Tuesday, January 26, 2010
BUY! BUY! BUY!
Even if you are worried about how Gold stocks will fare during a market downturn, an amazing buying opportunity in Gold stocks is here. I bought too early last week. Don't forget how fast Gold stocks can move up after a steep plunge like that of the last 8 weeks or so.
Producing gold stocks are a strong buy here for a 2-8 week bounce/trade higher, regardless of your longer-term outlook on Gold stocks. Gold stocks are certainly not showing strength relative to the Gold price here, and this is not ideal.
The character of the pending bounce higher over the next 2-8 weeks in the Gold stock sector will tell me all I need to know about the strength of this sector. If Gold stocks don't recover quickly and significantly outperform the Gold price on the bounce, then I am more than willing to get out of the trade to scalp a small profit and preserve capital.
Blue chip Gold stocks, including the GDX ETF, are a VERY STRONG BUY AT CURRENT LEVELS, even if it's only for a trade. I remain optimistic that Gold stocks will turn around and begin to outperform, but remain a (somewhat) humble student of Mr. Market and remain married only to physical Gold, while Gold stocks remain a tempestuous mistress. I will post some charts later.