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Ah, alack and alas! The world is melting down again, and I think we can say we’ve entered into a bear phase, ovah heah, if not a full blow bear market. I’m not going to show you the charts, as I haven’t annotated them, but we’ve got bear crosses on the major markets and the Transports — up to an including my beloved UPS are leading the way down.
Like in mid-2008, we are showing signs of a true Dow Theory bear episode, and who knows how long this one will take to exhaustion? We’ll have to play it by careful ear as we did in 2008-09, when I was a painful two and one half weeks early in getting back in.
In the meantime, like a fine-toothed cyborg marinated in Gatorade, the price of gold (POG) continues to break to new highs despite everything else melting around it. Silver, too, is being dragged along, if at a slower pace, which is driving our Gold:Silver ratio higher… to 45x at last count. You may recall when silver got to 72x the POG during the last extremis… I don’t think gold will break that far away from silver again…. but if it does…
I am continuing to take this opportunity to either sell or hedge my miner positions here, as I think they are not eager to participate in what may be the last rally for gold for months. This gives me pause, and it should you as well.
On the other hand, I continue to see setups (AUY, NGD) in the mining space, so I will endeavor to keep an open mind. One thing I am assured of, however, is that I should be trimming my non-metal positions, no matter what happens in the PM sector. The regular market has become a toxic swamp, and you are better off picking up limited short positions (like SKF that I bot today).
Stay alert, and I will try to do the same for you.
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