Gold bounced at the end of the week, but we barely saw the same in case of silver and mining stocks. Generally, we would expect those markets to be moving higher along with gold if this was the bottom - but they're not. They were both underperforming gold last week when gold corrected approximately 38.2% of the recent sharp plunge. The same is the case today with silver in pre-market trading. Gold is $26 higher - moving slightly above the first Fibonacci resistance level and silver is up 22 cents - basically doing nothing.

The HUI Index ended the week right at the 61.8% Fibonacci retracement level based on the 2000 - 2011 rally. There was no confirmed breakdown below this level, but the lack of a true rebound given the fact that we saw one in gold is not encouraging. In case of the HUI:GOLD ratio, there has already been a breakdown below the 2008 low and there's no support line that would be close to where the ratio is today.

Speaking of miners, we have analyzed charts of individual companies and in the vast majority of cases we have these stocks below the significant support levels and either relatively close to major support levels (examples: SSRI, ABX) or far from them (examples: HL, EGO). This is a bearish sign as it suggests that they have further to drop - as the short-term trend is definitely down.

Our trading plan and stop-loss levels remain unchanged for silver and mining stocks trading plan and stop-loss levels remain unchanged for silver and mining stocks and the stop-loss order for the short position in gold has been recently changed to $1,432.

In short:

• Investment capital - no position.
• Speculative capital - short position in gold, silver and mining stocks (half).

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 May, 2013 and we will send additional Market Alerts whenever appropriate. We have prolonged the time on which you will receive the Market Alerts daily for another full month.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA