Check out Jeb’s recent interviews with CBS Marketwatch, Barron’s, Thestreet.com, stocknewsnow.com and The Financial Survival Network. Please click on the links to read the full articles.
The recent selloff in gold prices has come despite a bullish outlook for the metal.
“The ‘cash is king’ crowd is at the heights of [its] popularity,” said Jeb Handwerger, editor of market analysis provider GoldStockTrades.com. Investors have been selling precious metals, hoarding cash and Treasurys instead. “That will change.”
“Already, the European Central Bank is literally seducing troubled financial institutions, dangling newly printed money before their waiting eyes,” he said. “Essentially, the ECB has inflated their books by 20% and this may only be the beginning as the moribund European economy will probably require further oxygen.”
The ECB isn’t the only one likely “cranking up liquidity” for 2012, the U.S. Federal Reserve is too, Mladjenovic said, predicting that Europe will be doing more bailing out, and a third round of quantitative easing in the U.S. is gearing up for an election year.
Jeb Handwerger is the Editor of GoldStockTrades.com, where his Newsletter Subscribers can read about his “up to minute” technical analysis of the markets, and he is also a Rare Earth Element Think Tank Member. Jeb stopped by SNNLive at the Hard Assets Conference 2011 in San Francisco to discussRare Earth Element sector. In this Rare Earth Element Wall Street View, Jeb wants, “investors to realize, most technology applications and smart phones, hybrid engines, require rare elements“, however, “most of the supply is coming from China”, as he states in this interview.
Mr. Handwerger claims that, “the biggest growth sector in rare earths right now is the permanent magnetwhich is used in wind turbines, which is used in Hybrid engines. Those permanent magnets require specific rare earths, specifically neodymium and dysprosium. These are the two elements that are really really in demand that are in a shortfall. Investors should look for companies that have neodymium, dysprosium and the heavy rare earths“.
Jeb goes on to discuss how he would like the United States to develop its own domestic supply of critical rare earths because, as he states, “By 2015, the Chinese have stated that they will no longer be exporting heavy rare earths.” Jeb concludes by saying, “right now, through my research, there is only one 43-101 compliantheavy rare earth deposit on US soil, that’s in Alaska, and that’s a company called Ucore Rare Metals“. Ucore Rare Metals was featured on the cover in the Quarter 2, 2010 edition of the Micro Cap Review.
“While GLD remains below its 200-day moving average, SLV is holding above its late-September lows denoting “critical” near-term support levels, Gold Stock Trades’ Jeb Handwerger told clientson Wednesday.
He also pointed out that the Market Vectors Gold Miners ETF (GDX), which finished Wednesday down 0.1% at $52.96 a share, continues to remain above its 2011 lows around $52 a share.”
“Jeb Handwerger, editor of GoldStockTrades.com, recommends International Tower Hill(THM) in Alaska as a good way to play this take-out theme. International Tower Hill has what big miners want — 100% ownership of the 20th-largest gold deposit in the world, Livengood. It ranks in the top 2% of gold discoveries over the past 20 years. The mine could produce an average of 562,000 ounces of gold over a 23 year life, delivering 664,000 ounces of gold during the first five years.
The company has 7 more years of feasibility, permitting and construction ahead of it before it will start producing gold. Although it has $116 million in cash and no debt, its capital costs will still reach $1.6 billion — all preproduction cost. Costs might be helped, however, by a new development. Tower Hill recently bought the land rights to an area near Livengood originally used for placer gold mining — gold that was originally at Livengood but has been moved over decades by rain and now lives in valleys at the base of the deposit. Tower Hill now owns that land.
Due to the concentration of gold, the grade is 3 to 4 times higher than the average grade at Livengood, according to the company. Tower Hill is working on a preliminary economic assessment which will provide cash costs and production capability, but the company now has the ability to become an overnight producer and use the cash to fund construction and production at Livengood. This might eliminate the need for Tower Hill to issue shares to raise cash and might make it even more appealing for a major searching for gold.”
