Gold has traded between $1,124 (just above its 50-day moving average) and $1,136 so far today…as of 9:30 am Pacific, bullion is down $1 an ounce at $1,131…Silver is up a nickel at $14.65…Copper has added 2 pennies to $2.27…Crude Oil has gained 87 cents to $45.30 while the U.S. Dollar Index has fallen nearly one-fifth of a point to 95.89…
The Fed will “probably” increase interest rates later this year (we’ve heard that before) and tighten policy gradually thereafter, New York Fed President William C. Dudley said yesterday, echoing the sentiment of Chair Janet Yellen that an uncertain global outlook won’t postpone liftoff into 2016…Fed personnel are sounding like politicians now, sort of like Obama, Mulcair and Trudeau, and that’s what savvy traders are picking up on…Fed-fund futures data conflict with the Fed’s assessment, showing traders see only a 41% chance the Fed will raise rates by year-end, down from a 64% probability September 16, the day before the Fed’s latest policy statement…odds climb to 48% by January, according to data compiled by Bloomberg…
Another central bank in full stimulus mode – India has lowered its key interest rates for the 4th time this year, and by a more-than-expected 50 basis points as economic growth in the current fiscal year is forecast to be weaker than previously projected…the bank was expected to reduce rates by a quarter point today as it did in January, March and June…
Glencore – The Next Lehman Brothers?
London-listed Glencore recovered around 15% today as some analysts defended the value of the debt-laden company and even suggested it could be taken private…a note from Citi said the sell-off has been “overdone”, and the broker maintained its “buy” rating for the stock…the Swiss company’s shares fell about 30% yesterday on fears that the commodities trader and producer would need to take more drastic action to reduce its heavy debt burden amid concerns that commodity prices ranging from Copper to Coal, two of Glencore’s key earnings drivers, could fall further…
Copper Updated Chart
Copper is at a critical point, at key support based on this 20-year monthly chart…this is what might be adding to concerns regarding Glencore…as you can see, the metal is in danger of tumbling below both a downsloping channel and a long-term uptrend support line…chartists will be watching this carefully…sell pressure is the most intense it has been since 1999, which from a contrarian standpoint is a good sign…however, sell pressure could still intensify further…one cannot rule out the possibility of a sudden, rather violent plunge in Copper which would lead to an important bottom…the other scenario is that the metal manages to hold on to these critical levels and starts working its way higher…
Canadian Dollar Update
The Canadian dollar hit a new 11+ year low this morning, trading briefly around 74.5 cents before recovering modestly…the loonie, which has fallen 20% since the middle of last year, likely has a little further to go on the downside with an obvious near to short-term target (Q4) of 72.5 cents which served as strong support in early 2004…obviously the October 19 elections could have an impact on the loonie, especially in the event uncertainty is created with a minority government…
Goldman Sachs Turns More Bearish
Goldman Sachs cut its year-end forecast for the S&P 500 today, citing a combination of the slower pace of economic activity in China and the U.S. and the fall in Oil prices…the U.S. investment bank cut its year-end price forecast for the S&P by 5% to 2000…it had previously forecast the index to rise to 2100 by the end of the year…Goldman also lowered its 2015 earnings-per-share estimate by 4% to $109 for the S&P 500, from a previous forecast of $114…
“The impetus for these reductions is that our models now incorporate a slower pace of economic activity in the U.S. and China and a lower Oil price than we had been previously assuming,” Goldman said in a note on U.S. equity strategy…
Today’s Equity Markets
Asia
Japan’s Nikkei is under significant technical pressure after breaking down below 18000…it fell another 4% overnight to close at 16931…China’s Shanghai Composite lost 2% to finish at 3036…
Europe
European markets stabilized today and finished down just slightly…
North America
The Dow is up 8 points as of 9:30 am Pacific…optimism among U.S. consumers continues to grow this month, adding to August’s gains and beating expectations, according to the latest data from the Conference Board, which this morning said its monthly Consumer Confidence Index for September rose to 103…that was up from the August reading of 101.3…according to consensus forecasts, economists were expecting to see a decline to 96.2…
Meanwhile, U.S. home prices continued to rise in July, according to the latest S&P/Case-Shiller Home Price Index released this morning…it rose 5% in July, roughly in line with analysts’ estimates for a 5.1% increase…
Volatility Index (VIX)
The VIX needs to be watched carefully – it closed at 27.63 yesterday, above the key 25 level which is not good for stocks…it has backed off a full point in trading so far today…the VIX is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices…intra-day August 24, RSI(14) on the VIX spiked to a level not even seen during the 2008 Crash…
In Toronto, the TSX has recovered a modest 45 points after yesterday’s big drop, while the Venture is 3 points lower at 524…
New One-Step Plasma Process For High Purity Silicon?
