Wanted to lead with this today. Please take a moment to read and consider this brief article.
Be sure to take notice of how this money manager is described, a "veteran value investor".
What Does Value Investing Mean?
The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company's long-term fundamentals. The result is an for value investors to profit by buying when the price is deflated.
Hmmm. I thought the precious metals were in a bubble due to rapid growth of price.
Hmmm. What is a "veteran value investor" doing buying gold as her largest holding?
Hmmm. "Protection against what can go wrong". I thought only we "insects thought that way.
OK, to the business at hand.
I got filled overnight on some July silver $40 calls. Paid the price I wanted to pay so The Turd is very happy...so far. Because I don't expect silver to exceed $45 before expiry in late June, I'll be looking to raise some additional cash by selling the 45s I currently own and a few more against them.
Here is an hourly gold chart. Note the sideways action. On the plus side, we continue to hold 1480 and even make higher lows. Now, if we can just make some higher highs...
Silver looks much the same. It continues to find very strong support in the area around $34, stopping overnight right at $34.00. The more times that level holds, the stronger it becomes. Eventually, nervous buyers will begin to sense that the storm has passed and see a winning risk:reward. Big buyers could enter right now, if they wanted to. I'd buy at $35 with a stop below 33.80. That gives you only $1.20 of downside. I don't see any real, significant resistance until the 39.50 area. That gives you $4.50 in upside. That's a risk:reward of almost 1:4. You'd think that would be strong enough to prompt some buying. We'll see.
Lastly, I very much appreciate all of the diverse feedback regarding the implementation of a nominal "troll" fee for the new site. After much consideration, I've decided against adding any kind of membership fee. The new site will be completely free of charge and will remain so. However, in order to participate in any of the discussions, you will have to register with the site, become a "member" and provide a valid email address. No fees, though. Again, the site is dedicated to reaching and educating as many as possible and charging fees would only limit that purpose.
That's all for now. I have lasts of 1499 and 34.93 so maybe, with a little luck, we can turn things green today. Have a great one! TF
p.s. You'll want to read this, too. Louise Yamada is the only technical analyst that I listen to. She is the best. Period. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/14_Louise_Yamada_-_$5,200_Gold_is_Long-Term_Channel_Target.html
And here is the full audio interview: