Saturday, June 11, 2011

Saturday

Just turned on my computer for the first time today - I just bought a Motorola Atrix, and am trying to assemble an RSS lineup.

Here's an article about Nouriel Roubini's prediction of a China crash by 2013. By the way, I said over a year ago that the next crash would come from China.

Also, Al Korelin and Mickey Fulp will begin a new podcast series introducing people to the basics of geology. (Um... economic geology, or mining science, probably - geology itself is very boring.) That's nice, because I'm learning geology right now, but unfortunately from geologists and not from mining analysts. Let's hope Fulpie can keep up to date on this podcast better than he has with his own free newsletter which he hasn't touched in months.

Thursday, June 9, 2011

Here's Kaiser & Coffin with their opinion on the junior miner market.

While the commodities supercycle is far from over, investment gurus at the Cambridge House World Resource Investment Conference in Vancouver, in early June, forecast a soft summer for markets. That means plenty of buying opportunities on the way - followed by a good run and strengthening market by the end of the year.

But John Kaiser of Kaiser Research went a step further, pointing to the possibility of a flash crash in the next three months, which would be followed by an "icicle" shaped rebound - a much more profound event than the markets' typical summer softness.

(The summer doldrums this year arrived a little early, with a correction evident in the junior market for the past couple of months.)

Kaiser predicted the paper value of mining juniors could decline as much as a 50%, explaining that the "smart money" that missed this runup (which peaked in December/January) will be leaning on bids to get on board. Some companies' shares could sink to pennies, becoming candidates for reorganization, Kaiser continued.

Despite that risk, China's hunger for commodities has not yet been sated. And although Kaiser and Eric Coffin, of HRA Advisory, posited that metals prices have probably peaked, neither believe a plunge in prices is likely, thanks to continued strong demand from China.

Key to China's ongoing infrastructure buildout is copper. Jack Lifton of Technology Metals Research noted that the red metal is such a key component of modern life and technology (a typical car has about 20 kg of copper, as just one example) that supply won't be able to keep up with demand.

"I will make a bet we're at the bottom of the copper market," he argued. While Lifton thought JP Morgan's forecast of US$10-per-lb. copper in 24 months is too high, he said that global copper production is growing at a rate of 4.5% a year max - not enough to keep up with Chinese GDP growth of around 10% a year.

Lifton didn't have much to say about gold and silver, but he did mention that platinum group metal rhodium, which is mostly consumed in the U.S. in catalytic converters in cars, is a rare metal to keep an eye on. The price of rhodium has already increased to about US$2,200 an oz. from US$1,200 an oz. three years ago, and China has just mandated the use of catalytic converters in cars - spelling a lot more demand for rhodium.

Frank Holmes of U.S. Global Investors forecast gold prices would move higher after seeing a bottom sometime between now and August (in line with gold's typical seasonal trend), Kitco senior analyst Jon Nadler continued to wind up the gold bugs by suggesting that the fundamentals will once again assert themselves in the gold and silver markets. CMP Group, for example forecasts the gold price will be reverting to around US$920 an oz. or so by 2013. Silver is forecast at about US$17 per oz. for 2013-14.

Nadler pointed out that many of the factors that have supported gold's spectacular rise over the past 10 years (and silver's more recent and even more dramatic price spike) can work in reverse. The dehedging among gold producers that has taken place over the past decade, for example, may be starting to reverse. And the ETF demand that has fuelled the price rise is fickle (in January, the ETF market saw the largest withdrawal on a single day ever). Nadler noted that gold and silver ETFs seem to be saturated, with volumes for both way down.

He referred to silver, which is famously volatile, as "investment nitroglycerin" - the most risky asset you can buy.

Lastly, if the price of gold is measured using a basket of currencies, rather than the greenback, its current price is only around $1,000 an oz., Nadler added. Supply of both precious metals increased last year and is forecast to rise again this year.

FVI chart of doom



Head & shoulders on FVI. Target somewhere around $2.00.

I haven't heard enough from Otto recently so I wanted to grab his attention. :-)

Seriously though. It's silly stupid dumb fruity nutty chart targets like these that make me disbelieve the H&S in the $HUI. Cos if $HUI's going to 400, FVI would go to $2 on its own H&S.

Buttonwood as contrary indicator?

