A Deafening Silence in the Gold Bull Camp
Posted by Frugal on September 20th, 2006
Have you heard the drop of a needle? No one speaks up anymore. While at the same time, the headlines are overtaken by commodity bears. In a way, sentiment-wise, this is a good thing for bull.
Such big reversal in the gold market happened before, but certainly it is not welcomed by any bulls. While I did expect the decline of crude oil (to $65, but not down to $62), I did not expect such a dramatic reversal in gold. In fact, the timing of such event is simply too suspicious. The entire week going towards the quadruple witching day experienced big selling pressure.
With the big loss of Amaranth hedge fund in the natural gas, things are really grim for commodity right now.
What is my own forecast now?
Gold/Silver: Change to Hold from Buy. Expecting another washout possibly with HUI down to 265, and spot gold down to 550 before a sustainable rally.
General market: Intermediate-term (4 to 5 months) Strong Buy. Adding short-term (~2 to 4 weeks) Sell. Long-term (6+ months) Sell (not so sure yet).
Oil: Change from Hold to possibly short-term Buy in maybe 1 to 3 weeks.
I think the commodity correction probably needs to be more extended, but maybe not much more downside. An extended sideway action of some 2 to 6 months may be in store. Put in simple layman’s term, you probably don’t need to rush in for any new cash. I do hope that a renewed bull in commodity will coincide with a renewed bear in stock market in about another 6 months.
I am still evaluating whether commodity market in general began its bear market descent in May. However, history shows that a “phase change” is never so short in duration. Certainly, commodity market cannot be called a bubble simply due to the participation rate. However, I do not reject the thesis from bears. One must be open-minded to all possibilities. If the bear market began, then it should be the time to liquidate instead of catching more falling knives.
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September 20th, 2006 at 11:30 am
Bull Camp VP checking in: NOTHING MUCH HAS CHANGED. Other than the price.
1. Physical gold & silver is to be bought (on pullbacks) and held.
2. Mining stocks are to be traded, not married. (These are indirect plays in real estate-land)
3. Options are for playing bounces, only. The objective is to make the money and fly.
4. Jr. mining stocks – subscribe to a newsletter you trust.
September 20th, 2006 at 12:11 pm
Larry, you’re funny.
Really need a laugh after such a BIG loss in my portfolio. I tentatively still stay on the bullish side, and my reason is the same as yours.
You laid out #1 to #4 REALLY WELL. Good and pithy. Now I just wish I have so much time to dedicate for #1 thru #4. I don’t even have time to go to the PM store to pick up more physical metals. Certainly, I don’t have time to get quotes for options.
And on the newsletter #4, do you mind sharing some good ones? I have subscribed to http://www.golddrivers.com. But it’s not the top-notch in my opinion. Takes some time & money to try out these different newsletters. Certainly by that time, the gold bull market is already more than half way done.
September 20th, 2006 at 12:59 pm
I am also interested in which newsletters to subscribe to. I am currently thinking about Jack Chan and Doug Casey. Any thoughts on them?
Also, I wonder if anyone reading frugal’s blog has recommendations of how to safely store the silver and gold in the home. It has to go somewhere after buying on dips.
September 20th, 2006 at 3:15 pm
Newsletters:
David Morgan: http://www.silver-investor.com/
Pat Gorman: 1-800-494-4149
Rich Radez: 1-800-285-1700
September 20th, 2006 at 9:42 pm
Roland Watson writes the investment newsletter The New Era Investor that can be purchased for an annual subscription of $99. To view a sample copy of the newsletter, please go to http://www.newerainvestor.com/ and click on the “View Sample Issue Here” link to the right.
September 20th, 2006 at 9:51 pm
Thanks Larry.
I will look into all the newsletters that you suggested. Haven’t been doing that well in my junior (or rather micro-cap) gold investments. I am still thinking how I should approach it without buying 50 different micro-caps, wasting a round trip commission of $60 for each selection. A little tough indeed.
My mid-tier so far worked slightly better.
September 20th, 2006 at 10:09 pm
Jr. Mining stocks – focus on companies that have what’s called a 43-101 compliant gold or copper, or silver resource. Four such companies are International PBX (IPBXF), Baja Mining (BAJFF), Polymet (POMGF), and Excellon (EXLLF).
