30th July 9:28pm I worked until after midnight to finish the educational file (NL) and in the office by 7:30am this morning. Newsletter No88 was loaded late this afternoon so I hope you find this one a useful reference for your mining investment in future.
Gold was tracking above a short term support line and has broken below – the indicators rolling over again and looks like a short term fall at minimum. Intra-day charts are fickle however they usually indicate the ultra-short term direction.
The XGD topped Wednesday last week and short term also looks weak.
The market awaits the FOMC meeting comments tomorrow night for direction so I will report on what ever I see tomorrow and Thursday after the event.
29th 2:39 update BDR put in a cracker of a quarter and look to be a very low cost operation as planned. The outcome takes away operational risk to some degree – this is robust and so they will now become a more important part of the portfolios.
The sector is weak today with very little liquidity.
I have to wait for a direction before I deploy the reduced capital. My systems are showing a chance of a firmer finish today.
29th pre-open comment many of the large orders in the depths of these miners are missing this morning. Even SLR looks good but 1M bid is at 47c area so does not count as real orders. Now we see if my moves over the past month were a massive mistake or not. This week will be telling.
Because there is always the chance of upside I will buy back some shares this week – maybe – which represent core positions but do not assume this means I have flipped bullish.
25th 12:49 comment – the big traders know loads of smaller traders are looking at the depth these days. Do not be fooled by large orders well below price or well above either as they often get removed. They are there to influence you, to encourage you to buy or sell in the direction the big traders want you to go.
25th 11:01 comment – answer to a client question – no I am not trading this at present. The reason is that I need to see how the intra-day charts play out. It is not worth the risk buying back in too quickly if we are in for a larger fall any position would soon be a major loss at least on paper.
25th July pre-open glad to be right out including trades this morning. I have covered my current views and strategy in much greater detail in Newsletter 87 now uploaded. The XGD rallied 38% which was sharp and what I have been looking for. The next position should be lower so I will monitor this closely for you and bring you a report on the stocks I liked most. It is also time to sort through all the quarterlies again and update the Ratings Tables.
FundA now holds $541k cash and $164k in shares.
FundB now holds $665k cash and $99k in shares.
I was working on an Educational Portfolio update however there was not room enough to cover what was needed so I published NL87 instead I hope it is of value to you.
24th July 10:38am OK this is fairly subdued I am going to drop the selling and trading to finish off a full Newsletter. Sorry for the delay but I did say I had to get aggressive so I need to focus more on the Funds and stocks to cover this more adequately for you all.
24th July 10:11am some follow through today. Sold 40k PRU @ 63.5c FundA
23rd market close how did I know this morning was a trap? Since this is educational I will share the secret. The intra-day indicators were overbought yesterday on the close and so the added strength this morning sent those indicators into the stratosphere – way overbought and therefore a bull trap. This translated into the type of day where the open is the top for the day. The close today was not particularly strong and so the professionals are taking profits, probably all day. We may see some more subdued follow through into tomorrow it will be interesting.
FundB cash level now $665,733
23rd 3:52pm sold 45,711 PRU @ 60.5 FundB
23rd 2:54pm FundA cash now back to $515,716 (+ shares held). A well placed purchase at extreme lows can see this push the Fund back to original capital in rapid order.
2:55pm Bought back 45,711 PRU FundB using cash retrieved from sale of 40k shares this morning – see below.
23rd 1:39pm bought back core position 40k PRU @ 61c FundA. This is for illustration – you can use this technique to lessen losses and manage a position. I expect paper losses on PRU into the lows however the position has been improved by around $3,000 thousand today on this one stock.
Note news follow through on SAR was spectacular and now sold off again. You often get a second wave of interest and next day on media if you are lucky for trading but I stand by the theory on good news.
23rd 11:45am proof of concept below – SAR opens strongly and already sold off so the new buyers on that news are already under water. I sell good news, never chase price after an announcement unless it is a major game changer for a company.
23rd 11:38am SAR has just announced results at Red October which looks set to expand their higher grade input in the mine plan. This will further assist them. Note I never advocate buying good news quite the opposite, within a short time the excitement vanishes – this is about longer term sustainability of this company which has an excellent hedge. The report should be on their web site soon if not already.
23rd 10:44am sold 40k PRU @ 64.5 FundA, note I could sit here all day playing with the Funds however the point is education so I will not. I will now update the trades and cash balances before finishing off the Newsletter.
23rd 10:39am bought 40k PRU @ 63.5 FundA
23rd post open sold FundA 20k EVN @ 86.5, 40k PRU @ 68cFundB sold 5k AGG @ 2.80, 40k PRU @ 67, 10k OGC @ 1.76, 3k IGO @ 3.38 and 20k EVN @ 86cAs I said this is time to get aggressive. I will buy these back cheaper where I can to hold some stocks.
23rd July pre-open beware of even trading this today I am looking for a further sell opportunity or two. Gold has penetrated the resistance zone and it not clear. This comment is related to risk / reward we have to buy dips not rallies. I am doing my best to get you a full Newsletter today.
22nd 4:12pm on close sold 50k BDR @ 76c FundB
22nd 3:09 update I have taken nearly 50% of the original capital out in FundA ready for the next entry point.
Working on the numbers for FundB next. The stocks which recovered during this rally will be the prime targets. I will cover this in a Newsletter I am working on.
22nd 1:31pm update sold 30k EVN @ 80c FundA
22nd 11:49am update sold 30k EVN @ 77.5 FundB, 7k IGO @ $3.23 FundB, 30k OGC @ 1.63.
22nd 11:33am sold 40k EVN @ 78c FundA
22nd 11:27am gold is just below the low of 1321.2 (April 16th) so this is a resistance area. I want to cash up the volatility is increasing and short term indicators overbought.
Sold 20k BDR @ 74c FundA
July 22nd personally I sold that this morning. Remember the rises look just as enthusiastic as the falls look hopeless. This is what sucks in most investors. I am working hard to complete a file however will stop for a while to check for sell opportunities.
July 17th 9am The Fed speech was a continuation of the “dovish” (soft) stance on monetary policy meaning gold traded essentially sideways. A small sharp drop stalled with no follow through. The XGD and gold will continue to drift around until it finds a direction. I am listening to reports and interviews constantly here when not writing files to get across the issues.
FML came out with another shocker but their cash burn slows dramatically next quarter with $16M outgoing including $12M on lag over mining expenses. This means their cash burn slows to circa $5M in the December quarter. The interesting comment was on “taking control of their own destiny in Laverton with no mention of Barnicoat. Something is afoot it will be interesting to see if DT is successful.
PRU is getting punished for missing guidance by a very small amount and now not game to offer anymore than a wide guidance they feel they can easily achieve and who can blame them. The price is probably overdone however they are not a low cost producer, rather mid tier making them a better proposition than most but not in the top group.
July 16th 9:36pm the XGD has pulled back lightly the last two days. The volatility has died off for now and I expect the XGD to trend sideways to slightly up – basically in a range the next several trading days. I may buy back some stock and sell it quickly during this time as I have also sold some of what I would call a core position.
I will only move to fully invested after a further fall but the 1000 point drop from 3000 to 2000 on the XGD will hold for now. Gold and the XGD will trade lower if my systems hold.
July 15 pre-open the XGD failed to make the new intra-day top Friday after I left home so the final sales will have to be completed today. This could rally to the 2674 area which was the low of 2008 now resistance. The turn pattern cannot be a sharp V after such a prolonged collapse. I am confident this weakness continues especially in the light of events in Europe at present. We had a 900 point rally in September 2008 on massive buying before the XGD went even lower. That was very near the bottom.
July 12 11:18am XGD over bought to extreme and 50% of last drop almost covered. I believe a drop will be followed by a slightly higher high intra-day and have set sell offers in to complete selling on this counter rally. I have to go out and may miss some offers by being too high however I have a good amount of cash now to fight the next battle.
I am relieved that the buying has been so much stronger this indicates I can fully invest on the next fall and I am not talking within this range. I need to see the XGD comply with my system. Risk reward is not there at present with the crisis coming to the boil in the international banks.
July 12 10:56am sold 26609 OGC @ 1.545 av FundA, sold 8k IGO average 3.10 FundA. Sold 40k SLR @ 80c FundB
July 12 10:03am the Bernanke comments were more about Europe than the US as US banks are massively exposed. Europe is falling over the edge into the abyss as Italy is now almost junk rated – down to BBB a point just above where they will not be able to get funded. Portugal is the same. Think about how Greece went once this tipping point was reached.
We are back to the depths of 2008 (worse) here and money is coming out, capital being destroyed creating the desperation we see and this will return to our gold sector unfortunately. This is why I am a seller into this rally it will be another false one in another bear flag but at least the buying is more aggressive down at these levels so that shows we are getting closer to the bottom.
Closing comment: As one savvy client put it those with power use it ruthlessly. I believe this is a sucker rally because it is based on a Fed comment. If there is a further rise tomorrow it will be a chance to sell more. Probably next week we will be falling again and I can buy back a core position in some stocks. The main buying will be at lower supports. Short stops are going off this is too sharp too fast against the trend. Take care.
At close of trade sold 40k SLR @ 75.5 FundA and completed part sale 23,391 OGC @ 1.476 av FundA.
Before close sold 30k BDR @ 62c FundA and selling at auction. I do not think this lasts long.
12:48 sold 40k RSG 65.5c FundB
11:30 sold 45k SLR @ 73c FundA
10:47am sold 30k RSG @ 63.5 FundB
11th July another Fed comment inspired false move on markets is underway. Was Bernanke just referring to rates or QE as well? The XGD is in a tight trading range again and I hope it can register a strong RSI rise here and set up a buy signal on the reversal of the final fall in this phase. The rally in some stocks is strong and I am using this to lighten further. I do not trust Fed comment inspired rallies this is a distortion and probably short lived.
