Thoughts on Markets

Monday, March 14, 2011

Destruction in Japan - Tsunami - DOW - TRAN - CEF - Miners - Currencies - States' Rights

Folks,  The earthquake in Japan and the Tsunami are prominent in the news. Many lives have been lost in Japan and there is a following threat from damage to nuclear plants. Our prayers before King Jesus should go to the throne of grace that He will use this to bring many into the kingdom and that He will bring healing and understanding to the remaining folks.

Remember that all of these disasters came about from the curse of God for the disobedience of our first two parents in the Garden of Eden. They are the results of this original sin and not necessarily the results of any particular sin of a specific individual or nation. All of us are guilty of sin and must repent before the Sovereign God of all: King Jesus Christ. Praise Him daily!

Mine Web:
Japan and precious metals: a snapshot
As the country still reels from the devastation of a massive earthquake and tsunami, we provide a brief view of where Japan fits into the world precious metals markets.
It feels callous writing about such an awful tragedy in terms metals markets, but sadly there is perhaps a call for a quick review of Japan's typical position in terms of normal demand levels.  This piece is not designed to take a view on the prospects for longer-term increased demand in terms of reconstruction, not to try and quantify how demand may contract in the short-term as some of Japan's industries have to struggle to contain their losses or temporary shut-downs; it is aimed more at giving a snapshot of Japan's market share in different sectors. Interesting perspective HERE

Stratfor:Red Alert: Saudi Intervention in Bahrain. 
Reports emerged on March 14 that forces from Gulf Cooperation Council (GCC) countries will enter Bahrain to help the Bahraini regime quell unrest. The report was published by Bahraini Alyam Newspaper (known for its close links with the ruling al-Khalifa family), and came one day after clashes occurred between Shiite protesters and police in the capital, Manama. Spreading unrest in Mid-East HERE.

Mine Web:
Utah Legislature sends strong gold standard message to Washington
If Utah's governor signs HB317, Utah will become the second state to recognize federally issued gold and silver coins as legal tender within the state. This is just one of the small steps of states standing up to the Federal Government (USG). We need more states to join in this, Obamacare, gun control, education, intrastate commerce, religion, and many other areas where the USG has encroached upon state's rights. This should be exciting, though just one small step, to all Christians and conservatives. HERE.

Mine Web:
Gold rises in morning trade in Europe
The yellow metal recovered some of last week's 1% loss as the earthquake in Japan added to upward price pressure on the metal. Certainly the demand for metals is such as to keep them rising against all unbacked paper currencies in the long run. HERE.
Mine Web:
Sprotts on silver - three digit price ahead
Sprott Money executives Eric Sprott (chairman) and Larisa Sprott (president), sing the praises of "poor man's gold" in this Gold Report interview seeing a three digit silver price ahead. Possible in the long run, but this seems a bit over optimistic in the short run. The Sprotts are well known and quite knowledgeable in the precious metals area. HERE.

DOW Theory tells us that confirmation by both the DOW and Transportation index must confirm for trends to continue. Non-confirmation indicates indecision in the markets. Currently, the bounce in the DOW has failed as the index is down some 61+ at present.
There does not seem to be a correlation of the two which is likely to mean uncertainty in the markets as we are experiencing. The intervention in the markets and the QEs have wrecked  havoc and made seeking accurate information from the markets very difficult for most of 2010 and 2011. So, we make the best educated guesses we can and often just bite the bullet and dive in or just sit on the sidelines. I urge you to use great caution with any  action in these markets. I decidedly prefer the precious metals and then the miners for my portfolios. 

Here is a look at the Canadian Trust (CEF) which holds both silver and gold. This is the one I prefer over GLD and SLV ETFs.  All of these are traded through brokers as are stocks.The last trade today was 21.83 up 0.18.

Miners from Scottrade:

Currencies from Kitco:

Some Prices: FVITF 5.21 ( nice buying range, but I prefer below 5 if available); BULM 1.42; OLVRF 1.8285; BYDDF 4.37; HHWW 1.00 (Up & down without direction); SENY 1.05; DOW off 69.52 to 11975.11; SOX off 9.69 to 1294.43; TRAN off 77. 51 to 5040.47; Gold up 4.10 to 1423.70; Silver off 0.01 to 35.89 (Both metals were higher earlier this morning)

Best to each, Doug


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