Despite the TSX Venture being down over 25% this year, three of our featured stocks had great gains. Niocorp (NB.V or NIOBF) is up 387% on the year, Western Lithium (WLC.TO or WLCDF) soars 127% in 2014 and Canamex (CSQ.V or CNMXF) rose 108% this year. In a historic bear market, 9 out of 10 stocks fail. As the old adage states, "When they raid the house, they get them all." However, I have been blessed in that most of our featured companies are hanging in there and two of them more than doubled and one almost quadrupled in one of the worst years in resource history. This indicates to me that our system of research and due diligence is improving and should show outsized gains once the 200 day moving average begins sloping higher.
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Junior Miner Up 38% This Week on Record 2014 Volume
The Holiday Season is here and a volatile 2014 is coming to a close. Be prepared to pick up quality situations during tax loss selling season. Yesterday we heard the comments from Fed Chairwoman Yellen which appeared to be dovish. Declining commodities and a rising US dollar will put a halt to any interest rate increases. Equities are rallying and following tax loss selling season the TSX Venture which is hitting decade lows may experience a major bounce due to the January Effect. The January Effect often benefits small cap beaten down situations as large investors reposition for 2014. It was interesting to see the reaction after the Fed Meeting going into tax loss selling season. This down period in the resource sector in prior years was followed by a very powerful first quarter. Late December buying has provided some excellent buying opportunities in the resource sector in the past.
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Junior Miner Up Over 500% In Past Two Years Despite Venture Collapse
For years I have highlighted a strategic metal called niobium. Recently Iamgold sold Niobec, one of the largest niobium mines in North America for $500 million cash and an additional $30 million once it comes into production. This could be a huge boost for one of our long term featured companies up over 536% the past two years while the TSX Venture has lost close to half its value.
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Gold Breaking Five Month Downtrend: Monitor For Powerful January Effect in Junior Miners
In a recent article I wrote, "Gold and silver could gap higher by the end of 2014 and the top notch juniors could skyrocket." I expected a breakout at $1205. It appears gold may be breaking that downtrend today.For a couple of years metals were knocked out of favor and now oil is on its knees with a major three month deflationary selloff that came out of nowhere. This black swan may be due to increasing tensions between the West and East.
Japan and Europe are turning on the printing presses to prevent deflation causing investors to flock to US dollars and the S&P500. Don't be so quick to chase them into the overbought markets.
The Fed needs to see more inflation and a cheaper dollar before raising rates. Once investors wake up and realize The Fed can't tighten in this environment, the dollar parabolic rise will pop. Once the dollar rally fizzles out investors should once again return to the beaten down junior gold and silver sector which is testing 2008 Credit Crisis All Time Lows.
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