This junior gold remains a long term short since it is highly
manipulated and has little liquidity. So far, we have bounced off
interim support near $3.40, but technical divergence in this issue
screams for shorting this issue - let alone capital better employed
elsewhere. BGO is one of those true "dead money" candidates -
typical of promotion under dilution!
Earnings continue to trend in the wrong direction as higher gold
prices HURT the financials due to their hedge book - and will not
wear off soon. Expectations of a report regarding the Russian
project will only serve for more distribution by insiders. The
company has no financial capability to exploit the positives of any
such project, therefore, it is becoming easy to spot the sudden
appearance of analysts touting this issue. They happen to be
involved in the deal! Not a following I want to listen to, but
rather, watching what they do! And they're NOT BUYING stock.
"Gonzzo" <nos...@aol.com> wrote in message
A Blurb in Barrons:
MARKET WATCH TODAY |
Good as Gold
Schaeffer's Midday Sector Update
Schaeffer's Investment Research, Inc.
1259 Kemper Meadow Dr.
Cincinnati, Ohio 45240
March 9 - Has gold's luster lost its shine? Spot prices for gold have pulled
back so far in 2004. The recent lows at $388.20 are down roughly nine
percent from the closing highs set in mid-January. However, given gold's
32-percent rally off lows reached in April 2003, some type of pullback can
be expected. This nine-percent decline should not be troubling at all for
investors with a longer time frame, as the primary drivers that should
sustain the market's uptrend remain intact.
Interest rates are at multi-decade lows. The Federal Reserve and the U.S.
Treasury secretary remain committed to a weaker dollar. The twin deficits
are large and growing larger and evidence of inflation has also begun to
Despite the positive fundamentals, trend, and price action underlying the
precious metals and mining sector, options investors remain pessimistic. The
current sector put/call open interest ratio reading stands at 0.79, which is
higher than 70 percent of the past year's worth of readings. According to
our own proprietary indicators, this reading is indicative of pessimism on
Sector short interest has also risen dramatically. There are currently 127
million total shares sold short on individual sector components. Total short
interest on the mining stocks has increased 62 percent in the past year. We
view this pessimism from stock and options speculators as a bullish sign
from a contrarian perspective.
Given gold's recent strong reaction to the weak jobs number and the strong
probability that the Fed has been sidelined by this number for the
foreseeable future, we believe that uptrend in both the gold and mining
stocks should resume shortly. Investors interested in gold and mining stocks
should be taking a page from the 90s stock market bulls. In a bull market
you should buy the dips, and this nine-percent decline to support provides
an opportunity to do just that.
-- Ron Taylor