All Star Market Timing

08/16/15 (Commentary for Sunday)
The SPX was drawn higher into the New Moon on Friday and that could be the end of an EW a-b-c bounce from 8/7 – Monday’s tape will tell us. Higher highs on Monday could imply strength into the 8/18-8/19 turn window. Still, many sectors and key stocks have already rolled over into their own bear markets and the biotech sector may be joining this list as well as the IBB threatens to break below 360. We’re looking for a reversal down on Monday and perhaps the start of a big impulsive move lower in the SPX. Gold may have found important support at $1080 and a trading rally may have started – we need to take out $1123 and then $1130 to confirm. The COTs for gold have improved and argue for a substantial rally but the HUI still looks weak to us – still, we expect a final low in the HUI bear market by October and we are following the stocks very closely. We still contend that the stock market will give us a 10-20% correction as we bottom the 7-yr cycle in the Aug – Oct period. The USD reversed down after the NFP jobs report and continues to sell off after the Chinese currency devaluation – this strengthens the short-term bullish case for gold. Oil took out the January low and continues to pull back after the New Moon. Oil is leading the CRB down to test the 2009 lows.    

Big Picture on Stocks (UPDATED) –  With China leading global markets down, commodities and commodity stocks are being pressured. We are expecting a big correction from August to October which could make a 4-yr cycle low and 7-year cycle low. In a Shemittah year, markets often either peak or hold up into the New Moon – this coming week’s trading action will be a key barometer.

• Big Picture on PMs (UPDATED) – We’re looking for gold to make a major low in August. If we can rally past $1123, a test of $1140 would be the next stop. The HUI may be close to major bear market lows and this sector needs to be followed closely.
  

• Stocks – The SPX appears to have finished an irregular EW a-b-c correction from 8/7 as we got a 5th of C rally on Friday. We need a reversal down Monday to confirm.
• Gold – The COTs argue that we made an important trading low in gold but we need to take out $1123 and then $1130 to confirm a rally is underway.
  
• Silver – Silver gave us an EW a-b-c correction into the New Moon but we need to reverse up impulsively on Monday to confirm a low.
• Bonds – Bonds may have peaked last week but Chinese currency devaluation implies more buying of US long bonds.
• Crude Oil – Oil took out the January lows in a 5th wave down that should test the 30s – we’re looking for lower lows on Monday.
• Dollar Index – The USD continues to correct giving gold and the commodity currencies a chance to rally.
  

TURNING POINT DAY

Our turn windows for this week are 8/18-8/19.

Depression Beater Portfolio: (This portfolio this week is just a sample of my own portfolio – no recommendation to others is implied or intended)

WEEKLY COMMENTS: Update for
7/05/15: The CDNX remains mired in a deep, historic bear market since the April 2011 which led the turn down in the gold and silver market by a few months. To us, junior mining stocks are just trading affairs unless the 50-day MA crosses up through the 200-day MA. In our best guess, we feel that the CDNX and the gold mining juniors could bottom by October in advance of our target of April 2016 for a final low in gold and silver – typically the gold mining stocks bottom 6-9 months before final lows in gold and silver. We have read that up to 45% of junior gold/silver stocks only have enough cash on hand to continue operations for the next quarter. Many recent equity-based financing are small and done just to keep the lights on. Until the CDNX turns up , it is best just to focus on well-financed juniors with great assets and positive cash flow. Now is the time to follow these stories since we are in the late stages of this brutal bear market.

• Great Lakes Mining (GLKIF, C$0.0703 +0.0182) – NEW Recommendation 7/5/15 – This is a unique situation in the high-end graphite market. This company is scheduled to open a factory to upgrade graphite for specialty applications by October. This vertical integration business model adds a new dimension to this company and is worth following.
• 
  Aroway Energy (ARW.V, C$0.015 +0.000) – This western Canadian junior is part of a very sweet JV deal with a private partner in the Peace River basin – it’s production share should climb from 669 BOE/day (75% black oil) to over 1200 BOE/day later in 2012 – management has selected a good slate of properties for drilling and it is bearing fruit. Buy on dips. Use a 20% stop from purchase price.
• Evolving Gold (EVGD.TO, C$0.075 +.000)- UPDATE:
  This stock has two world-class finds in Wyoming (Rattlesnake) and a potentially huge find on the Carlin Trend in NV. The problem is that the company needs a financing and could be forced to sell a world-class asset for pennies on the dollar.
• Uranium Energy (UEC, $1.26 +.01) – UPDATE: Uranium prices are recovering and the fundamentals are getting a perfect storm. Favoring the near-term producers here like UEC – the fundamentals are much more dramatic that the typical emerging gold producer.
• Energy Fuels (EFR.TO, C$5.30 -.23) – Finished acquisition of STM.TO in early September – building up a position as a strong US producer of uranium in a tight market.
• Prophecy Coal (PRPCF, $0.0330 -.0000) – UPDATE:
  This stock needs to get its Mongolian coal mine into a positive cash-flow situation to support its power plant project and other endeavors without diluting the common shareholder to zero.
  
• Gryphon Gold (GYPHQ, $.0250 +.0000) – UPDATE:
  De-listed stock. Good asset but
  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 30% stops based on purchase price. Buy a basket to diversify risk)

RULES FOR JUNIOR MINING INVESTING:



1) Keep to 5-10% 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.