Replies to post #27369 on RespireRx Pharmaceuticals Inc (fka RSPI)

[bigworld]

OT to K-G: I'd still hold tight in here, especially after today's rally. I'm still convinced that we're heading lower over the next two weeks. The volatility indexes (VIX and VXO) are still too low to form the basis for another leg of the rally. The S&P has to drop below so-called important support levels that various analysts say exists between 850 and 870 on the S&P. We'll probably get one or two high volume down days very soon that will trigger programmed sells and take out stop loss orders...at that point the intraday S&P might approach 800 before closing somewhere between 830 and 850. That will be the day to jump back in heavily on equities. Two exceptions that can be purchased now.....natural gas (UNG) and precious metals (SLV, GDX, etc). Nat gas has been so beaten down lately that it's bound to rally from here. It will easily double by winter. And the precious metal equities like GDX have already had their 20-25% correction, so further potential for downside movement is limited. I think gold has a pretty strong support level in this $900-$925 range and will move up strongly from here to take out the previous highs. I see gold going to $1075 (at least) before another consolidation, and then a further rally to at least $1200, and perhaps eventually higher by fall. The longer gold consolidates in here the higher the potential rise in mining equities like GDX, which is currently undervalued compared to the price of gold when you look at it in historical terms. Happy hunting.

[bigworld]

OT to K-G: Here's a follow up to my previous comments regarding the purchase of precious metal miners at current levels (from seekingalpha.com):
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Gold

This week has been disappointing for precious metals investors as gold, silver and corresponding equities followed the general stock market lower.

Gold moved lower despite the technical similarity to a previous pattern that was followed by higher prices. Higher prices were likely, but of course, not guaranteed. In order to make calls that have the greatest probability of being correct, it is important to always take what the market provides and use it on an “as is” basis.

Currently, gold appears to be close to bottoming out, as it seems to be forming the zigzag correction pattern. As mentioned in the past, precious metals tend to correct in a zigzag fashion, and this time we could see another example of this tendency, meaning that the bottom is rather near. Meanwhile, the medium term chart has not changed much in the past week.

The bullish cup-and-handle formation is still intact, even though the “handle” is now considerably bigger. This does not change the overall bullish implications this chart has on gold prices. Additionally, the Stochastic Indicator, which has proven a valuable tool in timing local bottoms in the past, is also suggesting that the bottom is rather near. While I have left the detailed descriptions for my Subscribers, I will provide you with one more chart from the premium version - one of our indicators suggests that higher prices are likely in the future.

The SP Short Term Gold Stock Bottom Indicator has flashed a “buy” signal on Friday, as it turned up after having declined below the dashed horizontal line. In the past, similar action meant that a bottom is already in, or that it will be in rather soon. Last time it was the case at the end of June, and the HUI Index has indeed put a local bottom. Currently, it may mean that precious metals are still vulnerable in the immediate term, but they are not likely to consolidate much longer.

Summary
The long-term situation remains inflationary and favorable for the precious metals sector; however, the short-term situation is rather cloudy. In the very recent past, precious metals have taken the general stock market’s lead, while the dollar has been trading sideways without a decisive breakout or breakdown from its trading range. The long- and medium-term trends are down for the USD Index, so a breakdown from here is more likely than another counter-trend upswing. Still, a significant plunge in the general stock market may negatively affect prices of gold, silver and corresponding equities.

Investors who are already in the market and plan to keep their positions for at least several months don’t need to trade the rest of the downswing. Short-term Speculators might want to wait a little longer before opening long position in the precious metals market.