It has long been a guiding principle of Gold Stock Trades that requires constant reiteration. “To know how to wait is the great secret of success.” At one time in the history of the United States there were great Americans who had little education, but they were endowed with a native intelligence. Will Rogers was one of them. One side of his family was pure Cherokee, the other side was plain hard scrabble Cowboy. When asked from where he got his material, he would look you in the eye and say, “Shucks, I just read the newspapers.” Speaking about investing he would say, “Invest in inflation its the only thing that’s going up.” These words were written in a time very similar to that of today. Political dishonesty, crony capitalism and downright immorality were features of the everyday landscape of his time.
Taking a leaf from Roger’s modus operandi we come across two significant developments involving nuclear energy. Russia and The United States have reached an agreement of safe, compact, economically viable development of the nuclear (NLR) industry globally. Thus two former adversaries are joining in the peaceful growth and development of nuclear power. This serves to vindicate the watchful, waiting policy of Gold Stock Trades in refusing to be panicked by the scare stories of the media. Our ongoing faith in nuclear energy’s future continues to be upheld by history.
Part of the Russo-American entente is the assistance that they will be giving in the building of reactors in such countries including Vietnam, Bangladesh, Turkey among others. These are tough economic times. Emerging nations can benefit immensely from such an economical, clean carbon source of energy. Note that the media hysteria leveled at nuclear energy is virtually absent in the developing world. After all its difficult to sell refrigerators unless they are wrapped in the shrill repetition of doomsday scenarios.
Don’t be so quick to nuke nuclear (URA). If you want power for growing major industrial nations, nuclear is the only viable option. The media was wrong in circulating horror stories of nuclear’s demise.
Germany (EWG) has been reduced to being a client nation ironically receiving nuclear energy from France and Russia. Look at the German economy whose economy has been affected adversely from closing down reactors. Poor Merkel has lost six consecutive regional elections to the Green Party. She is running scared, not smart. In doing so she is depriving the Eurozone with the assistance that a once productive, nuclear Germany was providing to the rest of the continent.
On the other hand, Japan (EWJ) has elected a new Prime Minister who states that Japan can’t survive as a major industrial nation without nuclear power. He is saying like it is and is not swayed by the strident voices of the environmentalists. Angela might well note this instead of caving in to an anti-capitalist opposition bent on reducing Germany to impotence.
What about those voices who claim that Germany will now become a demonstration model to the world extolling the benefits of solar (TAN), wind, coal (KOL) and gas(UNG) in lieu of nuclear energy? Noda states that the costs of the switch over would be ruinous to Japan. Merkel seems oblivious as to the source of capital for such huge projects. She would be well advised to have lunch with Noda of Japan, Wen of China and replicate the all important agreement entered into by the United States and Russia to furnish safe, economical, clean and compact nuclear power to the world.
Despite the underlying fundamentals, some of the prices of uranium mining equities are astonishingly cheap. For commodity investors looking for value there is no sector that has been so pummeled into oversold and ridiculously undervalued situations. Our focus is on U.S. near term producers and believe the bargain basement values now presented comes rarely maybe once in a generation. This is partial vindication of what Gold Stock Trades has been printing for the past months. Cameco, the largest publicly owned uranium company, warns that there will be a shortfall in the availability of uranium as the world increasingly reveals the supply shortage for nuclear ore. Companies have been frustrated raising capital for new projects. Increasingly, this has limited potential supply. Add to this the ending of the Russian HEU Agreement in 2013, which will further limit uranium supplies to the United States, which happens to be the largest consumer of uranium for its nuclear reactors.
Remember that Cameco (CCJ) has just backed away from the Hathor deal after Rio Tinto (RIO) trumped their bid. Hathor has made fantastic gains since the takeover battle began. We expect other near term uranium producers to make similar mover. Cameco has stated publicly that this will not deter them in their ongoing quest for producing nuclear ore right here in the United States. Stay tuned as I will be publishing an update on uranium miners which appear to be making key reversals in 2012.
Listen To My Recent Interview With The Critical Metals Report at the San Francisco Hard Assets Conference in late November 2011.
“Is It Too Late To Buy Rare Earths? What catalysts can reverse the recent downtrend?”
