As some of you know, I’ve been weathering this storm by deploying cash sparingly into what I consider to me vastly oversold conditions in the PM markets, especially the miners. Given historical metrics, the current $HUI and $XAU are pricing gold in the $800-1000 range. Needless to say, this has historically been an opportunity for those beleagured names.
Now I know the PM space has not been a happy one as of late, but given that nothing has changed with respect to the global liquidity situation, I am not convinced that there is some change in the current bull trajectory afoot. It appears that we are now approaching a long term support area as well.
As my good friend Gary Savage over at the Smart Money Tracker has been kind enough to point out, the 75-week simple moving average has been support for this bull for over ten years now with the brief exception of the 2008 meltdown, which marked the bottom of an eight year cycle event. Right now that line lies at $1591 an ounce, which we are (briefly, I think) below this morning . As a result, I think this is the time to mince into the market and make some quick coins.
I was not in the office yesterday, so I did not report my buys in SLW and AEM, and I apologize. It appears, however, I may have been a bit early. Today, I will add to those small purchases and throw some RGLD and perhaps even GDXJ in that mix. Make no mistake the juniors have been murdered here, and quarts of my blood are being transfused into them as we speak. When these things bounce, however, it’s going to be swift and eye-boggling. Go small until then, but be ready, as I think it’s going to be very soon….
Until then, I continue to be your honarable blood donor, down here at the Red Cross…