Since the October rally ended, the SPX formed what looked like an “extended distribution phase” in the form of a rounding top. This is even more apparent on the Dow Jones Composite Index. Early June, it dropped below its 100-DMA, it slightly breached its December low, but rallied. A second attempt was made to break through which also failed. The rallies found resistance at the 100 MA and last week, a third attempt at breaking the bottom trend line also failed … or did it?
With Greece’s default the Dow Jones index is completing its rounding top/descending triangle pattern by finally making a new low. A Monday morning opening gap to the downside could be the perfect way to end this formation. If so, this could be the beginning of the correction which has long been expected.
Current Position of the Market
SPX: Long-term trend – Bull Market
Intermediate trend – Waiting for confirmation that the ending diagonal is complete.
Short trend – Neutral
Greece’s decision to hold a referendum on July 5 and not to accept the final offer made by its creditors resulted in a Greek debt default and is currently unsettling to markets. Should that be the case, SPX should follow suit by extending last week’s decline.
This could be the end of the 7-year cycle we talked about, closing its grip on the market by applying pressure which is increasing gradually every week.
USA markets will be closed on July 3. It will therefore be a shortened holiday week of trading. My current concern now is whether or not World equity markets will resume a 10% correction down or more. This period of a cycle that we work with has a very high historical correlation to 10% or greater reversals in the DJIA. The question is whether that decline has already started.
We defer to our models for the confirmation of this move and any other future moves.
Gold fell to a low of 1167.10 on Friday, June 26. . This may be important because Silver fell to a low of 15.45 on Friday, June 26, well below its low of the past three months.
Something big may be in the works. It is ironic that the Greek debt default, the lack of a conclusion of the USA/Iran negotiations and The Supreme Court’s decision to uphold Obamacare subsidies of The Affordable Care Act are ALL historical events occurring at the same point in time is not a random act.
This decision upholding the IRS rule giving all Americans access to premium tax credits, millions of Americans can breathe easier today knowing that there is access to health care.
I believe that The Supreme Court validated President Obama’s massive power grab, allowing him to tax, borrow, and spend $700 billion that no Congress ever authorized. This establishes a precedent that could let any president modify, amend, or suspend any enacted law at his or her whim. President Obama has already creative secret deals that Americans are not yet aware of. I fear that these unchecked political power in the Executive branch will be misused again and again by the President.
At this time, we are currently experiencing a new “socio-politically-economic” revolution. The passing of this Affordable Care Act (aka Obamacare will continue to bankrupt the county and many of the people in it. It is only affordable for some in terms of lower premiums. The other side of the coin is that deductibles are so high that many still cannot afford health care under this Act. For them, it is anything but affordable.
The yield on the benchmark 10 year note closed last week at 2.26%. This week’s close was 23 bps higher at 2.49%. The 30 year bond yield closed the week at it 2015 high of 3.25%. Current financial market conditions with low levels of interest rates have resulted in negative yields for some Treasury securities trading in the secondary market. Negative yields for Treasury securities most often reflect technical factors in the Treasury markets related to cash and repurchase agreements markets and are at times unrelated to the time value of money.
We had a confirmed signal to exit the ETF “TLT” on June 3, 2015 at 118.39. Today, its current prices 115.23, I am expecting this price to go lower.
https://thegoldandoilguy.com/wp-content/uploads/2015/06/DieCast.jpg400500adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-30 02:17:312015-06-30 02:29:53The Die Is Cast
The Chinese central bank is backing its Yuan with GOLD. This may set the Yuan as a “New Reserve Currency.”
If this happens, a new order in global currencies will appear. This would attract new foreign capital. The rest of the world will view the Yuan as a real currency rather than a fiat currency. Creating the Yuan with a gold standard will surely make China more powerful and become a more influential world power.
The United States Dollar will no longer be the only “Reserve Currency” in the World anymore.
China will most likely become the world’s largest economy catapulting over the United States. They already have close ties to the world’s largest energy nation (Russia), and consumer based BRICS (acronym for the combined economies of Brazil, Russia, India, China, and South Africa). It is only a matter of time before a large portion of the world systematically rejects the Dollar.
