Far be it
for Gold Stock Trades to indulge in hubris, nevertheless with all humility we
not only saw this risk on rally forming in early October but
reiterated on many occasions "be not dismayed by recent declines."
"Commodities are not in a bubble." "Patience and
Recent action exemplifies the
importance of not being trigger happy when it involves the commodity arena
especially precious metals, uranium and rare earths. Volatility can daunt
even the most resolute of investors.
Gold Stock Trades is once again
vindicated in sticking with the ebbs and flows of the resource arena which
often contrive to misdirect, confuse and obfuscate the impatient investor.
The eventual payouts are worth the swings as we look forward to halcyon
What does this all mean for our
patient subscribers? When many respected gray beards were calling the end of
what they thought was a bubble in precious metals (GDX), uranium (URA) and
rare earths (REMX), our obvious conclusion was that even experienced so
called experts were calling it wrong. There are morals to be drawn here.
Adhere to the long term cyclical
upswing in natural resources specifically in gold (GLD), silver (SLV), copper
(JJC), uranium and rare earths. Breakouts occurring in 2012 are filling gaps
to the upside which were created in 2011.
Do not be dismayed of major
corrections in the long range move upward of our chosen sectors. Downside
gaps are in the process of being filled and are bullish moves. Do not be
turned off by whipsaws often engineered by the speculators.
We are in the time interval of the
first quarter, which is often a period of favorable seasonality. Hopefully,
may this force be with us. There is a turbulent atmosphere pervading the
world, wherein hard assets may be regarded as appropriate safe havens as
banks are buying treasuries at a record pace.
Observe the convolutions of the
Eurozone nations as they attempt to upright the various ships of state. On
the other hand we have just seen where Caterpillar is backlogged in its
orders of mining machinery. In fact, Caterpillar in their quarterly report
has stated that the demand for their machines represent a bullish and growing
activity in commodity production. Note the concurrent breakout in rare earths
and uranium despite any diversion caused by the European travails.
In conclusion, 2012 breakouts in
gold, silver, rare earths and uranium is a welcome confirmation to our
analysis and bullish for precious metals. General equities have hit some
resistance after making a powerful move since our October 4th buy signal.
We are witnessing a rotation from
treasuries into equities and the precious metals and natural resources arena
as investors are realizing that the outcome of Europe's 1 trillion dollar
LTRO program may be hyper-inflationary. The S&P 500 is hitting resistance
after a powerful upmove and we may see a rotation
into undervalued commodities such as uranium and rare earths. The uranium
miners have been rallying as Rio Tinto entered the Athabasca Basin. The heavy
rare earth miners are starting their breakout moves as well as Molycorp (MCP) announces the $1.3 billion dollar
acquisition of Neo Materials.