This is an early edition of Morning Musings due to travel commitments today…as of 1:30 am Pacific, Gold is down $1 an ounce at $1,637…Silver is off a nickel at $30.81…Copper is up 2 pennies at $3.70…Crude Oil is essentially unchanged at $103.07 while the U.S. Dollar Index has retreated just over one-tenth of a point to 79.25…
Copper Chart Indicates Turnaround
Copper is a very reliable leading indicator for global markets and the economy which is why it’s important to examine the Copper chart and fundamentals on a regular basis…John’s 6-month daily chart below is encouraging as it shows the RSI bouncing off previous support, Slow Stochastics at very oversold levels but beginning to rebound, and declining selling pressure as indicated by the Chaikin Money Flow (CMF-20)…in addition, a strong support band has been tested and is holding…
Analysts with Barclays Capital say their visit to the CESCO/CRU copper conference in Chile last week confirmed their view that the near-term fundamental outlook offers downside risks to Copper prices…they cite soft Chinese demand and imports and subsequent rises in London Metal Exchange inventories…still, Barclays says this is likely to be limited by higher contracted tonnage that China has booked for 2012, to the tune of 200,000 to 250,000 metric tons a month, plus a tightening global mine supply picture…
Six months ago, expectations had been for 2012 to be a “bumper year” for copper-mine production…however, Barclays says, feedback from producers suggests that moderate growth is more likely…further growth had been expected in 2013-14, and while increases are still likely, this also may be more constrained than once thought, Barclays stated…“People, power and permitting are the key challenges for mining companies, and with an increasingly hostile geopolitical environmental, capital costs for projects are rising and leading to miners acknowledging the need to work with higher long-term price assumptions for future projects to be realized”…
Today’s Markets
European markets are higher after yesterday’s sell-off while Asia was mixed overnight with China’s Shanghai Composite Index holding steady at 2388…stock index futures in New York suggest a slightly positive open on Wall Street…the FMOC meeting begins today and ends tomorrow with a Bernanke news conference which may help lift the markets out of their doldrums…Bernanke helped pull Gold down at the beginning of March…just the opposite may occur tomorrow…the risk for Gold is to the upside as it seems to have already factored in any potential negatives over the last eight weeks…
The Venture Exchange fell as low as 1363 yesterday before rebounding marginally near the end of the day to close at 1371…over 38 sessions the Index has lost 19.6%, a typical major CDNX correction and almost identical to the one during the same period in 2005…expect a significant turnaround in May given the very oversold conditions that now exist…
John has two interesting company charts this morning – Spanish Mountain Gold (SPA, TSX-V) and Richmont Mines (RIC, TSX)…the fundamentals for both are strong with SPA developing a significant low-grade deposit in central British Columbia while Richmont of course is a producer with an impressive growth profile based in Rouyn-Noranda, Quebec…
Spanish Mountain’s chart shows a rapidly improving technical picture which, we believe, is a positive sign for the Venture as a whole…
Richmont, which is trading at just 8 times its 2011 earnings (it should do at least as well in 2012), is a classic example of how oversold many Gold stocks have become…one cannot look at this chart below and argue that Gold or Gold stocks are not at or very close to an important bottom…intense selling pressure in recent weeks may have reached a climax…at yesterday’s closing price of $6.47, RIC is one of the best bargains in the industry at the moment in our view…
Note: John, Jon and Terry do not hold positions in SPA or RIC.
Analysts with Barclays Capital say their visit to the CESCO/CRU copper conference in Chile last week confirmed their view that the near-term fundamental outlook offers downside risks to copper prices. They cite soft Chinese demand and imports and subsequent rises in London Metal Exchange inventories. Still, Barclays says this is likely to be limited by higher contracted tonnage that China has booked for 2012, to the tune of 200,000 to 250,000 metric tons a month, plus a tightening global mine supply picture. Six months ago, expectations had been for 2012 to be a “bumper year” for copper-mine production. However, Barclays says, feedback from producers suggests that moderate growth is more likely. Further growth had been expected in 2013-14, and while increases are still expected, this also may be more constrained than once thought, Barclays says. “People, power and permitting are the key challenges for mining companies, and with an increasingly hostile geopolitical environmental, capital costs for projects are rising and leading to miners acknowledging the need to work with higher long-term price assumptions for future projects to be realized.”
The Dow futures are up, S&P futures are up, Nas. futures are up,
Gold is up. Silver is up, Copper is up, Europe is up. %K is up above
%D. I am up & feeling medium. With 11/4 hours left before the market
opens, let’s hope it all holds & we see a good day on the Denture
exchange. R !
Comment by Bert — April 24, 2012 @ 4:13 am
My sixth sense, today’s market will go up in the morning but will retreat soon. It may go lower than yesterday and I am not too positive in the junior stocks. Trading volume remain low in all dimensions.
Comment by Theodore — April 24, 2012 @ 4:36 am
Hello Theodore
Good morning my friend ! It’s like this, if the Venture moves up
this morning, it should stay up. The venture don’t change course
as quickly as the other exchanges. As for not being positive on
Junior stocks, it’s quite possible things can turn to the positive
as it did to the negative sometime ago & that’s what my 6th sense
tells me. Have a good day. R !
Comment by Bert — April 24, 2012 @ 4:58 am
20 minutes before market open & everything in Europe has turned
negative, as well as the S&P & the Nasdaq, so all i have to
depend on now is the stochastic readings yesterday. We shall see.
Comment by Bert — April 24, 2012 @ 5:11 am
Volatility is the name of the game this morning. Europe has
turned around, if only i had waited.
