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The Summer Sell-off Scenario PDF Print E-mail
Written by Clif Droke - clifdroke.com   
Wednesday, 11 June 2014 03:44

One of the most salient features of the market environment of recent months is the evolution of investor psychology. From March through May, stocks experienced a classic internal correction in which the most overbought and overvalued stocks declined while fairly valued large caps remained buoyant.

The rationale behind this strategy was the determination of money managers not to give back the big gains from the 2013 rally. Instead of selling everything they simply moved money out of last year’s top-performing (but overvalued) small caps and moved money into stocks sporting lower P/E ratios and higher dividend yields. Consequently, the benchmark S&P 500 large cap index held up well throughout the March-May correction, as did the Dow Jones Industrial Average.

[Read AlsoThe Two Most Powerful Forces Pushing the Stock Market Higher]

The trading pattern which emerged in the S&P during this internal correction was a lateral trading range. Many investors have difficulty evaluating trading ranges, although it’s a fairly straight-forward procedure. The most important thing to consider isn’t the progression of prices within the range, but the tenor of investor psychology while the range is taking shape. This is one of the ways which makes it easier to predict which direction prices will break out from once the lateral trend has run its course.

indu-10-jun

During the last few weeks investor sentiment has shown a remarkable neutrality or lack of commitment. Small investors have been reluctant to take a stand, whether bullish or bearish. Yet while the lateral trend was unfolding in the Dow and S&P, corporate insiders displayed a remarkable bullish bias. Insider purchases of shares in May hit their highest levels since October, the time of a previous interim low. So while small investors were too gun shy to buy, insiders were buying shares of their own companies with both hands.

insider-transaction-ratio

Our Composite Gauge also suggested that “smart money” traders were positioned for an upside breakout from the trading range. This indicator, which combines OEX put-call data with insider buying and other sentiment measures, was closer to the bullish end of the spectrum in the weeks preceding the breakout. True to form, the market eventually broke out above the top end of its multi-week trading range just as the smart money apparently predicted.

As discussed previously, we need to see the 10-day moving average of the Composite Gauge hit a reading of 45 or higher in order to signal the arrival of a frothy market. This would also tell us that a top could be imminent, at least short-term. The indicator is currently at about 40 and is inching closer to the critical 45 level. It’s not there yet, however, so the market could still make some additional gains before this indicator signals that smart money have started pulling in their horns.

[You May Also LikeMarket Strength Continues to Build as Laggards Become Leaders]

Another expression of Wall Street money managers’ stubborn refusal to give up the ghost is reflected in the S&P open-close indicator. This indicator is simply a cumulative graph showing the opening hour of trading each day for the SPX along with the closing hour. The theory behind it is that, in a well-established bull market, the opening hour should show a tendency to move higher on most days. This is a simple measure of the market’s forward momentum. What’s amazing about the following graph is that during the entirety of the March-May internal correction, the SPX continued to show a measure of forward momentum in terms of its opening hour performance. This explains how the S&P was able to remain so buoyant during the internal correction period.

spx-opening-hour

Meanwhile the closing hour component of this indicator was in negative territory throughout much of the last couple of months. In May, however, it started gaining upside traction and eventually broke back into positive territory. The assumption behind this is that “smart money” traders were gradually accumulating large cap stocks and thus the market was still on a bullish footing.

As strong as the stock market has been lately, many are wondering if the trend will remain up through year end or if there’s still a chance for a sell-off. Many investors consider the market to be overvalued and have launched what amounts to a buyer’s strike in the wake of the latest rally. These investors are nonetheless salivating at the prospect of being able to buy in at lower level if given the opportunity. Their hope is that this occurs sometimes between now and this fall when the major Kress cycles are scheduled to bottom.

Keeping in mind that the market is apt to disappoint the majority’s wishes, there’s still the chance that this summer could witness an important correction. The odds of this occurring will increase if the major indices continue rallying from here and become severely over-extended from their 200-day moving averages. This would put the market in a technically vulnerable position.

Under this scenario, a potential repeat of the August-September 1998 mini-bear market would be possible. For now, though, consider that the market’s main trend is up as the bulls still hold sway.

******

Kress Cycles

Cycle analysis is essential to successful long-term financial planning. While stock selection begins with fundamental analysis and technical analysis is crucial for short-term market timing, cycles provide the context for the market’s intermediate- and longer-term trends.

