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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)
11/30/10 (Commentary for Tuesday) The market sold off early but the ES found support once again at 1173 and bounced - there is a chance for panic selling going into the New Moon Timing Window on 12/5 but the Bears have to seize the day and drive the market down through ES=1173 in impulsive fashion. Gold CONFIRMED its cycle lows by taking out $1380 - gold and silver should both resume their rallies into the February seasonal top before a higher degree correction sets in. The US long bond is declining impulsively and rallying correctively on the 5 min chart - taking out 125'15 will imply another leg down has started but glabal tensions may support the US long bond in the short term. Crude oil rallied in 5-waves on the 5-min chart - looking for a move above $100 going into the New Year. The Dollar Index is rallying hard against the Japanese Yen and the fragile Euro but that didn't hold back gold and oil today.
Big Picture on Stocks – We are cautious here going into early December - still a chance for another pullback before a year end rally. After the New Moon on 12/5, we should see a rally start
Big Picture on PMs – GOT CONFIRMATION OF CYCLE LOWS BY GOLD AND SILVER TODAY. Looking for further blow off into at least the February seasonal highs before an extended pullback.
- Stocks - The market could go either way here - has a hard time staying above ES=1200 but finds support around 1173 - another selling attempt is possible going into the New Moon on 12/5.
- Gold - Taking out $1380 will confirm that our cycle lows have bottomed but a move below $1350 will lead to another leg down. Euro denominated gold made new all-time highs.
- Crude Oil – Oil rallied in 5-waves on the 5-min chart - Nat Gas is close to an important low. The 5-yr December spike rally cycle (1995, 2000, 2005, 2010?) argues for a big rally soon.
- Bonds - Bonds appear to be breaking down again - a break of 125'15 will argue that the next impulse wave down has begun.
- Dollar index - The Dollar Index is holding above 81 and could work higher on European credit worries.
TURNING POINT DAY:
Heavy geo-cosmic signatures argue for some downside volatility this week - a low around the New Moon on 12/5 is possible.
- Evolving Gold (EVG.V, C$1.00 +.06) - Lackluster management and marketing have kept this gem back during a period of speculative enthusiasm for PM junior miner. 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. Adding on weakness.
- Uranium Energy (UEC, $7.00 +.44) - Uranium stocks are playing catch up to the rest of the commodity complex. 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.V, C$1.32 +.08) – Very undervalued uranium stock with huge reserves (+100 M lbs of relatively high grade), lots of cash and production prospects by 2013.
- Prophecy Resource (PCY.V, C$1.01 +.06) - Normal profit taking going on here - no important news. John Lee is determined to drive this emerging coal producer in Mongolia into an international mining powerhouse. Started production this week but needs final permitting. 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. Buy on weakness - short-term news releases could drive stock much higher.
- Gryphon Gold (GYPH, $.20 -.01) - 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 environemnt 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.