Is the great bear market rally coming to an end?
While the “Happy” people on Wall Street can take some comfort that the stock market didn’t roll over on Friday given the clearly disappointing employment news, two key indexes are suggesting the end to the incredible run may come sooner than even I thought. The Dow Transports are clearly weakening, a sign that the green shoots are not maturing into sustained economic beauty. Meanwhile, the DJIA looks like it needs to test 9200 before any real chance of a resumption to the upside could even be considered. With little economic news due out this coming week, the “Happy” people have their work cut out for them. I expect a run on “magic dust” this week.
The real truth on employment?
http://www.kereport.com/weekendshow/weekendr-oct0309-seg3.html
http://www.kereport.com/weekendshow/weekendr-oct0309-seg6.html
I rarely recommend a service but John’s is a must http://www.shadowstats.com/
This upcoming week also looks like a critical period for gold and the U.S. Dollar.
As noted on Friday, The large number of gold bears and weak-knee bulls must have said to themselves shortly after the employment release that by days end they would be feasting on bull meat. Instead, they saw a sharp reversal in their fortunes and went into the weekend still hungry. The bulls are by no means out of the woods yet as we need to close above $1.025 before any bear meat feast can officially get under way. Stay tuned.
As noted on Thursday, the U.S. Dollar is at a key technical point. It too looked like it may gain some traction Friday only to end up what it usually does best – lose ground.
To me, there was no logic for oil’s $4 run up last Thursday. The fundamentals continue to stink and a key trader I spoke to said it was all a big push by the hedgefunds. He says the trade wants to hammer oil lower but is too afraid to go up up against the hot money. The U.S. dollar direction can also play a key role in determining where oil heads near term making the upcoming week very interesting.
The copper market also has an interesting situation. The market is in contango until the June 2010 contracts then it goes into backwardation. For the moment this suggest the market sees a double-dip recession. Hmmm….
Nevsun Resources and Sunridge Gold – NSU made this release, which was follow-up by this research update from Cannacord. We also saw another firm raise its target price (Nevsun Resources Tgt Raised To C$3.60 From C$3 By GMP >NSU.T Friday 10/02/2009 1:00 PM ET – Dow Jones News). Please note the analysts also visited Sunridge Gold who announced the closing of their deal that IMHO makes them the next possible Nevsun.
Is Continental Minerals now a no-brainer? First and foremost, I’m extremely biased. KMK has become about half of my entire equity portfolio. Secondly, I work closely with its management team (Hunter-Dickinson) as a compensated consultant in other companies.
With this in mind, I believe the news of another Chinese major shareholder has put KMK into play. The previous sole large Chinese stakeholder didn’t have it in its best interest to expedite matters (read the arrangement). Now, it has a direct competitor who at any moment can make an offer for the whole enchilada. This is a game changer. If the rumors that it had made a low ball offer has any validity, this would have to tell them loud and clear HD is ready to move forward, has the ability to do so, and now they are not the only kid on the block. I suspect HD will now do what it does best, move KMK to the next level and this should include now an active promotional campaign. Knowing how well followed they are, I don’t think it will be too long before we start to see evidence of this. I think we can now really appreciate the poison pill that was adopted earlier this year Stay tuned.
Al Korelin had two updates on a past and present client of ours.
“i suspect Hd will now do what it does best…….and this should include an active promotional campaign ” it would be nice to see HD do this for nak/ndm .
Another present client had a news release this week.Donner Metals gave drill results Peter.Do you have any comments or thoughts on them?
Hi Peter
When I saw the DOW Transports break last week I started to sell a few positions and tighten up some stops in others. I bought some TBT expecting treasuries to correct. I am with you on US treasuries as a head scratcher. I am very curious as to your opinion on something. Real estate all over the world has and is correcting significantly. Canada began a nasty real estate correction March 2008 through March 2009 many areas up to 20% down. However, March 2009 to present rallied hard to new highs in many areas mostly because of the mindless gorging on cheap debt. Given the historic percentage of household debt in the average canadian household and the huge amount of leverage combined with the fact the 59% of Canadians are living paycheque to paycheque, I feel that Canadian real estate is in a precarious position to say the least, some areas much more than others. Unemployment is hitting Alberta and BC much harder than the rest of the country. Given the Olympics will be over in February and the exodus of a rather large temporary workforce will either leave or be unemployed, the overall picture for BC is paticularly bad. What are your thoughts Peter? Or anyone else with anything of an educated or experienced background.
What does this mean?
“I expect a run on “magic dust” this week.”
Does it mean run on Dow 10500?
I went short for the first time since October 2007 this week. 60 percent up move from the March lows looked like a similar pattern to what was seen in 1930 following the 29 crash. And we all know what happened after that. The market continued a downward slide all the way until 1932 where it fell 90 percent from it’s top in 29. The economic fundamentals are all built on artificial Fed and government stimulus. It can only take the economy so far.
“To Each Their Own, A Happy Home”
#3 John.. Now that’s what they call a scary story. A delayed peak in Canadian real estate? I’ve got a lot of scary stories.