While cycles are important, having the right set of cycles is absolutely critical to an investor’s success. They can make all the difference between a winning year and a losing one. One of the best cycle methods for capturing stock market turning points is the set of weekly and yearly rhythms known as the Kress cycles. This series of weekly cycles has been used with excellent long-term results for over 20 years after having been perfected by the late Samuel J. Kress.

In my latest book “Kress Cycles” I explain the weekly cycles which are paramount to understanding the timing of stock market turning points. Never before have the weekly cycles been revealed which Mr. Kress himself used to great effect in trading the SPX and OEX. If you have ever wanted to learn the Kress cycles in their entirety, now is your chance. The book is now available at:

http://www.clifdroke.com/books/kresscycles.html

Order today to receive your autographed copy along with a free booklet on the best strategies for momentum trading. Also receive a FREE 1-month trial subscription to the Momentum Strategies Report newsletter.

Clif Droke is a recognized authority on Kress cycles and internal momentum, two valuable tools which have enabled him to call most major stock market turning points from 1997 through the present. He is the editor of the Momentum Strategies Report newsletter, published three times a week since 1997. He has also authored numerous top-selling books, including his most recent one, “Kress Cycles.” For more information visit clifdroke.com

 
We Need More Tungsten & 12 Stocks Poised To Take Advantage PDF Print E-mail
Written by Mark Seddon - The Mining Report   
Wednesday, 11 June 2014 03:31
Catch-22: We Need More Tungsten, But Projects Can't Find Funding

Even as demand rises steadily, the world's largest non-Chinese tungsten mine will be exhausted by next year. So investors should be lining up to fund new mines, right? Not a bit of it, says analyst Mark Seddon of Tungsten Market Research. In this interview with The Mining Report, Seddon argues that a supply shortage could mean much higher prices, leading to handsome profits for those companies that get to market soonest.

imagesCOMPANIES MENTIONED: ALMONTY INDUSTRIES INC. : BLACKHEATH RESOURCES INC. : CARBINE TUNGSTEN LTD. : HAZELWOOD RESOURCES LTD. :LARGO RESOURCES LTD. : NORTH AMERICAN TUNGSTEN CORP. LTD. : NORTHCLIFF RESOURCES LTD. : ORMONDE MINING PLC : VITAL METALS LTD. : WOLF MINERALS LTD. : WOULFE MINING CORP.

The Mining Report: Tungsten is often called "rare." Just how rare is it?

Mark Seddon: It's not that rare compared to a minor metal such as rhenium, which is used in superalloys. The total rhenium market is maybe 70 or 80 tons per year, whereas the tungsten market is currently around 80,000 tons (80 Kt) per year of tungsten metal content. So tungsten's nothing like a rare earth element (REE), but it is considered a strategic metal.

TMR: How is tungsten strategic or critical?

MS: It's strategic in that it has industrial uses. It's used in hard metals, cutting tools, etc. It has military applications, as well. The U.S. Defense Logistics Agency built up a stockpile of tungsten over a number of years, which it has pretty much sold off now.

And tungsten is a critical metal due to China's dominance of the market. China accounts for 80% or more of supply in various forms.

TMR: Tungsten is often compared to rare earths, but the latter's price is highly dependent on high tech. This is not true of tungsten, correct?

MS: Yes. Tungsten's main uses are industrial; the largest end user is in cemented carbides, what are known as hard metals. Those can be used in things like cutting tools, mining tools, drill bits and wear parts. So tungsten's demand curve tends to follow gross domestic product growth quite closely, whereas REE demand growth is more volatile.

TMR: But tungsten prices are rising.

MS: Yes, tungsten has risen in price because of a change in Chinese policy. Some 10–15 years ago, you could buy as much tungsten as you wanted from China, and the price of ammonium paratungstate (APT) fell to about $100/metric ton unit ($100/mtu). APT rose to a peak of $470/mtu in 2011 and was above $400/mtu in 2013.

Recently, the market has been a bit quiet. Today, APT sells for about $370/mtu.

TMR: So would it be reasonable to say that, as with REEs and other metals, the Chinese have decided they want to keep production for internal use?

MS: China is now less interested in exporting natural resources and much more interested in adding value to them. Internal demand in China for tungsten, REEs and so on has been increasing as its GDP has grown, recently about 7–10%/year.

