drbubb

I AM A "NOISE" TRADER - harvesting those brief surges from results or aggressive promotion I own over 30 miners and explorers. Some are only small postions left over from water-testing exercises in new stocks over the last year or two. I dont recommend so many, but I watch my portfolio carefullly, watch for signs of outperformance. When one runs ahead of the pack, and then the voluem starts to slow, I will sell it. I then reinvest the proceeds in more Juniors, or sometimes in Hk property. Fortunately, I have had few big losers, and this form of trading, sell my winners, after their momentum flags, has worked well for me over several years.

SENIOR GOLDS HAVE PERFORMED, Juniors Have Not A sad looking performance in 2008 for the Junior Miners & Explorers. I use the CDNX index as a proxy, and here's what I see for 2008: Date- -GLD-- -GDX-- -CDNX- -SPX-- Latest 91.75 51.21 2557.8 1353.96 Chg.08 11.3% 11.7% -9.93% -7.79% v. GLD 0.00% 0.47% -21.19% -19.06% GDX (Seniors) has slightly outperformed GLD (the Gold etf), while CDNX (a proxy for the Juniors) is lagging by a huge -21.2%. The Main problem? CDNX versus : GDX, RGLD, SPX ... update CDNX lost a massive 8.7% on Jan.21st, when the Canadian markets were opened, and the US markets were not. It still hasnt managed to recover much of the big massive underperformance from that day. Last week, It looked like it might start to recover. Then yesterday's tiny 0.15% gain fior CDNX, when GLD jumped 1.61% and SPX was up 1.75%, was a big disappointment. I still expect better, and hope to see it this week. = = . Frizzers, and others interested in the detail, note: Yesterday's news took the CDNX/SPX ratio back down to the top of that GAP, that I had previosuly identified. If you are looking for silver linings, I suppose you could say that "filling the Gap" first is not a bad thing. If the ratio jumps up from here, it will not leave those potentially-destabilising gaps in the the charts. A brick makes a better foundation than swiss cheese.

POSSIBLE PROXIES - for the CDNX Here's CDNX since Jan.2004, compared with Canaccord (CCI.t) and Endeavour (EDV.t) ... update

WHAT COULD ignite the Junior rally... Greg Silberman - “Thirdly, whilst the index is at new highs, the gains have mostly come from large cap miners and has yet to filter down to the smaller caps. Most exploration and junior producers are still down in the dumps. POINT IS, THERE IS DEFINITELY STILL TIME TO CLIMB ONBOARD BUT THE SPECTACULAR GAINS WILL MOST LIKELY COME FROM THE JUNIORS WHERE VALUATIONS ARE STILL LOW. When the first announcement of a takeover hits the junior market it will be like a match to the flame as speculation over who will be next causes rapid upward revaluations – the good investor will be buying now in anticipation of this.” Kitco.com /see: http://www.financialsense.com/fsu/editoria.../2008/0122.html

I could see this gap beginning to close, as the Juniors gather interest

Nice relative move today, in early trading: Ratio: $2578 /$1354.0 = 1.904 R-chg: +44.73 / +1.83 = 24.44 ! (That was intraday, On the close): Points +20.34 / -21.46 = +40.80 Ratio: $2554 / $1330.6 = 1.919 R-chg: +20.34 / -21.46 = -00.95 R-pct: +0.80%-(1.59%) = +2.39% That's even better. Getting thru most of that "Gap" area == Nice chart, Fr. that's how I see it too

"GOLD-in-the-Ground" is very cheap ======================== The Juniors (as represented by CDNX) as drilled down to a very cheap price Look at that ! Ratio has hit 2.60 in recent days, that is just HALF the peak ratio near 5.20 Latest: CDNX: 2,533.72 +93.38 / High: 2,533.72 Low: 2,476.26 / Volume: 182,000 Percent Change: +3.83% GOLD : $900.80 + $7 : $907.80 GLD-- : $ 90.08 +$2.19 / High: $ 90.25 Low: $ 89.13 / Volume: 10,627,400 Percent Change: +2.49% Ratios: (using 10xGLD as a proxy for Gold): Overall Ratio : 2.790 : (2,533 /$907.8) Ratio-of-Chg : 4.26 : (93.38 / 21.90) /(+1.34%) There was decent outperformance by CDNX yesterday

Interesting interview with John Embry, Chief Strategist for Sprott Next Leg Up For Gold *VIDEO* John Embry from Sprott Asset Management on the outlook for gold and gold stocks. // Host: Victor Adair. http://www.howestreet.com/audiovideo/index...mediaplayer/261 He says: + Gold and Gold shares will take off, + At some stage, Gold will decouple from stocks, and soar "like a scalded cat" + Gold shares should follow gold higher, but maybe with less enthusiasm + The Average person cannot "even spell gold" and is comfortable with money in the bank, but at some point they will want to get out + Bonds at a 3% yield are a terrible long term investment

MIND THE GAP The Ratio of CDNX-to-SPX needs to get back over 2.05. There's a sort of gap, in the area of 1.88 - 1.94 , and that could be jumped Friday or in the next few trading days. Everyday where the gain in CDNX exceeds twice the point gain in SPX pushes the Ratio higher. Let's see what yesterday brought: CDNX: 2,533.72 +93.38 / High: 2,533.72 Low: 2,476.26 / Volume: 182,000 Percent Change: +3.83% SPX: 1,352.07 +13.47 / High: 1,355.15 Low: 1,334.31 / Volume: n/a Percent Change: +1.01% Overall Ratio : 1.874: (2,533 /1352) Ratio-of-Chg : 6.93 : (+2.82%) that's Huge outperformance! A real "jump of the gap" might require CDNX to be UP on a few days when SPX is down. The overall gap back to 2.05 from 1.87 is: 9.6%

(from Advfn's RUG thread): energyi - 24 Jan'08 - 12:29 - 33344 Sahara: "E - I have the Gold mining juniors on high alert, and have been nibbling exponentially over the last few days, I posted a chart of the HUI and was impressesd with the prospects./\." Actually, A HUGE gap has opened up between HUI and CDNX, as you can see on my other thread: CDNX: http://www.advfn.com/cmn/fbb/thread.php3?id=16287876 If the CNDX plays catch-up now, it will be extremely profitable for those of us with large Core holdings in the Juniors - - "If so short closeing could add to the mix. Explosive stuff" Tim, I hope you are right about that.

That's impressive. The number of links and discussions continues to grow. I reckon that you need a large and useful website, and maybe you should try to get an interview on a podcast, or maybe a video on YouTube. There seems to be alot of interest in that sort of content

small one: smaller one: smaller, and cleaner too:

HUGE drop today : - 6.6% ! CDNX : 2,445.46 Change: -172.75 It seems that support area near 2,400-ish will be tested very soon, even today. It is often a good idea to buy when only a single market is open (canada), and you see these huge drops. If you dont have a Junior mining portfolio, this could be a great time to buy in

Speaking on FS, highly-articulate "private investor" Eric King talks about : + There are great values amongst the junior miners + Gold and Silver prices are going far higher + Majors are "going to have to go out" and buy juniors + The upside "is staggering" + Patience is key. "Sitting" not trading, is how the big money will be made + The really big money will be made at the end- in the manic phase /link: (about 40 minutes in): http://www.netcastdaily.com/broadcast/fsn2008-0119-3b.asx "they are on their own time table"- the juniors will not necessarily follow the HUI

It depends on the general market (and gold too!), I suppose. If SPX is bottoming in the next day or two, then CDNX should make its bottom around where it is. A futher break in SPX (or gold!) could take CDNX down to that 200wk. MA

Juniors (ie CDNX) are hovering between the Major Gold stocks (HUI) and SPX ... update Some points suggested by the chart: + The Juniors kept risng in the first half of 2007, even after HUI peaked in early 2007. + When the stock market slide came in the summer, the Juinors slid faster, and caught up with the falling HUI + The General indices, HUI, and CDNX all recovered after the Fed cut rates in late August + The Juniors never quite recovered the way that HUI did in its surge since mid-Dec. 2007 Stockcharts... CDNX and its ratios charts Canadian Venture index (CDNX) ... update If key support at CDNX-2600 is broken, it may quickly fall to 2400 Ratio : CDNX-to-HUI ... update This chart's breakdown looks horrible. But it exaggerates reality somewhat, since the CDNX should be converted into US$ (a weaker currency than the US$), before the ratio is run. If adjusted properly, CDNX would look very oversold, but not to this extreme. Ratio : CDNX-to-SPX ... update CDNX looks like it is trying to hold 2.0 - as a ratio to SPX. If SPX bounces back next week, then CDNX should too- perhaps more strongly. A breakout in the ratio above 2.15 (example: 2900-to-1350, is a 2.15 ratio), shouild signify that a period of CDNX strength may be right ahead of us. A Strange Ratio : CDNX-to-TLT ... signalling a possible turn here and now, or if it breaks below 27.40 trouble is coming. Good historical signals, will it work again?

