We may be near or at a temporary bottom in the market, which may present a good buying opportunity. The two-year graph of the S&P 500 (SPY) shows that technical indicators are flashing buy signals.
(Click charts to expand)
Plus, the euro seems to be near or at a temporary bottom. That is good for stocks, since they generally rise as the dollar falls against the euro.
Historically, December is the third best month of the year for stocks, after November and April. Plus, euro rescue proposals and a bright start to the U.S. shopping season may boost stocks.
Two interesting buys are Majestic Silver (AG) and Chesapeake Energy (CHK).
First Majestic Silver is a low-cost silver miner that mines entirely in Mexico. I did an interview with the CEO here. Based on 2009 figures, the company produced silver at a cost of $5.61 per ounce, comparable to that of other low cost miners like Great Panther Silver Ltd (GPL) and Pan American Silver (PAAS) and far lower than the $31 per ounce that silver trades for. Third-quarter numbers came in great with earnings rising 176%. With a forward PE of about 8, the stock looks cheap. Technical indicators are flashing buy signals.
Chesapeake Energy is one of the largest owners of natural gas properties in the United States. The company has a forward PE of about 9. It also benefits from the current natural gas boom, especially since Exxon Mobile (XOM) bought XTO Energy. Technical indicators are flashing buy signals.
Disclosure: I am long AG.
