Gold is down for the first time in 7 sessions following yesterday’s vote in Greece with the pro-bailout parties winning…as of 5:30 am Pacific, the yellow metal is off $8 an ounce at $1,619 but up from a low of $1,606…Silver is 40 cents lower at $28.34…Crude Oil erased early gains and is now down $1.11 at $82.92 while the U.S. Dollar Index has jumped nearly half a point to 81.83…
Today’s Markets
Asian markets were up significantly overnight with the Nikkei gaining 152 points or 1.8%…European shares are off their highs but still generally mostly in the green on the Greek election results but investors’ moods have been tempered with the fact that borrowing costs have risen today for both Spain and Italy…the yield on Spain’s 10-year bond went above the 7% “danger” level…stock index futures in New York are down modestly as of 6:00 am Pacific, reversing last night’s early gains…
While markets seem relieved that the radical, far-left SYRIZA party has not gained control in Greece, the fact remains that the New Democracy and Pasok parties who are expected to form a majority coalition were also responsible for the economic mismanagement and patronage system that brought Greece to its knees…in addition, SYRIZA vows to continue its opposition to painful austerity measures which has the potential of stirring up more social as well as political unrest in Greece…the bottom line is that the euro zone is only as strong as its weakest link which is why Greece, an economic and political basket case, needs to be given the boot…Greece, however, is just part of the problem and a bold, broad strategy to effectively deal with the euro zone crisis is urgently needed…
Elsewhere in Europe, French President Francois Hollande’s Socialists won an absolute parliamentary majority yesterday, strengthening his hand as he presses Germany to support debt-laden euro zone states hit by austerity cuts and ailing banks…what did Margaret Thatcher so famously say about socialism?…”The problem with socialism is that eventually you run out of other people’s money”…
India Holds Rates
India’s central bank left interest rates and the cash reserve ratio for banks unchanged today, defying widespread expectations for a rate cut as it warned that doing so could worsen inflation, disappointing markets…”Further reduction in the policy interest rate at this juncture, rather than supporting growth, could exacerbate inflationary pressures,” the RBI (Reserve Bank of India) wrote in its mid-quarter policy review…
Goldman Sachs Has Bullish 12-Month Outlook For Commodities
In case you missed it, Goldman Sachs last week recommended “stepping back into the markets” in its latest Commodity Watch…Goldman is anticipating a 29% return for the S&P GSCI Enhanced Commodity Index over the next 12 months and suggests investors might want to increase their position in commodities…crude, gas, copper, aluminum and Gold are the bank’s top picks…Goldman envisions a soft landing for China’s economy as well as accommodative action from global policymakers…
Below is an interesting graph from a report at www.usfunds.com that details global fund managers’ net allocation to commodities…many institutional managers have exited the commodities superhighway in favor of cash – currently at the third highest level on record – or technology stocks…in its global fund manager survey this month, Bank of America-Merrill Lynch found that advisers’ allocation to commodities reached its lowest level since February, 2009 – a great time to load up on commodity-related investments…
TSX Gold Index
The TSX Gold Index has been a reliable indicator of the direction of Gold prices over the last several weeks, and the chart suggests another bullish move to test resistance at 340 appears to be on the way…the May 16 low of 266 was an important bottom with the Index climbing 21% since then…John’s updated chart shows a very well-defined bottom with superb support at 300 and higher…
Lumina Copper (LCC, TSX-V)
Lumina Copper (LCC, TSX-V) jumped $1.07 Friday to $8.90 after announcing, essentially, that it could be close to concluding a deal for the sale of the company…its board of directors “has initiated a strategic review process to consider a range of strategic alternatives that have presented themselves to the company, with a view to enhancing shareholder value…strategic alternatives may include, but are not limited to, the sale of all or a portion of the company’s assets, the outright sale of the company, a merger or other business combination transaction involving a third party, a joint venture, as well as continued execution of the company’s existing business plan, or any combination thereof”…
It’s not surprising there appears to be considerable interest in Lumina’s Taca Taca copper-gold-molybdenum project in northwest Argentina…On May 7, Lumina released updated inferred and indicated resources at Taca Taca that total 1,762-million tonnes grading 0.53 per cent copper, 0.016 per cent molybdenum and 0.099 g/t Au…this equates to (approximately) 20.5 billion pounds of copper, 5.5 million ounces of Gold and 603 million pounds of molybdenum at a 0.40-per-cent copper equivalent cut-off (the gross metal value is nearly $80 billion)..the sulphide mineral resource remains open to the northwest, north, northeast, southeast, south and to depth while the oxide Gold mineral resource remains open to the east…