smilewithme - 02/Jan/2008 15:59 - 32312 / Advfn's Gold thread Video: http://piedmontmining.com/video.asp� Superb video as explained below. This was in connection with a Gold Play which I do not own - Piedmont Mining, but am hoping that Gold Summit can replicate their success. Discovery Investing - Looking for Ten Baggers. Here are some of the points 1. Are the assets potentially world class? Cure for TB, Major new Gold Mine etc 2. Do they own it or control it? 100% good, 51% etc 3. Management and Board of Directors - How Good? Track record? Are they concerned for Shareholder? Personal Stake? 6. What's the catalyst? If it has a chance for discovery. 7. Buy when CHEAP (normally no one likes them at the time) 9. Buy enough Stock to make a difference. 10. Not a trading strategy - Go To Sleep stratgy when you have your position - Let it mature and not sell. Have patience, courage and be willing to lose. ------------------------------ From over the pond post: Dr. Barry has led a group and his subscribers which has moved Gold Summit (TSX-V: GSM) look-alike Piedmont Mining (OTC: PIED) from .10 to about .30 and�we hope it will�climb from here. Both GSM and PIED focus on Nevada gold exploration.

I see your point. But MAJOR gold stocks (HUI) had been rising, while the stock indices (SPX) were falling. Until yesterday. Here's a chart, showing the ratio : HUI-to-SPX The gap near 0.33 needs filling, and a pullback to 0.31 would not be surprising. The strong rally off that clear mid-Dec. low would remain intact, if 0.30-0.31 holds

Hmmm... Interesting idea. Not yet, as far as I know. If anyone knows differently, please post that

Maybe this is why Royal Gold (RGLD), a royalty company, has started to outperform in recent days. People are beginning to realise that a royalty company gets its contracted royalty slice of gold production, even if mining costs rising. The main challenge for RGLD has been to get its own overhead under control. It lagged for a long time, because it was adding new staff and costs as quickly as its royalty income went up. How many people are really needed to run a roylaty company? But if you look back to 2005-6, you can see that the stocks can really sprint when gold prices are shooting up. Hope you are right. But I think the cost pressure has more to do with high oil prices, and a weak dollar = = BETTING ON A CATCH-UP by Juniors - what to buy? I am investingating this. What may interest some here is what I have been doing with my own portfolio. If you have been a regular listener to the CWR podcasts, you may know that over 2007, i shifted away somewhat from juniors in my new investing. Alongside the tax bargains, much of my investing had been into larger companies, with direct income and cash flow from godl production, like RGLD (still my largest position), and call options on stocks like: GFI, HMY, and AU. These stocks have soared in the past few weeks, and have driven my portfolio valuations to new record highs. I am begnning to slowly shift out of the Call options, and graduallly sheding some shares in RGLD. I am sticking with the Junior miners and explorers, and think they have great potential. Most of the cash from selling Gold share calls has gone into: + Calls on EWJ: the etf for Japan + Calls on some Energy royalty co's, like: HGT (moving too fast now), ERF, etc. + Some property-related shares in Hong Kong. But as I continue to take profits on the gold leaders, I may look to invest in some gold laggards. I will plan to talk about on this thread 9(or elsewhere) as my research and investing continues. Why not join me in this research, and maybe invest some too. Links: Charts of some Jr's interviewed by puplava : http://www.advfn.com/cmn/fbb/thread.php3?id=15918251

