Perhaps this is the beginning of the next upleg in PMs that I have been waiting for. I haven't been posting for over a month as I have been in a waiting pattern. Finally last week, the PMs and miners started to catch a bid and I judiciously added to resource stocks that I thought were strong.
The 2 names that I mentioned from the last post (SWC & TIE) have made new highs for the year. EGO is another one that seemed to bounce off key support and is now looking great.
The general mkt has been relentlessly grinding up and looks to me to be overbought. I favor the miners as I hope they will play catch up, having been dead money for a couple of months. Longer term, I think they will outperform the rest of the mkt.
An idea of mine would be to hedge my longs in miners by buying put options on the S&P. S&P is hitting a key resistance level at 1200 soon and I'm looking for a turn down from there. But I will play it by ear, since 1250 is also another potential upside target. Ideally, I would like to see a gap up for me to get better prices and have the mkt close down. Some good earnings news would probably trigger this, followed by selling after the news. This is typical mark up by the smart money who are selling into up moves.
Let see how this plays out.
Oh, here is an interesting article I read on the demand for silver eagles. Makes my ears perk up.
http://news.silverseek.com/SilverSeek/1270840329.php
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