Thursday, May 26, 2011

US Dollar Collapse continued: Gold, Silver, Copper, Rare Earths and Lithium ilc.v, tnr.v, lmr.v, rm.v,, ura.v, abn.v,,,, cgp.v, laq.v, bvg.c, bva.v, tnr.v,,,, ktn.v, gbn.v,, mgn, asm.v, sgc.v,, btt.v,, nem, fcx, bvn, auy, abx,

After all our preaching about the fundamental drivers in our generational Bull markets in Real Assets, it is time to have a look at the technical picture developing in the different asset classes. Charts don't lie - you can see the different picture there and draw your own conclusions, but they properly reflect the footsteps of all market players.

This is the alpha and omega - US Treasury market. This generational Bear market will provide liquidity for all other asset classes. Question remains: Who Will be Buying USTs after the FED - the largest single buyer now - will stop to expand its QE2.0 program? Bill Gross is shorting the Treasuries and we think that the largest bond manager in the world knows better than anybody where we are all going. 

After the Europe will be "saved again" time will come to worry about the largest debt bomb - US Inc.
China is reducing its USTs holdings and diversifying in Asian and Euro debt instruments; and Real Assets. Welcome to the new monetary system based on Real Assets - New Hard currency is Copper, Gold, Lithium and Rare Earths now.

Please note that all Europe's troubles started to surface once Euro was hitting dangerously high to 1.5 and US dollar was panicking at the waterfall edge. All these verbal interventions will be leading to only one thing - game of whose currency is the worst one and all FIAT currencies will be losing value against Hard assets.

US Dollar looks tired in its recent dead cat bounce. We have a Hanging Man - very bearish candle on the weekly chart. Rising dollar means Deflation and the death by thousand cuts. Time is to start the headlines with worry about US Inc. and bring the green fellow orderly further down.
What will be the catalyst here remain to be seen in the next couple of weeks. China has announced that they are interested to buy Portugal's bail out bonds and euro was rallying today.
Economic leading indications are very weak now and recovery can be stalling. We are entering the Reelection cycle and if anybody thinks about austerity in US now - they are welcome to burn the money and buy 30 year US Treasuries.

US dollar on Daily confirms Weekly observations. We are in a reversal phase of the recent bounce. 

US Dollar is not any more the store of value...after the FED inception in 1913, but now will be another tectonic shift - it will be phased out as the reserve currency of choice and the only universal means of exchange in the commodity markets.

Gold - the real wealth protection - shows remarkable resilience even after its so impressive run. Weekly chart is not broken and trend is intact. Normally, seasonality will be against Gold at this time of the year cycle, but fundamentals are pushing its value against all FIAT currencies now.

On a daily we have the Buy signal now. This correction was very different - Central banks are buying this time. Dip below 1500 was met by buyers who was left behind on the previous run.

Silver was the story on its own and if you were following are ranting here - you should have the great memories by now. Nothing grows up to the sky forever, every parabolic move will be followed by correction and consolidation. Please note that Gold was not yet in parabolic stage as Silver. Silver Bull will continue after this consolidation will be over. We have a Buy on Daily now. We expect volatility around 40 dollar mark. The place to be now will be in Gold and silver juniors. They had a great run, but were lacking the proper leverage during the last Gold and Silver advance. Now Gold and Silver Bulls must be confirmed by very strong Gold and Silver mining and developing companies performance.

We have the weekly chart of Canadian Venture Sector. It is not only junior mining companies, but it provides a very good picture of the Risk players in the Canadian market. We have a very promising development here. Index has bounced from the MA50 support trend line and we have a strong reversal candle. Once the US Dollar confirms reversal from recent rally and Gold will move up - junior miners will follow with fireworks from the recent oversold positions.

CDNX Daily confirms Weekly observations and we have a Buy signal here now.

The real generational Bull is happening now in Energy Transition space. We are in the mega trend of Peak Oil multiplied by Inflation. You can not browse this blog without sticking to this point almost at every post. Yes, it is not only considered to be highly important here, but we believe that our social survival depends on it.
SQM is used here as a proxy - it is not the real pure Lithium play, but the very good indicator. It is Life investment play - Lithium and Potash. Oil is everywhere and once it will be more and more expensive, inflation will be pricing out our food supplies and and we will have the real Anxiety Shocks at the Gas stations. 
It will be the time when Electric Cars's Range Anxiety will be nothing compare to the mere desire and ability to drive...anything. And Electric Cars are promising to be a very good luxurious choice for those times. Buy the way this time, according to numerous reports, is just around the corner.

LIT - the Lithium ETF provides some exposure to the investment trend based on transition of our transportation to the Electric Cars. It is not our investment choice, but this instrument provides a good indication of general investment appetite for the Lithium idea. It is at Buy on a Daily chart.

The real fortunes of this Lithium Bull will be made in the upcoming Lithium developments plays. One of our Top Picks in the sector - Rodinia Lithium provides the buying opportunity and is ready to move up with Risk coming back into CDNX plays.

Our Top Pick in the sector is TNR Gold and its recently spun out International Lithium. International Lithium has only few days of trading, but holds very nicely high level after the IPO. Strong strategic partner from China Ganfeng Lithium puts this junior on the map with very solid footing. Rodinia Lithium will be the first benchmark in this company's valuation here.
TNR Gold is finishing its consolidation pattern. Volume is coming in and even after ILC.v spin out stock is holding its grounds. Drivers will be - increasing value of its 30% stake in International Lithium and Los Azules wild card in litigation with now larger portion of "Big Copper in Argentina" at stake. TNR Gold's Rare Earths projects, Shotgun Gold deposit in Alaska and numerous Gold and Copper projects in Argentina will provide a lot of opportunities for the company's management to realize value in these unfolding Bull markets.

You can find our other ideas on this blog for your own DD - CZX.v, CGP.v,,,,, SGC.v, GBN.v, MXR.v, LAQ.v, LMR.v, ABN.v, URA.v, KTN.v, ASM.v,, EPZ.v,, FST.v, SVB, MGN, KS.v, HAO.v, BVG.v, BVA.v, BTT.v - summer is the best time to build up your own collection in junior miners.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.
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