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Also keep in mind the Russians are backing out on supplying the US w/cheap Uranium under the agreement to disarm old nuclear warheads.
Techs and semis/market trying to bottom but going into the weekend is going to be dicey given the geo-political events out there. Was tempted to make a few trades today, but so far resisting the urge. Still too much of a coin flip. Gold holding strong on the back of strong oil prices, but as usual shares are for the most part lagging given that it's coming from political instability vs economic. Watching to see if HUI 335 falls today or tomorrow. Could really go either way since if oil makes new highs I expect gold to follow. Not sure about the shares. Still have some DROOY and NG, but that's it in PMs. Still holding some BLDP and the rest is cash. Were it not for oil, India, Isreal and Iran I suspect gold would be $25-40+ lower right now. If gold can crack 660-665 area I suspect it'll run back to 700+ again ST. May try to pick up some PM laggards if that happens otherwise suspect I'll be able to buy at 310-315 (or lower) prior to this fall.
Down volume was about 70% yesterday and 90% earlier this morn, but back to 70% again now. Like the fact that the markets gapped lower both days in terms of trying to find a bottom sentiment wise ST, but not enough by itself to trade.
Between India, Isreal, N. Korea, Iran and Iraq gold certainly has it's share of geo-political catalysts of late. Typically the shares lag during such moves so I'm apprehensive about chasing here. Also gold and the Dollar rallying together right now which hasn't been the case of late so another reason to be wary at least ST. I think yesterday and today are creating a false breakout, but as always HUI action will tell the tale more than gold.
Latest on Isreal:
http://www.cnn.com/2006/WORLD/meast/07/12/mideast/index.html
I guess the premise on yesterday's run was that since India is the world's biggest buyer of gold and the attack happened on their soil that gold buying will be further increased. I think it's somewhat faulty or short lived since they buy for different reasons, but we'll see.
Yea NG has been weak of late maybe due to uncertainty over Rock Creek permits or maybe the market is thinking they'll have to pay more for PSM.TO or have more legal actions required/delay in Galore. Maybe it's just the fact that they're simply not producing yet so NG tends to run in spurts when there are no immediate news catalysts. Still confident LT, but have not been adding here since it's acting weak. Even if we get only slightly better PMs prices from here still think there will be a much better risk/reward entry in the next 1-4 months overall so gonna wait some more despite today big gold move.
Miners/gold looking like they could have another leg up here, but most PMs are lagging the surge in gold today. Silver stocks not doing much better. Ahead of G8 and Bernake testimony I think I'll continue to wait. On the plus side PMs are moving counter to the general market more and more. Not sure what today's catalyst is w/respect to gold. Maybe potential sanctions against N. Korea by Japan? Dollar isn't doing much. Japan will likely raise rates tomorrow maybe this is just sell the much aniticipated news?
Indian train blast responsible for gold move today?
http://www.cnn.com/2006/WORLD/asiapcf/07/11/mumbai.blasts/index.html
SMH breaking to new low here. Often a leading indicator for markets and Naz.
PMs holding pretty good in the face of a modest decline in gold. Still too close to recent highs to get aggressive trading there though. Better risk/reward entires should be coming yet.
Well I only have DROOY LT in a few accts and so far I've only been holding very ST. I've made far more money in DROOY the past year trading vs holding so it'll probably be the case again, but relatively speaking it's one of the cheaper producers out there. They've continued to migrate/diversify assets/production out of SA and Gold in Rand terms is quite profitable for them here and I expect it could get more so. LT for me w/DROOY might just be 1 year vs NG I think I could hold the next 5-10 and do very well. There are certainly much better issues than DROOY, but at the right price almost everything is attractive to me. I also like the liquidity here as a trader. Staying w/liquid issues for the most part until seasonality and TA are in our favor again. I have been selling some of the shares at 1.40 and above recently though as I expect a pullback again hopefully to 1.30 or less again.
Gold to oil ratio is still very cheap. I agree oil should have decent downside once a worldwide recession gets going which at some pt seems inevitable once the US Debt bubble starts to implode. As such I'm not so worried about declining oil prices hurting gold and agree on the cost part of the equation helping.
