Bad news is good news & it is good for precious metals

We were just back from a very intensive vacation trip in Australia and New Zealand, 10 connection flights within 14 days between visiting sites. Very interesting but also tiring.  Luckily, trip was very well organized with no any major problems. However, I must say that both Australia and New Zealand are very underdeveloped in terms of the Internet system. Virtually impossible to get easy and free access to Internet unless you pay a deal for it. Even my business BlackBerry had frequent interruptions during the period. So I basically could not really get good online review of the market news and developments.

It appears the market was up and down quite significantly in the past 2 weeks but did not drop as severely as I had expected. Actually the economic news was very bad: GDP was only 1.5% last quarter & much short of expectation, the US consumer sentiments were very negative & were cutting back expenses greatly, new house sales were down, and 46 million Americans (over 15% of the US population) were on food stamps...... But the market just responded positively to the bad news. You know what? This is so-called "Bad news is good news" phenomenon! Because the market is expecting that the Fed will inevitably come back with another round of money printing to stimulate the economy due to the very back overall economic condition, i.e. QE3 will come one way or the other. Of course, we also need to give some credits to the European Central Bank president, Mario Draghi, since his statement  on Thursday that ECB  "is ready to do whatever it takes to preserve the euro" has given the market a strong conviction that more money printing worldwide is coming.

This will be very good for gold and silver & eventually the mining stocks. I think I'm ready to put more money into this sector to catch up with this strong upward trend. For the general stocks though, I'm still not fully convincing that it will simply go up from here. I will wait a bit to see if the uptrend is firmly established, since from the bottom of my heart I still think there is a chance to see a sharp decline of the market before it launches a full-blown rally towards the year end.