Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)

Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)

Technically Speaking

After one holiday week completed, the most noticeable elements were the expected drop in trading volume and the less-expected drops in prices. Usually in the run-up to a holiday, investors bid up stocks however the last couple of weeks had already seen a significant rebound in prices and perhaps, in reaction to the buying, there was a significant amount of reluctance to bidding prices higher.

The lack of volume makes forecasting difficult as we enter the final week of the year. Nevertheless, falling stochastics suggests that further selling is possible. In particular, the tech sector, namely the Nasdaq twins, share stochastics that eased from overbought conditions and remain in a position to see further downward thrusts. The broader market defined by the Dow Jones Industrials and the S&P 500 have stochastics that are borderline oversold but could continue to drop in the coming week.

It is important to remember that trading volumes will remain light this week once more and it won’t be until the first week of the new year that any reliable pattern will emerge.

New Buy Recommendations (in order of preference):

We believe gold continues its development of a new bullish phase aided by governments around the world fighting to create inflation while surrounded by deflating prices. At some point they are likely to succeed considering the massive coordinated effort to inject funds into an assortment of industries hamstrung by tightened credit markets. We had initiated positions in certain gold stocks several weeks ago but were unfortunately stopped out of these positions prematurely. Now we prefer to re-initiate those positions in gold equities. The following gold equities are favored in order:

Royal Gold (RGLD)

Harmony Gold (HMY)

Iamgold (IAG)

Kinross Gold (KGC)

Barrick Gold (ABX)

New Short Sales

None.

Stock Positions to Sell/Exit:

None.

Portfolio Comments:

New stops have been added in bold to the list while others have been modified. Those that have blanks are being carried unstopped for now. Please see our complete list of stops in the table below.

List of Current Stock Recommendations:

Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S where positions should be retained. S+ and S++ indicate stocks for which there is a technical case to add to the positions with plusses adding weight similar to long positions. The maximum number of plus signs is 2.

N.B. There are no longer restrictions on foreign stocks held in Canadian retirement savings accounts.

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price