Good post here on gold/PMs:
http://www.siliconinvestor.com/readmsg.aspx?msgid=22605318
G8 and Bernake are additional legit reasons to be ST cautious on PMs. Holding approx 17% PMs (as core LT shares, NG and DROOY currently w/NG 5x greater) in largest account. IRAs are/have been 100% cash for about 2+ weeks now.
Today's gen. market morning bounce is not the sort of thing you like to see if you want to see excess optimism erased from the markets. Actually like seeing PMs and market trading opposite here. Hopefully the decoupling continues in the next few weeks. Patience continues to be the call here imho.
I'm mostly a swing trader myself, but ideally I like to buy issues for the ST that also have some LT potential. Once in a while I continue to hold some shares LT. Normally I don't look at weekly charts that often, but this one is very interesting and I use it as a proxy for the sector.
With respect to RSI/MACD you're talking about positive divergence and I've noticed the same thing on both the daily, weekly and hourly. If the sector was more fundamentally undervalued I'd probably take a bigger position here given the LT charts and OBV. Agree downside is limited and I should hold regardless, but I tend to protect capital above all else especially in this environment.
I don't have a very good feel for the markets or PMs very ST here so in those instances it's best to just step aside. Right now the BLDP position is relatively small for me. I was interested by the technicals 2 days ago and the relative strength, but so far it's been a losing trade. My largest position continues to be cash. Watching the Naz and SMH here for clues. Naz has been underperforming on this latest market ramp which suggests upside is limited. Nothing looks really compelling here long or short.
1/2 stopped out of BLDP. Should have support here, but markets just look plain ugly. I feel retrace is looking more likely now.
I liked it better when it was above the trend (same w/the rest of the sector). I'm playing BLDP just for a ST bounce and so far it doesn't look like the best entry, but downside should be limited as well. Been pulling back on lower volume and support at 5.9 should be decent.
I've been trading/following the sector mostly on TA, but from what I do follow it's my opinion that BLDP is further along and has a more proven technology vs FCEL. They both look relatively pricey here, but w/the short interest it doesn't take much to get them moving. I'll probably partially stop myself out on a close below 5.9 w/BLDP. Another one to look at is MCEL. Seems cheaper in it's own niche, but obviously given it's market cap it's much harder to trade. No position there currently, but have owned it in the past.
The best plan may be to simply stay away from the markets for another month or so and see what settles out. Hard not trade at times though when you're sitting in front of the computer. With the kids at home it's not like I can get away too much.
(edit) Been buying BLDP throughout the day and was just about to post the same. Looks decent on daily as well as 30 min. Playing it just as a trade on rising oil prices and a bounce play as they're a leader in their space.
ESLR also looks decent ST, but has already run some from the lows.
Another good reason to consider dumping ST gold trading shares:
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B6FD6EC2A%2DD0F6%2D420F%2DAF01%2DF412059F230...
Seems like yesterdays rally was mostly short covering and window dressing imho. This may continue a bit longer, but I don't think there was enough from the Fed yesterday to justify a big move here. They're still watching commodities per the statement and guess what....commodities are zooming again. Still treating this like a ST trading environment.
Had no shorts going into yesterday and still don't. Markets would have to get overbought before I'd consider that again.
HUI 60 min has fallen out of it's channel. Right now I still expect another 25 basis pt hike and little change if/any in the language. As such we'll probably get more buying ops post Fed. Market has sold off prior to Fed so a bounce is certainly possible, but risky environment here still. Sold 1/2 my SMH trade when it broke 32 today. Still looks like it could move higher IT, but cutting my losses in case I'm wrong.
NAK - As is often the case the TA reflects the news prior to the release. Rio Tinto sub buying 9.9% stake at $10 Can.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B41363FC6%2DC993%2D4678%2DA72D%2D54E6902BE71...
Any US based small cap uraniums that look interesting to you here? I need to setup an account to trade Canadian stocks directly. Been a bit lazy I guess and I like everything in one spot. Somewhat follow CCJ and FRG, otherwise don't track the sector like I should.
