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Timing & trends

"The US stock market is riding on the wings of hope ..."

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Posted by Greg Weldon via Weldon Financial

on Friday, 20 July 2012 16:34

One of Michael Campbell's favorite analysts, Greg Weldon,  is Michaels Guest Tomorrow on Money Talks. 

 From the iconic seventies rock band Jefferson Starship ... 

"If only you believed in miracles ... 

... like I believe ... 

... we'd get by." 

The US stock market is currently singing this song. 

Indeed, we work our way backwards in today's Money Monitor, starting with the markets, rather than the macro-data, by observing the chart on display below in which we plot the US S+P 500 stock index. 

We focus on today's upside breakout attempt, an event we anticipated as per yesterday's Weldon LIVE. The US stock market is banking on a miracle ... 

... another monetary miracle, to be delivered by the Fed, via QEIII

Evidence the daily chart on display below revealing that the benchmark US stock index (futures contract) is making a run at key overhead resistance defined by the July 5th intraday high of 1375.00 ... in synch with support generated by a increasingly bullish moving average dynamic, and in line with the completed downside Fibonacci retracement. 

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Reviewing the chart of the S+P 500 exhibited at the bottom of the previous page, we spotlight the fact that the July 5th high of 1375 was established within the context of a key outside-downside reversal day. 

Indeed, we observe that, currently, the S+P 500 is well below today's intraday high, which did in fact 'breach' the July 5th high. 

Food for thought ... 

... particularly when we can dissect the deluge of macro-economic data emanating from the US in the last week, and clearly conclude that DEFLATION is becoming increasingly dominant, as the primary macro-force. 

Hence, it becomes an easy conclusion ... the markets are pinning their hopes squarely on the shoulders of Ben Boom-Boom Bernanke. 

The US stock market is riding on the wings of hope ... 

... and the rally could fly, for a while. 

But at the end of the day ... the US stock market is DEPENDENT on yet another monetary miracle from the Federal Reserve. 

Be sure to listen to Greg's latest on Money Talks with Michael Campbell tomorrow at 9am PST. You can listen live at CKNW.com

 

Weldon's research publications extends an invitation to sign up for a FREE TRIAL for thirty days.

Weldon Financial produces independent research for the sophisticated investor and/or trader and offers investment management solutions that capitalize on global market trends. Greg Weldon is the founder and sole producer of all the research and operates his money management services as a registered Commodity Trading Advisor. 

Weldon's Money Monitor offers a very independent, objective view of the global markets by applying a top down market analysis and a bottom up technical analysis. Greg also publishes The Metal Monitor and The ETF Playbook offering specific focus on the precious metals markets (prices of Gold, Silver, etc.) and the world of Exchange Traded Funds, respectively. He has a creative and captivating writing style and his loyal readers have claimed that the ‘research pays for itself over time’. 

The Global Macro-Discretionary Program manages money for individuals, joint, trust, corporate and partnership accounts. Mr. Weldon approaches his investment selections from a top-down macro-perspective and then applies his quantitative discipline from the bottom-up to execute his methodology, seeking to produce an absolute return while sharply focusing on risk management. This program invests in a diverse range of futures contracts across the commodity, currency, global stock index, and global fixed-income sectors. Weldon's Commodity Long-Short Program takes a more quantitative approach, using our proprietary Momentum Trading Indicators, and invests strictly in the strongest ‘bullish’ and ‘bearish’ commodities. 

Weldon's research publications are explained in more detail in the Research section above including an invitation to sign up for a FREE TRIAL for thirty days.




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Timing & trends

The Most Important Chart in the World

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Posted by Todd Harrison - Jim Rogers Comment

on Thursday, 19 July 2012 13:25

The most important chart in the market might be the chasm between commodities and stocks, as per the chart below. Either the former must rally or the latter will decline. The famous and very rich Jim Rogers said in an interview yesterday:

 "the investing game is simple these days. I do believe I could count on one hand the number of times I’ve been presented with an investment opportunity that guarantees success no matter what direction the economy takes.”  Rogers adds, “If the world economy gets better, I earn my money on commodities. If the global economy gets worse, then they will print more money and I will make money in commodities.”  More of the whole interview HERE

(The CRB Commodite Index is Orange, The SP500 Index is White)

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Timing & trends

Buy Gold Now: Five ETFs to consider

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Posted by Don Vialoux Timing the Market & Equityclock

on Wednesday, 18 July 2012 19:45

Gold equities and related exchange traded funds listed on the TMX finally came alive on Friday after gold bullion prices rose sharply on news that China’s second quarter GDP recorded a healthy 7.6 per cent annual growth rate. Gold advanced to US$1,587.10 per ounce and briefly broke above its 20 and 50 day moving averages.

