Sakhaneft, with the alacrity of a futures trader! Nicely thought out and executed. Thanks for letting us participate in your thinking and trade! dcp
Sakhaneft, a week down the road finds your expectations to be mostly realized. I've looked at Stewart Thomson's comments this morning and he mentions that, from the $1183 area lows, gold has now rallied about $71, and established a nice uptrend channel. Importantly, the sell-side HSR (horizontal support and resistance) at $1240 has been penetrated this morning in a decisive manner. Fallowing a bout of profit taking, a real attempt at $1,350 is a potential target." One Indian banker stated, “Government corruption has always been a part of our culture, and it always will be. Isn’t that great?" ” I’m not sure how great it is, but it’s clear that Indian citizens are fully prepared to do whatever it takes, to import all the gold needed for their sacred religious ceremonies, regardless of the actions of any government entity.
What is known is that gold ultimately must come from gold dug out of the ground by Western mining companies. Refer to the weekly chart of GDXJ. From a technical perspective, a rare quadruple bottom pattern has materialized, with bullish implications for price of junior gold stocks. Maybe we can even start talking about silver, soon.
Meister, ending and for all the right reasons. The next OPEC meeting is in November. I would be surprised if we did not see another production cut if oil prices remain at these levels. I think that OPEC and the Saudis need to come in and support prices even more so than they already have following the cut in August. $95/bbl seems necessary for OPEC and more importantly NON-OPEC producers
U.S. Gushing Oil and a new era for US producers
One area that’s been very topical and interesting as of late is the growth in U.S. crude oil production. It’s at a new 25-year high. We’ve gone from basically 4.5 million barrels in 2008 to 8.5 million barrels. Energy stocks are no longer just the commodity play. They’re also a volume growth play.
There is a paradigm shift in that many of these shale producers have gone out and invested a lot of capital over the years and now, over the next two years or so, we’re going to start to see a free cash flow payback on that initial investment and infrastructure in fracking and developing their resource.
We’ve gone from basically 4.5 million barrels in 2008 to 8.5 million barrels. Energy stocks are no longer just the commodity play. They’re also a volume growth play and Global Demand Is Increasing, EVERY YEAR!
Note to Politicians
The U.S. has been gradually recovering from its worst economic period since the Great Depression, and to continue this progress, we need strong trading partners. If it weren’t for the U.S. and Canada propping up the rest of the world, Europe would likely be in a more depressed state than it already is.
It’s Economics 101: Capital cannot be spurred or created with high taxes and strangulating regulations. Nope, can't be done. Political regulation utilizing bigger and stronger central government works well on pape... with human beings.. NOT SO MUCH!!
Sakhaneft, gold IS the driver and the key to sovereign participation in a shift in currency markets. Russian Ruble identifies the current spate of problems. US$ is merely another beneficiary.. short term (I believe).
Sakhaneft, allow me to defer to your lengthy experience and trading longevity. Oil prices at $3/barrel built the house of Saud. The 1973 war changed global monetary politics and more than 40 years later we live in a 'brave new world'. It truly doesn't seem that Russia requires any help in executing self-destructive behavior.. and most certainly, not from the West! It is certain that there is a concerted effort to continue to manipulate precious metals pricing in concert with currency destruction and these efforts appear to be running headlong into a Chinese and Indian population that merely owns 5 grams of gold per citizen (at least in China) but bent, with what appears to be tacit and possibly overt government support or encouragement. The westerner is calculated to own 25 grams of gold per each. Yep, this is extremely a long view of anticipated market growth for metals but I too, similarly believe that the tipping point appears near. Petro-dollars.. I think about them. I don't believe that Russia and China fails to think about them on a daily basis. I'm political only to the extent that I devoutly desire that government be small and serve only my need for protection from threats.. both foreign and domestic. Screwing with the money once taken off the gold-standard screws with the basic freedoms the founding fathers envisioned and the rights my fore-fathers fought for. That's it for politics. Yes Mr. Sakhaneft, I bought some today for delivery. I simply think of it as ammunition that hopefully will never be needed. $1,180-90 is the next strongest line of support. Let's see another downdraft to @ $1,210 and then a challenge to that $1,240 area of resistance. I'm most interested to see what happens at $1,275. Call me a golden optimist.
Sakhaneft, I take your assertion that independent thinking represents only 5% of investors as a compliment. Look at what the other group has given us in the way of political representation in Washington. What you can count on is that these are frightened by what they have witnessed and now are looking for a place to hide and have a tendency to 'stay-away' rather than apply prudent management of resources in taking advantage of opportunities. Herd mentality works VERY WELL for those who relish the devouring of lemming for breakfast. Let's understand fundamentals in playing the long game and let us follow good technical indicators when taking shorter term positions. Good luck to all... even the lemmings.
Sentiment: Strong Buy
As I'm not a genius as applies to markets and timing, I try to use a discipline that has served me well in the stock market and in monthly or quarterly precious metals purchases; it is simply called "dollar cost averaging" in which a range bound market forces me to by more of a stock or precious metals coins when prices are low.. and less as prices rise.. simple.. effective, and it works. The shares I would purchase at $33 are now three times more plentiful and I'm forced to buy more.