Readers continue to express an abiding interest in silver, also known as the “poor man’s gold.” Prominent among the questions they raise: Quo vadis silver?
Recently the noble white metal experienced a rapid run-up to the halcyon heights of $50, only to retreat precipitously to the low $30s. This on-again, off-again action was due to a technical response to silver’s inherent volatility as both an industrial and a safe haven metal.
In order to quell such ebullient action, the Comex lowered the boom by a series of increasing margin requirements similar to what is occurring now in gold futures. I’ve written that such moves were in the cards with silver in late April, and gold more recently. Too much hot, speculative money was entering this market in late April (and early August in gold). Moreover, the big banks and hedge funds grew uncomfortable with their growing short interest positions. The actions of the Comex arrived just in time to save the day for the big fellows.
Furthermore, the $50 area represents formidable overhead resistance dating back to January 1980 when the Hunt Brothers drove prices from $11 to $50 an ounce. It did not come as a surprise when we saw the possibility that this overhead resistance would be subject to a Newtonian “equal and opposite reaction” to the mean that had been established in the low $30 area.
Where do we go from here?
Short and Medium Term: Recently silver has broken its 10-week base, and in the short term may have gotten ahead of itself on the breakout, as the 50-day moving average flattens and commences an upward slope.
Look for a rendezvous with the 20- or 50-day moving average or its short-term uptrend for a secondary buy point.
Long Term: My firm believes that silver will recapture its $50 heights sooner rather than later. The establishment of a base in the low $30 area has been a healthy and a necessary one for the technical resumption of the upward, long-term trend.
In confirmation, silver has made a triple top breakout on the point and figure chart. This formation is one of the strongest technical indicators that auger a pending upward rise.
Readers have asked whether silver is rising too fast in comparison to gold. My response is that we have only to look at the gold-silver equation. What had been historically a dominating ratio of gold to silver is readjusting to reduce the preponderance of gold in this formula. It might appear that silver is rising too fast, however it is playing catch-up to what has been a narrowing of the gold-to-silver proportion. My firm believes that, since the historic breakout in silver in 2010, the gold-to-silver metric would significantly decrease.
Silver operates from a dual base, acting as a safe haven for the rising middle class as well as its vital use in industry. Demand is soaring, while supply from existing mines is diminishing. This supports the bullish thesis. Whether the US dollar can maintain its safe haven status is questionable. Add to this the tenuous position of the Eurozone and the future of the euro. The supply of silver is extremely tight. There are few pure silver plays as it is mostly produced as a byproduct. For these reasons demand exceeds existing supply. Investors unable to do specific stock research should take a look at the Global X Silver Miners ETF (SIL).
Is silver the new gold? Is it going to be more of a safe haven as margin requirement increases hit gold? Interestingly, the biblical terms for money and silver are synonymous. My firm believes that the appellation “poor man’s gold” is not derogatory. Instead, it refers to universality and feasibility as a medium of easy exchange in the banking and public sectors.
When Dr. Paul asked Dr. Bernanke, “Is gold money?,” the answer might have been, “Yes, but silver is more so.” By federal law, silver is money, exchangeable more easily than gold for goods and services. Silver represents a rising area of importance in our everyday lives. It is ever present and growing in the age of the plagues of uncertainty, instability, turbulence, revolutions and fiat money. We expect silver to hit new highs, along with the miners, in 2011. Stay tuned to my daily bulletin for specific stock research and market timing.
My firm is witnessing the resumption of the long term uptrend in gold and silver bullion, as well as precious metal mining stocks. Along the way there have been many negative voices suggesting a move into the US dollar and long term treasuries. We see no underlying fundamental reasons for this and find that the safe havens of yesteryear are falling by the wayside. I’ve written that investors are preparing for further accommodative moves by the Federal Reserve Board.
I have firmly rejected these Cassandras. Instead my firm has advised patience and fortitude in precious metals. Truth be told, any retreats are regarded as a healthy event in the long range upward trend.
Economic Doubts
There is a lack of confidence among many citizens regarding the policies of our economic savants, as is so often the case in the lives of individuals, and in the fortunes of nations. Psychology certainly has a role to play in the marketplace. The apprehensions of the general public is dour indeed. Pessimism and doubts are increasing. It is said that 30 million people are looking for full-time employment.