Seasonal influences for gold and gold stocks are starting slightly earlier than usual this year as they did last year. Thackray’s 2012 Investor’s Guide notes that the period of seasonal strength for the gold equity sector is from July 27th to September 25th. The equity sector trade has been profitable in 17 of the past 25 periods including 11 of the past 14 periods. Average gain per period for the past 25 periods was 7.2 per cent.

On the charts, the S&P/TSX Global Gold Index at 289.06 has a negative, but improving technical profile. The Index bottomed in mid-May at 265.59, rose strongly to 340.71 in early June followed by a recent test of its low. The Index remains below its 20, 50 and 200 day moving averages. Short term momentum indicators are deeply oversold and showing early signs of bottoming. Strength relative to the TSX Composite Index has been positive since mid-May. A move above 340.71 completes a modified reverse head and shoulders pattern. Preferred strategy is to accumulate gold equities and related ETFs at current or lower prices between now and July 27th for a seasonal trade lasting until the end of September.

Canadian investors can choose between five ETFs when interested in entering the sector. Each ETF has unique characteristics;

The most actively traded gold equity ETF in Canada is iShares on the S&P/TSX Global Gold Index Fund (XGD $18.01) The fund tracks the performance of 59 precious metal stocks that make up the S&P/TSX Global Gold Index. The Index is capitalization- weighted. Largest holding are Barrick Gold, Goldcorp, Newmont Mining, Kinross Gold, Anglogold Ashanti and Agnico Eagle. Management expense ratio is 0.55 percent.

Horizons offers the BetaPro S&P/TSX Global Gold Bull + ETF (HGU $7.08) and the BetaPro S&P Global Gold Bear + ETF (HGD $12.59). Both are leveraged ETFs that track the S&P/TSX Global Gold Index. The Bull ETF is designed to generate twice the daily upside performance of the Index. The Bear ETF is designed to generate twice the daily downside performance of the Index. Management expense ratio is 1.15 percent.

Horizons also offers the AlphaPro Enhanced Income Gold Producers ETF (HEP $5.88). The ETF tracks the performance of a portfolio holding 15 equally weighted senior global gold and silver producers. At or near the money listed call options are written against security positions. Option premiums and dividends earned by the fund are distributed to unit holders on a monthly basis. The strategy is enhanced by high implied volatilities on the call options of senior gold producer stocks. Management Expense Ratio is 0.65 percent.

Bank of Montreal offers the BMO Junior Gold Index ETF (ZJG$13.28). The ETF tracks a diversified portfolio of 35 junior gold stocks that make up the Dow Jones North American Select Junior Gold Index. The Index is capitalization weighted. Largest holdings are Allied Nevada Gold, Coeur D’Alene Mines, Alamos Gold, AuRico Gold and Nova Gold Resources. Management Expense Ratio is 0.55 percent).

Below: The Nine year seasonality chart on the S&P/TSX Global Gold Index

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Don Vialoux is the author of free daily reports on equity markets, sectors, commodities and Exchange Traded Funds. He is also a research analyst at Horizons Investment Management, offering research on Horizons Seasonal Rotation ETF (HAC-T). All of the views expressed herein are his personal views although they may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment. Horizons Investment is the investment manager for the Horizons family of ETFs. Daily reports are available at http://www.timingthemarket.ca/ & http://www.equityclock.com/



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Timing & trends

Jim Rogers: Buying Commodities Now Guarantees Success for Investors

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Posted by Jim Rogers via OilPrice.com

on Wednesday, 18 July 2012 08:36

Jim Rogers says the investing game is simple these days. Rogers said this week, “I do believe I could count on one hand the number of times I’ve been presented with an investment opportunity that guarantees success no matter what direction the economy takes.”  Rogers adds, “If the world economy gets better, I earn my money on commodities. If the global economy gets worse, then they will print more money and I will make money in commodities.”

Although we have featured comments by Rogers many times on the site, Jim Rogers, who ran money with Mr. George Soros way back when, is one of the few investors with an investment record that substantiates his expertise and provides answers supported by both the fundamentals as well as detailed research.

