A Note from David Morgan of the Silver Investor
By David Morgan
What a
time in the markets. Just returned last night from
the biggest retail gold show in the world. My
comment is simple, there is fear in the market
place. Many "gold bugs" are fearful and not sure of
the precious metals ability to do well in the
future. During my workshop, I explained that all
markets go through four phases of emotion. First
there is pessimism, then skepticism, then optimism,
and finally euphoria.
Right
now we are still in the skeptics phase also known as
the wall of worry. No one knows how much more damage
we will see to the equity markets. The mining shares
have been hit but are starting to show resilience. I
know it is tough to breakthrough when so much fear
exists but it is not worth selling at this point
because the bottoming process is starting to take
place. Is this the short term bottom? Frankly, we
doubt it and think a good solid buying opportunity
will become available in February. However, then big
picture is clear. The financial system is under such
stress that investors will be seeking areas that
they trust and expect to do well in the future. This
is clearly the precious metals arena. We do not know
exactly when this shift in thinking by the general
investing public will take place but it will.
This
change of heart will move new money (new investors)
into the gold and silver sector and we will move out
of the skeptics phase and into the optimism leg. We
will be going into more detail in the February
report and focus on YOU, how the macro picture may
unfold, but more importantly what actions you should
consider to make the most of the days ahead.
A few of
my colleagues have posted good articles that I
largely agree with and rather than type out
essentially the same information I will provide the
links here and also let you know that they are also
posted on the website.
On a
very short term basis gold and silver have not
reversed to a downtrend yet. If we get a gold close
three days (in a row) below $880.00 and we see
silver close three days below $15.80 then we expect
to see support areas tested. This is fully what we
do think will happen, but until it does we still
remain in a high level consolidation period. To
break into a new high look for silver to close over
$16.44 and remain there for three full days.
Should
you sell now? We think not, at this point it may be
best just to ride it out, no one said it would be
easy, and although I do not speak on
www.financialsense.com every week as in past
years, I have made it clear several times that the
volatility would only increase and if the first few
years of the bull market scared you, then just wait.
These markets are not for the faint hearted, but
will over time prove to be the most solid strategy
for wealth preservation and enhancement.
Links to
read:
The
first article puts the perspective that one day does
not make a market here is the link,
http://investmentscore.com/editorials/what_correction
The second missive
is put out by Casey Research and follows closely to
what we expect as well here is the link,
http://caseyresearch.com/drpRoom.php?e=true
Next Morgan Report
is due Monday, February 4th 2008
The Silver Investor
