up, because the need for protection was predicated on the commodities following the general market down in the first place. Overnight spot prices of gold and silver continue to climb, we may be at this for a while longer yet.

None of the above is intended as investment advice. I have disclosed buy and sell decisions in the past, but there is no guarantee I will continue to do so in the future or in a timely fashion. While the above information is believed to be accurate, mistakes can and do occur. The responsibility for any investment decisions you make are yours and yours alone.