China has made very little investment in new tungsten mines, so it is really struggling to maintain production at current levels, which also would put pressure on exports because, obviously, it just doesn't have the material available for export.

TMR: Given the tightening of supply, where can we expect tungsten prices to go by 2020? 

MS: In the short term, I expect that prices will end 2014 quite a bit higher than now and continue rising in 2015. The only significant new supplier that has entered the market recently is the Nui Phao project in Vietnam. This is owned by the Masan Group, which is privately held. It came onstream in 2013, and is, as far as I know, still ramping up to production capacity.

In the longer term, major new tungsten supply will likely not enter the market until the second half of 2015. So the pressure on prices is really going to be upward, especially considering that Europe expects reasonable economic growth this year and slightly better than that in 2015. My feeling is that production shortages will result in rising prices at least until 2016–2017. Then, depending on how much new supply enters the market, a leveling off may occur.

TMR: Given that there's no futures market for tungsten, prices are determined by individual end-user contracts, correct?

MS: Yes. Tungsten prices are discovered, if you will, from data on ores, concentrates and APT provided by such publishers as MetalBulletinMetal-Pages and Platts. The main price that's followed is ATP. There are two prices in China: the internal Chinese price and the export price, which is a shipped-on-board Chinese port price. There's also a European APT price. However, because China dominates the market so thoroughly, Western prices tend to follow the Chinese example.

TMR: Given the paucity of non-Chinese supply and the exhaustion of North American Tungsten Corp. Ltd.'s (NTC:TSX) CanTung mine in Canada by 2015, how great is the need for new Western tungsten mines?

MS: The need is fairly great. CanTung is the largest single mine outside China, with production of about 2.8 Kt/year tungsten metal content, about 3.5% of global supply. As you say, it's nearing exhaustion, and its production will have to be replaced. It's unlikely to be replaced by the Chinese. Steady growth in tungsten demand of 4–5% per year, which is lower than it has been for the last decade, would add, say, 3–5 Kt per year tungsten metal to demand. Current producers outside China do not have the capacity to increase production significantly.

TMR: So how many new mines will be required to meet this rising demand?

MS: Pretty much one major new project coming onstream every year.

TMR: What is the average initial capital expense (capex) of tungsten projects compared to other metals?

MS: I would say no more than $100 million ($100M), probably a bit less. Quite a few current projects reside in the $50–75M range.

TMR: That's quite modest.

MS: Absolutely.

TMR: That raises the question of why tungsten projects have such difficulty in being funded, especially given expected rising demand and prices. 

MS: One of the biggest problems is that tungsten is not a terminally traded product, like gold, silver, copper, etc. So banks have difficulty in hedging their price risk. I've done quite a lot of work for various projects producing marketing reports and price forecasts, and my experience has been that 50% of potential banks and other institutional investors reject tungsten projects out of hand due to the lack of futures markets and the hedging they provide. The other 50% simply doesn't know much about tungsten, and so it is quite low on their list of priorities.

This funding deficit is obviously not just a problem for tungsten mines. It applies to rare earths, antimony, graphite and other minor minerals.

TMR: Tungsten is not as glamorous as metals such as gold and silver and, as discussed above, is not high-tech, like rare earths. Is this part of the problem?

MS: That's certainly a possibility. Tungsten's uses are almost exclusively industrial, so it's a steady metal, not a sexy one. It is perceived that the rewards to be gained in REEs might be that much greater, but then obviously the risks associated would also be greater.

Tungsten is not a metal that is much discussed, unlike rare earths, which have been featured in the global media since 2011, when the Chinese export restriction become widely known. However, studies done by the European Union, etc., place tungsten in the top three of most-critical metals.

TMR: There was a long article about tungsten in the Financial Times in March.

MS: True, but that's probably the first major article on tungsten in the Financial Times for years, even though China's export restrictions are a decade old.

TMR: Significant past European tungsten production originated from the Iberian Peninsula. Are we seeing significant developments there today?

MS: Almonty Industries Inc.'s (AII:TSX.V) Los Santos mine in Spain is actually producing. It's not a huge operation. It just published its production figures for Q1/14: 17 mtu tungsten trioxide (WO3) or 135 tons tungsten metal content for the quarter. If that trend continues, it would mean 540 tons/year tungsten metal produced annually.

TMR: What's the most advanced Iberian project?

