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Market Still Headed Lower
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Dear Subscriber,
On January 23rd, we wrote
an article entitled "Out of Time" which stated the
market was running out of time and should soon break to the
downside. On
the next day of trading, January 24th, the Dow Jones Industrial
Average did as we predicted.
It closed down over 230 points and broke below
its key support level of 8,250. Since that time, the Dow has
found short-term
support in the 7,900 range. We
are of the opinion that this break below 8,250 is very important.
The Dow has
been pushed below the bottom of it's short term trading range
and such downside
breaks are usually fierce. We are now expecting the market
to soon trade back to its fall lows (7400 range), if not lower.
Please view the following
chart :
As for the price of gold,
we continue to see strength. However, gold stocks
continue to lag the metal. As displayed by the chart of the
HUI
index, gold stocks are
having trouble breaking above their summer highs. This
is not dreadful news, as would be the expected first perception,
for the following
reasons :
1. Gold stocks are
now becoming increasingly undervalued when compared to
the metal price.
2. Because the 150-155
area on the HUI index has become such a hard upside
resistance point, we are of the opinion that when this is
upside point
is broken, it will happen in a vicious manner.
Interestingly, our research has revealed the short position
on gold stocks
is growing rapidly. If we do experience a break to the upside
for gold stocks
as indicated above, this large short position should cause
the breakout to be that
much more fierce.
Please see the HUI index
chart at :
On another note, it seems
all of our hard work is finally paying off. We
will discuss further in another email, but we feel this should
be noted. 'www.stockfocus.com',
a website that tracks the performance of over
300 investment newsletters, has reported results covering
the period
from October 18, 2000 to October 18, 2002. We are pleased
to announce
our investment newsletter, "Addicted to Profits", was ranked
4th overall
in terms of 'percentage gain' and 5th overall in terms of
'batting average
(% right)'. As
everyone is aware, it has been a difficult time for market
based investments.We
are delighted to see that our hard work, detailed research,
and contrarian investment philosophy has paid off handsomely.
Finally, we must report
the SEC has halted trading in Renaissance Mining (SSSI.OB)
until February 11, 2003. Due to this temporary suspension,
we feel it
is unfit to give any sort of editorial comment at this time.
As stated
in a recent Reuters press release, the reasons for the trading
halt are as
follows :
" U.S. regulators on Wednesday
suspended the trading of Sedona Software Solutions
Inc. (OTC BB:SSSI.OB - News) stock through Feb. 11 due to
concerns about
the accuracy and completeness of information made public by
the Vancouver, Canada-based company.
The Securities and Exchange
Commission said it had concerns with the accuracy
and completeness of information about Sedona on Internet Web
sites, in
press releases and in other information, including its planned
merger with
Renaissance Mining Corp., a privately-held company."
That is all we know at
this time. We, like everyone else, must wait for further
information to be released with respect to this situation.
We will provide
futher updates when more information becomes available.
Sincerely,
Dave Skarica
********
Disclaimer Note: Dave Skarica owns Renaissance via a private
placement and has paid for all his shares. In addition, he
has put friends and family into the private placement of Renaissance.
Dave Skarica is an independent newsletter writer and may have
positions for his clients contrary to the recommendations
in this newsletter, or may act on behalf of his clients on
certain recommendations in this newsletter. All information
in this newsletter is believed to be correct, but its accuracy
can not be guaranteed. The owner, publisher is not responsible
for errors, omissions or losses sustained by the reader.
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