Want to see a disconcerting chart? Go to http://www.stockcharts.com 3 year weekly for $SPTMN My opinion is that other World stock markets won’t provide much if any relief in the coming debacle. Longer term yes, but they won’t escape the decline that is coming before long.
I’ve been using MSN’s ‘Money Central’ charting service for years. Effective November 1st, they’re terminating the service. So I need a new home especially for 5 Year + charts and 15 Minute interval. Too bad. A Stockcharts subscription should be okay.
If you get over to MSN.com ‘Money Central’, take a look at a 5 year chart of the $HUI and ‘Fast Stochastics’ with a setting of 5,5. Other settings will do just as well, Slow Stochastics 5,5. “To each their own, a happy home”, I’m almost entirely cash.
So my next expected move is the Triple Leveraged Short Funds. Probably Large Caps. There was a recent posting around September 26th ‘ON THE TRACK OF THE BEAR’. It was a technical analogy about my expectation for stock market performance over the next few months. Sometimes we do get ‘V’ Tops and there’s not always 5 Waves, but it would be a sure Short if the market performs as expected in that recent missive. Speculation aside, it could be prudent at some point to hedge portfolios with protection.
I’ve never in my life been ‘LUCKY’ in the markets, and periods of uncertainty have rarely if ever broken in my favor. What has me uncertain is the unusual inter-relationship between Stocks, the U.S. Dollar and Gold.
U.S. Stocks go down and the U.S. Dollar goes up, sending Gold down. That has been the pattern since March 2008 and the government’s behind this in some way. So what happens if the stock market straigtens out in 2 – 3 weeks, we rise from late October into January 2010, and then start down in earnest?
Could there be a liquidity crisis that takes everything with it, Gold included, but to a much lesser extent? Or will the dichotomy end with Gold returning to it’s traditional inverse relationship – rising when paper assets fall?
Maybe no one has the answers and we’re waiting to see what happens. Uncertainty can be addressed through portfolio management with judicious exposures. So far, the Bear is performing as expected. It should come back up again toward November.
Remember that the market was looking queasy just before earnings last quarter. And what ultimately drives the market? Earnings saved the day. Until I see earnings…
The market is ignoring Donner…they need to alert people to their existence, which I think they are starting to do.
Just can’t believe our friendly little bull is already on Papa Bear’s plate, so I checked my crystal ball and it said “not yet.” Are the indexes rolling over? Yes. Is this the top, or just our long-awaited correction? Crystal ball says, correction.
US dollar has taken over the carry trade from the Japanese Yen. Dollar down, markets up. Dollar is in the midst of a short term counter-trend rally which probably only lasts into mid-late October. When the dollar resumes its downtrend, the markets should rally – at least into January. Best sectors will be the ones that have most to gain by a falling dollar – precious metals, technology, energy.
All due respect- but Who is JoJo- is he or she posting Peter’s comments….
I believe Jo JO is the assistant who posts Peter’s comments when he is unavailable to do so.
what would be a reasonable share price for donner in the next 3 months based on the current recent news by xtrata
As a newbie on this board I would like to share 3 observations:
1- Mr Grandich appears to be very naive about the way Chinese companies operate in thinking that a bidding war might happen over KMK. So far all I can see is dilution.
2- He obviously has no idea about what’s going on in the Oil market. It might help him if he were less provincial in his thinking.
3- His warning about a possible dollar rally should be ignored, unless he is talking about a 1-2% rally over a 3-5 day period.
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http://wallstreetpit.com/10908-the-market-is-set-to-make-a-very-big-move
Jim and Susan – I reloaded my NAK rolling block at $6.85 avg. on Friday. Going against my rule of reloading at $6.00 or below because I really do not think we will see $6.00 again…however, I will just be rolling for 50 cent profit and then I’m gone since I don’t feel any strength above $7.50 for the time being.
NAKTO….thanks for the update….keep me posted….had you told me this on Friday I too might have gone along for the ride….but I do hope its a good one!
Susan – Sorry…I went out of town on Friday and just got back around lunchtime earlier today. I think my new way of rolling NAK will be to roll in below $7.00 and roll out at 50 cent profit. We shall see how it works.
Why do morons like Hypatia enjoy making such foolish comments. he tells us he’s a newbie yet he feels it’s his place to take Petey to task.
Please tell us moron how Chinese companies think. If your brillant assessment had the least bit validity why then did a second direct competitor buy a similar stake in KMK – for share profits-LOL. Oh since you;re a newbie, you wouldn’t know that Petey was spot-on speculating this was coming.
Petey said sell oil at $120 before it hit $140 only to plunge to the mid 30s where he told us to buy up to the mid 60s. Yeah, he knows nothing-lol
Your moronic skills came through with flying colors on your dollar comment. All Petey has done is show us that the dollar was at the top of a downtrend channel and noted for us to consider the possibility if it was to occur. He has been spot on the dollar for years but as a newbie how would you know that-LOL
Like I said, I love these morons as going against them is like money in the bank.