MS: The Barruecopardo project, also in Spain, which is owned by Ormonde Mining Plc (ORM:LSE), an Irish company. Almonty tried to buy that project, but its bid was rejected by Ormonde.

TMR: Would Barruecopardo be a bigger project than Los Santos? 

MS: About three times larger: 1,800 tons/year tungsten metal. As much as CanTung produces, about 2.5% of current global production.

TMR: Ormonde published a definitive feasibility study (DFS) in February 2012. When is production scheduled to begin?

MS: Barruecopardo is still not fully funded, so it's difficult to say.

TMR: According to the DFS, the project has a pre-tax net present value (NPV) of $164.5M, a 52% internal rate of return (IRR) and a two-year payback period. The capex is $66.5M, and the Noble Group has agreed to buy the first five years of tungsten concentrate produced. So why isn't this project fully funded?

MS: There are quite a few tungsten projects working toward full funding. Many of them reach something similar to what Hollywood calls "development hell," where the studio has the script but can't get started without funding, and it goes around and around.

TMR: Is there a major European project that has got full funding?

MS: The Wolf Minerals Ltd. (WLF:ASX) project at Hemerdon in Devon, England, has fully met its initial capex of $197M, but that took quite a while. Construction has begun, and production should begin in H2/15: about 2.8 Kt tungsten metal annually over an initial 10-year mine life.

TMR: In this environment, how much of a premium is attached to getting a mine in production first?

MS: Hemerdon's projected operating cost is about $105/mtu APT. Compare that to the current APT price of $370/mtu, and you can forecast a high margin, if prices remain at similar levels. So the earlier a company can get into this market, the more it will benefit. And should new projects remain unfunded, prices will remain high.

TMR: Speaking of media coverage of tungsten, Forbes in May noted that Warren Buffett and Berkshire Hathaway have agreed to invest $80M in a South Korea project. What do you think of this, considering Buffett's oracle status?

MS: The project is called Sangdong. It is owned by Woulfe Mining Corp. (WOF:TSX.V), which is headquartered in Vancouver and not to be confused with Wolf Minerals, which is an Australian company.

Sangdong published a DFS in 2012 but seems to have run into difficulties. There has been considerable turnover in senior management, three CEOs in 13 months, for instance. Although Buffett is looking at investing, it's difficult to see what's going on there. There have been no announcements about construction or anything like that. One would have thought Sangdong would be well along the development path by now.

TMR: Woulfe's market cap is under $40M. Wouldn't it just be easier for Berkshire Hathaway to buy the whole company?

MS: Somebody with Warren Buffett's deep pockets could do that quite easily.

TMR: What is happening in Australia?

MS: Carbine Tungsten Ltd.'s (CNQ:ASX) Mt. Carbine project in Australia has an offtake agreement with Mitsubishi Corp. (MSBSHY:OTCPK). It is actually in production already, processing tailings.

TMR: How big is the project ultimately planned to be?

MS: Around 2.6 Kt tungsten metal per year—slightly bigger than Barruecopardo and slightly smaller than Hemerdon. If that succeeds, this would be a major project.

TMR: Are there any notable tungsten projects in North America? 

MS: North American Tungsten has a Yukon project even further north than CanTung. It's called MacTung and the company published a feasibility study in 2009. It projects almost 6 Kt annual tungsten metal production, which is bigger than any of the other projects we've discussed, but initial capex is $402M.

Largo Resources Ltd. (LGO:TSX.V) has quite a big project in Yukon, just over the border with British Columbia, called Northern Dancer.

Northcliff Resources Ltd. (NCF:TSX.V) has the Sisson project in New Brunswick. It hopes to be in production by 2016 at around 4 Kt tungsten metal capacity per year. According to its January 2013 feasibility, Sisson has a $418M post-tax NPV, a 16.3% IRR and a 4.5-year payback period. Initial capex is $579M.

TMR: Northcliff has investment from Todd Corp. in New Zealand.

MS: Yes, and it is part of the HDI/Hunter Dickinson group of companies. It has a record of bringing mines into production. In the past, the junior mining company would do the initial resource work and prefeasibility study, possibly even up to the DFS, then the project would be sold to a bigger mining concern that would bring it into production. But that's not happening in the current climate.

TMR: Isn't it true that in recent years many junior mining companies have foundered after they overextended themselves attempting to bring projects to production?