Put simply, according to Jim Rogers, CEO and Chairman of Rogers Holdings, we should invest in commodities.

....read more HERE

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Timing & trends

The next real gold rush: Underwater Mining

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Posted by Ben Gersten via Resource Investor

on Tuesday, 17 July 2012 00:08

The next real gold rush won't be on a far flung asteroid. It will be under the sea.

In fact, The Wall Street Journal said earlier this month that underwater mining could be a $500 trillion business someday.

That means underwater mining stocks, which are cheap now, could be headed for monster gains.

Scientists now project there are over 10 million tons of gold to be found by sifting through the seas - but don't go out with your shovel and sifter. Most of the gold is buried under a mile of water.

And that is just the gold.

Underwater mining companies also hope to extract copper, nickel, ore, silver, zinc, and even rare earth metals.

So for those of you who are worried that the earth will run out of these minerals, underwater mining should calm your fears.

"It's unimaginable to think we'll need to rely on asteroids from space to supply the Earth with metals," Scott McLean, chief executive of Ontario-based mining company HTX Minerals Corp., told The Journal. He said the idea is "interesting, it is visionary to think about these things," but he concludes: "The Earth's mineral bounty is immense, and it will continue to provide for millennia."

Underwater Mining: Tapping the Unknown

There is very little that is known about what exactly lies at the bottom of the ocean and how much of it there is. Yet engineers and scientists are coming up with newer ways to find out what is hidden below and how to extract those resources.

Last year scientists from the University of Tokyo discovered an estimated 80 billion to 100 billion metric tons of rare-earth deposits in the Pacific Ocean, or almost a thousand times more than current proven recoverable onshore rare-earth reserves, as estimated by the U.S. Geological Survey.

And the interest in underwater mining is booming on a global scale.

Over the last year, the International Seabed Authority, an independent body set up by the United Nations to control mining in international waters, signed four new contracts with groups interested in exploring the ocean floor, says Adam Cook, an ISA marine biologist.

That is a jump from the eight contracts previously, six of which were signed over 12 years ago, Cook said. The new contracts include agreements with state and private organizations from Japan, Korea, Russia and China.

Previously, underwater mining was too expensive and beyond our technologies to see to fruition. But recent advances in robotics, underwater drilling, computer mapping, and record high commodity prices now make underwater mining an attractive possibility.

And there are some Canadian companies already testing the waters.

The Top Underwater Mining Stocks

Nautilus Minerals Inc. (TSE: NUS): Thought to be the first to mine, Nautilus suffered a setback Friday, June 1 when the company announced that funding issues would delay its scheduled projects. This highlights the fact that the initial costs for underwater mining are still a major risk for investors, especially in the short term.

However, the Toronto-based Nautilus dealt with financing issues after the 2008 crash and this year signed its first customer for high-grade copper and gold that it expects to mine almost a mile below the South Pacific, in several sites off the coast of Papua New Guinea. Nautilus reported that one of its prospective undersea deposits in the Pacific Ocean has the capacity to yield ore with an average 7.5% to 8% of copper, compared with 0.6% at an average onshore mine.

Nautilus stock took a hit following the funding announcement and tumbled more than 60% to $0.94 over the next few days before rallying to its current price of $1.27. This might be the time to buy the dip as it traded above $3.00 just less than a year ago and has an average target price of $3.80.

Diamond Fields International Ltd. (TSE: DFI): Based in Vancouver, British Columbia, Diamond Fields plans to use a ship or platform fitted with an almost mile-long hose to vacuum up fine silt suspended near the bottom of the Red Sea by 2014. The company says the silt contains copper, silver, zinc and trace amounts of gold.

The stock is currently a penny stock trading at $0.06. Yet, it traded at $0.40 not more than a year ago and over $0.75 prior to the recession.

DeepGreen Resources: Also based in Vancouver, DeepGreen announced that Swiss-based Glencore International PLC ( LON: GLEN), a commodities trader, agreed to buy half of the nickel and copper it plans to process from tennis-ball-sized nodules sitting nearly three miles below the water's surface between Hawaii and Mexico. The nodules contain about 30% manganese, a metal used in the manufacturing of steel, along with cobalt, nickel and copper. DeepGreen hopes to begin production by 2020.

....read more HERE]

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The Dollar-Commodities See-Saw!

If you are interested in commodities, which has been a hated and neglected asset class since 2008, you will like the following chart I shared...

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