Thoughts on Markets

Wednesday, July 15, 2009

Metals & Miners Upward

Gold has made a nice upward move of 14.70 to 940 now. It has not been hammered, yet. This is a strong move which has not been seen of late.

Vista Gold is showing a positive "W" trace on the graph, below. However, the "W" is not a perfect formation, but the recent trend it upward. Therefore, I have put a 3% Trailing Stop Sell on a portion of my VGZ.
The DROOY trace of a positive "W" is also a bit sloppy. But likewise, I have a 3% Trailing Stop Sell on a portion of my DROOY.
Silver has broken above 13 to 13.20 up 0.32 as of now.
Hecla Mining has traced an almost perfect "W" on the graph, below. It is in a rather strong upward move. Likewise, I have place a 3% Trailing Stop Sell on a portion of my HL.
From The Daily Pfennig: "I see that Gold has finally shown some life this morning, adding $12 overnight... A reader sent me a link to a story about the manipulation of the Gold price, which I truly believe has been going on for years, but keep it in my back pocket only to bring out when it makes sense to do so... Here's a snippet of the report by GATA (Gold Anti-Trust Action Committee Inc.)

New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs). This essentially allows the gold shorts (and the exchanges themselves, which guarantee futures contracts) to transfer their obligations to third parties that may not have the metal they claim to have and that, in any case, are operated by the investment banks running major short positions in gold.

Thus it is likely that the paper claims to the world's supply of gold are greater than even GATA has suspected -- that the gold supply is even more oversubscribed and that "paper gold" is being created at an ever more frantic rate to suppress gold's price."

As strongly as I oppose intervention in the markets by regulation, it seems that at times this may be necessary. Of course, if the bullion banks are exempted from any such regulation, then we don't need it at all.


Gold stocks: neutral to souring

Barrick, world gold leader, displays a stock price that's been churning and churning for 2009, highlighting the dilemma faced by investors in an increasingly less popular mining subsector.

Author: Barry Sergeant
Posted: Tuesday , 14 Jul 2009


A year ago, Barrick, the world's biggest gold producer, and most valuable listed gold stock, topped USD 50 a share. It traded at somewhat higher levels earlier in 2008, along with gold bullion setting a record above USD 1,000 an ounce during March 2008. For nearly a year now, Barrick's stock price has not again sniffed USD 50 a share, and, indeed, has not been above USD 40 a share. Read it HERE.


Gold - the King of metals will keep its crown - Grandich

Market analyst Peter Grandich, sees good opportunities for investors who want to "buy things on the cheap" and also sees bright prospects for gold - Interview with The Gold Report.

Author: The Gold Report
Posted: Wednesday , 15 Jul 2009


The Gold Report: When we spoke in early February, you said, "Not only do I think that we are we going to retest the November lows, we're probably going to go through them." At that point, you expected a bounce that would see the Dow trading somewhere between 7,500 and 9,000. Looking back, that seemed very accurate. Can you give your perspectives on what's happened since February and what you expect going forward here in Q3?

Peter Grandich: We got involved in what will go down as one of the best bear market rallies the U.S. markets have ever had, but I don't think it's anything more than that. The expectation that somehow a normal economic recovery would take place in the second half of this year and things would go back to normal will prove to be a horrific error in judgment.

The market is starting to sense that this is an extraordinary time unlike any other economic period, and any real chance of economic growth after the worst financial disaster perhaps in all of America's history, is not going to occur. Therefore, we should see the U.S. stock market trend lower, not higher, in the second half of this year and go into a multi-year, if not a multi-decade trading range of somewhere around the lows of 6,500 and potentially as high as 10,000 or so on the Dow, but more realistically somewhere between 6,500 and 8,500. Read the interview HERE.

Gold and, to a lessor extent, silver will come into their own if the government and banks will move out of the way. Until that time, we must be patient. However, you will note that I have moved back into trading and am using trailing stops.


U.S. mining law reform a top Obama Administration priority

While news media attention is focused on the Senate confirmation hearing of a new justice a few doors away, the Senate Energy& Natural Resources Committee is busy adjudicating the fate of the U.S. hardrock mining industry.