Sold B2Gold (was CGX) 11,250 shares at A$2.56.
11:51am sold 20k RSG @60.5c FundA
10:50am sold 30k RSG @ 60c FundA
10th July 10:43am sold 60k RSG @ 60c FundA for trade purposes.
10th July 9:45am gold failed to make a new intra-day high above the US1265 level and is now back in a new down channel. The bigger indicator was yesterday on the XGD which rallied from an initial drop to the break even level. This made it look like an up day as prices were rising on balance yet it closes essentially even – with gold up circa $30 an ounce. This is not bullish, patience a new low is coming in the XGD and fantastic re-entry opportunity.
Macro – money is coming out of Australia and like the Asian crisis people do not realize how much and for how long. This is creating the anomaly so we have to be patient and pick off the clear entry points on the market. That is different for individual stocks if you are a trader there are always profits intra-day to be made but be out by the close to avoid over night risk.
9th July 11:05am gold just spiked and I suspect too many people trying to short it so the big boys (who can see stop losses in their system) triggered them to enable them to increase their own shorts. Investing is not a level playing field but if you understand what is happening you can ignore the “noise” and even take advantage of it. I base my comments on evidence of large bank prop desks churning and burning their own clients – this is not a conspiracy theory it is documented fact. Look at the LIBOR scandal for e.g.
9th July 10:31am gold rolled short term and and recovered on price but not indicators. The bounce this morning did not even last 30 minutes. Some stocks making new lows due to fear. The failure to bounce today means that any real fall in gold will result in a violent sell off on stocks. I will advise when I see the re-entry opportunity as I too will be using that as a trade / capital preservation strategy for the Funds.
9th July 8:51am the stochastic is rolling over on spot gold intra-day which is not positive. The XGD is oversold on the intra-day however any small bounce looks very short term here. If today is a power day I will have to take a fresh look but for now I view this as a short term trade today not a re-entry point.
8th July 10:29pm note: updating worksheets from diary and found 2 additional sales on 4th in FundB, also adjustment on 5th the RRL sale was FundB only.
8th July 10:25am clearly a good move to sell last week enabling the Funds to pick up cheaper prices. It is difficult for traders to wait but the XGD tells me that we head below that last low so for now I will hold.
The large volatility down at these stupendously cheap levels makes for exciting trading. Some stocks 20% below where I sold last week already so I will be able to capture the rise another time at least – probably many times to rebuild capital down in these lows.
5th July 11:31am sold 10k RRL @ 3.55 in FundB
5th July 10:45am update I am not sorry I sold and that is because the intra-day signals are rolling over and looking weak. The US was closed last night of course so volatility has been light ahead of the opening of Asian markets. Gold is very quiet even though it has drifted below a trading channel and looks vulnerable when volatility returns.
I am looking to buy back just as aggressively when of should I say if I am right.
4th Update 1:45pm sold 10k RRL @ 3.44 FundA and 10k 3.455 average FundB
4th July 12:57pm all my intra-day systems pointing to this dead cat bounce failing shortly. The XGD made that new RSI low on June 26th so a lower low is highly probable.
On that basis I have sold:
FundA 10k RRL @ 3.40, 10k RRL @ 3.39, 35k PRU (covered gap almost) 64c, 50k BDR @ 59c
Sold FundB: 10k RRL @ 3.38, 10k RRL @ 3.39, 20k OGC @ 1.435, 50k SLR @ 71.5, 50k BDR @ 58.5, 1k NCM @ 11.10, 20k TRY @ 1.62, 17k PNA @ 1.93 and 50k EVN @ 66c, 70k RSG @ 61.5, 35k PRU 64c
This was a disaster but I live to fight another day. More falls in gold and the XGD with aggressive buying in Funds at lows to come also. This will provide leverage to aid the recovery of capital. Remember we are setting up to become wealthy over the coming few years.
3rd July 1:45pm update the Funds bought too early so no point trading them even if I see another dip to the US$1150 level for gold. This was my first target as of mid April and it got there faster than I thought.
Personally I sold into late yesterday, traded some and bought pack partially today on this dip in case we do get an additional rise into this afternoon or tomorrow. If not I have cash to use should we plunge straight into the final low around US$900. I would be surprised to see that so quickly and therefore favor an upside rally after the fall next week.
I am sitting here working on how to deliver additional value to you all this week. If I get the right conditions I may cash up a little so I have a hedge (cash) and ammunition to use in a fall.
1st July 11:30am update now we see some serious bounce as the heavy buyers move in, how striking that the sellers are so much lighter today. The strength should last at least into tomorrow. I favor the domestic producers due to the weaker AUD outlook they will be safer.
Aggressive traders get the change to leverage their positions here in the extreme lows on extreme volatility.
Long term buyers will reap tremendous rewards over the coming few years on purchases in the right stocks at these levels.