The BarkerLetter

October 16, 2007

Greetings investors!

We’re reading the tea leaves on the $CDNX chart (Canada’s TSX venture exchange), and the signs are still pointing up. The relative strength index is particularly bullish, having crossed into mildly overbought territory yesterday. I think it still has a way to travel before ticking down.

The accumulation/distribution line has also behaved very well in recent sessions and is still marching consistently upwards.

You might think about taking profits in the coming days, depending on your risk tolerance.  Of course the biggest percentage gains always accrue to the aggressive investor, but so do the biggest losses.  A patient investor looking at the long term horizon would hold at this point. But for the rest of us, well let’s just say nobody has ever gone broke taking profits!

I have three investment portfolios, for the short, medium, and long term, so while I may take profits on spikes in the first two, I’ll leave the third for as long as it takes to get the maximum return.

Another strategy I use is to take a contrary position on a currency. For example if you’re long on your Canadian mining stocks you may look at shorting the Canadian dollar, as a hedge. It looks overbought right now anyway. Ditto for the Australian dollar.

More stock picks to come in upcoming editions. Watch this space!

Kb