A very good series of questions, Frizzers. And I want to look deeper into this (and maybe change the name of the thread) First of all, I have been searching for a chart which shows the underperformance, and I think I have found one: CDNX vs. HUI ... update ... CDNX-5years : 1.year : 3.mos : 10.days // CNDX vs. HUI- 3mos The CDNX index is an index of stocks traded on the Canadian Venture exchange, which is obviously heavily weighted towards junior mining and exploration companies, which are the main stocks that trade there. The chart above shows that a big gap has opening up between the sharply-rising HUI (Gold Bugs index), which includes the unhedged major gold producers, and the CDNX. There have been some lags in the past. HUI tends to move up first, but this is - by far! - the biggest gap we have seen over the 3 year time horizon. Even looking back to the beginning of 2003, I cannot find a period like this. In this past, the HUI normally got rolling first, but the CDNX would eventually catch up. It will take a real spurt on the part of the CDNX to catch up this time. How big is the gap? Eyeballing the chart above, I get HUI (235%), and CDNX (155%), that's a ratio of 1.516. The CDNX is back to the level of August 2007, when the HUI and the CDNX Index were at the same level. - the HUI is up 52% since then- that's a big gap. Let's dissect it. What can explain the gap: + Currency movements: (explains less than 1/10 of the gap) CDNX is priced in C$, and since August (C$0.95), the canadian currency has gained about 3% to C$0.98 That's not much. But if you look in some detail at the C$ since August, you will see some big volatility. The C$ spiked up to as high as $1.13 along the way. In fact, you could say that C$ movements explained much of the initial gap which opened up from August into early November. But since then as the C$ has pulled back. Meanwhile, despite a weaker currency, CDNX has eased into mid-December. The gap widened again as the HUI began its rocket-like ascent since Christmas. And the gap would look even more dramatic, if we looked at CDNX priced in US dollars since November. So we need other explanations. + Lagging general stock indices : People who invest in juniors also invest in the general market. If general stock indices lag, people will feel poorer, and be reluctant to invest in Juniors (especially exploration companies). This argument seems to be backed up the price action: CDNX versus SPY, HUI and GLD : ... update Since the sharp market break in August 2007, the CDNX has tended to move with the general stock indices, rather than following the upwards path of Gold, GLD, and HUI. Investors in juniors are rational. They realise that junior exploration companies "are like burning matches", and will need to keep coming back to the market to replenish their capital. Consequently, they are hostages to the market, and if there is little demand for shares, they will have sell stock at low price levels to keep exploring, and stay alive. + HUI (which is concentrated) has caught up with Gold, while CDNX (which is broad) has not : CDNX vs. HUI and GLD ... weekly update : daily comparison + Retail investors haven't started to buy juniors yet / the volume isnt there : Look at the volume in the chart above! It was up in the latest week, while the CDNX eased, and truly weak and pathetic in the prior two weeks, when the CDNX rose. The Buyer are not flooding into these stocks. Volume will be needed to get the junior stocks moving. We saw it last year, but not yet in 2008. (Admittedly, those two low volume weeks were mainly a result of holidays.) + Junior are a relative bargain - wait for the spillover and takeovers: Jim Puplava talks abiut this. He say the buying has been concentrated in the majors (HUI) because people realise there is enough liquidity. So they can get in and out. Buying illiquid juniors is a different proposition, they are so illiquid, that investors only buy for long term investments. Since they have lagged behind bit gold, and HUI, he believes the lower valuations are now so compelling, it is inevitable that the money will start to flow in. THIS WEEK, starting with trading on Monday 14 Jan. may show us the beginning of a flood into juniors CDNX chart ... update : intraday Friday's comparison was good: CDNX: C$ 2,797.76 +$19.10 , +0.69% / Volume: 85,738,400 SPX-- : $ 1,401.02 - $19.31 , -1.36% Outperformance was 2.08% in only one day ! A breakout above CDNX-2900 with volume behind it would give us a good indication that the inward flood into Juniors has started. = = = MORE CHARTS, and Links: Ratio (Gold majors-to-Stocks) : HUI-to-SPX :: Weekly : Daily Jim Sinclair's website............ : http://www.JSmineset.com

