Today we saw what I believe was a market turning point, DOW up 889 points! (10.88% in one day!)
Bad news, bah! We are off to the races once again.
The market is probably back into bull mode, probably for weeks, into Thanksgiving weekend.
Thanksgiving weekend may bring some very bad news as stores report bad sales, and bring the bear back, time will tell.
In any event, I am 90% long the market. I have NEVER been this deep long. From 2006 to 2 weeks ago I was 99% short. Currently majority stake is in GDX, Gold Minders, DIG, VMWARE, EMC, and couple other positions. (see past blog entry here)
I still recommend GDX, the low was this past Friday at 15.80. Today it closed at 18.69.
Assuming GDX rallies between now and Dec 2009 back to it's high of 56.87, you could stand to make 40 bucks per share by purchasing NOW.
If wrong, GDX may go down to 10 bucks, but it's hard to believe it will, after all, GDX in an index of companies that mine Gold. And at SOME point in the next year it will almost guarantee rally to 20 bucks (1.40 away) so risk to reward is golden.
I added a link to the right to follow GDX at-a-glance.
BTW, many many thanks to "Happy John" [formerly known as "The Punisher" :) ] who brought this play to my attention.
Another reason why I like gold is by looking at the US GOVERNMENTS financial data.
Take a look at the fed report shown to the left. Using the St. Louis Fed’s Adjusted Monetary Base (effectively total reserves plus M1 cash in circulation), the year-to-year growth in the latest period was an unprecedented 38.0%. In the period since 1919, the previous high growth rate was 28% in September 1939, and that was driven by WWII preparations. Loose fiscal policy WILL yield adverse effects on the US Dollar. See Preserving Wealth post.