Alert: Hecla is 100% Correlated to the Price of Silver and Gold I say the fed will delay the taper so I
I am willing to ride out any gold and silver drops between now and then...
I think the market rally is over because the stock market is hugely overpriced at this point and the:
1. coke had a 4% revenue drop but stock ent up 4%
2. Intel had 1% revenue growth
3. dupont had a 3% drop in revenues and earnings from last year but stock is up 20% from where it was then
4. Mcdonalds Walmart warned as have many other retailers
5. Fed said that credit card use dropped 3.4%
6. Mortgage bankers applications for Refis and purchases at 2 decade lows reported about 30 days ago
So I think at this point the market is going to have a hard time going higher and this was the
primary goal of the Fed to produce a wealth effect for spending.
Clearly the high end retailers have done well but not the middle income and lower income and associated retailers.
In the old days the fed stood by what they said for at least a short time now we see the fed can and will turn on a dime...
Today they are on a path that is reducing QE lower by 10 billion per month..
So in 90 days they will cut it down to 25 Billion...
In 150 days to 5 billion..
I say well **well** before they reach that number that is within 90 days they will announce
a delay of the taper because the little growth we see is from this artificial money..
This will be triggered by a weak stock market and negative retail sales as the QE gets drained out
of the hands of the upper middle class who was doing the spending..
They will cut at least 1 more time this month maybe 2 months but that will be it.
So if you we are going to get a drop in Gold and Silver it will have to happen very soon in next 60 days,
If not it will be up, up and away.
I think smart money knows this already and is why gold price is hanging around here and won't fall easily and recovers when it does. For me I would rather take an unlikely 30% drop in gold then to be out when taper is announced.
You have the right facts but coming out with a wrong conclusion and investment theses. You need to thought these out:
1) HL is a reverse leverage to gold and silver. Draw a graph and see for yourself.
2) HL is leveraged to zinc and lead. If zinc and lead prices go over $1 lbs HL will make huge money. With deteriorating economy base metals will be subdued. Though zinc might surprise to the upside.
Kored.....The economy does not appear to me to be that weak right now that the fed would change their taper agenda. Last week's earning's number's were not a disaster, & I suspect next week's heavy reporting period will indicate more of the same, or slightly better. IMO it look's like many are just tempering their spending a bit right now because of economic uncertainty, read RISK OFF mode. There are lot's of nervous squirrel's out there in WS that are necessary to see higher stock prices. Which way the squirrel jump's short term is anybody's guess. Frankly I think those that predict 2014 as a whole will be flat economically will turn out to be correct. So in the meantime you try to trade/hold those stock's with steady earning's...I don't count HL as one of those. It's a speculative play like all miner's, for folk's anticipating inflationary forces down the road. Mining itself is also a very risky business as long's have discovered with the accident's, environmental issues etc the last 3 year's. The PM market does seem to getting wound up pretty tight here, as is the fiat index, which way they break's though is still a big ??? short term !
Bottom line...HL is probably at, or close to "fair value" right at the moment considering PM prices & co. leverage in place. With .50 up/down parameter's depending on which way PM's move short term ! With the tech. picture not O/S enough to get really bullish quite yet. Flip a coin & hope for a break right now. GL