The average person may be sensing that our guiding elites are impotent in their attempts to invigorate a weak economy. The on again-off again comments by Bernanke to the effect that QE3 is once again on the table has swept the land with the increasingly uncomfortable feeling that our professors and our politicians may not really know what they are doing. These sentiments are reflected in a number of current polls.
Yesterday, the general markets responded to Bernanke’s announcement to turn the printing presses on by keeping interest rates low until 2013. He also indicated that QE3, in whatever guises necessary, will be employed on any equity market weakness. We notice that the general market faded after a strong start. Volume fell and the indexes finished in the lower part of their range. This may have indicated profit taking.
The US dollar is breaking down as Bernanke announces the possibility in some form of renewed quantitative easing. At the same time credit agencies are warning that it may reduce the credit rating of the United States even further. The Euro is breaking down as well, leaving precious metals firmly standing in the center of the ring.
The Safest Haven
The market should not be confounded by the precious metals, which triggered a buy signal as they resumed their upward trend. Gold is leading the way, as everyone and their brother tries to buy some. However, we must not forget the miners, which are extremely undervalued as gold tests $1800. Once again the miners should capture the heights of various industry groups once the panic selling and deleveraging ends.
Where oh where are the safe havens of yesteryear? To use a boxing metaphor, the old champions of the US dollar and the Euro are growing “weak in the pins”. There was a time when dollars and euros were viewed as safe havens. Now they are losing their luster. Precious metals dominate the investment arena as an increasingly safe haven — the currency of choice.
The elections in Peru of avowed radical socialist Humala is a development of great significance for precious metals and mining investors. It’s not an event that has gone unnoticed by experienced speculators. Mining investors worldwide are eyeing July 28th, when the new regime takes control. So far in 2011 investors have sold off mining assets in Peru and are buying the underlying metals.
What we are witnessing is no less than the ongoing sophistication of the third world. Peru is only the latest development in this continuum. “Nationalistas” – Chavez in Venezuela, Morales in Bolivia, and Lula’s successor and protégée, Dilma Rousseff in Brazil — are raising the ante around the negotiating tables. One cannot help but wonder who is next? Mining investors are increasingly aware of civil unrest and geopolitical uncertainty. Recently they have been in favor of holding the underlying metal, causing a major divergence. There may be a reversion to the mean where high quality projects in mining friendly jurisdictions receive a premium. We must not forget that Peru was recently regarded as a mining haven and a model for foreign investment with such mining giants as Southern Copper (SCCO) and Buenaventura (BVN). Unfortunately 2011 has not been kind to investors in Peruvian equities, as Humala is an unknown and his election victory has significantly weakened assets in the country.
Mining stocks are beginning to emerge from a severe selloff starting in April. No doubt technical damage was inflicted. The recent correction was the most severe downturn in the past two years and had all of the earmarks of a classic panic as it momentarily broke 2011 lows.
We are in the greatest gold bull market since the 1970’s. The metal is up almost 500% over the last ten years. We went through an uncomfortable and painful short term correction in what has always been a volatile arena, add to this the summer doldrums, global unrest, economic uncertainty from the withdrawal from QE2, and the possible advent of QE3.
All of these imponderables add up to confuse and discourage investors. The markets have always done this in an attempt to create the transfer of wealth from weak hands to strong. This is the very essence of market place dynamics.
Mining stocks in mining friendly jurisdictions are regaining their technical strength. There is a divergence between the price of mining stock equities and its underlying assets in all sectors that my firm follows: gold, silver, rare earths, and uranium. However, for every action there is an equal and opposite reaction. The bounce could well be as frenetic on the rise as it has been panic ridden on the decline.
Start getting excited for the second half of 2011.
Click here to receive my premium daily bulletins for free.
We have witnessed an important watershed in world history with the unwinding of QE2. Every citizen, no matter where, has a ready camera eye on the world, carried in his smart phone case. Even more so does the internet provide the anvil for major nations to forge economic strategies. “Swords are being hammered into cybershares.”