Look, I like the Buttonwood column at the Economist, not least because it gives me a non-American perspective. But this recent post is the type of sloppy doomsaying that might just indicate a market bottom.

Basically, the suggestion is that the Baltic Dry looks bad right now, despite commodities being up. The hidden suggestion is that the commodity boom is pure speculation because international shipping isn't also booming. Thus, look out below, S&P 800, stock up on guns, etc.

The Baltic Dry is down because a whole fleet of new ships was ordered back in 2005-2007. They're only now being delivered, and so the fleet expansion is depressing shipping prices. That's all. Commodity consumption, worldwide, is still great, though I'd be happy if you send me some data to disprove that.

People seem to be reaching for reasons for the market to collapse. It's funny that despite electing a baby-eating Communist, and despite the majority of their economy being based on metals that are supposedly about to fall in value, Peru's BVL isn't utterly collapsing. Why should the BVL not be completely destroyed if there really is no inflation, no fundamental commodity demand, blah blah blah?

It's the fecking summer doldrums in the markets! Deal with it! Today is never the apocalypse.

update

I think I might have gobbled up all the AUU. It's funny though - now TMX says it was Jitney who was dumping at 0.165. I think my buys musta gone through another exchange, or maybe were internal to the brokerage, because they're not showing up on TMX. Might be dumb to have boosted my AUU position by 50%, but really this is a day of real puking into the market - check BHV's morning action for a stock getting slaughtered by a lot of dumping into the bids.

HUI has now painted a full reverse with today's candle. And action in silver and the Q suggestes today's going a little back towards risk-on. I still don't trust it, but I'm feelig a tiny bit better that we can see $HUI break through the EMA(some small number less than 10) and consider this an end to the mimer collapse.

Oil is also up. And if the market collapse was truly over, I'd suggest grabbing some more GPM at today's discount price.

market comment

Unsure if this is just a 1-day rebound or if it means anything. At the very least, $HUI would have to close above the EMA(5) to look healthy, judging by the past, and it hasn't done that yet.

There are two iceberg orders on Aura silver right now, holding the price down. TD's dumping all they can at 0.165, and BMO Nesbitt at 0.17. Looks like a good flip. I bought a fat load. AUU can't stay below 20 cents, can it? I'm assuming I can sell half back at 0.22 to bring my cost base down when the PP closes and we start getting results from Baker Lake. Seems pretty ironclad.

EPU's crawled above $41. So I guess the low was on Monday.

I dumped my U this morning. Realized that even though it was a deadly deal at $6, U can go a lot lower (the U3O8 chart looks horrible). U's chart also looks horrible. The only chart I would buy right now is BTO. That one looks beautiful. Well, and RIO of course. GUY is borderline.

Wednesday, June 8, 2011

Oh my

Just came back from an all-day meeting and saw who just threw up all over the market.

You can now buy Guyana Goldfields at $8 even, if you have the cash. Put a tight 1-2% stop on it if you want - but the risk/reward is high, if you don't look at the H&S in the $HUI.

I personally bought the Uranium fund for $6.13. Again, look at the chart - when has it been this low? Fukushima? No. It also seems to jump back fast. I'll be happy to dump it tomorrow for a few percent win. Look at the May 31/June 1 price moves for what I want to see. I'll dump if it loses the round number.

BTO's also come back down, that's nice... I can still buy back in for less than I sold, soon, hopefully. I'll be happt to do that.

SWD is coming back down to the $1.40s - still fairly well supported for a little nobody stock, but I guess this come-down means we don't get Titiribi results for another few weeks. Otherwise I don't see why it'd be getting dumped right now.

US Silver looks like chickenshit. I'm half convinced I should dump it.

Tuesday, June 7, 2011

VMS deposits and great butter

Looking for some articles on sodium depletion as pathfinders for VMS deposits.

Found a nice article from Geoscience Canada. Article's author?

John Lydon.

You may know him from his Country Life butter commercial.



And here's another article, this one from JM Franklin of Aura Silver. I kinda hoped he'd have published some articles, considering he's got a Ph.D. after his name.

In fact, here's a whole PDF-directory with loads and loads of articles from that same source. I guess now I have far too much reading for my own good.

making something up here

Here's a picture for you:



So Bernanke speaks and the S&P tanks back down. IEF is the 10-year-bond ETF: it goes up.