Jeb Handwerger of www.GoldStockTrades.com joins us for a wide ranging interview covering Rare Earth Metals, Uranium and the intractable US Budget Deficit. Jeb has been following mining stocks for many years and is an authority on Rare Earths, Uranium and other mining sectors. He explains why it’s crunch time for the Western World to break China’s monopoly on these metals which are vital to modern life as we know it. Rare Earths go into just about every electronic item that we require in our daily lives, from cellphones, to computers, to windmills and automobilies.
His view of Uranium is quite compelling. Are you aware that there is a treaty between the US and Russia to dismantle Soviet Era nukes that provides much of the nuclear fuel consumed in the United States? This treaty expires in 2013 and may lead to almost immediate shortages of Unranium around the world. The Chinese are seeking supplies from any place they can find them.
Finally, we conclude with Jeb’s concern and ideas for limiting the Federal Budget Deficit. He believes that the problem can only be addressed by revitalizing America’s core manufacturing and mining sectors.
Subscribe to Jeb’s free 30 day trial of his members-only, premium up to the minute analysis on precious metals, uranium and rare earths by clicking here…
The market does whatever it can to confuse, misdirect and obfuscate the investor. It is entirely possible that a grand strategy underlies Bernanke’s game plan. With recent markets creating more skies of gray than any Russian play can guarantee, there are plenty of storm clouds hovering over head to throw the investor off his track. This is exactly when the markets may be forming a base for a surprising upward market move.
(Check out video from early October highlighting potential reversal in the S&P 500)
The Federal Reserve will accelerate its counter attack on deflation by continuing to introduce liquidity into the market place. It will be no surprise to observe him follow through his oft stated promises to use whatever monetary arrows he carries in his formidable quiver. Already QE3 is being discussed as unemployment levels stay dangerously high.
He is a Princeton PhD whose doctoral theses is based on mitigating deflationary depressions such as the one that occurred in the 1930’s. It was a period which resembles the traumas through which capitalism is now progressing.
Not withstanding the many negatives that confront global investors such as the Eurozone convulsions, rising U.S. unemployment and swollen bank overhangs—These may be the obfuscatory factors to throw panic into the psyches of speculators. Cash abounds in the treasuries of American corporations such as Apple, Google and other industrial coffers. If we are indeed facing a rally it may be comparable to a change of speed thrown by a pitcher to confuse the batter who was used to 98mph fastballs.
Gold Stock Trades focuses on sectors that may in the future be buffeted by deceptive curveballs. Using this metaphor the batter adjusts his swings to keep his eagle’s eye on the ball and a firm grip on the bat.
We reiterate the coming rally will be substantial especially in precious metals, uranium and rare earths. Watch silver.
Silver is just beginning to breakout of a consolidation and is moving above its 50 day moving average. Gold Stock Trades believes it held long term trend support.
Gold (GLD) is forming a bullish consolidation for eight weeks after hitting its early September high. Look at the rising trend and the pattern of higher lows and increasing momentum. This indicates a possible breakout forming.
At present the Fed has more moves at its disposal than existed in those dark days of The Great Depression. Monetization of debt will be continued as a “Bernakian Tactic”.
Do not be be hasty in throwing in the towel concerning our oversold and undervalued rare earth and uranium sectors. It may be exactly the wrong time to move into the U.S. Dollar and Long Term Treasuries, which is precisely what the herd is doing.
Recently the Swiss National Bank moved to put a floor on the Euro to prevent the safe haven Franc from continuing to appreciate. So far this action appears not to be working as well as expected. Cheap currencies will increasingly be the order of the day, not only in Europe, Brazil and Japan, but in the American monetary system. This may well have been a tactic designed to push up the U.S. dollar in advance of Bernanke’s QE3 pronouncements as investors panicked out of undervalued mining equities and moved into the grossly overbought greenback and long term treasury market.
What does all this mean for GST subscribers? Sooner or later attention will have to be paid to real wealth in the ground hard assets. The masses may leap from Yen to Franc to Greenback, eventually monies will be attracted to real mineral wealth in the form of gold, silver, rare earths and uranium.
The road upward particularly in the rare earths and nuclear sectors may try investors patience as they complete bases. Technically the longer the horizontal base, the more profitable the rise from that foundation.
A valuable characteristic of point and figure charting is the base count, which has invariably indicated the broader the width of the base, the more elevated the potential objective.
