gold investment, silver investment

E-mail Jun 17, 2008

June 17, 2008, 12:00 PM
We pledged to send out a commentary, as the U.S. Dollar Index approaches the critical resistance in the 74 - 74.5 level. This has just been achieved and here we are.

We will begin with the update with our current view on the general stock market. We were expecting the DJIA to bottom quickly around the 12250 level and it did not happen. We still think that the general stock market will bottom rather sooner than later, perhaps as low as 12000 on the DJIA. That's just our best guess for those of you who want/need our precise picks. The main point is that we think the stock market's fall days really are numbered.

Our view on the precious metals did not change at all. In our opinion we have already bottomed or we are very close to the bottom. We find the latter version more probable - meaning that the bottom is most likely only several days away. If we get a 'spike' low on a huge volume in the GLD, SLV, GDX and main precious metals stocks than we will consider the bottom to be in.

As far as the precious metals stocks are concerned, we have just published a commentary on that topic. You may read it here.

We have previously outlined our preferences regarding the type of companies that we currently prefer, but for newly registered Users - right now we favor junior mining companies to big companies. We cannot emphasize enough that the key to successful investing in juniors over time is diversification.

We have outlined a few ideas for speculation, which we said could be used as the USD Index approaches the resistance level around 74 level. Since this has recently happened, this part of our commentary requires further attention.

Before we proceed, please note that this part of the Update is for risk-tolerant and disciplined speculators. If you decide to follow us in these trades, please remember to use only a s mall part of your portfolio. How small? Definitely not more than our Posit ions Size Calculator (please see the Tools section for more details) suggests. Even that may be too much for some people. Always ask yourself whether the position is small enough, not to interfere with your perception of the situation on the market, should you lose that money. It's better to use too little money, than too much. Consult your financial advisor, if you haven't done so already.

We mentioned several stocks on which call options would seem attractive under current circumstances. Below you will find the updated list along with our preferred strike prices AT THE MOMENT OF WRITING. Although we referred to June and July options, right now we would not recommend buying June options as they are only a few days away from expiration. Naturally, options with more time to expiration can also be used. This way you can reduce the overall risk level, but also the potential profit. This may involve changing the size of your speculative position.

Precious metals:
SSRI (30)
PAAS (30)
BVN (65)
AEM (65)
AUY (14)
GG (40)
NEM (47.5)

Gold / Copper:
FCX (120)

MOS (150)
POT (230)

We decided not to take positions in the steel sector at the moment (X and MT).

* - MOS and POT have recently rallied substantially. We feel that they may decline very temporarily if we get rapidly lower in the DJIA. We plan to buy call options on these companies, should that take place.

All of the above is just our view on the current market situation and may prove wrong, as nobody can be right each and every time. By registering at our Website, you confirmed that you are interested in our thoughts on the current market situation, so we're sending it to you. Please do your own due diligence before making any investment decisions.

This is the initial, basic from of our commentary. The Weekly Commentary (+updates) will include more thorough, complex and longer content with detailed, User-friendly explanations. The new, convenient form will include many charts and tables with specific comments.

We will be launching our paid service soon, but before we do we would like to ask you for specific suggestions regarding the 'weekly commentary' section. If you have any suggestions, requests, ideas, or you think that something could be done better than we currently do, then please drop us a note - either by replying directly to this message, or through the 'Contact us' section on our Website. Ultimately it is you, who will benefit, if the form of our service better suits your needs.

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