Hysteria,

I have been trading on these ratios up until this summer and they worked. I am holding most of my long positions now based on these ratios and have been surprised at the deterioration. When these ratios said buy late this summer, I did and now am underwater on my positions. MY TDC was bought more than 2 years ago independent of this.

I am concerned as to silver's recent performance and its weakness relative to gold. If gold follows suit, our stocks will take yet another fall to new lows. I am watching gold 850 support closely which must hold. If it does not hold, we will probbaly see the 700's again. I am concerned that a prolonged stay of gold in the 700's will seriously dampen any confidence the market may have in exploration companies.

We needed several days with gold above $900 which we did not get. We now need to test and stay above $850 for several days. I am hopefull this will happen.

I see screaming buys all over the place, but the technicals in both the metals and the equities are not confirming a buy yet. On one positive, today's action on the HUI and XAU were not indicative of the losses in the metals, so a possible turn is in the making. I had thought a couple of weeks ago a test of 850 is needed and will be healthy, so it looks as if that may be in the cards now.

I am keeping powder dry until a better base forms and will buy into the producers that have positive cash flows first. The junior explorers could be held captive by the credit market for many more months yet to come.

Any other thoughts?

Just my plan,

SilverNut