MKT UPDATE  MAY 20, 2003

I am tempted to say the decline that we have been waiting for has finally begun, but I sense that we will have one stab to the 8788 area, before we begin a somewhat controlled decline, at least that’s what the markets are showing right now, the first stop should be 8350 and if that is broken  8270 will be the next, we will stop there for now. In addition today’s decline occurred also on lower volume which is actually a bullish sign, and indicates it was more profit taking, then bears coming to the front line and starting to short the market, the bears are still to wounded and busy licking their deep wounds, so they will wait before going to the battle lines again. In addition PC ratio did spike a bit and closed at 1, this indicator is virtually meaningless now days and is only good as a very short term indicator, usually good for about one day, past that time frame its pretty much worthless. VIX still has not dipped below 20, perhaps we will do so very soon we did get a reading of 20 something just a tad bit  higher than the current 52 week low.

So lets carry on waiting on the sidelines before deploying some ammunition to the short side.

Our gold stocks and gold options are doing fabulously so lets  not be to eager to jump into another fire, unless everything lines up in our favour.

Gold options.

It is time to take profits in all our gold options, if you want to speculate and take more of a risk you can ride them further but I suggest taking profits now. We are up tremendously on the RGLD options.

Sell the GLG calls for( bought for 2.60 and 2.80) at  4 or higher, Hl options for between ( bought for 1.05) 1.75-1.85, MDG calls ( bought for 50-60 cents) that were a pure speculative play can be sold for 75cents or higher, XAU calls ( paid 3.80 for them ) sell them for 5 plus go for the best prices that you can get, it possible that tomorrow gold will open up higher, right now its up 4 dollars more in the evening session. The rgld calls are bidding 7.50-7.90 we bought these for between 3.60-4 bucks. So we are holding some very nice gains lets take profits in all of them.

Also traders and people that have two portfolios start to lighten up on your trading portfolio and keep this cash ready to buy the strong stocks when they pull back. In addition get rid of all the weak stocks in our portfolios per my gold update that was sent out earlier today, slowly sell this stocks into strength.

Mutual Fund play

PMPIX is up 18% plus for a lovely short term gain, off course it could go higher, but we are going to get ready to sell half maybe as early as tomorrow and lock in some profits. So watch out for an Flash alert during the day which if it is sent out, will be sent before 2Pm, since these orders have to be put in before 3Pm for this fund.

In addition there is a possibility that we will short the market via the mutual fund URPIX so be on the look out for an alert on a possible short also

The dollar

The dollar has been in almost free fall for sometime now, look for it make a final low soon and then start rallying, this has to be done by the PPT etc etc, because while a weak dollar is good for exporters a  dollar that is to weak and that drops to fast, will cause an avalanche of selling as foreigners race for the exits, so for this very reason the decline has to be made to look organized, if there can be such a thing as an organized decline, sounds like an oxymoron to me, but what can you expect when all the economic advisors put together have less brains than a well trained monkey.  The dollars days are over, its not going to be number one for a long time to come, and gold will end up being the ultimate currency, the situation in Europe is just as rotten as it is in America, so the increase in value of the Euro, is all about the  rats abandoning one sinking ship to jump onto another that has not begun to sink yet.  With extra profits that you have from some of your stocks and or new money consider buying some gold and silver bullion.

52 WEEK NEW HIGHS

RANGY,GOLD,IAG, LIHRY  all made new highs today, and the stock that I mentioned I was going to add to our core list MFN also made a new 52 week hi, these are the stocks we want to own the most of, GSS is very close to a 52 week high, and RGLD has come back from the dead with a vengeance.

Top stocks for those of you that want nothing but the cream of the crop

Are

GOLD,LIHRY,RANGY,IAG,MFN,GSS,  a HL and GLG are also pretty good.

Moderate plays are CDE,MNG,CBJ ( which replaces WHT) but remember to follow the instructions on how to buy the stocks, don’t just sell and buy the stocks at any prices, buy them at their mean prices or lower as per the instructions in the gold standard deviation update.