Comment by Bert — April 24, 2012 @ 5:18 am
Bert.. really nice to have you here. opinion yes.. but not intrusive!! Theodore on the other hand injects what he believes and probably keeps peeps off balance… like many of the ‘analysts out there.
way too much confusion, to get you confused, and to challenge whatever your belief is. no disrespect Theo… just saying that with all the varying opinions and observations, it is very difficult for the herd to take a direction… thus the panic mindset…
and if most lose money investing, then it makes sense that you should go against the crowd… but as one said.. the market can remain illogical longer than your portfolio can remain solvent
we hope this isnt one of these times….
Comment by Jeremy — April 24, 2012 @ 7:30 am
Manitou Gold Consolidates Past Producing Mines in Goldrock Area
MTU is just off an all time low
Comment by Andrew — April 24, 2012 @ 7:59 am
stockhouse.com/Columnists/2012/Mar/23/If-junior-golds-are-an-indicator-of-market-risk-or
more info on the herd
Comment by Jeremy — April 24, 2012 @ 8:02 am
quote from the above article…
When we are seeing valuations like this (and continual selling even near the low), there is something seriously wrong with the investment environment. What that is, I am not sure at the moment. I do know that we could all use a sustainable rally in “something” to bring back the speculators and inject some life into these beaten down juniors.
its the lack of intelligence and excess of emotion that is bothersome… RIC can go to zero…. who knew…!!
Comment by Jeremy — April 24, 2012 @ 8:07 am
I’m calling this week the bottom in the CDNX. CAN has started its uptrend as well some of the key juniors are forming bases. I think its onwards and upwards from here.
Let the pickin’s begin. LVN, CAN, VTR, WS, GCU, KAM, ATC.
I think we’ll start to see some improved performance out of china in the coming months which should provide boyancy to commodity stocks.
Comment by Andrew M — April 24, 2012 @ 9:03 am
Andrew M – I’m calling this week the bottom in the CDNX.
Bert – I’ll take it, i’ll take it. I’m here in a tug
of war with Theodore & it looks as if he may be the
winner. Darn it ! There’s no way of predicting anything
these days & that’s why the pressure is now on you, Andrew
M. R !
Comment by Bert — April 24, 2012 @ 9:35 am
Well if 1300 isn’t the low then we have bigger issues and I just don’t see that from market fundamentals.
Comment by Andrew M — April 24, 2012 @ 10:14 am
Sinclair – Shorts Now Trapped & Gold Could Gap Up to $3,000
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/24_Sinclair_-_Shorts_Now_Trapped_%26_Gold_Could_Gap_Up_to_%243%2C000.html
Comment by Andrew — April 24, 2012 @ 11:00 am
Hey, Can you check out this chart and tell me what you think. V.IO
Thanks.
Comment by tony — April 24, 2012 @ 11:52 am
Theodore
Your senses were right on today my buddy, good predicting. I have to admit though, that the
Stochastic %K moving up above the %D below 20, didn’t necessarily mean the Venture would move
up today, instead expect it to happen soon, but i actually thought it would happen today, after
all, we are due a green day soon. R !
Comment by Bert — April 24, 2012 @ 12:07 pm
true enuff Bert .. one of these daze….. the sinclair piece is really interesting… but as with al things.. its the timing and of course if it ever is ALLOWED to happen…
we had better get a seventh sense Bert .. or we could be in for a kick in the butt!!! by big boots..
we HAVE to be close ….. dont we??
Jon… trendlines… do you draw them tail to tail, or close to close???? talking about the hui monthly… from 2001 to now…. it would seem that we are at the level of trandline support if we go close to close, but have a waze to go if we go tail to tail… or am I simply bonkers?? thx in advance
Comment by Jeremy — April 24, 2012 @ 12:55 pm
Jeremy re Trendlines.
If the candle shadows are long I draw two trendlines, one through the Closes and one through the ends of the shadows. This gives you a support or resistance band.
Always consider resistance and support as bands not as absolute levels carved in stone.
Hope this helps.
Comment by John - BMR — April 24, 2012 @ 2:07 pm
Good news for the Dow, Apple’s profit almost doubles. Will it rub off on the other
exchanges. Anyway, the Dow is getting good results from different companies, we
don’t seem to have anything speculator happening to spur our Venture on. In the
good old days i was inundated with news letters, releases, etc. Today everything
appears dead out there & that includes the exchange… I am quite anxious for the
Yukon & other frosty areas to open up..Keep the faith my friends ! R !
Comment by Bert — April 24, 2012 @ 4:07 pm
Canaco Responds to British Columbia Securities Commission Notice of Hearing; BCSC is Proposing to Rewrite the Rules of Materiality, Creating a Chilling Effect on Junior Mining Companies in BC
Comment by Andrew — April 24, 2012 @ 4:55 pm
thx John .. not sure it helps yet:) maybe I will annotate the chart and send it if you would be so kind to guide me in my errors:) hope thats cool:) happy monday to all…
apple snapple!!!:)
Comment by Jeremy — April 24, 2012 @ 5:48 pm
Berquackie speaks tomorrow, so expect another drop in the gold price after he is done, these guys all belong behind bars..
Comment by Greg — April 24, 2012 @ 8:10 pm
8:45 a.m. Nfld time
Everything is up as i type this a.m., in particular the Nasdaq,
up 50 pts., mainly because of Apple. Gold only slightly up, in
fact, in & out of positive territory. Under normal conditions,
it would also be a good day for the Venture, but because things
don’t seem to be normal, i will only state that we should see
a really good day in the Venture, but i am not holding my breath.
Come on Stochastic don’t let me down. R !
Comment by Bert — April 25, 2012 @ 3:26 am