Zeev, I'm certainly not going to pound you over the head with it -- gold is gold, and at the moment the 200 day MA on my favorite mid cap gold producers are pointed in the Northern direction.
From what I can tell, gold and the US$ index have an inverse correlation -- gold stocks and the broad market indexes also have an inverse correlation. We've seen the Nasdaq soar from 1000 in 1995 to it's peak of just over 5000 -- we've also seen the US$ go from 70 (1995) to it's peak of just over 120.
Might be an off handed remark but I think both the DOW30 and the US$ have some catching up to do, no? High profile scandals at GE, IBM and CAT could be the catalyst for a new round of US$ weakness and it's round trip back to 70.
Oh, I dunno... I've been long on gold stocks since the beginning of last December because I thought the Euro was going to cause anarchy. Duh, silly me. The US$ dropped and gold shot up instead because it was accepted-- I got lucky.
Anyway, I'm fully invested in the mining sector and will return to a more conservative 2/3 by the end of October. My intention is to invest 1/3 into the broad markets - just not in the stocks that are played here. I think if there is a huge correction-- investors (not speculators) will migrate to stocks that are paying a healthy dividend. My top pick in this category is Cummins (CUM).
Michael
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