MS: You're right. But needs must, as they say. The juniors can't sell their projects to larger mining companies because they are not interested. The larger companies are consolidating in precious metals, copper and so on, while leaving minor metals to the juniors.

TMR: Largo's Northern Dancer has molybdenum, as well as tungsten. To what extent does a tungsten project with other metals make it more prospective?

MS: It depends on which other metals. Tungsten tends to occur on its own. Hemerdon has some tin but not very much. Sisson has molybdenum. This is a credit against the tungsten costs, so it can only help. But tungsten projects must be treated as such. If a company is relying on byproduct to get it over the line, that would be dangerous because if the byproduct price takes a dive, then it is left with a very marginally viable project, if that.

TMR: Which of the projects we've discussed seem most likely to succeed?

MS: Hemerdon is pretty likely to go ahead because it's fully funded and in construction. Sisson looks to be a pretty good bet because it has HDI behind it, and Todd Corp. is invested in it. It is making good steady permitting progress but still needs financing and will not produce until 2016–2017, at the earliest.

TMR: What about other projects?

MS: Vital Metals Ltd. (VML:ASX) has the Watershed project, and Hazelwood Resources Ltd. (HAZ:ASX)the Cookes Creek project. Both are in Australia. Blackheath Resources Inc. (BHR:TSX.V) has the Covas project in Portugal.

Most tungsten projects have similar size, deposit grade and production costs. If only one besides Hemerdon were to go ahead, it would be difficult to say which one. It always comes down to funding, and that is obviously down to the bankers. Picking winners in this business is hard, which makes investing in mining projects that much more risky.

TMR: Let's say that only one or two of these major tungsten projects begins producing in the next couple of years. So we have a tungsten shortage leading to a significant price increase. Then the financial institutions worry they've missed the boat, finance a bunch of projects, and we end up with a bubble. A possibility? 

MS: This is the problem. No market is run with perfect efficiency, and you do get cycles. It is quite possible we will see more volatility in tungsten prices in the next several years. To repeat, there doesn't seem to be enough projects ready to begin production in the next five years to cope with the expected increase in demand and the exhaustion of CanTung.

The logical conclusion would be that tungsten prices will rise. Depending on how tight the market gets, that rise could be quite rapid. When tungsten prices got over $450/mtu for APT in mid-2011, this sparked interest in tungsten from those who were normally not interested in it.

TMR: We saw much the same with rare earths that year.

MS: When prices go crazy, everybody thinks, "We should be in REEs. Or tungsten." Or whatever. If that leads to a whole slew of projects suddenly hitting the market at the same time, the pressure on prices would be inevitably downward. History shows that this is the way things tend to happen.

TMR: So we could see a collapse in tungsten prices?

MS: It is actually quite difficult to see a bust situation in tungsten because it's quite difficult to see enough projects coming on to make prices crash. Prices could come down, but they should still be significantly higher than 10-15 years ago.

TMR: Mark, thank you for your time and your insights.

Mark Seddon has over 25 years of experience in the commodities industry. He is director of Tungsten Market Research Ltd. in London and was formerly managing director of Roskill Information Services and a sugar trader with Louis Dreyfus. He holds a Bachelor of Arts in European business administration from Middlesex University, as well as a Diplôme d’Études Supérieures Européennes de Management.

Want to read more Mining Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit The Mining Report homepage.

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DISCLOSURE: 
1) Kevin Michael Grace conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None. 
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Carbine Tungsten Ltd. and Largo Resources Ltd. Streetwise Reports does not accept stock in exchange for its services.
3) Mark Seddon: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent. 
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

 

 

 

 
Gold Stock Update PDF Print E-mail
Written by Biiwii.com   
Wednesday, 11 June 2014 03:26

"As has been the case often lately, the precious metals are positive in pre-US open.  These have tended to be fleeting positive vibes, but we should keep the technical parameters in view nonetheless because a) you don’t want to buy (or at least hold) a sucker bounce and b) just maybe the forces of right and good will one day break out of this funk.  So we should stay tuned up on what constitutes bull and bear in the precious metals." - From the last eLetter dated 5.22.14 (pardon the duration between letters):

The precious metals complex eventually broke down, testing the support in gold, silver and notably the critical HUI parameter of 205 also noted in that update.  This parameter is the one that keeps the potential for a weekly bottoming pattern in play. 

Gold stocks rallied today.  So is this something real?