September 21st, 2006 at 6:54 am
How I have played the stocks, working backwards:
sold CBJ on 9/14 ($3.80) and bought more GG
Doubled up IPBXF on 8/25
Sold AUY on 8/14 ($10.01)
Sold ABX calls on 8/3
Bought GSS on 7/27 $3.09
Bought more AAUK on 7/17 $19.47
Sold AZK on 5/23 buyout $2.75
Sold GCGC on 5/5 $9.50
Sold half EGO on 5/1 $5.36
Sold half KGC wts on 5/1 $0.99
Sold BVN on 4/28 $29
Sold half KRY on 4/7 $5.92 (when Cramer pounded the table to buy)
Bought OZN 4/7 $2.14
Bought half position in IBPXF 4/7
Bought PMU 4/7 $0.77 – STILL A BUY
Bought BAJFF $1.45 – STILL A BUY
Sold GG long calls on 4/6 (early)
Sold PAAS long calls on 3/27
Sold SIL long calls on 3/23
Sold half SLW on 3/20
Sold some KRY on 3/13 that I bought for $1.66 and bought BVN at $23.92
Bough BHP on 2/27 $36.76
Sold DEZ on buyout at 2/22 at $5
September 21st, 2006 at 6:56 am
How I have played the stocks, working backwards:
sold CBJ on 9/14 ($3.80) and bought more GG
Doubled up IPBXF on 8/25
Sold AUY on 8/14 ($10.01)
Sold ABX calls on 8/3
Bought GSS on 7/27 $3.09
Bought more AAUK on 7/17 $19.47
Sold AZK on 5/23 buyout $2.75
Sold GCGC on 5/5 $9.50
Sold half EGO on 5/1 $5.36
Sold half KGC wts on 5/1 $0.99
Sold BVN on 4/28 $29
Sold half KRY on 4/7 $5.92 (when Cramer pounded the table to buy)
Bought OZN 4/7 $2.14
Bought half position in IBPXF 4/7
Bought PMU 4/7 $0.77 – STILL A BUY
Bought BAJFF $1.45 – STILL A BUY
Sold GG long calls on 4/6 (early)
Sold PAAS long calls on 3/27
Sold SIL long calls on 3/23
Sold half SLW on 3/20
Sold some KRY on 3/13 that I bought for $1.66 and bought BVN at $23.92
Bough BHP on 2/27 $36.76
Sold DEZ on buyout at 2/22 at $5
Bought NTO (more) on 1/3 at $3.13
September 21st, 2006 at 6:58 am
How I have played the stocks, working backwards:
sold CBJ on 9/14 ($3.80) and bought more GG;Doubled up IPBXF on 8/25;Sold AUY on 8/14 ($10.01); Sold ABX calls on 8/3; Bought GSS on 7/27 $3.09; Bought more AAUK on 7/17 $19.47; Sold AZK on 5/23 buyout $2.75
Sold GCGC on 5/5 $9.50; Sold half EGO on 5/1 $5.36; Sold half KGC wts on 5/1 $0.99; Sold BVN on 4/28 $29
Sold half KRY on 4/7 $5.92 (when Cramer pounded the table to buy); Bought OZN 4/7 $2.14; Bought half position in IBPXF 4/7; Bought PMU 4/7 $0.77 – STILL A BUY; Bought BAJFF $1.45 – STILL A BUY; Sold GG long calls on 4/6 (early); Sold PAAS long calls on 3/27; Sold SIL long calls on 3/23; Sold half SLW on 3/20
Sold some KRY on 3/13 that I bought for $1.66 and bought BVN at $23.92; Bough BHP on 2/27 $36.76
Sold DEZ on buyout at 2/22 at $5; Bought NTO (more) on 1/3 at $3.13 – Not too much lately
September 21st, 2006 at 6:59 am
test
September 21st, 2006 at 3:15 pm
How I have played the stocks, working backwards:
sold CBJ on 9/14 ($3.80) and bought more GG;Doubled up IPBXF on 8/25;Sold AUY on 8/14 ($10.01); Sold ABX calls on 8/3; Bought GSS on 7/27 $3.09; Bought more AAUK on 7/17 $19.47; Sold AZK on 5/23 buyout $2.75
Sold GCGC on 5/5 $9.50; Sold half EGO on 5/1 $5.36; Sold half KGC wts on 5/1 $0.99; Sold BVN on 4/28 $29
September 21st, 2006 at 3:15 pm
Page 2:
Sold half KRY on 4/7 $5.92 (when Cramer pounded the table to buy); Bought OZN 4/7 $2.14; Bought half position in IBPXF 4/7; Bought PMU 4/7 $0.77 – STILL A BUY; Bought BAJFF $1.45 – STILL A BUY; Sold GG long calls on 4/6 (early); Sold PAAS long calls on 3/27; Sold SIL long calls on 3/23; Sold half SLW on 3/20
Sold some KRY on 3/13 that I bought for $1.66 and bought BVN at $23.92; Bough BHP on 2/27 $36.76
Sold DEZ on buyout at 2/22 at $5; Bought NTO (more) on 1/3 at $3.13 – Not too much lately
September 22nd, 2006 at 2:36 am
Larry,
I really appreciate all of your contribution here. I have been too busy to look at any stocks. Kitco in Asia/London is showing $589 for spot gold right now at 2:36am. Hopefully, it won’t get killed at US market.
Regards.
September 22nd, 2006 at 7:38 pm
Watching the gold chart for a break-out, Fri., Sept. 22, 2006, 8:46 AM
Colin Twiggs excellent technical analysis work (www.incrediblecharts.com) puts gold under the microscope. Charts like his are closely followed and decisions are made on the basis of trading pattern changes.
Continue reading “Watching the gold chart for a break-out, Fri., Sept. 22, 2006, 8:46 AM”
September 23rd, 2006 at 1:14 am
Thanks for your notes. I’m checking that out….
September 23rd, 2006 at 7:41 am
http://www.billcara.com/archives/2006/09/watching_the_go.html#more