We think of wars being fought with soldiers on battlefields, now Cyberspace is the new field of combat. As we have seen with the uprisings in North Africa and the Middle East, the use of the internet is becoming a vital instrument in fighting the wars of the future. Cyber-spying to formulate the economic policies of nation states are an increasingly critical factor. So it has never been thus that even friendly nations may spy on one another in order to formulate their investment timing.
An interesting development that underlies the growing importance of the internet in our daily lives is occurring under our very noses. Recently, an unnamed, nation state cracked into the confidential, super secret network of the International Monetary Fund (IMF). The IMF is an integral component of the global financial system.
It is important to comprehend the significance of this developing story. Indebted nations are strategizing methods, in which they can pay off ever mounting debts with cheaper currency.
China, who is sitting on a hoard of devaluing dollars and bailing out a debt burdened Europe, must exchange them for real assets in the form of precious metals and natural resources in the ground. History presents us with watershed events which are difficult to perceive while we are in the midst of them. This has been no surprise to readers of Gold Stock Trades.
In a series of articles entitled the “Chinamese Twins”, I have identified the attempts on the part of China and America to achieve a kind of symbiosis. It is a pro-quid-pro where deals are being constantly negotiated between the two superpowers.
The recent arrangements consisted of the U.S. paying off rising debts with cheap dollars (UUP), while China increased the value of the Yuan (CYB) in order to combat inflation. At the same time, the higher Yuan might purchase real mineral assets. We are now seeing the outcome of a much weaker dollar, higher commodity prices, and less inflation in China.
This year the Chinese Investment Corporation, who has been given a duty to look for potential North American resource assets by the Government of China, opened its first international branch in Toronto, the North American epicenter of resource companies. It is within conjecture that China may step up its hunt for resources in the second half of 2011.
Egypt has upcoming elections where the Muslim Brotherhood looks to be taking a major role, Democracy-Islamist style. Then we have the imminent Iranian Nuclear developments probably in 3 weeks. Did we forget about the PIIGS and the U.S. debt problems?
There is a whole flotilla of Black Swans straight ahead that could lead investors to the safe havens of precious metals and strategic metals resources.
Overall, there have been “summer doldrums” for mining stocks (GDX), gold (GLD) and silver (SLV) unless some exogenous event swoops down upon us. Although things may taste flat to bitter at this time, the aforementioned additions to the soup can serve to bestir the pot. Important reversals are being monitored as QE2 expires.
The markets will do what they always do: confuse, misdirect and obfuscate. It’s important for investors to stay on target and not be swayed by skewed media reports and questionable economic data, which often serve to mislead us as we make our way through the investment jungle.
The long range arc of gold, silver and mining stocks moves on a maze-like path, however it should be noted that the path ascends upward over time. As precious metal investors, we must view temporary corrections with an eagle’s eye, making sure to survey the economic landscape. In doing this, I see a chaotic game-plan unfolding below the headlines.
At times like this, we as investors must avoid the turbulent winds that only serve to divert our course. Precious metals will remain the true compass to guide us on the path toward investment profits.
Our leaders, however, are charting a different course. President Obama’s reelection campaign is already on the road. The current administration seems to be increasingly concentrating on its own interests. This was highlighted by Obama’s move to release 30 million barrels of emergency reserve oil (OIL). This oil is supposed to be used for emergencies, not votes. Why did it come right as QE2 ended? Is this a stimulus in disguise?
We’re told by the politicians that unless the national debt ceiling is raised quickly and unconditionally, the nation will be adversely affected. Standard & Poor’s threatened that if the US government fails to raise its borrowing limits, they will give the lowest credit rating possible, forcing interest rates to soar and causing a deflationary nightmare. The US has until August 2 to increase its debt limit. Since 1960, it has been raised over 60 times. Spending, entitlements and deficits will increase, and the long-term upward trend in gold and silver should proceed.
My firm believes that this trend of raising debt limits will continue. It’s an election year, and politicians’ jobs are at stake. The last thing they want is default. A lower credit rating would cause borrowing costs to skyrocket, which would cripple the US in paying back its soaring debts. Don’t forget that the US is the world’s biggest spender. This is the third year that the deficit has exceeded a trillion dollars.
