A Comment -- General Comments From an Expert (A Commentary)

(Market Call Minute.) Natural gas? Likes natural gas and you want to be buying companies at these levels.

The market has started a correction. It became over bought. Timing indicator suggests a correction until the end of May or beginning of June. After that the market will rally. We are into a ‘V’ right now. Another dip will come in October. Beyond that we will have a good time until at least the end of the year.

Canadian banks. The next big catalyst that has to happen for Canadian banks is when we see the first dividend increase. That will be your “all clear” sign that the banks are comfortable with their balance sheets and loan losses. He prefers Royal (RY-T) and Scotia (BNS-T).

How far out would you go when writing Calls? Depends on what you are trying to defend. When gold started to cross $1200 he was writing 1-month calls against the Gold ETF (GLD-N) on the expectation gold would come off. Generally, 3 months is what he would be looking for.

The Greece bailout is just kicking the can down the road. The market is awaiting details of the bailout. The market wants to see the details of a plan.China has inflation up the most in 18 months. In the housing market there could be a bubble. But overall it will be continued growth of the middle class and infrastructure spending.There is a potential for a double dip because of Greece contagion and UK debt. The US stands to be at the same point by year-end. Every market is negative year to date except North America. We are benefiting because the rest of the world is worse off.

US$. Expect the US dollar will continue to be a strong currency in the foreseeable future because the domestic economy is quite strong and getting stronger. Cdn$ is even more attractive. Europe will go through a period of austerity and that will hit their GDP growth.

Gold. Likes this sector and has been adding to this in the last few weeks. He owns both physical gold and gold producers but prefers the producers such as Red Back (RBI-T), Eldorado (ELD-T) and several others.

Caller has stocks in his RRSP where he can't write options. What about writing naked calls on these? Naked calls is essentially something you should never do. There is no reason why you can't write options in your registered account.

Covered Call Strategy. Write monthly covered calls month after month or go for long-term, say 1-year out? He prefers 6 months out which saves on trading costs over a month-by-month and on a yearly one, you don't get the same bang for the buck. This also gives you downside protection.

Canadian investors have a golden opportunity with the strong Cdn$ to buy shares in companies that are domiciled in countries where the currency is weaker. You are getting quality companies at value prices.

Long Gold Corp GG-N and Short $39 May calls. Take $1.35 for the month. You are harvesting 3.5% a month or 40% a year. If gold stocks stay where they are or go higher you make 40% a year..

Why not GIC's where the yields are little higher than bonds? GIC’s are like bonds in that you have a coupon and a maturity date. GIC’s are much harder to sell if you have to exit your position. CDIC insurance covers you for up to $100,000 making them a AAA credit.

High-yield junk bond ETF's. How do they maintain their capital base? About 3% of high-yield bonds will default in any given year. Default doesn't mean it will go to zero. ETF’s do not buy bonds at a premium, but quite often at a discount to their par value. Ideally, an ETF will maintain its NAV and pay out a high-yield stream over time.

Junk bonds. Do you think aversion from European crisis might extend to junk bonds in general? If so, is it time to sell? He would say No. Last week cost of default swaps on European sovereign credits (cost of insurance on a basket of bonds against default) was more than it was on US investment grade corporates.