Interesting news this morning from PyroGenesis Canada (PYR, TSX) that potentially could have a revolutionary impact on the high-purity silicon market…the company has filed a provisional patent for a 1-step process using plasma for producing high-purity silicon from silica…the Purevap is a proprietary process that uses a plasma arc within a vacuum furnace to produce high-purity, metallurgical-grade silicon (MG-Si), solar-grade silicon (UMG Si) and polysilicon from quartz…
“We expect this process to not only have strategic significance with respect to silicon, but will allow PyroGenesis to further develop distinct plasma processes geared to refining other high-grade and valuable metals as well,” said Pierre Carabin, director of engineering of PyroGenesis. “Applying plasma to silica in this manner is another example of how PyroGenesis is finding high-value niche markets for its plasma-based processes.”
“Advances in solar energy and electronic applications have made silicon a strategic material in the 21st century,” said Peter Pascali, President and CEO of PyroGenesis. “The world consumption of silicon metal in 2014 alone exceeded $6 billion (U.S.). Therefore, there is a significant need to finding ways to reduce the cost of producing strategic materials, and PyroGenesis’s processes are poised to do just that.”
Adventure Gold Inc. (AGE, TSX-V) Update
One Venture company we’ve maintained confidence in throughout the turbulent last several years in the junior resource sector is Adventure Gold (AGE, TSX-V), a well-run operation with money in the bank and numerous projects in its pipeline…its important asset in our view is contiguous to Richmont Mines‘ (RIC, TSX) Beaufor mine near Val d’Or…we suggest readers check out AGE’s August 19 news release regarding its Val d’Or East Gold Project and the New Beliveau deposit…
We completed a site visit to this project in 2011…key infrastructure includes an existing 340-m deep shaft, underground development drifts on 5 levels, industrial access road, power line, a railway within 1.5 km and custom milling facilities in Val-d’Or (4 Gold mills within 25 km)…no environmental issues apparent from past exploitation onsite…there is also strong level of local and provincial support for the project…
Our last update on AGE was in late November last year when it was trading around 7 cents, and clearly a bargain…it closed at 12.5 cents yesterday…its 200-day moving average (SMA) has reversed to the upside (currently at 10 cents, new support also coinciding with Fib.), ending a decline that started late last year…AGE has also broken out above a downtrend line going back to the summer of last year…
Given this company’s assets, AGE should be watched closely as it could continue to out-perform the market as it has over the past 12 months…
Note: John and Jon do not hold share positions in PYR or AGE.
Jamie and everyone else. EQT is NOT drilling 24/7. – It probably won’t be till later this week or early next week till we hear something. Weather is playing a part in it. Jamie, yes it is the PP holding EQT stable as the shorts keep playing with her in this range. When the PP closes, the shorts will have to cover. It could be a tremendous ride on the short squeeze too.
Comment by dave — September 29, 2015 @ 9:06 am
EQT take advantage down here.
Lots of chatter on MSD.V and news flow about to start. Same team that ran VID and NPH from ground floor is involved here. Now that the pp is behind them, October should be a big month.
Comment by BigRig — September 29, 2015 @ 9:19 am
EQT – there is still over 2 hours left to trading, but so far this is what I am looking for. A lighter than normal trading volume day. the breakout usually occurs after this.
Comment by dave — September 29, 2015 @ 9:28 am
Thanks for your comments and opinion Dave. For what its worth I never thought they would be drilling 24/7 but understand where you are coming from. A short squeeze would certainly be nice..LOL
Comment by Jamie — September 29, 2015 @ 10:10 am
“sell pressure is the most intense it has been since 1999, which from a contrarian standpoint is a good sign…however, sell pressure could still intensify further…one cannot rule out the possibility of a sudden, rather violent plunge in Copper which would lead to an important bottom”
Copper already at 1/2 its 4/50 per pound peak. I would categorize that as a violent plunge.
For that to happen China’s gotta land hard, no Chinese fiscal and monetary stimulus, Glencore truly being the Lehman of miners.
IMO I see Glencore showing its middle finger to the shorters and going private, no way is Glencore even close to bankruptcy. As for China, their “crisis” is self-imposed! I’m expecting a return to spending monies on infrastructure in the short term, a shot in the arm if you will.
Comment by ConcernedCitizen — September 29, 2015 @ 11:46 am
Chile’s Collahuasi copper mine to cut output amid price rout
reuters.com/article/2015/09/29/anglo-american-collahuasi-idUSL1N11Z1FX20150929
Comment by ConcernedCitizen — September 29, 2015 @ 11:50 am
Dave, Any predictions on where the SP could go short term pardon the pun if the shorters have to cover?
Comment by Dan — September 29, 2015 @ 12:03 pm
Hope MSD has everyone’s attention now. What a great day. John and Jon can u guys do a bit of research and share with the board. Cheers.
Comment by BigRig — September 29, 2015 @ 12:32 pm
The IMF has warned of a possible new financial crisis, particularly in emerging markets, when central banks start raising interest rates.
Vale’s market value ascended to just shy of $200 billion in January 2011. But the Brazilian company is now worth less than $22 billion.
Glencore lost almost $45 billion in market value this year. People are comparing it to Lehman Brothers.