In addition, there is a large short interest position in many of the GST chosen rare earth and nuclear situations. The short sellers will in time be “hoist by their own petard”. They will be compelled to cover and the consequent run should be dramatic on the upside.
Consider the ever increasing growth of the cell phone industry worldwide. Smart phones are no longer luxury items in today’s world…at least not in the minds of teenagers who live on Itunes.
Rare earths are going to be in increasing demand by not only the new high tech devices but a host of other nascent industries such as hybrid autos and military applications. Rare earths and nuclear energy represent not only the waves of the future, but the essentials of the present.
The world is not coming to an end despite the sea of red that we are currently progressing through. The extreme pessimism as represented by current market developments and bearish, myopic analysis from banks presage a bottoming formation which is requisite for potential turning points.
Gold Stock Trades will be watching the events unfolding as Bernanke reaches into his quiver to produce arrows of stimulation in whatever guises necessary. Remember the worst thing were the better they got. Stay tuned to my free newsletter with up to the minute market analysis, interviews with leading executives in the mining industry and sector updates in precious metals, rare earths and uranium by clicking here.
Check out this recent interview with George Salamis, CEO of Edgewater Exploration, a new company that is rapidly developing assets in Spain and Ghana.
He who fights and runs away
May live to fight another day;
But he who is battle slain
Can never rise to fight again. – Oliver Goldsmith
Traders entered the new year exiting their commodity positions on fear of growing austerity measures and possible exit strategies out of Central Bank quantitative easing strategies. There has also been a huge move into risky equities from traditional safe havens, but that may end in the next few weeks.
When the conductor desires to lower the volume and tempo of the orchestra, he motions downward. After sometime it is followed by a loud and explosive crescendo. At this time I am navigating readers to be cautious and play defense in equities, gold, and mining stocks. This correction will take some wind out of the sails of latecomers to this precious metals rally who bought when gold and silver were way extended in October and November of 2010, and who are now having to suffer through a possibly quick but painful decline. However, this current shakeout will provide a slew of new mining recommendations and buy signals on gold and silver bullion. Corrections in secular bull markets shake out the weak hands, while the disciplined investors wait for oversold conditions and long-term support to add or enter long positions. Many high-quality mining stocks are creating sound bases and will provide highly probable signals where the odds are more favorable for a significant gain.
I have been counseling defense since October 2010 — when I sold my core bullion positions and moved into uranium, molybdenum, and recently rare earths — and have been making very large gains in the past three months. The gold bullion market has been range-bound and volatile. Our firm’s individual miners have acted much better, outperforming gold and the large-cap miners.
Now this consolidation in gold just made a fake breakout for the third time after finding support at the 50-day moving average. There is nothing as bearish as a fake breakout. It was quite important that this most recent attempt to break out from the 50-day should have been successful. That third reversal was quite bearish as institutions came back after the holiday break to sell their gold positions and bid up the US equity market. This signals that the short-term trend has been exhausted and that we could see a quick shakeout in gold and mining stocks. Gold appears to be forming a bearish head-and-shoulders pattern. Further weakness today should confirm this pattern and the selling should intensify.
Gold will again approach our long-term support areas indicated in the blue circles in the chart above, which is when I take a large and aggressive position in bullion and mining stocks. I prefer to buy at support and when fear is high. All markets are volatile with ebbs and flows between euphoria and gloom, including gold. This correction is very healthy for the long-term secular bull market in precious metals. I believe it still has many years to run, but there will be corrections and times to buy when fear is increased and where gold is at key support levels. That is why I have urged readers to lock in profits when stocks have reached targets as they will be able to enter at highly profitable times similar to the end of July 2010. This is a disciplined approach which removes getting caught in the euphoria and gloom of the market. This gold topping pattern needs to be monitored, and during times like this, the quote above from Oliver Goldsmith needs to be reviewed. In the market, one must learn which battles should be fought and when it is better to retreat.
The high volume distribution and failed breakouts into new highs is indicating institutional selling. I choose to fight another day.
Over the past three months, gold has been consolidating, working off overbought levels. I believe this next correction will set up precious metals investors with the next major buying opportunity in bullion like we saw in late July 2010.
