CS. In a few words: they all are going much higher now. Let's discuss why we think it is going to be the case. This week we had the very important move in the US Dollar:
"Initially US Dollar went up on the escalation of the situation in Ukraine - as any potential military action in the world is supposed to be positive for the U.S. Military Complex, but on Friday with major headlines from Moscow about Ukraine Dollar has dived decisively below 80.00 to the 79.78 close.After these U.S. actions in Ukraine considered as an insult by the Kremlin the least you can expect is selling of the US Treasuries by Russia and, maybe, already accelerating of selling by China as well . They have been already smelling the rat about the USTs Game Of Musical Chairs for a long time. It is just too personal. None of these two countries - or it will be better say leaders - would like to be liberated next in any circumstances."
What is coming next for stocks and commodities? The concept of Great Inflation in 2014 was first introduced here by Toby Connor article and so far the market was unfolding as he has predicted. The most important observation here is that not only we are seeing the first signs of increased money velocity and unfolding Inflation in the different Commodities Breakouts, but that FED is actively looking forward to create Inflation. Janet Yellen statements about desired level of Inflation were quite a revelation for the Central Banker to say the least. Never fight the FED and with the help of Russia and China US dollar will slide down even more and Inflation will be coming not only onto your grocery bills, where it was never gone, but even into the massaged government statistic reports.
Toby Connor: Dollar Breaks Down, Great Inflation to Push Gold And Silver Much Higher TNR.v MUX GDX GLD SLV
"Toby Connor provides very interesting technical view on the general markets, Commodities, Gold and Silver. Nobody can find inflation these days and his take on the final rise and bust in the general markets is very intriguing. Our own observations confirm the CRB - Commodities Index breakout and that Gold is knocking on the $1270 with huge break out to the upside after that. Supply and Demand picture provides further support to the technical observations in Gold and Silver markets these days. Where the Gold will come from in the future with China record buying continued? M&A activity will be driving the next Bull market in Gold and Silver miners."
Today we would like to share very interesting conversation from Jim Puplava's Financial Sense:
"Erik Townsend and Chris Puplava co-host this week in a special edition of the Big Picture. The first topic is “When will Janet Blink?”, refers to new Fed Chair Janet Yellen, and if she will stay the course in taking the Fed’s tapering program back to zero stimulus. Erik contends that it’s impossible to trade or invest using conventional wisdom in this environment, and only elite insiders know in advance what to expect from the Fed."
They are discussing at depth the very similar scenario presented by Toby Connor: when weak US Dollar will actually push Equity markets even higher as it happens in the first stages of Inflation environment. Once the first signs of Inflation will make its way into the official statistic equities will provide the certain level of protection of wealth as "they own the real assets". Here we will not digress to discuss the real assets behind WhatsApp 19 Billion valuation by Facebook.
Commodities will be the major beneficiaries of this trend. On the CRB chart below you can see the huge breakout by Commodities from the down trend:
Commodities have created the very big consolidation base with Double Bottom Reversal with Lows in Summer of 2012 and in the late Fall of 2014. The Second Low in November 2014 was confirmed by retest in December 2014 and very strong breakout after that. All enormous liquidity created by QE on the world-wide scale is finally sipping into the real world and pushing the commodities prices Up.
Gold and Silver were one of the first to benefit and we have seen the very important confirmation by the Gold and Silver Stocks, but even more important is the unprecedented demand from China for Gold now.
"Frank Holmes presents a very interesting set of charts supporting the bullish case for Gold and Gold stocks. Now with Gold crossing 200MA we have the game changer for the Gold marker. Professional traders have positioned themselves after 20MA was breaking out to the upside and smart money has followed after 50MA. Now the retail public will start buying the new Gold Bull leg.
Number of Gold stocks with, McEwen Mining among them, has printed The Golden Cross already, when 50MA is crossing 200MA to the upside, confirming the bullish reversal pattern. It is very bullish set up and we expect the rally in Gold stocks to widen its base to include the smaller junior miners."
TNR Gold TNR.V is one of the most intriguing microcap stories I follow.
#insidersbuying cc: @Sufiy @TedDixon @inkresearch
Another very important confirmation is when insiders are buying into their own companies like in case with TNR Gold.
GDX Gold Miners ETF has a very strong breakout from the December 2013 Low above MA50 and sitting right on that level retesting it now. All momentum indicators are still in positive territory. Gold and Silver price will be the major drivers here with the Catalyst for particular stock with the new discoveries and M&A activity.
Copper should be the major beneficiary of the rising Inflation tide.
Sector was very volatile recently, but the emerging upside trend argument can be already made here as well. It must be confirmed by further strength and breaking out above the MA50. The most important confirmation of the rising Copper prices to come, as Glencore is talking about, is industry insiders M&A activity:
Rumour Mill: "CITIC Buying Into Pascua Lama" - Can Argentina Mining Really Make Its Come Back? TNR.v MUX ABX LCC.v
"After the bidding war for Las Bambas Copper in Peru there are not so many world class copper assets left. M&A activity in Copper sector is heating up with ongoing deals on Glencore's Las Bambas, Hudbay's acquisition and OZ Minerals talks with potential partners. Now the projects like Los Azules copper will get more industry attention. We are following McEwen Mining and TNR Gold involved in this project, please read carefully all our disclaimers and do your own DD, as usual."
Lithium sector has finally its come back now in style on the back of Tesla Gigafactory news:
Lithium ETF has a definite breakout to the upside and Buy Volume signal and Lithium Stocks had an explosive move this week from very depressed valuations. After the initial excitement time is to make your homework and separate the future winners and the wannabes by your own DD. LG Chem is already chasing Tesla with its own plans announced today to build a Lithium Battery factory in China. One thing is for certain: Battery Industry insiders are building new production facilities as they see the coming demand - it will require new secure sources of Lithium. We will have to learn the new names like world leading Integrated Professional Lithium Producer Ganfeng Lithium and its partner International Lithium from Canada with Lithium projects in Ireland, Canada And Argentina.
Lithium Stocks Surging On $5B Tesla Gigafactory Plan To Ramp Up Mass-market Electric Car ILC.v TNR.v LIT WLC.to
Now we have more details on Tesla Gigafactory and Elon Musk's plans to produce Lithium Batteries on a mass scale and dramatically reduce the cost. This plan brings catalyst to the whole electric cars and energy storage industry. As we have discussed before, Lithium materials industry is getting the boost as well. Investors are taking notice and Western Lithium is already up 300% this year. Rodinia Lithium and International Lithium are getting the bids now as well. After the initial hype in the Lithium sector the main question was when the mass market for electric cars will be coming to life. Now we have this answer and access to the capital will define the new winners among Lithium Juniors. International Lithium with its strategic partner Ganfeng Lithium from China, one of the top Lithium Materials producers in the world, are getting ready for the surge in demand advancing Lithium projects in Ireland, Canada and Argentina.
Tesla Gigafactory is driving a lot of interest to the Lithium sector these days. Lithium stocks were surging this week and it is time to find out who is who in this investment mega trend and separate the wannabes from serious players with projects, technicals teams and, the most important here, strong strategic partners available to provide capital and expertise to develop those projects. If this strategic partner, like in the case with International Lithium and Ganfeng Lithium from China, happen to be one of the leaders among Integrated Professional Lithium Producers in the world it should deserve your attention. Do your own DD and always kick the tires - we will provide you with the initial information.
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