This alert will be brief so that you will be able read it and perhaps take action before the market closes.

http://biz.yahoo.com/ap/090318/fed_interest_rates.html - "Fed will buy up to $300 billion of long-term government bonds; keeps key rate at record low (...)".

The Powers That Be have openly stated that they will simply print $300 billion. This monetization of debt is very positive news for gold and is likely to serve as a catalyst for another upleg in the precious metals and corresponding stocks, especially given that gold has just touched its support level. If you were waiting for a final call before entering the precious metals market, it may be a good idea to get in now.

The volume in the major PM stocks and in the ETFs has been huge today, which makes today's price action even more significant. I believe that entering speculative long positions right now should prove profitable.

I believe that one could put up to 10% of one's speculative capital into call options expiring in April, and up to 17% of one's portfolio into June calls.

My favorite speculative stocks at the moment:

Gold: AEM, GOLD, RGLD, KGC, ABX
Silver: PAAS, SSRI, SLW

Using the GDX ETF might also be a good idea. Please remember to speculate only with money that you can afford to lose.

As far as strike prices are concerned, I prefer out-of-the-money options, but those that are relatively close to the price of particular stocks at the moment of purchase.

I will write about the results of previous transaction in the next Market Update.

Sincerely,

Przemyslaw Radomski

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