So why's the dollar not going up too?

I'm only a market newbie but I'm still over-reaching here when I suggest that maybe it was just stupid Americans who dumped stocks for the bond.


Here's the same 3, charted from the May top. US dollar was going up til May 21st as the S&P 500 dropped, and if you divide out the USD from S&P it was actually even. But now both are falling, pretty strongly too. Meanwhile people are moving into bonds. Okay, so that looks scary.


And here's some perspective for you, from all the way back at Satan's Bottom.

market comment

A few free minutes at work.

$HUI still looks weak, H&S pattern is still printing. Silver was also looking like it was going to paint an outside down day - we'll have to see if that was just a fake-out, but if we get that outside down candle I wouldn't want to be long silver or the miners thereof til it settles at a new level. Broader market rebounding, but only weakly, prolly just a short-term reaction.

RIO is showing no more panic selling, so perhaps we'll see those rabid accumulators of last week pile back in and spike it again? I doubt it, but it could happen. Volume is lower today, only about 600K or so traded as of noon.

PGM has a brutal L2 right now. Wonder how low it can go? On the other hand, SWD has a very strong L2, someone wants to accumulate a lot so it seems. US Silver is stinking right now - wonder if they actually will show any positive results in their Q1 financials? Perhaps someone knows something that we don't? Why would USA be at $0.49 right now given the certitude of a good Q1?

GOZ is looking strong. I was waiting to see if break through 0.80 before thinking about buying. But today's advance was on very weak volume so it's probably meaningless. BTO has taken off - oh well, too bad for me, I missed out. RIO's giving me about the same positive kick as the BTO that I sold to buy it, anyway. Good for you who own both.

If $HUI shows continued weakness, there'll be great opportunities to buy KAM at $3, GUY at $8 (almost there already), and maybe even PVG again at $8.50 or so. Those are only the ones I'm paying attention to right now; there may be more.

Monday, June 6, 2011

HUI's lost the program

$HUI has lost the EMA(10). Last few times it did that, it dropped 40 points or more before bottoming. So, last week's speculation has been proven wrong, and we will indeed get a full H&S print as HUI plummets to 500.

Maybe.

God and silver look okay, but not great.

I don't care, I got half my money in RIO now. :-)

market comment

Well, that kinda sucks. I only managed to get 7000 shares of RIO on special. There's very strong buying support, and as of now it's back up around $2.10. I'd hoped it'd tank when the Lima exchange reopened, but it didn't.

So, I bought back my half position in FVI (for a bit cheaper). BTO's sorta run away from me, but I think with the $HUI H&S actually drawing out now, I should be able to get back in if I feel like it. I don't care anyway - I'm making more profit with my money in RIO than I would with my money in BTO.

I have absolutely no desire right now to sell my RIO. Really, I think this was it. Far too much buying strength to kill that puppy.

Wondering if RIO will tank tomorrow morning as well? I really think the selling pressure isn't enough to kill it, but maybe the buyers are happy to let it tank during Retail Hour and only start buying at 10:00.

Still got some cash. Dunno what GT's smoking to get him to like ITH - that chart has a brutal triple top. I've crossed that ugly beast off my list. No interest. Golden Predator looks good though - maybe if $HUI can look a bit worse, I can grab some for $1? They do gots gold, as well as imminent drill results aplenty, don't they? (I'm ignorant about them - I kinda thought they did.)

Macusani Yellowcake

YEL is presently at 22 cents. Market cap something like $18M. PEA on Colibri 2 and 3, assuming $65 Uranium, NPV(13%), was $64M.

According to Reuters, they just raised $14M in cash.

So buying YEL, you get $14M cash plus some borderline uranium properties.

What the heck am I missing here?

Jim Rogers' investment strategy

I think this is a quote from Jim Rogers about his investment strategy:

"I wait until there's a pile of money just sitting there in the corner. Then I walk over and pick it up."

Whoever it was, he's brilliant, and I should try to be more like him instead of the impulsive all-too-human that I usually am.

Today at the open RIO dumped as far as $1.76 - what a moron! Who sold that? Was it just a stoploss trip? Anyway, I dumped half my USA at the bell for $0.52 (seems it's always strongest at the bell), dumped BTO at $3.27, dumped GUY at a wash, and dumped half my FVI at a loss which still left me net positive on the day.