Sakhaneft, you offer a studied assessment of Pan American shares as presently trading and in view of current silver prices. All things remaining as they are, I suggest that your share target(s) pricing and ranges for year end and 2015 to be a reasonable expectation with surprises most likely being to the upside. Thanks for this offering and your diligence to detail. dcp
Sakhaneft, you play a superb game of chess as you move your pieces ahead of the market, rather than behind it. A well developed sense of self preservation combined with a broad sense of market timing again seems to have served you well. Again, thanks for your update. JNUG has garnered some of my attention and looks like a fast one when gold turns. dcp
Sakhaneft, you may be even more schizophrenic than many of us, but we're glad you are back to being fully loaded without being the worse for wear. Now, let's begin to hunt the bear! dcp
321golddotcom, Trading capital (our opinion):
It seems that having speculative (full) long positions in gold, silver and mining stocks is a good idea:
Gold: stop-loss: $1,172, initial target price: $1,249, stop loss for the UGLD ETF $11.29, initial target price for the UGLD ETF $13.56
Silver: stop-loss: $16.47, initial target price: $18.07, stop loss for USLV ETF $23.94, initial target price for the USLV ETF $31.73
Mining stocks (price levels for the GDX ETF): stop-loss: $19.94, initial target price: $23.37, stop loss for the NUGT ETF $18.25, initial target price for the NUGT ETF $28.99,
In case one wants to bet on higher junior mining stock ETFs, here are the stop-loss details and initial target prices:
GDXJ stop-loss: $28.40, initial target price: $37.14
JNUG stop-loss: $6.19, initial target price: $16.34
Sakhaneft, I'm sorry you were taken out with a 'stop' order, but in hind-sight, these are placed before hand with an abundance of caution and cannot be second-guessed. Things are not likely over .. not by a long-shot. There's a lot of over-head resistance that must be eaten up before momentum indicators begin to turn around; not that I'm not certain that won't happen.. but it is rare indeed, to see it happen quickly. Thanks again for sharing your update and sharing the benefit of your analysis and position activity. dcp
Carl, I think it's important to realize that the average Joe is complacent when it comes to currency destruction and really doesn't see it as a problem. This works out very well for ALL sovereign banking systems as even the Swiss Franc is now little backed by anything of specific value (intrinsic worth)... Yes, it all works out very well right up to the point that it doesn't. Learn the phrase BANK HOLIDAY and realize that when you next hear it discussed that it isn't a discussion of a HAPPY OCCASION even though it is meant to sound as such. I was in Sao Paulo in the mid seventies when the Cruzero became The Real .. to save time, they took the 10 Cruzero bank notes and stamped a BLACK ZERO behind the '10' .. VIOLA! It became a '100' Cruzero note! Bank Holiday.. learn about it and know why it is NEVER DISCUSSED in public. And yes, things do change in as little as 24 hours! Folks have yet to understand this.
Sakenheft, I believe you've read the production scenario for PanAmerican exactly right. PanAmerican management WILL continue to produce silver, gold, zinc, lead and whatever else they can extract. We know the all-in-cost associated with doing this and it makes no sense at all if you believe that metals prices can only decline from present levels. Management of PanAmerican doesn't believe that the present gold and silver price slump is a long-term phenomena and neither do I. You pay your money and you take your choice. If you really want to make your life more exciting, buy some dollar denominated options.. I can practically guarantee that your investment life is likely to get more interesting, should you choose this strategy.
Stewart Thomson (see 321golddotcom) agrees with you, Treto~ Stewart Thomson 10-06
Deflation as bullish for gold stocks
A week ago I urged short term traders and options players to be patient, and wait for my price stoker oscillator to reach the 21 area, before buying. It’s there now, and gold looks ready to launch an assault on overhead HSR (horizontal support and resistance), in the $1240 area. The meltdown in Japanese and European GDP has caused most fiat currencies to sink against the dollar. In the big picture, this is likely to increase inflation in China, and could create a significant increase in gold buying, by inflation-wary citizens.
The US dollar is strengthening on economic weakness in other nations, rather than on economic strength in America. That’s very dangerous. Global demand for oil is collapsing, and the dollar rally is exacerbating the problem.
If oil prices decline further, the entire fracking-focused US oil boom is at risk of imploding. If that happens, America could be thrown back into recession. I sold about one third of my physical silver position for gold in 2011, and I’m starting to buy it back in small stages now, using my pyramid generator to systematically allocate capital.
Well, I asked for it and now it appears that more towels are being thrown than in a Turkish Bath! Investor salivation along with capitulation means that you do what your instincts tell you is suicide.. 'course I've been buying physicals all the way down but, TODAY? Yeah, I'm starting to like this with gold at $1,190 and a 5% yield that EVERYONE is afraid to touch.. the temptation is becoming nearly way-too-much!
Sentiment: Strong Buy
Some lucky Pan American Silver share holder got to sell his shares at $10.90/each! Talk about lottery winners. Some lucky margin buyers have brokerage back offices that knew when to liquidate for maximum effect. What's that about kicking a dog when he's down?
Sentiment: Strong Buy
Silverski, it's the disenchanted longs that need to throw in the towel. That's what it takes to make a bottom. Of course, in our heart we know it's our leverage and expectations that infringe on our spending habits that cause the real pain. Brief aside: I just bought some 1959 proof sets (last of the franklin halves) at $34/ea today and I think I did well.
Sakhaneft, seems to be solid volume numbers today but not what I'd describe as capitulation by longs.. at least, not yet. The next few days may tell the story. A strong rebound will really whip the trading market place and we might see this type of trade last several weeks.. if you can imagine this being the case! Would like to see 2+million shares rather than a whimper. Interesting stuff and a genuine market definition. I wish you well on your new position, as always! dcp