Monday, November 10, 2008

Forced selling

As subscribers know I'm not only bullish on the general market right now but I'm especially bullish on two sectors. One of them is mining stocks.

The last time the XAU traded as low as it did in Oct. Gold was around $325 an oz.. With Gold now priced more than 2X higher than that I doubt the mining industry is in any danger of bankruptcy, unlike the financial sector. If miners aren't going bankrupt then the only reason I can see for such ridiculously low prices is simply forced selling. Other wise know as emotions run amok.

When the market does something stupid I want to take advantage of it. No matter how I look at this it still looks stupid. Miners should be a big beneficiary if the market rallys.