Market Observations for the Coming Week: Our bias is that the Fed will boost the SPX to new highs by the 12/16 FOMC meeting where we have market expectations of a 25 basis point rise in rates.
11/26/15 (Commentary for Thursday) We're in a bullish seasonal period for the market - the Friday after is dominated by retail investors and has a bullish bias. The market will be trying to get a sense for Black Friday spending and a picture for holiday spending as a whole. Commodities got a bounce across the board Wednesday - oil, copper and gold in the Full Moon Timing Window. Bullish seasonality and performance hungry hedge funds persuade us to buy dips into the December FOMC meeting on December 16. The SPX is doing a sideways correction into the Full Moon and we expect a reversal up by Friday. Weakening retail sales from restaurant and department store chains still is a concern - as is the technical condition of the SPX components with over 50% of component stocks in bear market patterns. The market has now gone through most of the earnings season and is now factoring a "one and done" rate hike in December. Bonds rallied Thursday and moved against our short position. Crude oil and copper reversed up in the Full Moon Timing Window but gold made lower lows on Thursday - slightly undercutting Wednesday's lows. Gold bounced to $1080 Tuesday and then pulled back - we may have seen the low last week at $1062 - the COTs released late Friday argue that we are close to an important intermediate low. The USD tested 100 early Monday and is rolling over giving commodities a bounce.
Big Picture on Stocks (UPDATED) - The SPX made a low on 8/24 and retested it on 9/29. We now look for the SPX to reach new highs by the 12/16 FOMC meeting.
- Big Picture on PMs (UPDATED) – The Comex gold COTs released late Friday show a big reversal in both "Large Spec" and "Small Spec" trader positions - this argues for an important low soon.
- Stocks - We're looking for a reversal higher Friday as bullish seasonality kicks in.
- Gold - Gold slightly undercut Wednesday's on Thursday - $1062 may be an intermediate low.
- Silver – Silver looks stronger than gold here.
- Bonds - Bonds bounced into Thursday putting our TLT puts under water.
- Crude Oil – Oil reversed higher after the Full Moon - looking for more rally
- Dollar Index – The USD is rolling over on Thursday night.
TURNING POINT DAY
The Full Moon on 11/25 is a key turn window for the week.
Depression Beater Portfolio: (This portfolio this week is just a sample of my own portfolio - no recommendation to others is implied or intended)
WEEKLY COMMENTS: Update for 7/05/15: The CDNX remains mired in a deep, historic bear market since the April 2011 which led the turn down in the gold and silver market by a few months. To us, junior mining stocks are just trading affairs unless the 50-day MA crosses up through the 200-day MA. In our best guess, we feel that the CDNX and the gold mining juniors could bottom by October in advance of our target of April 2016 for a final low in gold and silver - typically the gold mining stocks bottom 6-9 months before final lows in gold and silver. We have read that up to 45% of junior gold/silver stocks only have enough cash on hand to continue operations for the next quarter. Many recent equity-based financing are small and done just to keep the lights on. Until the CDNX turns up , it is best just to focus on well-financed juniors with great assets and positive cash flow. Now is the time to follow these stories since we are in the late stages of this brutal bear market.
- Great Lakes Mining (GLKIF, C$0.0576 +.0068) – NEW Recommendation 7/5/15 - This is a unique situation in the high-end graphite market. This company is scheduled to open a factory to upgrade graphite for specialty applications by October. This vertical integration business model adds a new dimension to this company and is worth following.
- Aroway Energy (ARW.V, C$0.010 -0.000) – This western Canadian junior is part of a very sweet JV deal with a private partner in the Peace River basin – it's production share should climb from 669 BOE/day (75% black oil) to over 1200 BOE/day later in 2012 – management has selected a good slate of properties for drilling and it is bearing fruit. Buy on dips. Use a 20% stop from purchase price.
- Evolving Gold (EVGD.TO, C$0.0357 +.0007)- UPDATE: This stock has two world-class finds in Wyoming (Rattlesnake) and a potentially huge find on the Carlin Trend in NV. The problem is that the company needs a financing and could be forced to sell a world-class asset for pennies on the dollar.
- Uranium Energy (UEC, $1.03 +.01) - UPDATE: Uranium prices are recovering and the fundamentals are getting a perfect storm. Favoring the near-term producers here like UEC - the fundamentals are much more dramatic that the typical emerging gold producer.
- Energy Fuels (EFR.TO, C$2.58 +.04) – Finished acquisition of STM.TO in early September - buil0ding up a position as a strong US producer of uranium in a tight market.
- Prophecy Coal (PRPCF, $0.0240 -.0042) – UPDATE: This stock needs to get its Mongolian coal mine into a positive cash-flow situation to support its power plant project and other endeavors without diluting the common shareholder to zero.
- Gryphon Gold (GYPHQ, $.0040 +.0043) - UPDATE: De-listed stock. Good asset but needs a cash infusion and maybe a partner. Good leverage to gold.