Depression Beater Portfolio: - see below for new updates on Junior Miner Favorites - (This portfolio is just a sample of my own portfolio - no recommendation to others is implied or intended)
11/27/11 (Commentary for Sunday) Last week gave us the weakest Thanksgiving week market action since 1942 but we suspect that the New Moon/solar eclipse on Friday gave us a short-term low. We should get at least an oversold bounce into the 11/29-11/30 turn window but maybe a multi-week stock rally if gold can close above 1704 – the DX and US long bond both look primed for a C-wave down on their daily charts into mid-December. Back-to-back McClellan Oscillator readings of < -300 also suggest a multi-week bounce here but the DAX will have to lead the way.
Big Picture on Stocks (Updated) – We bottomed the first phase of a global bear market on 10/4 and we are in a large corrective rally that should run late into the year. Looking for a pull back into the 11/23-11/24 turn window before the next phase of the corrective rally.
Big Picture on PMs (Updated) – This year is comparing well with 2006 – a parabolic blow off in the spring and then a stiff >20% decline into October. We're looking for an explosive rally to start in the PM sector by the 11/23-11/24 turn window – this should run into 12/21 or so.
- Stocks – The ES (and the DAX) looks primed for a reversal up if we get supportive news from Europe -the New Moon/solar ellipse should mark a short-term low. Looking for a X-mas rally to start tomorrow in Europe.
- Gold – Gold bottomed early Tuesday and reversed up in a 5-wave rally to CONFIRM Weekly Reversal Timing from Starkey – a retest of last week's lows should result in a rally that takes us above last week's high.
- Sllver – Silver should reverse higher going into the 11/29-11/30 turn window – taking out $34 would be short-term bullish.
- Bonds – The bonds made a B-Wave test of the 10/4 highs on the daily chart – looking for a C-Wave pull back into X-mas.
- Crude oil – Crude oil has been outperforming the SPX – tensions in the Middle East and a rolling supply shock from the 2008-2009 washout should give us another price spike above $100 going into the first half of 2012.
- Dollar index – The DX appears to be making a B-Wave test of the 10/4 highs – looking for a C–Wave down into the X-mas time frame. Our target of .90 appears to be farther off in time – perhaps in early 2012 as the next stage of the European debt crisis rears its head.
TURNING POINT DAY:
Global markets fell hard into the New Moon/solar eclipse on 11/25 – looking for a bounce into the 11/29-11/30 turn window.
Depression Beater Portfolio: (This portfolio this week is just a sample of my own portfolio - no recommendation to others is implied or intended) DELAY NEW PURCHASES UNTIL LATE-OCTOBER – TIME TARGET FOR MARKET CORRECTION LOWS
- Evolving Gold (EVG.TO, C$0.3550 -.035) – The stock price fell back to the level of the recent private placement – drill results coming out soon could confirm a world-class find in the Carlin trend – this stock is a buy here. But a world-class deposit in Wyoming (Rattlesnake) and a potentially huge find on the Carlin Trend in NV argue that this stock will be a big winner. Goldcorp took a 15% interest and that says it all.
- Uranium Energy (UEC, $2.68 -.08) – The uranium supply/demand story still has legs despite the Japanese disaster. Favoring the near-term producers here like UEC - the fundamentals are much more dramatic that the typical emerging gold producer. Adding on weakness.
- Strathmore Mining (STM.TO, C$.3850 -.005) – Very undervalued uranium stock with huge reserves (+100 M lbs of relatively high grade), lots of cash and production prospects by 2013.
- Prophecy Coal (PRPCF, $0.4585 -.0035) The spinoff of the Prophecy Platinum Company (PNIKF) has galvanized this stock – look to buy at key chart support as the broad market corrects into September/October. John Lee is determined to drive this emerging coal producer in Mongolia into an international mining powerhouse. Started production last fall with a favorable off-take agreement. Very aggressive business plan in place to make it a billion dollar company. Following the path that Robert Friedland took with South Gobi. This stock has obvious 10-20 bagger potential.
- Gryphon Gold (GYPH, $.273 +.003) - Got plan from management to begin phased production by early 2011 - financing details have yet to be announced. Has >1M oz AU proven, mining permits and a highly prospective land package. Needs a cash infusion and maybe a partner. Good leverage to gold.
JUNIOR MINING FAVORITES:
(These companies are speculative - best to keep them to 10% of a portfolio with 50% stops based on purchase price. Buy a basket to diversify risk)
RULES FOR JUNIOR MINING INVESTING:
1) Keep to 10% of a portfolio.
2) Due your own Due Diligence.
3) Maintain a price stop of 30% of purchase price or whatever your Technical Analysis suggests is prudent.
4) Sell half of position on a double.
5) In this speculative environment with many junior miners coming to life, put a TIME stop on your junior investment. If your position is DEAD MONEY, consider rotating it to a stock that has more favorable technicals - juniors should have a PERFECT STORM behind their back between now and April 2011 - it's a time to MAKE HAY.
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