Precious metals and corresponding stocks finally bounced significantly and this time it seems like the bottom is finally in. The previous Market Update was sent on September 10-th and we advocated making additional purchases as we thought the bottoming process was complete. The HUI Index tested the lows the following day which proved to be a great buying opportunity. Those of you, who followed us on the speculative transaction that our model suggested are now very happy with the results. No wonder the suggested Sep 30 calls on GDX went from about 60 cents to $6 during just six trading days. Even though the size of this position was (or at least should have been) small, the profits are substantial. If you did not sell already, we would not advocate waiting until tomorrow.
The size of the rebound and the high volume that accompanied yesterday's rise indicate that this rally will last more than just a few days. Although we are likely seeing a beginning of a bigger rise, a short pause is probable. The price is still low and we are still in the bull market, but that does not mean that the price will go up each and every day.
It seems that we will now experience a brief test of the upper border of the previous downtrend channel before rising further. We may go up right away, so we naturally don't advise selling your long-term holdings now, but if a part of your capital is dedicated to speculation, we would wait for the 'test' before purchasing precious metals stocks or call options on them. If we do have a pause, it may be very short-lived, so we suggest placing your orders ahead, to make sure that you will not miss this opportunity.
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The size of the rebound and the high volume that accompanied yesterday's rise indicate that this rally will last more than just a few days. Although we are likely seeing a beginning of a bigger rise, a short pause is probable. The price is still low and we are still in the bull market, but that does not mean that the price will go up each and every day.
It seems that we will now experience a brief test of the upper border of the previous downtrend channel before rising further. We may go up right away, so we naturally don't advise selling your long-term holdings now, but if a part of your capital is dedicated to speculation, we would wait for the 'test' before purchasing precious metals stocks or call options on them. If we do have a pause, it may be very short-lived, so we suggest placing your orders ahead, to make sure that you will not miss this opportunity.
