Based on yesterday's price/volume action and on today's pre-market trading action we believe that adding to one's speculative long position might be profitable at this point.

Yesterday, the volume in mining stocks (GDX ETF) was low relative to both Tuesday's upswing and the whole previous month. Similar thing can be said about gold and silver, so it's not a coincidence. In this case it means that the selling power has become weak, and that it's not likely to match the buying pressure. In other words, price is likely to go up from here. This signal could be easily invalidated if today we get an upswing on volume that's similar to yesterday's or even lower or we get a downswing on significant volume. Should that be the case you will be notified before tomorrow's market open. Please note that the Premium Update is going to be posted tomorrow, so we'll take a look at this situation in detail.

Additionally, please note that the USD Index appears to have just bottomed - very close to its cyclical turning point (and also very close to the strong long-term support line), and begins to move higher. While we're not big fans of forex trading ourselves, if you trade currencies, it might be a good idea to purchase the US dollar with other currencies.

Although it is often believed that rising dollar is bearish news for gold, silver, and mining stocks, that was not the case during the past several months. The USD Index was leading precious metals, and now appears to be trending in tune with them. That's why USD / gold/silver correlations (as seen in our Correlation Matrix in the Tools section on the website) are positive in the short-term. Consequently, we don't think that it's likely that the USD Index will have any significant negative impact on prices of precious metals and corresponding equities.

We believe that no adjustments in the long-term capital are necessary at this point.

As always, we will keep you updated, should anything change.

Thank you for using the Premium Service.

Sincerely,
Przemyslaw Radomski