Monday, March 30, 2009

Recession severe, Great Depression no way

ARNA releases positve study but the amount of weight loss not as much as wanted by market place--stock drops by 1/3 at open today. I still think this drug will be released after Sept phase 3 study report. I bought additional July call options today.

Follow this link for gold historical performance
I remain very bullish on silver and precious metal stocks.

God Bless and wishing you all a wonderful trading day.

Monday, March 23, 2009

Gold and Silver Stocks Safe Haven? Major Market rally

I took a 20 % position in SLW, AUY, RGLD,GSS. ALS:TSX remains on my watch list as does the biotech ARNA (Phase 3 weight loss pharmaceutical product results will be released at end of month). Tomorrow I will take an additonal 2% position in ARNA.

While institutions and central banks are increasingly looking to gold’s safe haven attributes as portfolio insurance, retail investor sentiment remains lukewarm with only a minority of the investment public having any allocation to gold whatsoever and the vast majority of the mainstream media almost completely ignoring gold’s continuing outperformance of other assets and extremely strong fundamentals.

Media coverage of gold continues to be lukewarm and focuses on the fact that gold has not yet surpassed its record nominal high of $1,030/oz, which is pointed out repeatedly.

What is rarely pointed out is that gold rose in nearly all currencies in 2007, in 2008 and is up some 8% in dollar terms (more in euro and sterling and far more in other smaller currencies many of which have fallen very sharply) so far in 2009 in stark contrast to equity markets (see Performance tables below).

Disclosure: none

Wednesday, March 18, 2009

Fed Rings Bell

There is an old saying on Wall Street that no ones rings the bell--however todays action by the Fed comes as close to bell ringing that I have ever heard. I look for gold to soar and the dollar to tank. Buy april call options on SLW, RGLD, Auy. I prefer just out of the money options based on the underlying stocks price. This is a turning point--The FED is running the printing presses full tilt.

Monday, March 16, 2009


Washington - America's recession "probably" will end this year if the government succeeds in bolstering the banking system, Federal Reserve Chairman Ben Bernanke said Sunday in a rare television interview.

In carefully hedged remarks in a taped interview with CBS' "60 Minutes," Bernanke seemed to express a bit more optimism that this could be done.

Still, Bernanke stressed - as he did to Congress last month - that the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally.

Sunday, March 15, 2009

IBD signals market rally

Thursday marked a follow-through session for the market, on Day 5 of a rally attempt as reported by IBD. So has Dow Theory confirmed this bear market rally--or is it the start of a new bull market? Only time will tells us--I can interpret trends--I do not forecast the future. I am not smart enough. I also notice that when I take a market position my objectivity becomes clouded--I look for any evidence that supports my position and ignore the signals that are screaming at me to take my loss and regroup. Such is the life of a trader. I have been blessed by the good fortune of side stepping this vicious bear market--I moved to 90% TREASURIES IN November '07.

I plan to invest soon in this current market rally. I continue to hold a 10% position in precious metal mining stocks. I also look for a rally in the oil stocks and for the U.S. Dollar to decline markedly over the next year. Inflation should start to heat up over the next 6 to 9 months. I monitor the U.S. Dollar interst rates, TIPS, Gold and OIL. My favorite sector right now remains the silver stocks. I look for spot silver to spike as high as $50. I favor holding for 1 to 2 years--I get whipsawed every time I think I can time the precius market and gold trades. I also look for a huge rally in biotech stocks. My current favorite is ARNA.

The bear market peak for the Dow occurred in October 2007 at 14164. The recent low was recorded on March 9 at Dow 6547. This represents a total loss of 7617 points. A one-third correction would take the Dow back to about 9500. A two/thirds correction would take the Dow back to 11629. A 50% correction would take the Dow back to 10355.

Saturday, March 7, 2009


If you want to speculate on biotech weight loss drugs take a look at ARNA. 2 other biotech stocks are VVUS, and OREX. I think biotech will be next sector to watch if and when a rebound comes for the broad markets. I am keeping a watch list of gold and silver stocks and biotech stocks.


Now bullish on silver stocks: SLW, PAAS, SSRI

Gold stocks I like are: AUY, GDX, RGLD

Tuesday, March 3, 2009

GDP declined 6.2% in 4th quarter of 2008

Real gross domestic product (GDP) declined 6.2 percent in the fourth quarter of 2008 after declining 0.5 percent in the third quarter, according to the Bureau of Economic Analysis. The fourth-quarter growth rate was revised down 2.4 percentage points from the “advance” estimate of a 3.8 percent decline released in January.
The sources of weakness were the same as those reported in the advance estimate.

A sharp downturn in exports

A continuing decline in consumer spending

A larger reduction in business investment
• A continuing decline in housing Imports, which are a subtraction in the calculation of GDP, continued to decline.
Quarter-to-Quarter Growth in Real GDP
2005 2006 2007 2008
Real GDP growth is measured at seasonally adjusted annual rates.
The GDP revision was large. The revision reflected new source data that showed substantially weaker inventory investment and exports than BEA had assumed for the advance estimate. The average revision (without regard to sign) between the advance and preliminary estimate is 0.5 percentage point.
Prices paid by U.S. residents fell 4.1 percent in the fourth quarter, after rising 4.5 percent in the third quarter. The decline reflected a large downturn in energy prices. Excluding energy, prices rose 1.5 percent after rising
3.3 percent.
BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: E-mail alerts are also available.
NOTE: Additional information that becomes available in the coming weeks will be incorporated in a “final” estimate of fourth-quarter GDP on March 26, 2009. An estimate of corporate profits will also be released.
Contact: Ralph Stewart or Thomas Dail (202) 606-2649 Bureau of Economic

Monday, March 2, 2009

New Market lows, Gold stocks flash sell signal

Where is the outrage. Bernacke, Frank and Dodd should resign immediately. Obama should lower taxes instead of raising them and the financial stimulus plan should send $200,000 directly as a tax rebate to each and every tax paying household. I see a one term presidency, civil unrest and $INDU below 5000---readers of this blog know that my prevous forecast was for $indu 7500 to hold. I now like silver mining stocks but am waiting for a short term buy signal soon.