PMs continue to look strong ST, but I ain't chasing. There will be better risk/reward entry pts even if they're higher (which I doubt that it won't get better price wise as well).
Markets and gold expecting 50 pt hike and then done. Not sure they'll get their wish, but enough odds that it pays to have some exposure prior to the Fed.
Sold some higher cost NG shares since I was overweighted into this morn's pop. Will probably go into Fed meeting w/15-20% PM weighting overall between all the accounts. Things look decent ST, but there should still be more dips in the future. Also looking for some end of month selling from funds looking to window dress.
SOX/SEMIs/SMH
This is probably just a ST trade for me, but yesterday's move w/today's pullback provides a decent entry pt. INTC really beaten down and others look decent. Don't want the risk of individual issues here in case of earnings warnings so SMH looks better.
pms retested breakout and now firming. pog relative to dollar looks good too. added some smh, drooy and ng this morn. typing w/one hand as baby on chest right now. ;)
What's your FA/TA opinion on SU here as a ST trade? Seems reasonable to me, but I hate buying on days where the market is already up this significantly. Could gap either way tomorrow.
Both HUI and S&P flirting w/top of channels here. Not exactly the safest place to buy. S&P not quite there. Gold testing it's downtrend as well at these levels.
Markets starting to discount language change from Fed or just counting on 5.5 putting the Fed on hold?
I'm guessing quite a bit of today's action is short covering.
If we can break this level on the HUI we could get another 10-20 pts in short order prior to the Fed.
http://www.investorshub.com/boards/read_msg.asp?message_id=11646183
Ideally need a close above 304-305 to be convincing. Don't have a good feel ST so staying put for the most part. Added some DROOY at 1.23 just an initial position just in 1 acct so far. Looks pretty washed out, but if the sector makes new lows something around $1 wouldn't surprise me. Just to make it difficult a close around these levels on the HUI prior to the econ data tomorrow would keep everyone guessing. A gap up/down would probably in order. Volume really lacking so far.
They're paying all cash for Pioneer. They may have to raise it somewhat, but it's about 34 mil Canadian right now so can't see it having too much impact on a company the size of NG. I think NG is being hurt more by lack of news and delay in Rock Creek. Permitting is always a slow business. About 6 months ago NG was hoping to potentially start production in early 2007. Now they're saying mid 2007. Rock Creek is only a small part of the overall story, but enough to have an impact here. Also given the Pioneer bid I don't expect any news on Galore until this is finalized. Both Galore and DC should get resource upgrades sometime this year or early next I suspect.
Agree w/action in gold and PMs relative to Dollar/Euro and gold. PMs trying to make one more move to the upside. I suspect the HUI will try to test the upper trendline prior to turning down again.
I don't think this rally is going too much further ST prior to the Fed. If the Fed does something unexpected and pauses then possible this could develop into something more, but right now I don't expect much change in the language (maybe at 5.5 FF).
We need to break this at a min
I don't think housing stats good or bad will move the market much ST. By all meassures the home builders have broken down.
Bad numbers are already factored in. Not short the home builders here as I'm waiting for a retest of the trend again to consider going short again.
Leading indicators and Durable goods on thrus and friday will be more key.
http://biz.yahoo.com/c/ec/200625.html
A continued rally into maybe mon/tues seems more likely than not and then it'll be down a bit prior to the Fed. Just a swag since I'm not long or short the gen market here.
Not sure does the Fed meet the 27th (tues) or the 28th?
I also expect the same. Very ST gold stocks have sold off on very low volume. A test of the upper trend line as well as gold filling the gap (GLD) might be in order next week (HUI 305-310). I still expect some weakness prior to the Fed as those in doubt will raise cash, hedge etc. I don't think the Fed is going to change it's language much from last time and odds are close to 100% chance they'll raise so I think the market will be disappointed if it continues to rally much more ST. Sitting on existing positions here and sleeping well. Markets, gold and commodities still too connected for my tastes.