There will be profits in miners and precious metals as we have seen in the past. Over the past few weeks it has been hard for me to find sound patterns, and I was reluctant to make new recommendations because of the overall gold bullion market. The recent bounce off the 50-day failure at new highs signals that now traders should wait for further weakness as this will provide the next ideal buying opportunity. The bearish head-and-shoulders pattern coupled with high-volume reversals should signal caution. Instead of getting caught in the hysteria, it is best to try to capitalize on it.
On a previous update I mentioned not to get too excited by buying the miners when they are overextended. Look for strength as the mining index will come back to support which was previous resistance at 37.50. Notice the upward sloping trendline that will act as support as well. Coincidentally it appears as the 20 day on the weekly chart is very close to this trendline.
NGD came to its 20 day moving average and is closing at the high of the day reversing from being down most of the day shaking out weak hands. Buy at 2.65.
Notice the thick blue line and how FXI (25 largest and most liquid China Stocks) crosses that trendline on the point and figure chart. This shows us the strength of the most leading emerging market and how this market had impacted this rally for the past three months since the March bottom.
It is clear that China is buying up natural resources and stimulating their economy. The real estate market and construction industries in China are heating up. They are building power plants, mines and roads.
There are a few signs that there might be a slight short term pullback the next few weeks from the non confirmation in relative strength and low volume. However, this is the time to get into companies that the Chinese need which have huge amounts of natural resources.
The secret is out China is on the search for precious metals and natural resources. These next couple of days will give second chances to get into companies that have those assets.
We know what the Chinese need and are able tom make huge gains in finding the companies that have the greatest leverage to these necessities.
We wanted to show a 2 year chart on GDX gold miner etf. There is major resistance at the $45 dollar area which needs to be broken. In order to do that I would not be surprised of a short term correction to the $39 area. This is where I would wait so that the GDX comes off its overbought status and prepare for the next leg up.
How hypocritical! Bernanke came out yesterday requesting Congress to curb budget deficits after increasing the money supply exponentially. Use this time period to look for additional opportunities to get into the best commodity opportunities. NGD, TGB, GMO and UXG are great low priced positions that will move higher in an inflationary environment.
A few days ago (please see my archived post from 5/31/09) we mentioned be careful of chasing the gold sector as it is quite overbought. We also mentioned to wait for a retracement to the 20 or 50 day moving average. This is what is happening a retracement to shake out weak holders. Our students and long term followers have been following Taseko for a few months. Today thestreet.com had a video on it. So the mainstream is now picking it up which concerns me as that means we will probably have a pullback.
Dollar is exremely oversold and will bounce. Mining stocks are overbought. Place trailing stop losses to lock in gains. Be careful not to take new positions if stock is overextended. Wait for a pullback to get into positions. We believe we will have second buypoints for our position as a shakeout of weak hands will take place now. We will inform when our stops are hit. We will not be giving out new positions until we find more opportune buying points.
We posted a morning stock pick at 2.49. The stock was up over 10% with volume three times normal. Breaking through 2.75 will be impressive and lead to huge gains. It seems institutions are looking at exploration companies. The major companies may need to aquire smaller juniors with interesting exploration activity as their profit margins are being squeezed. U.S. Gold has quite an impressive land position and drill results may lead to more institutions buying shares. Tomorrow they are having a conference in New York City. It will be interesting to see what news they will release soon.
U.S. Gold has one of the largest mineral land positions in Nevada and they have just shown quite impressive results in Mexico. They are owned by Rob Mcewen who built Goldcorp. Rob has success in building gold companies and rewarding his shareholders. Rob has decided to invest his own money in exploration as a way to leverage your investment in gold. UXG is an exploration company which means that if they make a discovery an investor may make huge gains. Their land position in Nevada is located right next to some of the biggest mines in America in one of the most friendliest mining states. The drill results in Mexico that they reported are great and may be a major discovery.
I would buy here as UXG broke out of a symmetrical triangle pattern on above average volume. They have a conference coming up on Wednesday and I would not be surprised if an announcement may be made that would break this stock through $2.75 to $7.
This appears to be an inverted head and shoulders pattern which means that a break to the upside is highly probable. Look for a breakout of the previous top with good volume.