Pain Street USA: '08 housing outlook // Too many Vacant homes The forecast is for a longer, deeper home-price slump than previously expected, with double-digit declines in many markets. By Les Christie, CNNMoney.com staff writer NEW YORK (CNNMoney.com) -- The United States is deep in its worst housing slump since the Great Depression, and according to a new report, it's not going to get better any time soon. In a new survey, Moody's Economy.com says many metro areas will record losses of 20 percent or more during the downturn, with the national median price for single-family homes dropping 13 percent through early 2009. Factoring in discount offers from sellers, the actual price decline would be well over 15 percent. Eighty of the 381 metro areas covered by the report will record double-digit losses, according to the report. Most of the worst-hit markets are in once high-flying areas, such as California and Florida. The steep losses were bound to arrive sometime. Throughout the housing slump, which began in the summer of 2006, experts kept expecting prices to tumble, but it wasn't until recently that they dropped substantially, according to Mark Zandi, chief economist for Moody's Economy.com. "There has been a sea change in seller psychology since the subprime shock this summer," he said. "Sellers now realize they have to drop their prices to make a sale and prices are coming down very rapidly in some markets." One such place is Punta Gorda, Fla. In Moody's outlook, prices there will undergo the steepest correction of any U.S. market. From their peak during the first three months of 2006, to their bottom, forecast for the second quarter of 2009, prices will decline 35.3 percent. That's in nominal dollars; adjusted for inflation, the loss will be even greater. Other metro areas expected to go through crushing price drops include: Stockton, Calif., where prices are forecast to drop 31.6 percent, Modesto, Calif. (-31.3 percent), Fort Walton Beach, Fla. (-30.4 percent) and Naples, Fla. (-29.6 percent). The worst hit market outside the Sun Belt is expected to be Ocean City, N.J. where prices will fall 24.9 percent, according to Moody's. Prices in St. George, Utah (-21.8 percent), Grand Junction, Colo. (-18.9 percent) and Atlantic City, N.J. (-18.6 percent) will also suffer. In the Washington, D.C. metro area, Moody's forecasts a decline of 18.4 percent. Home prices are being pulled down by an even more severe decline in home sales, which Moody's expects to bottom out in early 2008, when unit sales will be down more than 40 percent from their peak. Home builders continued to add to inventory even as the slump got well under way, contributing to what is now an 11-month back-log of homes for sale, according to the National Association of Realtors. Many of these homes are sitting completely empty: The Census Bureau reported a total of 2.1 million vacant homes for sale. Vacant homes add pressure on prices because owners of these houses are usually more willing to slash prices to move the properties. They cost out-of-pocket cash each month while providing neither income nor shelter. Even though home construction has now contracted severely - the Census Bureau reported Tuesday that new housing starts were down to an annualized rate of 1.187 million units in November, the lowest in 16 years - it will take time to work through the excess inventory. The housing slump will have a substantial impact on the overall economy, according to Moody's, which says it will depress real gross domestic product by more than a percentage point this year and by 1.5 percentage points in 2008. Speculative investment in the mid-2000s helped fuel the current slump. Zandi pointed out that 16 percent of mortgage originations during 2005 were for non-owner-occupied housing, twice the number of a few years earlier. "And that's a very conservative estimate of investor demand," he said. "Many home buyers lied on their mortgage applications." That's because interest rates are lower for owner/occupied dwellings. ...more: http://promo.realestate.yahoo.com/pain_str...ng_outlook.html

Funnily enough, I have been aware of this possible likeness all along - it isnt the first time that I have pointed this out on HPC. In fact, I kept the Logo on GHPC simply because of the possibility the market will peak out when the mountain said it should By the way, it traces out a final 5th-of-5th wave after the 2004-5 pause BTW, I want to keep a "human face" on GEI, so I may stock with the current logo. At least until I can feel unreservedly bullish on the Stock market. That may never happen.

I see what you mean. . . . . . Will I have to update my Logo as well ? . . . . . should go back to the Old One? .

(I'm looking to update these cycles): The article suggested cycles of: 2.4 years, 8.3 years, and 30 years This projects an coming 30-year peak in 1980 +30 years = 2010, the same year as an 8-yr. Low? 30 year cycle lows: a. 1931 & 1933 : say, 1932 b. 1962 ?? c. 1992 ?/ article said: 1993-95 If the low was 1962, not much happened until about 10 years later. Long sideways movement: 1957 to 1970 8.3 year Lows, per article estimates: 1960-1, 1969, 1977, 1986, 1994, 2002-3, 2010? (competes with the 30 year cycle high!) The article projected an important low in 1993-95. (more detail from article?) Actual low came a few years later , near the end of 1998 ...so 8.3 years later would be, early 2007, and guess what we saw: So may there is something in these cycles after all! The 2.3?? year cycle is more difficult to track... And I will be looking into it'seffectiveness further in subsequent posts. But those longer cycles would now suggest; + A Big Peak about 2010, and + An 8.3 year cycle around April 2015