Then I grabbed another 7k RIO in the low buck ninetys.

I was hoping to get another 7-14k of RIO. But it looks now like there's strong support at $2.00. I do not want to buy that support today; the support could be gone by tomorrow. Or this afternoon. Or half a frickin' hour from now. Basically, I'm in no rush to buy. I'm going to just walk over.

For some reason, US Silver has sold off badly, so I might buy back my .52 shares at .50 or .495.

EPU, the Peru ETF, looks like a deal at $39.50... but what's holding me back is that on April 26, when Humala was but a possibility, EPU closed at $38.15. That suggests to me that now Humala's a reality, the Peru market should still have at least 5-10% of downside from where we are today.

I therefore also apply that logic to RIO.

Today is the day that heroes are made!

Sunday, June 5, 2011

the evils of the internet

The internet is a terribly evil place where "people" of unspeakable immorality spend their time committing horrible crimes against humanity.

One need go no further than the "file-sharing" sites, where copyright is infringed left and right. I've personally already taken action to stop the sharing of works such as introductory video lectures on geology. They also illegally share books on geology too! I do not in any way condone this sort of behaviour.

I urge all readers to take action to stop this illegal spread of information across the internet.

RIO strategy for Monday

OK, I'm writing this without yet having seen any election-day commentary from Otto, but I need to write this down anyway. Humala could win the Peru election, and I'll just assume that this means there'll be post-election volatility in RIO. (Maybe in FVI too, but I'm not going to worry about that so much.)

First off.

I've watched RIO's L2 very closely the past few days. Despite the constant price dumps, recently there has always been support in the L2 come $2.20. You can see it on the past week's Wednesday and Friday charts. It's like there's a $2.20 alarm that goes off - it might drop below for half an hour, but then the buys come storming back in. Intraday weakness has until now always been repaired fast.

Next.

I know a lot of people want to accumulate RIO, and the big price spike on May 25/May 26 suggests that these people like to do so very competitively and impulsively. BUT. I look at the election situation and say "hey, if Humala wins, RIO can be expected to tank." I have to assume all these people will think the same way as me.

So, on Monday, I'm going to watch to see if RIO loses support at $2.20. If it does and buyers come racing in to send the price back up, that's swell! I can hold, I'm in at $1.85 or so. But if RIO drops to $2.20 and the entire buy side then steps aside to let it tank, I could get an amazing deal on RIO.

But I already own RIO?

Ha. I am still happy trading RIO!

So. come Monday, assuming there's any news re: election from Peru that's pro-Humala, I'll watch the $2.20 price point, the L2, and the Money Flow indicator (which means keeping Yahoo Finance open all day as well). If it collapses below $2.15 with no backup, I dump. I will then try to buy back my shares at $1.80-$1.90, which should be the absolute bottom. Or, wherever the support comes racing back in. But I'll expect the market to be bloodthirsty on this.

If it dives below $1.80, then I am fully happy to add to my position. I will probably dump US Silver (at a profit? maybe) first. Other than that, all I have that's dumpable is a measly $10k in BTO and $5k in GUY.

I'm probably going to leave FVI alone, unless it starts losing all support as well - which I don't see any reason for, as they're not an all-Peru play, and I think they're already at a political discount. But the market can prove me wrong. If it does I'm happy to dump FVI for a couple hours.

There's absolutely no way for me to dump SWD, as the liquidity isn't enough for me to move my large position in and out of the market without paying a high premium which is beyond what I could make on pennyflipping RIO. Same for AUU but worse, and i'm also way underwater with AUU (not that I'm whining or anything).

And then I may be able to continue this day-trading play for several days.

I'll try, at the end of each day, to get back more than my original amount of GUY and BTO shares. And more. BTO I'm not concerned about - even if it makes a really strong intraday upmove, it seems to retrace every large white candle that it prints.

Maybe if I make really good money, I'll add some THM and GPD - those charts look very juicy right now, in exactly a BTO kind of way (i.e. still a big downside, but very easy to see the upward trend support line).

So, we'll see what happens? I sincerely doubt I can get a very good deal on RIO, because the price targets issued by analysts out there are too damn juicy, and some major player is probably going to decide to buck the trend and swallow up all they can all the way down, and all the way back up.

We'll see.