Stockcharts.com is down today, but we used backup Barchart.com to post a couple charts of GDX at the website, illustrating a potential bear flag, low volume and resistance on the daily chart:  Gold Stocks at Resistance.

27e6b61a-7614-4cfa-9cd0-cc679aeee255

As you can see, the daily chart is at important resistance.  It is considered a bear flag until this zone is successfully cleared, preferably with some conviction (read: volume).

f594ca98-b97e-4d46-b12c-c9f91cdc7800

Why do we continue to work this sector?  Well, it sure is not due to current fundamentals (a subject for another day... or every week in NFTRH).  It is due to the ongoing potential that GDX/HUI have been forming Inverted Head & Shoulders bottoming patterns and that technicals would lead fundamentals.

So I wanted to call your attention to the fact that GDX has not proven anything yet, despite today's bullish activity and indeed the entire bounce of the last week, which we have been anticipating.  The daily chart is the key to the weekly because if the bounce continues and morphs into a rally that starts clearing resistance levels, then the weekly pattern takes over... and it is bullish.

First things first, however.

Some notable posts at the website since the last eLetter:

'

Thank you again for reading. If you'd like an affordable weekly guide (with interim TA and Trading updates as needed) that is always on the job for its clients' best interests, I'd be more than happy to welcome you to the Notes From the Rabbit Hole Premium subscriber base.  --Gary Tanashian

“Many thanks for a really consistently great service.”  –John C  6.5.14

Biiwii.com
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About & ToS

Biiwii.com does not recommend that any trading or investment positions be taken based on views expressed in this eLetter. If you speculate or invest it is suggested that you consult a financial adviser qualified in your area of interest.  See full Terms of Service (ToS) above.

 
Todd Market Forecast - Cash On The Sidelines PDF Print E-mail
Written by Stephen Todd: The Todd Market Forecast   
Wednesday, 11 June 2014 03:19

DOW                              + 3 on 550 net declines

NASDAQ COMP            +2 on 400 net declines

SHORT TERM TREND                      Bullish

INTERMEDIATE TERM TREND       Bearish

STOCKS: We finally had a decline of sorts. The Dow was down almost 50 points, but the tendency to buy every two hour decline is still prevalent. This is the type of psychology that happens before more serious tops.

One of these days investors are going to buy a decline and it won't rebound. I don't think it's going to be all that far off. Be sure to examine the chart.

GOLD: Gold was up $7.

CHART: We keep hearing that there is a lot of cash on the sidelines and that this is one reason for the rally. Not if you look at money markets assets as a percentage of all mutual fund assets. This chart tells us that we are in danger of running out of money. Note how high it was when the market was at a bottom.

843

TORONTO EXCHANGE:  Toronto was up 33.

S&P\TSX Venture Comp. The Venture Comp. was down 1.

BONDS: Bonds moved lower again.  

THE REST: The dollar was higher as was silver, copper and crude oil.

BOTTOM LINE:  Short Term Bullish - Intermediate Term Bearish

NEWS AND FUNDAMENTALS:

There were no important economic releases on Tuesday and there will be none on Wednesday.

Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( .80 or below is a negative. 1.00 or above is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. - 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative).

No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.

 
Faber : 'I like the concept of Bitcoin' PDF Print E-mail
Written by Marc Faber via Bloomberg   
Tuesday, 10 June 2014 17:20

UnknownMarc Faber told Bloomberg in an interview that he will “never sell his gold” and that “I buy more every month.”“The momentum sell-off has caused internal market damage” and “svery asset in the world is over-inflated right now…”

Faber warns.“If one analyzes the data carefully” it is clear that “China is growing at most 4%.” Given the“gigantic credit bubble” the outlook is not hopeful as the sharp deceleration in growth is likely to continue.

Faber also has strong words for Western nations treatment of the rest of the world and “the US will have to back off.. because China is so important.”“I like the concept of Bitcoin”...  “Bitcoin has its merits since you may not be able to carry gold across borders,” Faber said.“People think they know what the future holds… and what Central banks are up to.. they don’t… I will never sell my gold and I buy more every month… I would not be short gold,” Faber said. 

...more from Marc:

Mario Draghi Easing More Important For Europe Than Emerging Economies

 
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Mark Leibovit
23 July 2014 ~ Michael Campbell's Commentary Service

We intruded on Mark Leibovit's summer break and asked him for...   Read more...

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