What the SLV debut means to Silver

One of the top secular themes listed in our “2006
Investment Roadmap
” (see below for details) was the trend in metals. Since
2002 we have emphasized the secular nature of the run-up in precious and base
metals and have suggested core positions in precious metals and precious metal
stocks as well as in base metals (which have so far outperformed precious
substantially). We particularly liked GLD the gold iShares, which made gold
purchases much easier for investors. This week the silver iShares debuted. SLV
now allows stock market investors to purchase silver just like it was a stock.
In PSL our aggressive Major Theme portfolio, bought July silver at 10.291 and
has profited nicely from the wild run-up, particularly since March.

Investors should note that gold made a peak just after the first iShares in it
came on the market. Will silver do the same? Last week’s lows appear critical in
this regard, as does the 15 level which has resisted rallies for many years.

Regardless of short-term action in silver we are very bullish long-term and
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iShares will be a substantial profit maker for investors who,
along with
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(a commodity index),
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(crude oil), and
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can now diversify more easily into commodity moves than ever before. Commodities
are the best asset-class to mix with stocks historically, as they are the most
negatively correlated. Therefore mixing strategies of timing entry and exit into
DBC, GLD, USO, and SLV cannot only help improve profits but smooth them and
reduce drawdowns.

And while we’re on other asset-classes, we have repeatedly emphasized the
importance of the 1.235 level in the Euro as definitive toward the trend of the
dollar. Since that breakout the new Euro iShares,
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has moved up nicely
from 123.5 to over 127 in very short order — this is yet another uncorrelated
asset class to trade and watch carefully.

Investors should realize that mixing reliable strategies for trading diverse and
different asset-classes into a portfolio could smooth returns, cut drawdowns,
and improve profits and consistency in trading. The new iShares such as FXE, GLD,
DBC, USO, and now SLV should make this easier than it has ever been before. Be
sure and watch these new vehicles carefully and look to our “2006 Investment
” and other services for ways to trade these profitably and

I continue to suspect strongly that the period directly ahead is one where it
may be ABSOLUTELY CRITICAL for investors to have a solid grasp and understanding
of the Big Picture Macro background of global markets, the top secular themes,
and the huge vulnerabilities of this environment. A potential MAJOR SHOCK to the
markets is brewing and those unaware could easily be sideswiped. That is why I
wrote the “2006 Investment Roadmap” which is my best effort at thoroughly
explaining the global macro picture and its precarious state as well as what to
watch closely to monitor how massive risks are developing.

Investors must continue to keep one eye on bonds now, as continued declines in
bonds, especially if yield move higher from here and break a trendline in force
since the 1980’s, could become lethal for stocks at any time. The trend remains
up, but caution is still advised. Diversification into shorts against longs and
into other asset classes is strongly advised.

Meanwhile in our US selection methods, our Top RS/EPS New Highs list published
on TradingMarkets.com, had readings of 80, 55, 61, 78 and 71 with 15 breakouts
of 4+ week ranges, no valid trades meeting criteria, and no close call. This
week, our bottom RS/EPS New Lows recorded readings of 9, 16, 11, 14 and 24 with
5 breakdowns of 4+ week ranges, no valid trades and no close calls. The “model”
portfolio of trades meeting criteria is now long USG (use last weeks low to 50
day ma as ops area if not stopped out already), GG, TS (last week’s lows look
important to hold), MTU, and WIRE (here too last week’s lows look critical)—
with new highs this week in GG and positive action in WIRE. Continue to tighten
up trailing stops whenever possible on stocks with open profits and strive to
move stops to break-even or better as quickly as possible in new entrants. Look
for short-sale hedges against these positions in some of our favorite short sale
sectors like interest rate sensitive, utilities, managed health care, and home

Mark Boucher
has been ranked #1 by Nelson’s World’s Best Money Managers for
his 5-year compounded annual rate of return of 26.6%.

For those not familiar with our long/short strategies, we suggest you review my
The Hedge Fund Edge
, my course “The
Science of Trading
,” my video seminar, where I discuss many new techniques,
and my latest educational product, the

interactive training module
. Basically, we have rigorous criteria for
potential long stocks that we call “up-fuel,” as well as rigorous criteria for
potential short stocks that we call “down-fuel.”

The “2006 Investment Roadmap” is also my best effort at explaining the
top secular themes that every trader should be focused on in their portfolios. A
special offer of this exclusive report is available to TradingMarkets.com
clients at
. So far the groups highlighted in the 2006
Investment Roadmap are exploding in value and appear set to continue to do so.