Junior gold stocks may finaly make a move. The New York Stock Exchange indicator for new lows reached an extreme of 1304 on Tuesday the 15th of July. That was even worse than the 1100 new lows reached on the 22nd of January. Such extremes spell one thing P-A-N-I-C.
Whilst its difficult to infer any far reaching conclusions about one day sell-offs, even panics, the odds now favour a bounce in very oversold equity markets. As for how high and how long the stock market will bounce is anyones guess, but here again, probabilities favour the market to move higher and longer than anyone expects so that sentiment indicators return to their old complacent Bullish state!
What will work during this period of relative calm?
We had noticed a very definite flight to safety since market volatility began in October 2007.
Firstly, a flight away from common Dow stocks to Gold Mining Stocks because gold is seen as world wide currency which is more secure that worthless paper money. The Dow stocks have slowly been decreasing in value for the past year as gold mining stocks have been increasing in value overall. Gold stocks is were the smart money is moving into.
Within the Gold market this has manifested itself as a flight to bullion and away from Gold Mining Stocks. Yes money had been moving gold stocks higher but the majority of gold investors are buying bullion or the gold bullion etf (actual gold bars) because it currently has lower risk than trading gold mining stocks. So gold bullion and the gold bullion etfs have been out performing the price of gold mining stocks for the past year even thought both Gold and gold stocks have increased in value.
Now that there is a good chance equity markets will stabilize, the trends will moderate and reverse. This means Junior Gold stocks prices should begin closing the valuation gap and discounting higher earnings based on $900 Gold.
The remainder of 2008 looks set to be very bullish for Gold Stocks and Gold Stock Juniors Gold Stocks in particular! August to December are the best months for gold for the past 40 years so we are looking for higher prices in the near future.
Many investors do not like the thought of junior gold stocks because of their volatility. There is a solution for this and it is to trade gold etf funds. The are exchange traded funds which trade like a stock but allows your to own a piece of each gold mining company and it provides less volatility. The two main etfs are GLD and GDX ticker symbols.
Junior gold stocks,Gold Mining Stocks and More commentary to follow….
Junior gold stocks may finaly make a move. The New York Stock convert index number for new lows reached an uttermost(a) of 1304 on Tuesday the 15th of July. That was even worse than the 1100 new lows reached on the 22nd of January. Such extremes spell one thing P-A-N-I-C.
Whilst its difficult to infer any far stretch conclusions about one day sell-offs, even panics, the odds now favour a bounce in very oversold equity markets. As for how high and how long the stock market will bounce is anyones guess, but here again, probabilities party favour the grocery store to move higher and longer than anyone expects so that sentiment indicators rejoinder to their old complacent Bullish state!
What will work during this flow of relative calm?
We had noticed a very definite flight to safety since commercialize excitability began in October 2007.
Firstly, a flight away from common Dow stocks to Gold mining Stocks because gold is seen as world wide currency which is more batten down that worthless paper money. The Dow stocks have slow been decreasing in value for the past year as gold mining stocks have been increasing in value overall. Gold stocks is were the smart money is moving into.
Within the Gold grocery this has manifested itself as a escape to bullion and away from Gold Mining Stocks. Yes money had been moving gold pillory higher but the majority of gold investors are buying bullion or the gold bullion etf (actual gold bars) because it currently has lower risk than trading gold mining stocks. So gold bullion and the gold bullion etfs have been out performing the price of gold mining pillory for the past year even thought both Gold and gold stocks have increased in value.
Now that there is a good chance equity markets will stabilize, the trends will check and reverse. This means Junior Gold stocks prices should begin closing the evaluation gap and discounting higher earnings based on $900 Gold.
The remainder of 2008 looks set to be very bullish for Gold Stocks and Gold Stock Juniors Gold Stocks in particular! venerable to December are the best months for gold for the past 40 years so we are looking for higher prices in the near future.
Many investors do not like the thinking of junior gold stocks because of their volatility. There is a solution for this and it is to trade gold etf funds. The are change traded funds which trade like a stock but allows your to own a piece of each gold mining company and it provides less volatility. The two main etfs are GLD and GDX ticker symbols.
Junior gold stocks,Gold mining Stocks and More commentary to follow….
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