Author: Dorothy Kosich
Posted: Wednesday , 15 Jul 2009


As environmental special interests congratulated themselves for U.S. Interior Secretary Ken Salazar's declaration Tuesday that mining law reform is a top priority for the Obama Administration, lost among the rhetoric and news coverage was Salazar's equally important declaration.

"In my view, our own security depends on maintaining a viable domestic mining industry," Salazar told the Senate Energy and Natural Resources Committee Tuesday. "Minerals are also needed to support development of renewable energy," he added. Read it HERE.

I doubt very seriously that any Obama sponsored mining regulations will be of any benefit to our nation other than an increase in tax revenue, if even that is a benefit. Think about it, as industries are taxed, their cost of doing business rises and is past on to consumers in the form of higher prices. So I doubt that additional taxes are good, at all. The danger is that the environmental considerations and the push for alternative green fuels will be the predominant goal in any legislation which will drive more industry out of America. Much of our mining industry has been forced to move in the past because of regulations.

Is the president a radical Bushite? Check a scary video HERE. This is a video which must be seen or at least heard by one and all. I believe that God will see a World Government as just another Tower of Babel as men attempt to raise themselves above the Law-Word of our Creator God. It is bound to fail, but could in the meantime cause the citizens a lot of pain. By the way, if you have not read "1984," find this Orwell book and read it. It describes a totalitarian state in great detail in an age of high tech everything. It is a small easily read book and should be required reading for every person young and old.


EPA Cover-Up
by Walter E. Williams

Here's what I wrote in last year's column titled "Global Warming Rope-a-Dope" (12/24/2008): "Once laws are written, they are very difficult, if not impossible, to repeal. If a time would ever come when the permafrost returns to northern U.S., as far south as New Jersey as it once did, it's not inconceivable that Congress, caught in the grip of the global warming zealots, would keep all the laws on the books they wrote in the name of fighting global warming. Personally, I would not put it past them to write more." On June 28, 2009, the House of Representatives, by a narrow margin (219-212), passed the Waxman-Markey bill. The so-called "cap and trade" bill has been sold as a system for cutting greenhouse gas emissions in the struggle against global warming. There's a full-court press on the U.S. Senate to pass its version of "cap and trade." This is very dangerous legislation and should be opposed by every legal means possible. Get on board and bug your senators. We do not need or want it. It is another Obamanizm. Read Walter's article HERE.


Greenlight Holds Bullion, Buys Reinsurance Stocks
By Saijel Kishan

"July 14 (Bloomberg) -- Greenlight Capital Inc., the $5 billion hedge-fund firm run by David Einhorm, told investors it switched all of its holdings in a gold exchange-traded fund into bullion during the second quarter.

“At a minimum this will provide some savings as the costs of storing gold are less than the fees” for the SPDR Gold Trust, the New York-based firm said yesterday in a letter to investors.

Einhorn, 40, told clients in January he was buying gold for the first time amid the threat of inflation from higher government spending. The firm, started in 1996, held 4.2 million shares of SPDR Gold Trust in the first quarter, making the gold- backed ETF its biggest holding. Gold has climbed 5.8 percent this year." This is particularly important if you own precious metal ETFs or Trusts >> Read it HERE.

The Game Changer?
By: Theodore Butler

Every once in a great while, something big comes along to upset the status quo. Sometimes the change is long overdue and welcome. I think we may soon witness such a game-changer in silver.

As I briefly referenced last week, the new chairman of the CFTC, Gary Gensler, issued a statement on July 7, that I felt was very important. Upon further reflection and subsequent additional statements from Commissioner Bart Chilton, I am convinced that great change may be on the way.

The statement from Chairman Gensler is clear; he is deeply concerned about and is soliciting your input on the matter of speculative position limits. In a moment, I will suggest how you can participate in the coming great change. This is an important read. Check it out HERE.

Folks, we must turn back to the God of most of our founders. He will not long tolerate a people who turn their backs on him. With all of the young folks emphasis upon high tech games and phones, it is no wonder that they have no time for the Creator and Sustainor of all. They must learn at a very young age to fear the Sovereign God from Whom there is no appeal. He must become the center of their lives for them ever to have any real learning and insight.

Best to each, Doug


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