Hi Ganalane!

I am not worried about the share price this time around. Granted, I am a permabull under any circumstances so my opinion is not necessarily anchored to reality. But I have a PF of nearly 50 juniors and actively monitor about 80 on my watchlist, so I think I have a good idea what is going on in the sector as a whole. KXL was one of the best performing juniors since the start of July, during which time we have endured yet another nasty correction with a hint of capitulation. Most of the juniors on my list are down by 20-40% just in the last 5 weeks!

KXL is unique because it has been locked in a sideways correction for 8 months. People tend to over-react at the peaks and troughs but overall the stock has been rock solid while just about everything else is losing value. So I do not think we are in for a particularly nasty downside move from here. We could dip another 25 cents or so before bouncing yet again to the top of that channel just based on recent history, and I hope we do. Sooner or later KXL will bust out through to $3 and above, and then its see-you-later for good, IMO.

My optimism is based on a few key points. First off, the last PP did not have any warrants attached, and therefore investors cannot just sell the common and play the risk free warrants. Some of the volatility is no doubt due to institutions cashing in their broker warrants and taking profits, and when they are done they are no longer a factor.

The second point is that KXL is largely held by sophisticated investors. Everyone is capable of doing something stupid, no matter how many digits you have in your bank account. But given that so much of the float is held by people who are not looking past what happens next week for their grocery money, I think we are less at risk of a wild capitulation event just based on a bad day. We got stop loss orders triggered and touched a serious intraday low last week, but then the stock bounced sharply thereafter. People are willing to hold KXL and aggressively buy the dips, while other juniors are withering on the vine.

Next, bear in mind that KXL has so many drills turning, and the potential for so much more news in the near future, now that they have the assay lab caught back up, that we may have even better news on the way that can cause a surprise rally. There is one project in particular that I am thinking of here, and probably other targets are on deck that I have not even heard of.

My last point is that we are emerging from a point of seasonal weakness. Once the FED announces they are full of shit and have no plans to raise rates again this week, gold will probably go on another extended rally. Downside risk for gold is probably already priced in and there is still a real potential for a breakout to new highs. Then money flow may finally ebb back into the juniors.

So things have not changed because we got a million share day on Friday and a whole bunch of short term flippers bailed out. I bought more stock before I got on the plane last month, and I would have been a seller for those traders based on my past strategy. From now on, I am a buyer, and my intermediate target is $10 before I look to lighten up. We may get that this year, or next year, but I think its coming. Again, I am probably not the only one that has changed their outlook and will not be looking to flip small trades to book profits along the way anymore.

Sorry for the long post...

cheers!

mike