Last week we wrote on the blog about New Gold and the opportunity the chart was presenting to us. We put a buy point at $2.50. On Friday it closed at $3.10 which was a 24% gain for our followers. This was a breakaway gap as it broke out of a base on more than three times normal volume. Breakaway gaps usually do not fill. As the mining sector is overbought there might be opportunities to buy NGD at a cheaper price if there is some overall weakness. Otherwise this is a classic breakaway gap which usually preceded major moves to the upside. So to all our students who got in when we posted are in a great postion.
The S&P 500 remains above the 20 and 50 day moving average. The S&P has moved sideways making a base after breaking out to the downside of a rising wedge pattern. This rally has been on low volume. So this rise has been on the back of other factors such as a seriously declining dollar, a bear market in treasuries and a major rally in the emerging markets.
If you remember when the stock market crashed last year everyone was running into treasuries and the dollar. Now the opposite is the case people are running out of treasuries and cash. The stock markets have rallied and companies with real commodity assets are soaring. It seems as though the opinion that a deflation will precede inflation has been confirmed.
The dollar was hit hard on Friday leading to a huge rally in gold mining stocks and basic materials. As you can see the rally is impressive, however it is extended. Investors need to be cautious in chasing after this sector.
Last week I showed the chart of TBT which is the short etf fund and I mentioned not to get to excited and wait for a pullback. That pullback has come and from the high volume sell off it seems as though the pull back could take longer as it is extremely overbought. I would wait until it approaches the 50 day moving average before taking new positions.
The rally in China is strong and hope has come back that the worst is over which has caused a major upturn in commodity industrial stocks. As you can see the I Shares Hong Kong is much more impressive than the US indices. Other emerging markets such as Brazil and India are also outperforming.
This is a great point to buy New Gold. They have just combined with Western Goldfields. They will produce enough gold to be able to fund their development project in British Columbia called New Afton. This project has close to a billion pounds of copper. When buying a gold company making sure you have the management to grow and finance a company is crucial. They have the top minds in the field behind this company. Buying here at 2.50 is a great point to get in.
The volume is good on Taseko above average today to qualify as a breakout. Let’s hope it closes at the high of the day as more investors pile in and recognize the breakout.
Genereal Moly has one of the largest undeveloped molybdenum mines in North America. Moly is necessary for high strength steel which is used in many industrial applications such as oil drilling and nuclear reactors. Demand is growing again as the economy is bottoming out in China and in other emerging markets. A breakout through $2 on volume will catapult this stock to $5. Arcelor mittal put a lot of money into this company and I wouldn’t be surprised if they got a takeover bid at this level from Thompson Creek Metals.
It is crucial to look for a follow through on yesterday’s huge volume rise. Today will give many investors another chance to get in before the next leg up.
Yesterday I gave a signal that Taseko would breakout of the symmetrical triangle formation. Today it did on huge volume. I believe this will be a quite profitable trade at this point.
Investors are nervous of the government sales of treasuries which is causing the late afternoon selloff. The oversupply of treasuries and Fed’s balance sheet is a concern we should all have. How long can the government be bailing out and spending like there is no tomorrow?
I want you to take a look at this chart of the dollar and the long term treasuries. They are both very bearish charts. The dollar has a head and shoulder reversal pattern. In December there was heavy institutional selling followed by a retest of the high on low volume. Each time it has tried to retest its 50 day moving average it fails. 200 day in danger of turning negative meaning that inflation is on its way. Both treasuries and dollar appear to be very bearish on the GDX which tracks mining stocks is giving a very bullish picture as we just had a breakout. I would wait for GDX to pull back to its 20 day moving average or the 38.50 are before buying.
Taseko is on the verge of a major breakout. Great project…there is a little opposition to the Prosperity mine but that is minimal to the economic benefits to the region. This is a great managed company. Notice it closed on higher volume then the previous day even though it was below average volume. Look for volume through 1.60.
The Dow was up and regained to stay above the 20 day moving average even though volume remains quite light. It does look that the market is rounding and price volume action is poor. Be careful. Look at GLD. Gold closed near the high of the day after opening up lower. Price volume action is good as it approaches all time highs. Look for GLD to pull back to 20 day before breaking out into new high territory.
We are broke…dollar has fallen significantly as well as long term treasuries. Look at the chart of the TLT versus GLD. I believe this trend will continue and now with a lower price of oil and labor select mining stocks will make nice returns.