Thanks. Fairly long, but decent read. A few tidbits where new to me concerning the overall mine size as well as NAK's reaction to mitigate environmental issues. I suspect this mine will get developed eventually, but whether that is 2011-2012 like NAK plans or 2014-2016 is anyone's guess right now. NAK contineus to act really well though. For my money I'll play NG as a proxy as for it's own reasons.
Euro/HUI charts
I'm no expert in EW, but this looks like it has another move down coming up.
Also HUI very much in no-man's land ST. Maybe we hit the top of the channel here, but for new money ST looks like a coin flip on risk/reward basis.
I think I'll be patient here and wait for some divergences to show up on the dailies.
I do of course look at the dailies and more frequently than not. However, when in a fast trending market I do look at hourlies more. I also had some real world stuff yesterday so I was away from the computer more and like everyone after a serious correction I tend to keep my bear suit on a bit too long. Saw a profit and got mentally lazy I guess.
Nice job in holding this whole time. Wonder to what extent options expiration and short covering are playing in this rally. If the markets have decided that Ben will pause after this next hike or if the Fed does in fact pause I guess this could continue for while. Not sure if I'll be buying the next decent dip or waiting for a nearly full retest. Crazy volatility.
You're probably right in that course. I tend to sell early as well. But I have been keeeping some shares throught this entire correction and plan on holding some regardless. As such I don't mind if I "miss out" and things continue higher as I've got a core.
Scaling out another 1/2 of what's left in the trader PMs. This could continue, but getting overbought on the hourly so a break is possible soon. I got a bit too cautious at the bottom like I usually do, but at least by selling these rallies I'm setup to buy any dips again. I think between now and the Fed meeting we'll at least get once more op similiar to what we had 2 days ago.
LOL. Yea right after I post. Did most of the selling a while ago though so it doesn't matter. NEM still noticably weak as well as POG and silver. Good divergence so far, but hard to get too excited yet. Still feel good about selling some and holding some. Not sure what to make of this ST. I think we'll get a chance at these same prices or lower sometime the next few days/week so not too worried.
Yea already on the same page. Parred back to only holding approx half of what I bought from yesterday. Don't want to get too cute as we may simply get a gap higher in POG just to spite us. More than likely though 540 looks to be tested at more length. Small gains are better than small losses.
Miners look ok here it's POG and the gen market that can't seem to find a bottom.
Didn't think Don recommended individual issues much. Why does he like FAL so much? Haven't really followed it in the past.
NAK has been stubbornly strong throughout this correction. Great resources, but huge initial outlays required, low grades and won't be mining for a while. Also, very close to an important river area on public lands so it could be tied up a while in permitting. Has support of the governor though. No position currently, but have owned in the past. Too illiquid for me right now. I bring it up since NG is similar, but all of the mines are located on private land, they'll have smaller initial outlays and they'll be producing sooner. If NAK does get bought soon it should help to put a floor in NG or maybe even help it bounce some. Expected NG to be stronger through this correction, but not terribly suprised given all the damage that has been done even to high flyers such as GG. NG is trading a premium to NAK, but still dirt cheap compared to other resource plays also given their track record for increasing resources, liquidity and location of mines. We'll see. Any opinions on NAK here given how it's behaved?
I turned sour on NAK when they said they were going to drill even more holes and were putting off a feasibility study to do so. A mistake obviously. Was expecting a secondary given their cash position, but looks like their negociating for a buyout or more likely a JV where the partner will probably pay for most of the initial construction. Maybe NAK keeps 30%-40%? No position currently. Watching mostly as to how it might impact NG. But not opposed to owning NAK again just want more clarity first even if it means I have to pay more.
Things looking a little better in PM land now.
Yea the bounce is somewhat tepid considering. Sold off maybe 10-15% of my traders bought yesterday. Just the higher cost ones in case we do a partial retest. Don't want to sell much or buy much here until the ST direction is clearer.
Volume needs to pick up.
I'm liking this action this morning, but not adding further yet. Feel comfortable w/current exposure and don't mind adding higher post Fed once the smoke has cleared. Low volume retest coming in the next few days? Hard to say. Past PM bottom tend to be long drawn out affairs.