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The Federal Reserve did what was expected on Wednesday and dropped interest rates by 25 basis points. I had expected some fireworks, especially given that they also needed to inject $75 billion of liquidity into the market early in the week to keep overnight lending rates from spiking. Instead the markets have been relatively subdued since Wednesday.
Anyway, it is worth noting that gold is starting to creep higher this afternoon and many mining stocks have put in what I would consider a tradable bottom, even if just on a short-term basis.
This is a pretty straight forward trade with the stop being at the recent swing low. So far it has not been a strong move off of the bottom so I don't have a lot of expectations regarding how it will play out. My strategy will be to take profits sooner than later. I should note that some charts look much better than others.
EDV for example is clearly breaking above its short-term down trend here. OLA looks almost identical to this. A few others that look relatively strong include AMX, MIN, FNV, and SVM.
With respect to energy stocks, they are still looking pretty strong overall. Some have corrected (ECA, BNP, for example), while others are still pretty overbought (CPG). I will wait for some of those that are correcting to put in a reversal before I buying anything.
Have a great weekend!
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