There’s no question Taca Taca is a world-class Cu-Au-Mo porphyry system with tonnage and grade in the top quartile of undeveloped global porphyry systems…Lumina hit an all-time high is $17.96 at the end of March while it appeared to bottom out last Thursday at an intra-day low of $7.26, just below its rising 500-day moving average (SMA)…the 200-day SMA is still increasing and currently sits just under $12…the current market cap is only $364 million based on 40.9 million shares outstanding…
Below is a Lumina chart from John that shows a confirmed hammer reversal supported by strong volume and buying pressure, so the potential for more upside clearly exists from a technical standpoint – throw in some fundamental factors like a potential takeover and this appears to be a low-risk opportunity at current levels…
Another “play” on Lumina may exist with Cascadero Copper Corporation (CCD, TSX-V) which we highlighted a few months ago…interestingly, CCD came out with news Friday on the same day as Lumina, and climbed 2.5 cents to 16 cents on its highest volume (392,000 shares) since 2010…reading between the lines, there could be discussions between these two companies as Cascadero has property adjoining Taca Taca…in fact, CCD’s 50% owned Argentine subsidiary has just completed a program of mobile metal ion (MMI) and outcrop rock grab samples in an area adjoining Taca Taca…elsewhere in the region, Cascadero recently completed five drill holes at its Pancho Arias Cu-Au-Mo prospect…assays are pending but the company reported intersecting variable Mo mineralization from surface in all five holes and variable chalcopyrite mineralization form surface in four of the holes…all holes ended in mineralization…the Pancho Arias mineralized zone outcrops over a large area…
Great Panther Silver (GPR, TSX)
One of our favorite Silver plays for the long-term is Great Panther Silver (GPR, TSX) which has traded in a fairly tight range over the last 9 months between strong support around $1.75 and significant resistance just below $3…the stock’s technicals have improved recently and a reversal to the upside in GPR’s 50-day SMA is just underway…GPR closed Friday up 11 cents at $2.15, and the near-term technical outlook shows opportunity based on John’s chart below…
Note: John, Jon and Terry do not hold positions in LCC, GPR or CCD…
I put in a bid at .065 last night on elo looks like I must of been dreaming because there is no way its going to be filled this morning
Comment by gil — June 18, 2012 @ 6:33 am
Hard luck, gil – good try though but its flying now. 🙂 CEV has to be the biggest disappointment in my holdings. I’m out as soon as it comes up a little and into ASW or GR if the price is right! 🙂
Comment by Andrew — June 18, 2012 @ 6:58 am
CTV news was full of doom and gloom for the markets last night. Euro collapse was inevitable with Italy next in line. Investors with equities would basically be wiped out etc.
Comment by Andrew — June 18, 2012 @ 7:05 am
Is RBW doing a private placement right now? Someone on stockhouse has been writing about it (dont get me wrong i dont believe alot of things written on there). If so at what level and how many shares any idea?
Comment by Ed — June 18, 2012 @ 8:41 am
RAINBOW RESOURCES INC.
TERM SHEET
PRIVATE PLACEMENT OF UNITS AND FLOW-THROUGH UNITS
Issuer: Rainbow Resources Inc. (“Rainbow”)
Offering: Offering of units (the “Units”) and flow-through units (“FT Units”) in the capital of
Rainbow (the “Offering”) to be issued by way of private placement exemptions from
the prospectus requirements, subject to receipt of any applicable regulatory and director
approvals.
Each Unit will be comprised of one common share in the capital of Rainbow (a
“Common Share”) and one-half of one Common Share purchase warrant (each whole
purchase warrant, a “Warrant”).
Each FT Unit will be comprised of one flow-through share in the capital of Rainbow
and one-half of one Warrant.
Warrants: Each Warrant will entitle the holder to subscribe for one Common Share at an exercise
price of $0.25 per Common Share for a period of 24 months from the Closing Date,
provided, however, that in the event that the closing price of the outstanding common
shares on the TSX Venture Exchange (the “TSXV”) is greater than $0.50 for a period
of 10 consecutive trading days at any time following the four month anniversary date of
the Closing Date, Rainbow may, at its option, accelerate the expiry date of the Warrants
by giving notice to the holders thereof and in such case the Warrants will expire at 5:00
p.m. (Toronto time) on the date which is the earlier of: (i) the 30th day after the date on
which such notice is given by Rainbow; and (ii) 24 months from the Closing Date.
Issue Price: The issue price per Unit will be $0.18. The issue price per FT Unit will be $0.20.
Amount: Up to $360,000 worth of Units and up to $200,000 worth of FT Units, with Rainbow
having the right to increase the Offering by up to $560,000 of either Units or FT Units.
Closing Date: Payment for, and delivery of, the Units and FT Units is to occur on or about June 29,
2012 or such other date as is determined by Rainbow (the “Closing Date”).
Commission: 8% cash or shares
Use of Proceeds: The gross proceeds of the FT Units will be used for exploring Rainbow’s exploration
projects in Southeastern British Columbia, and the net proceeds of the Units will be
used for exploration work on the projects in Nevada and Southeastern British Columbia
as well as general corporate purposes.
