Long Term Gold Chart and a New Set of Hedged Positions

We are in a market liquidation that is very powerful and ought not to be underestimated. In the short term value means little when the task is to raise cash and sell assets to do so.

Still, it is good to keep the longer term in mind, while we WAIT for the market to stabilize. Please also remember that the mining stocks are NOT the underlying asset, and should be treated as a speculation.

We started buying high yield and high cashflow per share energy and mining stocks today, hedging them dollar for dollar with QID and SDS and DXD. We will vary the ratios and positions accordingly. We have done this before in this cycle when we reach support and resistance levels we consider to be 'extreme.' The first few attempts were not entirely fruitful.

The objective is to emerge from a short term or intermediate term market bottom with our capital intact, holding a portfolio of very desirable stocks with attractive yields that pay while we wait.

This mix gives us some downside and upside protection, for those who have had this market whipsaw them on the bearish side with 400 point rallies. We actually came to this strategy from our approach to this decline from the short side.

This is not simple to do and we do not recommend it for those not experienced with hedged positions. Getting the ratios to work for you, and not against you for a double hit, is a critical competency. Overtrading is a definite risk.