Forex Books Talking

to be trend-following cyber-machines and they don't care about valuations." What I took away from that conversation is that as stupidly undervalue

as the HUI got all last year until Jan. 19 of this year, it didn't change until the "bots" started to trend-follow the gold miners, and that includes the GLD

(SPDR Gold Trust). What that means is that gold inflow from the momo-worshipping "bots" inhaling the GLD is now pitted against the Commercials insatiable desire to satisfy "bot" demand. And it looks as though this Ali-Frazier slugfest won't end any time soon.

So how do you play it without losing your positions? Well, exactly how I have been—you take the GDXJ (Market Vectors Junior Gold Miners ETF) where you own 1,000 shares

when it hit $30, you were ahead roughly $11 per share. When the Commercials blew through 171,000 shorts, if you bought 10 puts of the GLD May $30 puts for $2.30

Last week GDXJ hit $39 so you gained $9,000 in equity but gave up $2,300 in hedge costs. You STILL OWN your GDXJ and you have been sleeping just fine, thank you.

With all of these indicators flashing warning signs and despite their ineffectiveness until now, you must remain protected by way of limited-risk hedges. That's the only sensible way to invest

market that is being driven by pattern-recognition technology, a technology that can turn in a nanosecond and move the market from up 4% to down 7% in the time it takes for a trade to travel via microwave signal 790 miles from the Crimex in Chicago to 33 Liberty St. in NYC.

The second reason that hedges are imperative is state of mind. I have discovered an inverse relationship between the size and scope of mining position hedges and liquor cabinet

and medicine chest inventories coupled with a direct correlation between hedge position abandonment and nasty dog bites and extremely cold shoulders from spouses,

bank managers and clients. It is my guarded advice that for your senior and intermediate miners, you get hedged and you STAY hedged until those indicators mentioned above come back into line again.

Lastly, the micro-cap explorer/developer group that usually reside on the TSX Venture Exchange has advanced 27.28% YTD versus the seniors represented by

he HUI up 103.4% YTD, begging the question, "Is there a "catch-up" trade in the little guys?" and the answer is categorically "Absolutely." In late 2014, I put out a

disastrously ill-timed collection that I affectionately called "The Scurvy-Ridden Bilge Rats" in reference to just how reviled the sector was back then. Being about 15 months early

that Kaminak has advanced from $0.77 to $2.04 in that period. This time, however, I am going to diversify the list by disintoxicating it with more silver than gold and