New Gold is an intermediate gold producer with great projects. They just aquired Western Goldfields. They have the cash flow to grow and develop new projects such as the New Afton project in British Columbia. Their management is the best in the business. Some of the directors ran Newmont and Goldcorp. They know how to finance gold companies and have a history of success for their shareholders.
The copper chart above shows a potential breakout which could lead copper significantly higher. The dollar’s chart as well as the long term treasury chart is extremely bearish this is due to two major reasons the excessive debt the USA is getting itself into and the fear that it will not pay back its debts. Also the copper chart is showing that the global economy is improving which is also bearish for cash as institutions want to invest that cash. There is a huge amount of cash on the sidelines about to be put into key stocks that will protect against inflation. Taseko (TGB) already has a great copper mine that will only be more profitable as copper rises and they are at the ground floor of the major Prosperity project in British Columbia which is one of Canada’s leading undeveloped gold-copper mines. This is a great way to be leveraged to the price of gold and copper.
Symmetrical Triangle Formation…Look out for breakout on volume! MACD about to cross. Great Story with prosperity permitting coming out soon.
Cheaper oil and labor costs coupled with the massive money supply will give a chance to make huge gains on certain mining stocks. The secret is out China is buying gold and are nervous with the US paying back its debt. Select mining stocks will give investors the opportunity to make huge gains and protect themselves of the folly that is going on in Washington.
Rare Earth Element sector. In this Rare Earth Element Wall Street View, Jeb wants, “investors to realize, most technology applications and smart phones, hybrid engines, require rare elements“, however, “most of the supply is coming from China”, as he states in this interview.
Notice the thick blue line and how FXI (25 largest and most liquid China Stocks) crosses that trendline on the point and figure chart. This shows us the strength of the most leading emerging market and how this market had impacted this rally for the past three months since the March bottom.
We wanted to show a 2 year chart on GDX gold miner etf. There is major resistance at the $45 dollar area which needs to be broken. In order to do that I would not be surprised of a short term correction to the $39 area. This is where I would wait so that the GDX comes off its overbought status and prepare for the next leg up.
The S&P 500 remains above the 20 and 50 day moving average. The S&P has moved sideways making a base after breaking out to the downside of a rising wedge pattern. This rally has been on low volume. So this rise has been on the back of other factors such as a seriously declining dollar, a bear market in treasuries and a major rally in the emerging markets.
As you can see the rally is impressive, however it is extended. Investors need to be cautious in chasing after this sector.
Genereal Moly has one of the largest undeveloped molybdenum mines in North America. Moly is necessary for high strength steel which is used in many industrial applications such as oil drilling and nuclear reactors. Demand is growing again as the economy is bottoming out in China and in other emerging markets. A breakout through $2 on volume will catapult this stock to $5. Arcelor mittal put a lot of money into this company and I wouldn’t be surprised if they got a takeover bid at this level from Thompson Creek Metals.
Yesterday I gave a signal that Taseko would breakout of the symmetrical triangle formation. Today it did on huge volume. I believe this will be a quite profitable trade at this point.
I want you to take a look at this chart of the dollar and the long term treasuries. They are both very bearish charts. The dollar has a head and shoulder reversal pattern. In December there was heavy institutional selling followed by a retest of the high on low volume. Each time it has tried to retest its 50 day moving average it fails. 200 day in danger of turning negative meaning that inflation is on its way. Both treasuries and dollar appear to be very bearish on the GDX which tracks mining stocks is giving a very bullish picture as we just had a breakout. I would wait for GDX to pull back to its 20 day moving average or the 38.50 are before buying.
Taseko is on the verge of a major breakout. Great project…there is a little opposition to the Prosperity mine but that is minimal to the economic benefits to the region. This is a great managed company. Notice it closed on higher volume then the previous day even though it was below average volume. Look for volume through 1.60.
The Dow was up and regained to stay above the 20 day moving average even though volume remains quite light. It does look that the market is rounding and price volume action is poor. Be careful. 
Look at GLD. Gold closed near the high of the day after opening up lower. Price volume action is good as it approaches all time highs. Look for GLD to pull back to 20 day before breaking out into new high territory.
Symmetrical Triangle