The world will seek stability in a much different type of financial construct. The BRICS nations have already started making alternatives to the World Bank, IMF, and the SWIFT system. We will be facing a hard choice: Either remain steadfast to the old regime or shift to the “New Paradigm.” In shifting to the “New Paradigm”, we will set up the Yuan as the next global reserve currency.
Russia and China are in the works to create a new alternative to the long-standing SWIFT system. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. It is a messaging network. Financial institutions use it to securely transmit information and instructions with a standardized system of codes.
An alternative to SWIFT could end the US Dollar as the sole reserve currency in the global financial system. The Russians would then turn away from the SWIFT system and have a new alternative. They would thus avoid any serious economic sanctions now or in the future.
Russia is expected to join forces with China and create their own “Union Pay”. The People’s Bank of China started “Union Pay” in 2002. It is now the second-largest payment networking system behind Visa. Union Pay is now preparing for a full-scale collaboration with Russia.
It has developed the foundation needed to be very successful in this venture. This would replace the SWIFT system. Then Russia and China could avoid any interference by a Western superpower imposing economic sanctions on them. To this end, they have decided to end the Dollar as the global reserve currency.
They are now creating another choice everyone can pick and use as they like. I would call this a “Game Changer”. There will be two reserve currencies as Petro-Yuan joins Petro-Dollar.
Americans have no idea that the United States is on the brink of an economic crash. It is really not conceivable to the majority of Americans. We have been told by President Obama that we are experiencing economic growth and that the economy has been stable for a number of years now. The stock market continues to surge to new heights. The NASDAQ is at a brand new all-time record high.
So how in the world can anyone be talking about an economic collapse? Many Americans will agree that we did have a big bump in the road back in 2008, but things have pretty much returned to normal now. Unfortunately, this brief period of stability that we have been enjoying is an “illusion”.
The fundamental problems that caused the financial crisis of 2008 have yet to be addressed. Our long-term economic problems have actually gotten worse. In the 8 years that the Fed has been doing QE, our leaders in Congress and the White House have made no progress towards the required Fiscal Policy changes that have to be addressed. Of course, it has just been business as usual back in Washington DC.
Today, the entire economic system in the United States is based on debt. Without debt there is little to no economy. Thus, debt comes from the banks and the concept of the “too big to fail banks” is at the heart of this debt-based system.
If the economy was expanding and is as healthy as we have been led to believe, there would be lots of buying and selling, and money would be moving around rapidly. The U.S. economy is behaving exactly contrary to that right now. The velocity of M2 has fallen to an all-time record low. This is a very powerful indicator that we have entered a deflationary era and that the Federal Reserve has been attempting to combat this by flooding the financial system with more money through more QE.
The main problem with this economy is that it has not been repaired. The only fiscal change taking place in the high echelons of Congress has to do with the way that money is being spent without having any money. This is what is fundamentally wrong with our economy.
In the past 7 years, it was imperative for the government to have focused on a much more balanced budget. On a very basic level, the amount of economic activity that we have been witnessing is not anywhere near where it should be, and the flow of money through our economy is very stagnant. They can try to mask it for a certain period of time, but it will come unraveled.
Why would McDonald’s plan to permanently close 700 poorly performing restaurants over the course of 2015? Why would they be doing this if the economy is “getting better”? Procter & Gamble announced that it will be cutting up to 6,000 more jobs from their payroll. JP Morgan just announced 5,000 layoffs last week. Why would they be doing this if the economy is “getting better”?
Because the economy is NOT getting better, it has just been getting worse. Our Government has persistently manipulated the formula in order to create a facade that they want us to see. They are changing the calculations on GDP for the 2ND Quarter of 2015 so they will not result in a negative number. That is truly how bad the economy really is. As recently as today, the Fed has made a 3rd revision of the GDP which is more negative.
“The American Dream” is now dead. We live in a country where almost everyone is drowning in debt and where a vast number of people are simply broke. This is the reason that both parents are working in most families today. In fact, both parents are working multiple jobs in a desperate attempt to make ends meet.
Over the years, the cost of living has risen steadily, but American paychecks have remained the same over the last 40 years. The erosion of the middle class will continue until it will just not exist anymore. Our dream in America has always been that we could afford a home, a car or two, and a nice annual vacation. “The American Dream” is out of reach for more Americans than it ever has been before. As it stands now, the middle class is dying right in front of our eyes.
It is empowering to know what is coming in the future and especially to understand why it is coming. It is vitally important to get prepared in advance for turbulent times. It is totally necessary to have a plan for the years ahead. My intention is to inform and educate before it all falls out from under us.
Everyone should be prepared well ahead of time, especially now. Have you ever visited a “food bank” near you? You should go see how much longer the lines are getting and nothing really explosive has happened yet. Americans are so poor that many of them can’t even afford to shop at Wal-Mart and Dollar Stores anymore. They are now going to their local charities and churches in order to get through the day. They are asking for help from food banks and churches, plus going to used second-hand clothes stores and emergency assistance in order to keep their electricity on.
How prosperous are Americans in the United States today? Let’s take a look at what the BIG BOYS are doing. Bank of America and Merrill Lynch wrote that the client’s net sales of US stocks amounted to $4.1 billion last week, the largest total since January 2008. Most of the selling is being led by the institutional investors. Hedge funds were net sellers for the ninth consecutive week, while private clients bought stocks last week following the previous week’s net sales. Most of the money came out of healthcare and financial stocks. Last week outflows from healthcare were the largest on record.
Chris Vermeulen
TRADE THIS CRISIS WITH US!
https://thegoldandoilguy.com/wp-content/uploads/2015/06/global1.png221227adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-25 13:04:262015-06-25 13:16:06Americans have no idea that the United States is on the brink
https://thegoldandoilguy.com/wp-content/uploads/2014/07/oil.png172151adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-24 14:40:122015-06-24 14:42:24Is Crude About to Make Major Gains?
There is no question that precious metals along with gold and silver mining stocks are clearly out of favor with investors. Most of these stocks are 50, 70, even 85% since the 2011 top. It has been a painful ride to the bottom for those who invest with the buy, hold and hope strategy.
The good news is that I see light at the end of the tunnel, meaning gold, silver and miners are showing serious signs of bottoming. While the fundamentals have been bullish on metals for years which is a positive, we also know that fundamentals don’t really play into immediate price action of any specific asset when it comes to trying to time a market.
But the level of M&A (mergers and acquisitions in sector) along with technical analysis are now showing signs that intelligent gold and silver investors are accumulating specific companies and exploration properties at rock bottom prices in anticipation of the next bull market in silver and the price of gold.
At this stage of the game the shotgun approach for owning mining stocks will not work well. If you want the best bang for your buck you need to get specific companies which have true potential of making money.
The Sweet Spots:
Savvy investors have been flocking to two types of mining stocks recently accumulating positions in anticipation of some big events.
These two business opportunity types are:
1. Exploration companies with proven properties containing a sizable amount of valuable resources.
2. Mines starting production.
What do both of these types of stocks have in common that make them attractive?
They both are one event away from generating big value to its shareholders. This proven resource rich properties will either be acquired by a larger firm. This type of event can provide returns of up to 10x ROI on the share price in a blink of an eye in some cases.
Or these resource rich exploration stocks decide to go into production for themselves and provide potentially even more value long term for its shareholders much like what CMC Metals Corp. (TSX.V: CMB) is doing.
I’m not going to reinvent the wheel here in talking about what CMC Metals Corp. does and the stage that it’s at.
It has been years since I have been excited about precious metals and mining stocks. Subscribers of my trading newsletter know we have avoided owning gold and silver stocks since late 2011.
While I still believe metals and miners will struggle as a sector. It is clear that there are some amazing opportunities available for those who know what to look for, and have the guts to step forward when most investors are stepping back.
The markets go in cycles also known as of expansion and contraction in price and sentiment. Assets classes which are most out of favor eventually become the next market darling. But before that can happen the asset class/sector must be completely out of favor and hated by most… which gold miners are.
Recently I met with the president of the company in Toronto to learn more about its financials, management and project. I now personally own share of CMC Metals Corp. with an average price of 6 cents and I plan to hold these shares for a long time until I think the next gold bull market is almost over.
Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by CMC Metals Corp. In addition, the author owns shares of CMC Metals Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
https://thegoldandoilguy.com/wp-content/uploads/2015/06/gold1.jpg183275adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-23 17:52:092015-06-23 19:02:35Sweet Spot for Gold Stock Investors
The Wall Street Reform and Consumer Protection Act of 2010 is better known as “The Dodd-Frank Act” to the American public. What the American public does not know about, is that it codifies a “bail-in” provision that ensures that the United States can conduct the type of bail-in that we saw in Cyprus.
The bank bailouts of 2008 and 2009 will now be history as Dodd-Frank authorizes the Federal Deposit Insurance Corp. to recapitalize failed financial institutions by confiscating customers’ deposits.
A bail-in takes place before a bankruptcy under current regulations, regulators would have the power to impose losses on bank depositors while leaving other creditors of similar stature, such as derivatives counter-parties untouched. If your bank goes bust then your deposits/savings will be taken from you and turned into shares of the bank. You have no say in the matter because in legal terms, as a bank depositor, you are just an unsecured creditor of the bank.
A derivative is a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by the use of high leverage. Smart investors like Warren Buffet view derivatives as “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” At this point in time, I certainly agree with him 100%. I blame derivative instruments like collateralized debt obligations (CDOs) and credit default swaps (CDSs) for the financial crisis in 2008.
The name “derivative” reflects a sense that derivatives somehow derive value at one or more future points in time based on observable events such as prices, interest rates, exchange rates, indexes, events of default.
The real problem with derivatives has to do with overexposure by the banks and “uninformed investors. I believe derivatives can add value to companies as long as the corporate leaders at those companies use restraint and hold a limited amount.
Derivatives may not be a financial instrument that the average investor wants to try on their own, but derivatives can add value to society when used appropriately and in moderation.
A bail out is when the government steps in so that the financial institution can avoid bankruptcy or insolvency and is not able to continue operations It may take the form of a direct transfer of capital. In September of 2008 the insurance conglomerate AIG found itself in serious financial problems the Federal Reserve bailed it out by extending $85 billion (and eventually $182 billion) in credit to the company. Proponents of bailouts say that they keep an economy afloat when an industry thought too big to fail otherwise would collapse. Many opponents contend that bailouts are inefficient and non-competitive companies ought to fail.
Dodd Frank was passed in the aftermath of the crisis to avoid another speculative bubble.
The key fact of Dodd-Frank, Title II of the Act to establish an Orderly Liquidation Authority, which vests the FDIC with the authority to conduct a European-style bail-in. The preamble to the Dodd-Frank Act claims “to protect the American taxpayer by ending bailouts.” This is done, through “bail-in”, which is a critical feature of the internationally established regime of what is called cross-border bank resolution.
It claims to protect the American taxpayer by ending bailouts. That is done by implementing” bail-in” to stave off financial collapse, but is this constitutional?
The Dodd-Frank Wall Street Reform and Consumer Protection Act took up 848 pages and contained 383,013 words. In July 2012 an additional 8,843 pages of rules were added, representing only 30% of the rules to-be-written. The estimate for the final length of the Act is 30,000 pages. The six largest banks in the U.S. spent $29.4 million lobbying Congress in 2010, and flooded Capitol Hill with about 3,000 lobbyists–a ratio of 5 lobbyists per 1 congressman The Dodd-Frank Wall Street Reform and Consumer Protection Act currently stands as the single longest bill ever passed by the U.S. government. The length of the bill was intended to intimidate members of Congress and the public as well.
Title I of the Dodd-Frank Act requires each banking entity to periodically submit to the FDIC and the Federal Reserve a resolution plan that must address the company’s plans for its rapid and orderly resolution under the U.S. Bankruptcy Code.
Title II of the Dodd-Frank Act provides the FDIC with new powers to resolve by establishing the orderly liquidation authority (OLA). Under the OLA, the FDIC may be appointed receiver for any U.S. financial company that meets specified criteria, including being in default or in danger of default, and whose resolution under the U.S. Bankruptcy Code (or other relevant insolvency process) would likely create systemic instability.
Title II requires that the losses of any financial company placed into receivership will not be borne by taxpayers, but by common and preferred stockholders, debt holders, and other unsecured creditors, and that management responsible for the condition of the financial company will be replaced. Once appointed receiver for a failed financial company, the FDIC would be required to carry out a resolution of the company in a manner that mitigates risk to financial stability and minimizes moral hazard. Any costs borne by the U.S. authorities in resolving the institution not paid from proceeds of the resolution will be recovered from the industry.
Dodd-Frank, Title II, Sec. 209 (b):
if claims are made against a firm, they will be paid in this order:
administrative costs
the government
wages, salaries, or commissions of employees
contributions to employee benefit plans
any other general or senior liability of the company
any junior obligation
salaries of executives and directors of the company; and
obligations to shareholders, members, general partners, and other equity holders
The liquidation during resolution is done at the discretion of the receiver, the FDIC, on the basis of salvaging what is, in its view, most important for financial stability. Under Title II, Sec. 9 E, it is stated that the FDIC, “shall, to the greatest extent practicable, conduct its operations in a manner that–..(iii) mitigates the potential for serious adverse effects to the financial system.”
When you deposit money in a checking or savings account, that money no longer belongs to you. Technically and legally, it becomes the property of the bank, and the bank just issues you what amounts to an IOU. The bank considers this as an unsecured debt.
You will have to stand in line behind trillions of dollars of derivative payouts before your checking and savings accounts will be made available to you. Both the Bankruptcy Reform Act of 2005 and the Dodd Frank Act provide special protections for derivative defaults, giving them the legal right to demand collateral to cover losses in the event of insolvency.
Reinstating America’s traditional banking act is crucial to protecting U.S. depositors by rebuilding the wall of separation between commercial banks and investment banking which would dissolve the “mega super market” banks.
Glass-Steagall was repealed by Congress and President Clinton in 1999 under pressure from Wall Street speculators who needed access to Main Street’s commercial bank deposits. Less than 10 years later, Wall Street suffered a financial collapse that required hundreds of billions in taxpayer bailouts to the country’s largest banks.
If implemented as an act of the United States, an act of the sovereignty of the United States, (Glass-Steagall) would effectively override Dodd-Frank. It would override this bail-in regime as soon as it is implemented,
This Act needs to be nullified or the result of its enactment will be the mass destruction of U.S. citizens through economic means. The fact is this has NOT been openly disclosed to bank depositors or the general public.
This legislation will result in the mass destruction of the citizens of the United States through economic deprivation, through the collection and extraction of funds done in such a way as to leave the US Bank holders subject to become extremely desperate to the point of extermination.
The United States of America has been a free and sovereign nation, based upon a foundation of law. What underlies the founding laws of the nation is the issue of its “Right”. The right of the nation to govern itself and to govern in a way that upholds the right of each citizen to his or her life, is the most fundamental value in law.
As of 2010, the total world derivatives had a value of $1.2 quadrillion, approximately 20 times the world GDP. Because of the lack of clarity of the derivatives markets, the exact numbers are virtually impossible to produce. However, the Bank for International Settlements quoted global OTC derivatives – derivatives that have a paper-trail–at $632 trillion as of December 2012.
Dodd-Frank, will deprive the citizens of the United States of those rights guaranteed to them under the Constitutional Law to their right to life. They will be deprived of their right to petition their government, they will be deprived materially and certainty that many will be deprived of their lives–by violence, poverty, starvation, extreme want, or suicide.
This Act establishes a Cyrus style bail-in mechanism that would enable the government to transfer enormous amounts of wealth from the collapsing banks into the hands of a private cartel that control the new Orderly Liquidation Authority.
The FDIC will be held accountable for losses to banks via the risky derivatives estimated in the HUNDREDS of TRILLIONS of dollars. This would BANKRUPT the U.S. government.
It’s time to REPEAL this monstrosity and PASS H.R. 129 or S.985 Restore Prudent Banking Act of 2013, which represents the return of Glass Steagall – separating investment banking from commercial banking.
In my view, we cannot wait for the next banking crisis to occur, this is a fraud developed by the banking industry to STEAL more of our money and why I have recently started to accumulate physical metals here (gold and silver) and having it stored with a third party vault out of the banks grasp as an insurance plan for worst case scenario.
Each week I will break down and discuss the major problems unfolding in both the United States and Internationally. While it makes me sick to my stomach thinking about what can and will likely happen and the result it will have on the economy and our lifestyles, the only thing we can do is prepare ourselves and position our capital properly to avoid and or profit from the next financial crisis and bear market in stocks.
https://thegoldandoilguy.com/wp-content/uploads/2015/06/gfrws.png94717adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-22 15:30:362015-06-29 02:56:44If You Have Money in a US Bank Account Be Aware!
Next week I will tell you about two more stocks that I think will start making some big moves also. They are CMC Metals Corp. (TSX.V: CMB) which is a gold exploration which is going to get their assay (what is an assay?) next week and is about to start production and they have a very exciting story, and companies in the past who have been in the same situation have seen insane share appreciation. Click to see chart: http://schrts.co/l66lXx
The other company is Morro Bay Resources Ltd. which is a gold and silver exploration in Mexico. They are new to the scene but also have an exciting situation and management team as we slowly enter the next commodity bull market. Click to see chart: http://www.stockhouse.com/companies/quote/v.mrb/morro-bay-resources-ltd
Last but not least, here is my analysis of what to expect with the broad market, and commodity sector as a whole:
Have a great weekend and we will talk Monday!
Chris Vermeulen
Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp., Discovery Ventures Inc., Morrow Bay Resources Ltd., and CMC Metals Ltd. In addition, the author owns shares of Cardiff Energy Corp., Discovery Ventures Inc., Morrow Bay Resources Ltd., and CMC Metals Ltd. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
https://thegoldandoilguy.com/wp-content/uploads/2015/03/investment.png175263adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-12 19:25:002015-06-13 00:18:18Next Week: New Trades & Market Forecast Video
From being heavily involved in the gold market since 2001 I have seen numerous gold mining shares rocket 300% – 1200% in value. Long time readers of my reports know I call these rare plays “Golden Rockets” and I would like to talk about a stock which has all the ingredients to emerge as a huge winner.
Before I get into the details it is important that you know where we are in terms of the resource and specifically metals like gold, silver, copper, nickel etc…
For YEARS commentators have been saying buy precious metals and gold stocks, and they have been dead wrong in terms of their timing. In short my readers and I have waited over three years for the next bull market to start in this sector. In fact, we have not traded or owned a single gold stock since 2011.
You see when it comes to trading/investing, timing is EVERYTHING. Even if you pick the best stocks they can underperform if the overall sector is out of favor. You do not want to own shares of companies when they are out of favor because it will pull the share price down nine times out of ten no matter how strong the company financials may be.
The key is to patiently sit on the sidelines until the market tips its hand showing its true strength/weaknesses and then wait the perfect opportunity presents its self which is what I am sharing with you here.
As a technical analyst 90% of my work is based around price (price patterns, momentum, sentiment, and volume). Taking into account global markets, US equities market, the dollar, commodities, and economic data I have provided a simple comparison on what I feel will happen with US equities, gold, and gold miners.
Most of my analysis is mimicking that of 2000 when stocks topped and gold miners emerged to generate an average return of 1000% (10x ROI).
With the US equities market teetering on the verge of collapse, properly positioned gold miners are basing and preparing to rocket higher as a leveraged safe haven play.
Now let’s get into the important stuff… My Golden Rocket Play!
The company is Discovery Ventures Inc. (TSX.V: DVN) and they have a high grade gold and copper claim. There are several things I like about this play that make it highly attractive and it will get the attention of investors over time.
The details I share are a quick overview so be sure to perform your own due diligence.
Here is a run-down of their core project which is called “Max Mine and Mill”:
The Max Mine and Mill Project consists of 59 mineral claims totaling approximately 5,489 hectares and certain under surface rights located in Revelstoke mining division of the Province of British Columbia.
The Max Mine and Mill includes an underground molybdenum mine, crushing, milling and concentrating facilities, tailings storage facilities, mineral claims, mining leases, licenses and other holdings located near Trout Lake in the Revelstoke mining division of the Province of British Columbia.
What really excites me about Discovery is that this new mine is entering the market at a great time. A few years ago claims, mining equipment and energy were selling at premium prices. In the last couple years Discovery cleverly acquired to properties (Max Mine & Willa) including state of the art mining equipment. The Max Mine won the 2009 B.C Mining & Sustainability Award, which proves the land and location of this project is great.
The cost of the Max Mine and Mill could have easily cost a company $100 million for the land and equipment but because the previous company was mining another material which no longer has much value Discovery purchased the package for only $6 million.
The Max Mine portion of the deal also came with a massive tax savings. Discovery now has a $50,000,000 tax pool which means potentially a quicker return on investment for Discovery and a higher earnings per share for investors.
An added bonus with the new properties is that Discovery needed a mill solution, and ironically one of the properties had one. Now both projects (Max Mine and Willa) can share the mill, which saved Discovery a lot money and will cut down in processing costs when they go into production in the coming months.
Discovery now has fully permitted mining project located in the best jurisdiction in the world for exploration and mining, and the Kootenay region has a prolific history in this sector.
Discovery Ventures has a powerful PEA for its two new properties (Max Mine and Willa). What the PEA shows is the potential life expectancy of these new properties based on their current mineral findings, production per day, estimated revenues (will vary depending on commodity value), IRR%, and their CAPEX.
These are very attractive numbers, but if you don’t know what they mean let me explain:
The company should be able to produce 500 tons per day of high grade material through their state of the art equipment. There is enough material for them to mine for 4.25 years. With the current price of gold, silver and copper they could generate $164,000,000 in revenue.
I should also mention that DVN also announced that is has filed an application with the ministry of mines to re-open the existing adit portals and conduct underground exploration activities to sample some of the mineralized zones, which could increase the mines life and revenues.
What I like about these numbers is that I feel commodities especially metals will enter a new bull market which will last 3-5 years and it should start later this year. When precious metals become the global safe haven from collapsing currencies the price of gold will soar. I would not be surprised to see gold double or triple in value.
The IRR means (What is Internal Rate of Return?). The higher the number the more desirable the project is by investors. And with an IRR of 412% Discovery is a hidden gem in my opinion.
The CAPEX for this project is extremely low… and as investors that is exactly what we want. It means the cost to maintain project each year is low. (What is Capital Expenditure?)
Golden Rocket Chart Analysis: DVN.V
Unfortunately this company launched at almost the worst time back in 2010. They started just before the price of gold and silver topped out. But with every negative there is always a positive takeaway. And that is the fact that they have survived once of the most difficult times this sector has seen in years and the share price is trading with a low evaluation.
During the past few years the share price has been building a major basing pattern between 10 – 50 cents. Shares have been moving from those of weak hands to those of strong long-term investors. And this is exactly what the On Balance volume indicator at the bottom is telling us.
As this gold exploration company sees light at the end of the tunnel to start gold production investors continue to want more shares.
This will be Discovery Ventures first project to go into production and it is the key which will ignite the rocket under the share price. Once this company staring producing and making money investors of all types will want to own shares.
A great comparative example of what Discovery Ventures has with another company of the past with a similar situation is Klondex Mines Ltd. (TST: KDX). In 2013 they had a low of $0.91 and the price continues to climb with a current price of $3.38. That is a 370% return during a time when gold and silver have been in a bear market. Just imagine the potential for Discovery Ventures (TSX.V: DVN) when it starts production and the gold price rises!
Concluding Thoughts:
Naturally I am a very conservative person in both life and trading. But I also know that when things make logical sense and there is a potentially great investment I always put some of my money to work with them. I like Discovery for the reasons stated above and why I own shares of this stock.
Last but not least today they announced confirmation of a $7 million line of credit, which also has some of the funds being convertible into shares for the investor providing the capital. This is great for Discovery and its shareholders long term. This will allow them to compete the balance of the work and become a full production gold mine.
My first stock pick from a couple weeks ago – an oil exploration stock about to start production – CLICK HERE
Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Discovery Ventures Inc. In addition, the author owns shares of Discovery Ventures Inc. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
https://thegoldandoilguy.com/wp-content/uploads/2015/06/goldrockt.png246218adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-10 09:50:502015-06-11 11:41:03The Next Golden Rocket – Part II
If you remember the dot com bubble as clearly as I do and are a technical analyst then you will recall the month which the NASDAQ broke down and confirmed a new bear market has started. The date was November of 2000.
You may be wondering why I bring this up. What do tech stocks have to do with commodities?
Good question because they have nothing in common. But the key here is that when a bull market ends in one asset class that money is shifted into another. That money moved into commodities and resource stocks and in a big way.
Precious metals and miners exploded, surging an average of 1000% return (10 times ROI) over the next six years, topping out in 2008. In fact, these resource stocks bottom the exact month which the NASDAQ confirmed it was in a bear market on Nov 2000.
Compare Dot-Com Bubble & Burst to Precious Metals Stocks
Over the next couple of weeks, I will be sharing some of my top stock picks in the metals sector (gold, silver, nickel, and copper). If you missed the 2001 and 2008 metals bull market then you best pay attention and be sure you don’t miss what is about to happen.
Compare Bull Market in Stocks with the Energy Sector
The financial markets and asset classes move in cycles, and there are times when specific sectors outperform others. Resources stocks specifically the energy sector is about to enter its strongest phase within the US equities bull market which started in early 2009.
Oil stocks have a lot of positive things in their favor in my opinion, though many will disagree. But it’s all in how you look at the data and your investment horizon.
During the previous market tops which are the same for NASDAQ, DOW, S&P 500, energy stocks have outperformed most sectors. Why? In short, we will always need energy, many of the companies pay dividends and when money starts to roll out of equities the underlying commodities typically hold their value for an extended period of time.
These past stock market tops generated 36%-40% returns during a time when most traders and investors were losing their shirts, or should I say lost 50% of their life savings… Which train would you rather be on?
Now take a quick look at the price of crude oil
Oil has formed what is called a (double bottom, or “W” formation and also appears to be completing a cup & handle pattern). Whatever you want to call it, they are all very bullish patterns, meaning a much higher price for oil is expected.
In short, higher oil prices, means more profits for energy companies, it’s that simple.
An Oil Junior Resource Stock
There are times during market cycles when I like to own shares of some junior companies. When a major shift looks imminent within a market or sector just like we saw in 2000 and again in 2008 I like to hold shares in companies which have the potential to rally several hundred percent.
A couple of weeks ago I talked about a speculative oil stock Cardiff Energy Corp. which I own shares. The story behind this stock is real and the horizontal well which they will start drilling mid-June 2015 has the potential to generate 5-7 times of a vertical well. Below is the chart with my short term targets.
The low priced crude oil is wreaking havoc with oil companies and share prices. The best plays are those who have the lowest cost of production per barrel and I heardthis well could produce profits even if oil was trading at $25 per barrel and sold at WTI pricing with no discount.
The energy behind this share price is very impressive and shows that investors are confident in the horizontal well. If they strike oil who knows where the share price could rally to.
Side note: I met with Jack Bal the President, CFO, and Direction of Cardiff Energy Corp. in Toronto recently to learn more about the company and projects. Cardiff is currently doing a private placement to raise capital and if I’m correct investors can get shares at 25% discount from the current market value. And from what I understand they have room for a few more small investors. If this is of interested to you give Jack Bal a call directly at Cardiff Energy 1-604-306-5285, and you can mention this report if you want.
Next Bull Market Conclusion:
In short, every good investment will eventually become a bad one and vice versa. Knowing when to shift our capital from one sector to another is vital for steady long-term growth of our portfolio.
Over the next couple weeks through this multi-part series I will be sharing some very lucrative stock picks which I am investing in and the second one will likely be a nickel resource company that looks poised to rocket higher.
Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
https://thegoldandoilguy.com/wp-content/uploads/2015/04/bullandbear.png229306adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-06-09 16:11:052015-06-09 16:31:04Time to Move Capital into Next Bull Market – Part I
