For those sitting on the sidelines with a fair amount of cash earning 1.25% interest it has been difficult to maintain a big picture perspective of the recent equity gains since November 2012.
The Canadian Equity Markets have not fared as well as the US markets. The Canadian TSX Index is dominated by four sectors as illustrated in the following chart. This chart from Danielle Park's Juggling Dynamite website clearly indicates that the only major sector holding up the TSX index is the financials.
The Gold/Precious Metals Sector has been the worst performing. And investors/speculators are asking is this the time to BUY Gold stocks. The chart for Goldcorp presents a specific study of the rewards and risks for an excellent major gold producer.
At current levels it is bottoming near the 1 year support shelf at $32.
On the other hand if Equity Market Index's (SP500, DJI30, TSX) top and drop; then most likely major gold producers such as Goldcorp will continue to trend lower as investors/trader flee to cash.
So What Is One To Do?
If YOU believe that the current worldwide major country debt bubble's will burst in coming years?
Then leverage in. Just take part of your position now. And add to the position when lower support levels are reached or a new weekly uptrend line is formed.
Click to enlarge the chart. When uploading more than one chart to this blog I have difficulty positioning and sizing the other charts.
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