In our previous Speculative Alert we have written the following:
(...) HUI touched several important support lines and we believe that this fall's days are numbered. (...) Since this downleg is so dramatic, we think that the odds are that the upswing will also be quick.
We also indicated that it was probable that the bottom was already in at the moment of writing those words, but that was not the case. The technical analysis, which is one of the best tools of establishing entry and exit points is based on the principle that the history repeats itself to some extent, is usually very useful, but it is not perfect. This downswing has really been extraordinary in both steepness and range, and as such it was very difficult to predict this bottom correctly with great precision.
However, in light of todays action, we believe that the bottom is in or only days away. This time both: the potential gains that can be realized, as well as probability of a sharp bounce are higher, than they were when we sent you the previous Speculative Alert.
Many indicators are screaming 'oversold'. Juniors fell considerably. We have had a very dramatic sell-off on a huge volume in gold and especially in the PM stocks, which is typical for bottoms in this sector. We see extreme fear among the precious metals investors and speculators we get many e-mails from our registered Users, who are 'concerned' about the precious metals market, to say the least.
All of the abovementioned factors made us INCREASE our long position in the precious metals market. In other words we have added to our short-term speculative positions on GDX and were also trying to purchase medium term GDX call options, but our orders were not filled. Our Position Size Calculator suggested a very risky play on GDX Aug calls, strike 35 and we used a modest amount of capital to purchase them.
Please note that these transactions are designed for risk-tolerant and disciplined speculators. If you decide to follow us in these trades, please remember to use only a small part of your portfolio. How small? Definitely not more than our Position Size Calculator (please see the Tools section for more details) suggests. Even that may be too much for some people. Always ask yourself whether the position is small enough, not to interfere with your perception of the situation on the market, should you lose that money. It's better to use too little money, than too much. Consult your financial advisor, if you haven't done so already.
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(...) HUI touched several important support lines and we believe that this fall's days are numbered. (...) Since this downleg is so dramatic, we think that the odds are that the upswing will also be quick.
We also indicated that it was probable that the bottom was already in at the moment of writing those words, but that was not the case. The technical analysis, which is one of the best tools of establishing entry and exit points is based on the principle that the history repeats itself to some extent, is usually very useful, but it is not perfect. This downswing has really been extraordinary in both steepness and range, and as such it was very difficult to predict this bottom correctly with great precision.
However, in light of todays action, we believe that the bottom is in or only days away. This time both: the potential gains that can be realized, as well as probability of a sharp bounce are higher, than they were when we sent you the previous Speculative Alert.
Many indicators are screaming 'oversold'. Juniors fell considerably. We have had a very dramatic sell-off on a huge volume in gold and especially in the PM stocks, which is typical for bottoms in this sector. We see extreme fear among the precious metals investors and speculators we get many e-mails from our registered Users, who are 'concerned' about the precious metals market, to say the least.
All of the abovementioned factors made us INCREASE our long position in the precious metals market. In other words we have added to our short-term speculative positions on GDX and were also trying to purchase medium term GDX call options, but our orders were not filled. Our Position Size Calculator suggested a very risky play on GDX Aug calls, strike 35 and we used a modest amount of capital to purchase them.
Please note that these transactions are designed for risk-tolerant and disciplined speculators. If you decide to follow us in these trades, please remember to use only a small part of your portfolio. How small? Definitely not more than our Position Size Calculator (please see the Tools section for more details) suggests. Even that may be too much for some people. Always ask yourself whether the position is small enough, not to interfere with your perception of the situation on the market, should you lose that money. It's better to use too little money, than too much. Consult your financial advisor, if you haven't done so already.
