The Daily JDV Market Timer – December 29, 2011

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)

12/29/11 (Commentary for Thursday) The large contracting triangle formation that has formed on the daily chart of the Nasdaq and SPX is close to the apex - a breakout is imminent – we're looking for a break to the upside into the New Year.. The Nasdaq found support on the uptrending line of the triangle – a resolution to the upside is expected. Gold made an important low today at $1525 in the 12/29-12/30 turning point window and reversed to the upside with a 5-wave impulsive rally. The GLD also gave us a capitulation volume – we're looking for a bounce to the top of the daily range – buy gold, silver and gold stocks on dips. Oil erased yesterday's losses in a 5-wave impulsive rally - buying oil stocks on dips.

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 has morphed into a contracting triangle on the daily chart. We believe that this triangle will break to the upside into the New Year. We should get a tradable bounce into January.

Big Picture on PMs (Updated) – The daily chart of gold shows a clean wave count for an almost completed EW a-b-c zig-zag decline – we started a 4^th wave of C bounce on Tuesday and we should get a 5^th wave down to the low 1500s to finish the pattern. Gold made a major low today at $1525 as the 12-wk cycle low bottomed in the 12/29-12/30 turn window – buy the PMs on dips.

• Stocks – The Nasdaq found support on the uptrend line of the contracting triangle on the daily chart – looking for a break out into the New Year.
• Gold – Gold bottomed today at our $1525 target – the 12-wk cycle low bottomed into the 12/29-12/30 turn window – BUY GOLD + GOLD STOCKS on dips for a tradeable bounce.
• Silver – Silver found major support at 26.15 and reversed up impulsively. We may have seen an important intermediate low – buy on dips.
• Bonds – The bonds appear to be tracing out a corrective leg down on the hourly.
• Crude oil – Oil bottomed in the 12/29-12/30 turn window and reversed up impulsively – buying gold stocks on dips. Iranian tensions 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 may have peaked a B-wave on the hourly and is retracing in a C-wave down. 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:     

The New Moon on 12/24 should dominate trading this week – looking for a rally into the weekend and then a reversal down early next week.

 

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-DECEMBER – TIME TARGET FOR MAJOR CYCLE LOWS

 

• Evolving Gold (EVG.TO, C$0.300 -.00) – 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, $2.97 +.02) – The uranium supply/demand story still has legs despite the Japanese disaster. Favoring the near-term producers here like UEC - the fundamentals are much more dramatic that the typical emerging gold producer. Adding on weakness.
  • Strathmore Mining (STM.TO, C$.36 -.00)– 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, $0.407 +.007)  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, $.251 -.009) - 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.