Over $5 Trillion erased from Chinese & American stock markets recently.
China’s economy appears set this year for its weakest performance in at least a quarter of a century.
and…
U.S. consumer confidence rose to an eight-year high last month. Wait, what?
Comment by ConcernedCitizen — September 29, 2015 @ 3:08 pm
If the shorters cover, I’m thinking it could test that .36 Fib. but now I ain’t no crystal ball either. EQT seems to have a mind of its own as far as strength. The chart looks good and the second PP due to close anytime. Once again we are in the window of timing.
Comment by dave — September 29, 2015 @ 3:59 pm
See latest Advertisement by Hardy on BTV
Watch on Youtube… “Using Advanced Technology to Find Nickel”
Comment by Dan — September 29, 2015 @ 4:05 pm
China cut the minimum down payment requirement for first-time homebuyers, stepping up support for the property market amid an economic slowdown.
The reduction to 25 percent applies to people buying homes in cities that don’t have home-purchase restrictions, the People’s Bank of China said in a statement on its website on Wednesday. The previous down payment requirement was 30 percent.
Comment by ConcernedCitizen — September 30, 2015 @ 2:40 am
-0.1 Negative inflation in the Eurozone pressures the ECB to up stimulus.
Comment by ConcernedCitizen — September 30, 2015 @ 2:43 am
I see posts about a short position on EQT and have scoured the web looking for a site that shows short positions on venture stocks but can’t find anything. Where are people getting this information? Thanks
Comment by Danny — September 30, 2015 @ 4:42 am
Copper may have further to fall. Goldman Sachs Group Inc. expects prices to drop to $4,800 a ton by the end of December and $4,500 at the end of 2016 and predicts the bear market will last years, according to a report last week. Deutsche Bank AG says prices will average $4,650 a ton next year.
Concerns about the slowing demand from top consumer China, surging stockpiles and the prospect for rising interest rates in the U.S. suggest copper will slump further, Goldman said.
The main culprit is China, where the economy is set to grow at the slowest pace in more than two decades. The nation’s copper consumption will increase just percent 2.4 percent this year from an average of 7.5 percent in the past five, Deutsche Bank said in a report on Tuesday.
The fading appetite for copper has coincided with a surge in supply as years of investment in new mines added to the glut of metal. Production is set to exceed demand by 250,000 tons this year, according to estimates by Societe Generale SA.
Not everyone is pessimistic. Today’s oversupply may start to reverse, pushing prices above $5,700 a ton by the fourth quarter, Citigroup Inc. says. More than 1.5 million tons of output has been lost this year for reasons ranging from riots in Chile to droughts in Zambia and Papua New Guinea, the bank’s analysts including David Wilson said in a report Sept. 15.
In addition, Glencore has spearheaded output curbs in response to falling prices. The company said earlier this month it plans to reduce copper output by about 20 percent over the next 18 months by shutting two of its flagship operations in Africa.Freeport McMoRan Inc.and Asarco LLC are also curtailing production, and other rivals may follow.
Comment by ConcernedCitizen — September 30, 2015 @ 6:47 am
a little weakness in EQT today
Comment by bcguy — September 30, 2015 @ 7:07 am
EQT is looking great – just touched support this morning at the bottom of the pennant formation, which is tightening up…and the weakness was on low volume, a good clue…buy pressure is increasing according to the CMF on John’s 3-month daily chart which we’ll be posting this morning…
Comment by Jon - BMR — September 30, 2015 @ 7:23 am
Jon is correct, the non-confirmed breakout the other day extended the apex to the triangle. It all fits in with the PP closing, shorts covering, and NR after this. Chart still in the uptrend.
Comment by dave — September 30, 2015 @ 7:38 am
To put it another way, its made the triangle or pennant whichever you prefer calling it bigger. All is good. I stand pat with my position. Too risky here as .165 would be absolute lowest and it could bounce hard up from there. We are at that time again where PP could be announced any moment and this thing starts moving up.
Comment by dave — September 30, 2015 @ 7:41 am
Oh, also remember I mentioned last week when we had a smaller triangle that the volume like Jon mentioned is KEY here. When the volume decreases significantly is when the breakout to the upside is NEAR.
Comment by dave — September 30, 2015 @ 7:43 am
thanks Dave
Comment by bcguy — September 30, 2015 @ 8:47 am
Jon, John and Dave, Are you expecting EQT’s breakout to dance around the .23 cent fib resistance? Or could a breakout from this triangle be stronger and lift it over 30 cents to the next level?
Comment by Phil — September 30, 2015 @ 9:33 am
Is that the Howard Group you are talking about Big Rig with regards to MSD? Thank you.
Comment by Hugh — September 30, 2015 @ 9:43 am
PHil–When EQT breaks out from the Pennant I expect it to move up strongly to the 23c level, take a breather at that level then continue on towards the 36c FIB Level. Lets see what happens.
Comment by John - BMR — September 30, 2015 @ 12:30 pm