Based on today's move higher in the precious metals sector, we suggest closing the small speculative short positions in gold, silver and mining stocks. We placed the stop-loss orders close to the entry prices so that an invalidation of the head and shoulders formation - something that changes a lot as far as the short-term outlook is concerned - would take you out of the market. We also used only half of the regular position size. By definition, patterns are things that work most of the time and invalidations are exceptions from what happens usually.

The medium-term trend is still down, so we will quite likely open another short position in the near future.

To summarize:

Trading capital: No position.

Long-term capital: Half position in gold, silver, platinum and mining stocks.

On an administrative note, this week's Premium Update will be posted 1 day ahead of regular schedule, on Thursday, Oct 3, and there will be no Market Alert on Friday, Oct 4, due to the annual meeting of the Sunshine Profits Team which will start on that day. If you have any comments, suggestions, requests regarding anything that we are doing, please let us know - that's the perfect time for it, as we will immediately discuss it.

Also, we have just posted our latest Market Overview report titled "The Dollar System and Possible Tapering" in which we discuss when the tapering is likely to take place, what part of the Fed's minutes is crucial, the shocking link between Fed's assets and the stock market prices.

As always, we'll keep you updated should our views on the market change. We will continue to send out Market Alerts on a daily basis (except when Premium Updates are posted) at least until the end of October, 2013 and we will send additional Market Alerts whenever appropriate.

As a reminder, Market Alerts are posted before or on each trading day (we usually post them before the opening bell, but we don't promise doing that each day). If there's anything urgent we will send you an additional small alert before posting the main one.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA