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Gary opines on natural gas; and the markets.

Big Al
October 5, 2015

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Discussion
49 Comments
    Oct 05, 2015 05:48 AM

    I agree with Gary’s reasoning. The most convincing rallies in any sector happen during a bear market and there has definitely been a change.

    Btw, AXU popped 8.5% today after I said on Saturday that “…it’s still a daily chart sell but I think AXU can get new buy signals in a hurry if silver does well on Monday.” I also said: AXU is getting ready to launch a Claude-like bull market of its own:
    http://schrts.co/ua3xFR
    ——

      Oct 05, 2015 05:00 AM

      Silver is doing well today……….and gold has not been slammed………

      Oct 05, 2015 05:19 AM

      btw………….nice call and pop……………

      Tim
      Oct 05, 2015 05:45 PM

      last couple of weeks miners were very weak when gold went up, Glencore was going down, miners are going up now after Glencore stopped it’s decline and rallied off it’s lows, watch out if Glencore decides to go lower than where it hit last week

    Oct 05, 2015 05:49 AM
    Oct 05, 2015 05:52 AM

    COSWF is up over 50% today! Why didn’t the technicals foresee this?

    Oct 05, 2015 05:57 AM

    If anyone doesn’t think the ‘rebalancing’ in Syria etc in the Middle East does not effect our markets…

    Oct 05, 2015 05:58 AM

    I also recently said that the Canadian dollar should be going up and it’s looking better and better.
    http://schrts.co/S7VWaj

      Oct 05, 2015 05:03 PM

      I said that too.

      Before you!

        Oct 05, 2015 05:03 PM

        Copy cat.

          Oct 05, 2015 05:12 PM

          Let’s not have a cat fight here………. 🙂

            Oct 05, 2015 05:28 PM

            Just having a laugh Frank. I’m bored today. Anyway, we aren’t speaking anymore.

            Oct 06, 2015 06:23 AM

            Breaking up is such sweat sorrow …………… 🙂

          Oct 05, 2015 05:53 PM

          Personally, I feel that the Canadian dollar should be going up and it’s looking better and better. I am surely the first to point this out.

        Oct 05, 2015 05:20 PM

        First, you are dead wrong and second, I want everyone here to note that YOU took just a couple of days to break our deal to ignore each others’ posts. I hope your little supporters feel as foolish as they should.

    Oct 05, 2015 05:01 AM

    Garry might be right.
    I bought a lot of Pen West tsx sub .80 cent mark….it has rocketed up %56 in the last 2 days on zero news. Maybe oil hits the $49.50 then we get another kick to the teeth? Could be that the currency folks are signalling QE 4 and this is why oil is creeping up? Exciting stuff!

      Oct 05, 2015 05:10 AM

      Penn West has its own problem. The management is terrible and its compliance is a mess plus debt. If any larger company goes under in Canada, it would be Penn West.

    Oct 05, 2015 05:22 AM

    Dragonite,
    sure you have some valid points but as with anything like this, only time will tell. I might hold for another few days and unload as oil cranks up to the $49.50 mark. Could be $1.35 by then!

      Oct 05, 2015 05:31 AM

      Fine for day trade. My friends inside the company are not feeling good.

        Oct 05, 2015 05:21 AM

        Dragonite,
        The management should be worried as that is their job. The oily sector has gotten hurt in Alberta. Benj Galander bet on this puppy when it was $3. He has one of the best records in Canada. That was 9 months ago though…..a LOT can change in that time. I remember him saying that the management would “do the right things to keep the company viable.”
        Either way my stops are pretty tight.

    Oct 05, 2015 05:24 AM

    S&P is headed to 2000 soon. Energy and Tech stocks should help as panic shorts.

    Oct 05, 2015 05:28 AM

    BTW……….BIG OWL………..thanks for the mention………..INDY

    Oct 05, 2015 05:33 AM

    I am holding ECA at $14.53. It set a 52 week low about a month ago at under $6. I think averaging down at any time under $10 could not hurt unless they go out of business. They just paid out a 7% dividend last month so they must not be too broke. Opinions?

    Oct 05, 2015 05:34 AM

    Hi Matthew, good call on AXU. It is too much a probability of bankruptcy for me to mess with it, but I guess you think they will make it through this downtrend?

    I bought RBY this morning at .469 when I considered it to be way oversold on the news (but I could be wrong). Have you looked at RBY today, Matthew?

      Oct 05, 2015 05:37 AM

      I say AXU is scary due to the 72 of the financial distress scale here:
      https://www.macroaxis.com/invest/market/AXU–Alexco%20Resource%20Corporation

      Oct 05, 2015 05:57 AM

      Hi Wiseguy, AXU is high risk for sure but I consider bankruptcy to be very unlikely. Dilution is a much greater threat but if silver cooperates and gets moving to the upside, future share offerings are likely to be done at a much higher price.

