Saturday, January 10, 2009

US Dollar Break Down is the Key to Gold, Silver and Juniors. 2009 Investment Memorandum. GDX, DXY, SLV, GDL, AUY, SLW, SST.v, OK.v, MGN, TNR.v, CZX.v

US Dollar is the key to the potential break out of Gold, Silver and Junior miners. They are almost all in the same Cup and Handle formations with Bullish Flags forming in the Handles. Decisive move down in USD below 81 will bring fireworks into the Gold camp. VIX is potentially topping out on recent down week in general markets, DOW has closed below MA50 which could turn Bearish, but SPX is right at the support level of MA50 and TSX is forming a Handle above it. TLT and Treasuries are making a right shoulder of the reversal H&S on daily at area 110 - 112. Pound is out of the game for a while with recent Cut, Euro will be the playing card: so far ECB was very cautious of Freee Money approach in US. This is the fundamental to watch out which could break technical picture. What will play to low US in the next week:
1. Stimulus news: how much will be added to already announced 1.2 Trillion Deficit.
2. ECB decision: will Europeans still be thinking before they are talking? Germany knows what inflation means.
3. Move up in OIL and Commodities on stimulus plans across the world: first signs are talks on steel price increase. Watch out Zinc here at rising above 0.6 USD, CZX.v is to play that game.
4. Treasuries move down from the Right Shoulder formation below 110.
Do not forget the name of the Obama game: Bring Inflation Back by all means! Subtitles: Keep the US Dollar down!
What if FED will succeed in distraction of its own currency? Why nobody is giving any credit to all these respectful guys. At least they have never managed to invest social security Trust funds with Madoff. Or even TARP funds for that matter. OK, OK we give up - it is not to their credit: there is simply no money in any Trust or in TARP, otherwise who knows? We are safe: they have to borrow it or print it or both and we have completely lost in all this Quantitative Easing complications. Last time we do not understand how subprime could become AAA rated, all Hell broke loose with those guys. Something is telling us it will be the same with US Dollar value this time. So we have a lot of faith in distraction power of FED curing the disaster from complications of a cheap money and easy credit with Trillions of Freeee Money and even more credit. We do not blame them, our small task it to find the tide and flow with it.
Watch out Juniors for clues: Silver and Juniors will be explosive on Gold moving above MA200.
We are leaner and tougher now, the powerful force which almost crashed Junior market will bring it back: liquidity multiplied by demand from reinflated economy. It is time to take our nickels left and search for pennies in all this rubbish.
Few ideas for DD, charts to follow:
Gold Miners ETF GDX - if you would like to play the whole sector and money coming In: bifurcation point is Break out in Gold above MA200 with falling USD below 81.
Yamana Gold AUY - explosive leveraged mix on Gold price break out, Reducing panic levels for South America money flow In, call on Copper price.
Silver Wheaton SLW - double leverage on Silver break out.
Silverstone Resources SST.v - SLW small brother highly leveraged to Silver price.
Orko Silver OK.v - forgotten Treasure and call on Silver.
Crazy staff which could double should Silver go to 15 USD: MGN, SRLM.ob, FVI.v, CNU.v, SBB.v,, KTN.v.
My dear friends in order to be worth the memory space on our beloved Google GOOG blades we are searching constantly for next Tenke Mining If time is giving something back apart from memories, slowly destroying us with disbelief in our own abilities to judge and act accordingly it is an experience. And our senses telling us now that we are in that period of time when such dreams becomes reality in strong capable hands. What were the signs from Tenke Mining story:
1. You have to trust the guys in charge. Lundin family was good enough for us.
2. Value was distracted by place and external circumstances - Congo and War is not the best investment combination.
3. Goods were there: exploration risk was substituted by political.
4. Nobody wanted it, so you can acquire big stake without moving the price.
5. Timing was right on increasing Value of underlining commodity Copper and decreasing political risk for a while.
Nowadays we will not invite you to invest in Congo so far. Mr Market and its totally depressed mode for Junior miners is given us a lifetime opportunity to acquire stakes in companies with:
1. Solid management with access to financing.
2. Goods in the ground with potential to double growth of underlining price and size of the deposit.
3. Valuations as nobody wanted them any more, with manageable risks involved.
4. Low or manageable political risk.
5. Timing is up to you as always: nobody can get rich for you, on another hand there is thousand and one tricks how to lose money by asking others to watch them for you.
Our Ten baggers Totally Crazy Squad for 2009 (Do not forget that Crazy is You should you expect such a return, so dig in with DD) :
TNR Gold TNR.v - junior on a life support fighting Xstrata for a piece of 600 mil deposit in Argentina and developing two very interesting properties among another 17. Recent activity is showing that it is more alive then dead. At recent 0.09CAD (it was even at 0.035CAD for a week) any one of the projects could be worth the recent market cap. Developments to watch: support financing from insiders, Alaska/Pebble play, J/V with majors on Argentina, major asset is Los Azules play against Xstrata, study the people involved for the serious intentions. Interesting twist could be with Xstrata going out of the picture, which will push Lundin and McEwen into partnership in South Americas to move project forward. In any case TNR Gold is a nice back door for any of them into the value of this important south American discovery.
Canada Zinc Metals CZX.v - any move in Zinc above 0.6USD will bring attention back into Zinc - it is pure Canada Infrastructure/China play. These guys are worthless if Zinc will go below 0.4USD in the End of the World case, but in FED Obama play "Shovels against Depression" we would like to support Obama and should he win only this company's maps of the deposits worth more then recent market cap at 0.18CAD.
Roxmark Mines RMK.v - company is in the right place: Canada, in the right staff: Gold with the right people with money for exploration: Premier Gold. Insiders are showing support at 0.1CAD with recent low at 0.05CAD.
Suramina Resources - once Lukas Lundin will be out of mess with Lundin Mining I guess he should find some time and consolidate his South American Exploration plays: it is time to acquire assets at ten cents on the dollar value and move forward. He still has his name to rise money, team to develop projects and few slices on the plate like Minera Andes and TNR Gold TNR.v in front of him.
Good luck in your Dreams and Homework in 2009!

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