TGR: Why is that?

RW: I think if we get into a nasty situation regarding delivery and some other problems, you could be out in the wind on ETF delivery. You are holding paper with a claim. I wouldn’t do it.

TGR: So what do you suggest for investors?

RW: Small traders should start with a good coin program buying steadily from a reputable dealer. By small accounts, I mean somewhere between a few thousand dollars up to maybe $100,000 or $150,000. These traders should have maybe 10% in coins. For larger account sizes, you can only hold so many coins in personal possession. Then we recommend buying bullion in depository storage.

Here’s another thought, too. I’ve asked the investment advisors at GG if it is possible for an American to buy the shares directly from their company in Toronto and hold them in escrow. This would accomplish two or three things if, in fact, you could do it. As an American, you would own one of the premier gold companies, which is probably going to be in position for the long pull to make a lot of money. Your money is out of the U.S. It’s not in a New York brokerage, it’s not in your personal possession; it’s in Canada. There’s been talk, of course, of gold confiscation. I don’t know where that’s going to go. I can’t really say one way or the other. But if, in fact, you’re holding GG shares in Toronto, I would think you’re pretty safe. That’s something with a lot of merit in this environment. People wonder how they can have some resources that are unattachable, shall we say, in the United States. Buying directly in Canada might provide the answer. There may be rules that prohibit that, but we’ll find out.

TGR: You’re suggesting buying shares directly from Goldcorp?

RW: Yes. Most people don’t know it’s possible. If you want to buy GE stock from GE without a broker, you can do it. The domestic versus foreign share buying has yet to be addressed.

TGR: To summarize, you’re suggesting investors should own gold shares and you see a rally ending somewhere between mid-April and the end of May. What will signal the music has stopped, telling us to run for a chair or get out the door?

RW: You have got to be very careful. On any news out of Washington, you trade the opposite. A lot of traders say that when Tim Geithner starts making a speech, they hit the sell button. The point is that we can forecast selling time within a few days. Most importantly, I would rather be premature on an exit than too late. I can evaluate the technicals using several indicators. There are important interrelationships between different markets, not only domestic but also foreign. I am very fortunate I’m able to see several institutional reports most people never do. One of the best traders in the United States—in fact, she won the trading championship the last four years in a row—is Louise Yamada. Louise said that this Dow is going to 4,000. She won’t put timeframes on it, but she is correct almost all the time. Bob McHugh is extremely correct with his technicals. I read his daily reports and we exchange newsletters.

TGR: He’s a newsletter writer?

RW: Yes, and he’s a gentleman; just a fine person and he has a fantastic technical letter. Some people prefer a straight recommendation: “Buy this, sell this, put a stop here” and that’s as far as they want to go with it. But if you’re into charts and numbers, subscribe to Bob’s letter. It’s 50 pages and like a continuous price chart that just keeps going and going. He covers the U.S. and Australia and more. We very much appreciate what Bob does because his numbers are accurate and technical. I am a technical analyst and rely on seven other pros to back-check my work. Bob McHugh is one of my seven selected.

TGR: What do you foresee after the spring meltdown?

RW: I expect it shall be quite tricky to find new entry dates. June, July and August are usually not good times to trade. But, anything can happen. If things get crazy enough in May and June, there may be unusual trading opportunities in July and August. I don’t know. Normally there are not and it’s not a good time of year to be fiddling around. Usually the best cycle time is from September until April. That’s it pretty much right on through.

So May is a sell; the June, July and August period is choppy flat; and in September, you’re getting ready to go. Normally traders get serious and back to work after Labor Day. Last fall, because of unpleasant credit things, that cycle was delayed, too. When Lehman hit, everything went down the drain. Do not be afraid to be in the markets. Just understand your risk, and plan your trades very carefully.

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LINKS:  For additional comments on Endeavour Silver Corp. (TSX: T.EDR), Eastmain Resources Inc. (TSX: T.ER), San Gold Corporation (TSX: V.SGR), Clifton Star Resources Inc. (TSX: V.CFO), Canplats Resources Corp. (TSX: V.CPQ), Goldcorp (TSX: T.G) (NYSE: GG), Hecla Mining Company (NYSE: HL), Rio Tinto (NYSE: RTP), Pan American Silver Corp. (TSX: T.PAA) , Silver Standard Resources Inc. (TSX: T.SSO) ,  Agnico-Eagle Mines (TSX: T.AEM), Yamana Gold Inc. (NYSE: AUY), and Kinross Gold Corporation (TSX: T.K) from newsletter writers, money managers, and analysts, click on the respective links or visit The Gold Report.

Using the nom de plume “Traderrog,” Roger Wiegand produces the popular Trader Tracks e newsletter, providing investors with short-term buy-and-sell recommendations and insights into the political and economic factors that drive markets. An insatiable reader, he digests a variety of domestic and international publications, with the economic, political, monetary and market news and commentary woven into his opinions and analyses. For more than 17 years, Roger has devoted intensive research time to the precious metals, currency, energy and financial markets. But his varied background—which includes graphics, writing, editing, sales, marketing, commercial printing, consulting and real estate development (from sand and gravel mines to landfills to residential/commercial projects)…and trading—also shapes the view he shares. In addition to Trader Tracks, Roger also pounds out a weekly “Rog’s Corner-After The Bell “column for Jay Taylor’s Gold, Energy & Tech Stocks newsletter. For other essays, visit websites such as Kitco.com and, of course, The Gold Letter. Roger is a frequent speaker at The Cambridge House Resource Conferences. Visit Roger and Jay’s website at webeatthestreet.com. Tel: 718-457-1426 Claudio Bassi, Manager cbassi@miningstocks.com

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