      I don’t follow RBY these days so I can’t offer anything useful about its situation. But looking at the action today (buyers stepping in aggressively), I bet you’ll be happy with the price you got -at least in the mid to long term.

      Thanks for the link to macroaxis, I hadn’t heard of that site before.

        Oct 05, 2015 05:09 PM

        That MUST be a good site since they agree that CRJ/CLGRF is a strong buy. 😉
        https://www.macroaxis.com/invest/market/CLGRF–Claude%20Resources%20Inc.

          Oct 05, 2015 05:17 PM

          On the other hand, this company has 50% more cash than market cap and no debt; so where’s the “financial distress” going to come from?
          https://www.macroaxis.com/invest/market/SMDZF–Strategic%20Metals%20Ltd.

            Oct 05, 2015 05:44 PM

            It gives more information when you click the “Financial Distress” link.
            https://www.macroaxis.com/invest/market/SMDZF–fundamentals–Strategic-Metals-Ltd

            I’m not saying it’s foolproof. I think the Z-score is a better estimate of it’s bankruptcy possibilities.

            Oct 05, 2015 05:47 PM

            Thank you.

            Oct 05, 2015 05:08 PM

            Good discussion Matthew and Wiseguy. Wiseguy – thanks for posting the link to macroaxis as I was not familiar with that site either and I’m running some ticker’s through their analytic system. Neat.

          Oct 05, 2015 05:45 PM

          Yeah, I really wish Claude wasn’t on the pink sheets. I have trouble buying and selling the pink sheets through my brokerage account online (I have to do it over the phone).

            Oct 05, 2015 05:56 PM

            I think they will get their listing back soon since they only delisted themselves in order to conserve cash. I know that doesn’t help you right now though.
            At least it’s relatively liquid compared to many similar juniors. If you really want in, you could wait for a down day and place your bid right in between the bid and the ask. This is somewhat aggressive but it can be very hard to get filled if you set it to low, as you might have noticed. That approach even seems to be working today -a sign that few believe the sector is going anywhere.

            You could also look into an account with Interactive Brokers and trade its Canadian listing.

    Tad
    Oct 05, 2015 05:44 AM

    Loving the new charts on the screen!

    Oct 05, 2015 05:18 PM

    yeah,,, macro axis may be a little (sarc) biased…

      Oct 05, 2015 05:46 PM

      It could be that their criteria isn’t right for assessing juniors with little to no income. Based on their getting Claude right, I want to give them the benefit of the doubt.

    Oct 05, 2015 05:38 PM

    Miners continue to look healthy. Looking to see if last minute buying closes many on their highs today, like last Friday. Could be a good tell about tomorrow continuing with this uptrend.

      Oct 05, 2015 05:01 PM

      A LOT of green on the screen on those miners…….looking good today………..ootb

        Oct 05, 2015 05:33 PM

        Heaviest selling of the day for DUST came in the last 5 minutes. Somebody is betting big for the near future. short term holders again gave away their MUX at the close and AEM showed highest volume at the close, up to nearly the high of the day. Guess I’m looking for some consolidation tomorrow. JMO

    Oct 05, 2015 05:11 PM

    I suspect that there will be a big smash later this week. Let’s see.

    Oct 05, 2015 05:46 PM

    World’s largest coal miner going gangbusters
    Frik Els | October 5, 2015
    PeopleMine
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    World’s largest coal company going gangbusters
    Hopes are high that India, set to overtake China as the world’s most populous nation during the next decade, could take over the role of China as the world’s growth engine.

    China’s coal production and consumption peaked last year after being responsible for 80% of global coal consumption growth since 2000.

    As far as thermal coal is concerned India has already overtaken China as the world’s top importer and domestic production is ramping up just as China’s starts to decline.

    According to latest government data state-owned Coal India’s production grew 9.4% in the April-August 2015 period helping total coal output in the country to grow to 187 million during the second quarter.

    Coal India’s growth will only accelerate from here – the company said there was a whopping 37% increase in overburden removal at its open pits during the April-September 2015 period.

    That would lead to additional tonnage of at least 50 million in the current fiscal year following 32 million tonnes of new supply from the company in 2014.

    Delhi’s target for Coal India is 1 billion tonnes by 2020 with private sector mining contributing another 600 million tonnes by that time to make the country less reliant on imports.

      Oct 05, 2015 05:16 PM

      Another polluted country joins the rank. Coal is really not the way to go.

    bb
    Oct 05, 2015 05:54 PM

    If anyone is interested, isis is now on the run from the Russian air force and Syrian army.
    At least in the west.
    I guess they are running to Jordan.

    For anyone that happened to see, Palmyra, (ancient ruins) was being destroyed by isis.
    2 convoys leaving Palmyra were hit by the Russian air force.

    People probably have forgotten but isis destroyed the place Jesus was baptized, a few eastern orthodox Christians attempted along with the Syrian forces to save it. No western Christian organization were interested.

    Personally, Im happy the guys that hurt Palmyra at least got some payback.

    The Russians have asked the Americans, where is the “Free Syrian Army”?
    So as not to hit the “wrong” guys.
    Turns out they don’t exist, they were an “idea”.

    Very befuddled ex intelligence chief retired US Lieutenant General Michael Flynn interviewed on RT today. “Geez, we need to work together”
    Pucker up Obama.

    Oct 06, 2015 06:24 AM

    Inflation: Silver Leads & Gold Follows

    Stewart Thomson
    email: stewart@gracelandupdates.com
    email: stewart@gracelandjuniors.com
    email: stewart@gutrader.com

    Oct 6, 2015

    When combined with rate cuts, QE becomes a deadly deflationary cocktail. Banks have no incentive to make loans, and T-bonds become the asset of choice. The T-bond money is squandered by governments, and money velocity implodes.

    The bottom line is that bank and government wealth is inflated by QE, and the wealth of the average person is massively deflated. “QE to infinity” is better described as “deflation to infinity”.

    Please click here now. In the mid-1990s, US money velocity peaked, and entered a multi-decade bear market. It was caused by the Fed forcing savers out of banks and into risk markets.

    As government became an ever-bigger part of the global economy, productivity also entered a gigantic bear market.

    The situation is dire. Modest rate hikes are desperately needed, because rate hikes pressure global governments to shrink themselves.

    The hikes also incentivize savers to put money back into banks, where it can be professionally loaned to consumers and entrepreneurs.

    Please click here now. Double-click to enlarge. That’s the quarterly bars XAU:gold chart. The Fed’s obsession with rate cuts helped grow government, destroy savers, and it also created an enormous multi-decade bear market in gold stocks.

    I’ve predicted that the bear market will be ended by Janet Yellen. Her decision to get rid of QE, and her coming decision to raise rates, is the right one; government size and power is out of control, and I think Janet will do what is necessary to end what is essentially an insane “bull market in government”.

    I realize that many investors in the Western gold community were terrified of the taper to zero, and they are now almost as equally terrified of rate hikes. It’s important to understand that what matters to gold price discovery is demand versus supply, inflation, and the real level of interest rates.

    If rates rise, but inflation rises faster because of a reversal in money velocity, money managers will buy a lot of gold.

    The four main drivers of higher gold prices in the coming years are Asian central bank buying, Indian economic growth, a rise in US inflation linked to a reversal in money velocity, and geopolitical events in the Mid-East.

    Markets tend to move in anticipation of these key fundamental events. On that note, please click here now. That’s the daily GDX chart. Note the huge volume bars in play during the last two trading sessions!

    GDX has now penetrated a significant downtrend line, and done so on high volume. Forward-thinking money managers are likely buying in anticipation of higher nominal rates, and lower real rates.

    Please click here now. That’s the daily silver chart. Silver just staged a very interesting breakout, from a multi-shouldered inverse head and shoulders bottom pattern.

    In the short term, a quick pullback to the $15 area is possible, but the target of the pattern is the $17.25 – $17.50 area, and I think that’s very realistic.

    The bottom line is that when system risk dominates the radar screen, top money managers buy T-bonds and gold bullion. When inflation dominates, they are inclined to focus on gold stocks and silver bullion.

    Please click here now. That’s the daily gold chart. I predicted that gold and related items would decline into Friday’s US jobs report, and then blast higher as the report was released.

    That’s exactly what happened, and I think the potential is there for the rally to extend until the next FOMC meeting in late October.

    Gold is trading in a magnificent symmetrical triangle. If the breakout is to the upside, and odds are growing that it will be, the technical target is about $1250!

    Please click here now. That’s the daily GDXJ chart.

    Note the big green wedge pattern. It’s very bullish, and suggests that GDXJ is poised to surge to my $28 target area.

    Professional money managers could move serious liquidity into the GDX and GDXJ ETFs very quickly now, in anticipation of a rate hike that is a game changer for money velocity.

    All gold community eyes should be on the GDXJ $30 area. I’m looking for a three week close over $30, to signal an end to the multi-decade bear market in US velocity.

    If that happens as Western bank economists begin to take notice of the Chinese central bank’s new gold buy program, and as India’s “titans of ton” continue to ramp up their demand for gold, I think the Western gold community is going to be very happy, for a very long time!