The opposition to such threats is supine and voiceless. The Republicans are accused of “brinksmanship” and plunging us into a fiscal abyss. Instead of viewing this as a major lever in obtaining important concessions from our leaders, only the “voice of the turtle” is heard through the land. Consequently, the US is heading toward a European-style centralized government, which the current administration hopes to effect if they are reelected.
As precious metal investors, we observe a different vista. We sense that the “Summer Goldrums” is creating a base right here in precious metals. It is a short-term pullback in a secular uptrend.
Mining stocks may be affording us with a pivotal turning point from which a profitable new rise may emerge. Miners have currently tested the key $52.50 level successfully, the 2011 low-on-low volume indicating a lack of buying rather than aggressive selling.
I am keeping an eye on what may be a good re-entry point for the commitment of new funds. My firm reiterates its conviction in the long-term upward trend of the mining stocks and precious metals. Gold maintains its strong uptrend, evident on long-term charts, and many who have been calling a finale will realize that this period is just an intermission.
Follow my daily service for free by clicking here.
Base metals soared today as car sales in China are increasing at a rapid pace. Taseko, New Gold and General Moly are companies with huge deposits that have not been developed. TGB and NGD are producing now so they will have cash flow.
Inflation is kicking in and the long term prospects of these companies are excellent. I would buy GMO on any further weakness. Molybdenum is used in making steel stronger and withstand greater heat and pressure.
UXG about to breakout of symmetrical triangle near 52 week high. Notice how the volume is confirming price. Again its giving us another opportunity to get into this position with an incredible land position in Nevada and great opportunity in Mexico. This company has the top management in the business where the owner puts his money where his mouth is. Rob Mcewen owns a good percentage of this company.
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.
Thompson Creek came out with a news item today which states that it will increase production of molybdenum due to the improved market conditions. This is what we saw here a few months ago in the charts of Thompson Creek and General Moly. We believe that this is an opportune time to get into commodities as prices have not fully reflected market conditions. We will be issuing recommendations shortly on a few more trades. Stay tuned.
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.
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.
Since the March low the Nasdaq rally has lacked volume and appeared to make a rising wedge. After a breakout to the downside on low volume the Nasdaq appeared to make a rectangle sideways pattern. This battle between buyers and sellers was resolved today to the upside. Today the Nasdaq broke out of resistance so buyers are in control where bad news is shrugged off and any good economic news sends stocks soaring. At the moment we need to stay long and continue looking for the best trading opportunities.
General Moly had a major follow through today closing near the high on huge volume. If you were following since last Wednesday you would have a nice profit. I believe this company could run to at least 4.25. It seems as though institutions are piling into this stock. China is importing molybdenum as their demand is increasing significantly and the markets worst case scenarios are in the rearview mirror.
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.
“Our nation’s system of retirement security is imperiled, headed for a serious train wreck. That wreck is not merely waiting to happen; we are running on a dangerous track that is leading directly to a serious crash that will disable major parts of our retirement system.”
– John Bogle, Feb. 24, 2009
Many people we come across tell me they are invested in the market with a financial adviser and they don’t even look at what they are invested in are how they are invested. They place their hard earned money in load mutual funds where they pay huge fees in ignorant bliss.
So many have lost their retirement or as Madoff has shown these so called advisors are emperors with no clothes. Buy and hold investors have been destroyed or in some cases duped.
In this blog we highlight specific companies that are breaking out using technical analysis. Technical analysis gives one of the tools to know which direction the market is going. We look at price and volume. We also look at key fundamentals of a company that has the ability to grow. Staying on the right side of the trend and managing risk is crucial to make good returns and have a retirement.
Finding small companies that are about to grow exponentially gives one the opportunity to make huge gains. Please follow along as we recommend low priced companies that are about to explode higher. I’m sure you won’t regret it. We do our research, we take chances, and we admit when a trade or stock has went against us and we preserve capital. Straight talk…no double talk from other so called financial experts.
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.
Since the March low the Nasdaq rally has lacked volume and appeared to make a rising wedge. After a breakout to the downside on low volume the Nasdaq appeared to make a rectangle sideways pattern. This battle between buyers and sellers was resolved today to the upside. Today the Nasdaq broke out of resistance so buyers are in control where bad news is shrugged off and any good economic news sends stocks soaring. At the moment we need to stay long and continue looking for the best trading opportunities.
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