Comment by Andrew — June 18, 2012 @ 8:54 am
elo may still be a bargin at 9 cents .Ceo has been an buyer on the open market between 7 to 12 cent.I bought a small amount at 9 cents
Comment by gil — June 18, 2012 @ 9:15 am
Are you guys out of your minds? have you been taking too much babool up the vor and its clearly affecting your brain its so big…
RBW is not going anywhere…i might as well sell what I have and buy myself a mic mac combo…it’ll do more for me going into me (and out) then rbw will….
bullmarket run…your thoughts on this horrible stock?
P.s. once the boobool come out, the napags come out, and when the napags come out, they get big.
Thanks – jon i look forward to your response.
Comment by Avo — June 18, 2012 @ 9:25 am
I wonder how the placement is going with the share price being 15 cents and the placement going for 18 and 20 cents.
Comment by Ed — June 18, 2012 @ 9:27 am
I have to think thar rbw has more than just moose pasture when they are having investors and newsmen visting their property this week.I would be surpised if we dont get a nice pop within the next 30 days .Hold me to it
Comment by gil — June 18, 2012 @ 10:04 am
Hello Jon/ Jonh,
Can you please comments on RBW?
Thanks
Comment by Eric Benson — June 18, 2012 @ 10:10 am
Heavy selling going on at 15 cents in RBW but nobody panic it should be fine “imminently” :).
Comment by Ed — June 18, 2012 @ 10:41 am
15 cents is a bargain for RBW…. I got some .. I am a collector or RBW.
Comment by Theodore — June 18, 2012 @ 10:46 am
Yes people has been saying that since it was at .20-.25 too. My average is .19 but I don’t like what I’m seeing right now… Hope you all are right 🙂
Comment by Kalkan - Sweden — June 18, 2012 @ 10:55 am
Rbw everyone askin for a response why they screwed this pick bad,im not here to make pennies you say jokers i hope no one else ever listens to your crappy picks thanks for nothing,go back to your daytime jobs.
Comment by Gerry — June 18, 2012 @ 11:10 am
RBW – I don’t see any reason to panic. Once the results start coming in the SP will recover assuming there’s not a world recession by that time. I’m expecting the gap to close at 0.135 and if it does I’ll be adding. 🙂
Comment by Andrew — June 18, 2012 @ 11:23 am
Eric, Kalkan, Gerry et al
There is no need to panic, everything is developing very well with RBW. Yes,the stock is trading between 15c and 16.5 but any stock for sale has been bought up within that range.
The Company is:
1. Preparing for a visit by investors, analysts and newsletter writers(including BMR) this week.
2. Waiting for drill permits.
3. Warrants are being exercised this week ahead of the June 24 deadline.
Hang in there guys and please be patient.
Comment by John - BMR — June 18, 2012 @ 11:45 am
Ed- i was writing about rbw pp on stockhouse. i consider my posts fairly reputable. IR say pp is going very well. Theo has the right idea. Buy what u can below 16.
Comment by db — June 18, 2012 @ 11:47 am
`Did I see 17 cents on rbw up 3percent
Comment by gil — June 18, 2012 @ 12:01 pm
@ John
I’ve been in rbw for a while and I’m patient. Just didn’t like what I was seeing earlier. But it closed at .17 and 3 percent up for the day which is good. I’m hanging in there, have to at least double up on this one, .35-.40 seems realistic within 3-5 month.
Comment by Kalkan - Sweden — June 18, 2012 @ 12:26 pm
I am more greedy… looking at 50 cents mark … and I am happy to collect more at 15 cents.
Comment by Theodore — June 18, 2012 @ 12:51 pm
RBW – Questrade had a huge bid of 100k shares on it earlier in the day. They bought some above .15 and removed the rest of that bid at .15 – Level 2 looking like she may drop a little more, but in the venture nothing is for sure. Level 2 changes constantly. I may be a buyer when she pokes her head up some. I have learned over the years that even though you leave some on the table, buy when its moving cause she can drop further right now. I don’t chase, but I can read the chart and TA and pretty much know when its time. Andrew, you may have the right idea at .135 which would fill the gap.
Comment by dave — June 18, 2012 @ 7:46 pm
I dunno guys, you sure your not pumping RBW a bit too much. Seems to me the volume needs to increase, and its slowly edging down even as good news awaits? I ve been bitten a few too many times here, ABI, SD, GBB, TYE, SFF, VGN. They have all lost money for me. I did day trade a few of them, but still doesnt make up for the losses? Summer is here and hopefully the buyers will all come back, but some how I get the feeling alot of ppl check out for summer and return when school starts?
I hope I m wrong. Really hope I wrong.
Comment by alec — June 18, 2012 @ 8:23 pm
relax just smoke some hopium
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/6/18_The_Greatest_Bull_Market,_A_Gold_Standard_%26_Silver_Shortages.html
Comment by Hugh — June 19, 2012 @ 3:19 am