Precious metals markets are moving fast once again and we believe many of you are wondering if it's a good time to take some profits off the table. In short, at this point it seems that it might be a little premature, as gold and mining stocks are currently moving higher on high volume (taking today's early trading into account) after a small pause in the past few days.

At this point it seems that mining stocks could still move higher before pausing - perhaps slightly above the $58 level in the GDX ETF, and $1375 - $1,380 for spot gold (GLD ETF at $134). Silver has been moving quickly higher, and the short-term target here is $30 for the SLV ETF ($30.60 for spot silver).

However, before suggesting closing speculative long positions around these levels, we would prefer to see a confirmation perhaps in form of a daily upswing on very low volume, or a bearish candlestick pattern on high volume (for instance the "shooting star" candlestick). We don't have the at this point, and the situation remains bullish.

There was a significant development on the general market yesterday - stocks (S&P 500 Index) moved above their August 2008 high of 1313.15. So far, this break out has not been confirmed, as the price has yet to close above this level for 3 consecutive trading days. Additionally, volume was not particularly huge (it was not extremely low either), so at this point we would not consider the breakout as a true one - at least not yet.

The recent rally in the general stock market has contributed to silver's outperformance relative to gold in the past days. This may cause you to consider moving most of your long-term holdings back into silver (by selling gold). Our view on the situation at this point is that it is still justified to stay with most of one's long-term capital in gold (not silver), simply because the situation on the general stock market did not improve.

The goal of the recent change in our views o the long-term holdings was to make it much less vulnerable to any significant sell-off in the main stock indices. The risk of the sell-off in stocks is still present - as yesterday's move higher has yet to be confirmed. Should that be the case, we will consider moving back to silver and - of course - will report to you accordingly.

Please keep in mind that the point of managing long-term investments is to ride the big upswings, while at the same time being protected against major downswings in the market. Here, one doesn't aim to make short-term profit in trading (that's what's speculative capital is for), but rather to make sure that the main moves in the market don't catch one by surprise. Consequently, in case of the long-term capital, it's imperative to stay protected against a major (!) downswing even though it might sometimes mean missing a small (!) part of an upswing.

Summing up, we believe that at this point no adjustments are necessary in both: speculative and long-term capital. As always, we will keep you updated, should anything change.

Meanwhile, we're sure that some of you have already noticed minor changes on our homepage (www.sunshineprofits.com). In case you didn't, you might want to take a look, as we've posted a video-teaser featuring the new Sunshine Profits website that we're currently working on. We had been expecting to launch it months ago, but unfortunately, we've encountered many obstacles along the way. Nonetheless, it seems that the new website might be released in a few weeks, and as you will notice on the video (and the mix of a few screenshots below), the odds are it will prove worth waiting for. Our main goal is to provide you with easier to navigate, feature-rich and useful website - the new look is only the side product. Thank you for your patience.

In other news, this week's Premium Update is going to be posted one day earlier than usually - on Thursday, Feb 10th, 2010.

Thank you for using the Premium Service.

Sincerely,
Przemyslaw Radomski