The VRTrader.com VR Silver Newsletter - Wednesday 1/3/2007
"Tools for the High Performance Trader"
Copyright ©2006, All rights reserved.
LEIBOVIT FILES | by Mark Leibovit
Wednesday, January 03, 2007
Watching the January Barometer!
---------------------------------------------
TIMER DIGEST has awarded Mark Leibovit of VRTrader.com thedistinguished honor of TIMER OF THE YEAR for 2006!
---------------------------------------------
First of all, we want to wish all our friends and subscribers a Happy, Healthy,Peaceful and Prosperous 2007!
---------------------------------------------
Economic Data/Events scheduled January 2-5:
---------------------------------------------
TUESDAY, January 2:
Markets Closed for President Ford memorial service
Treasury auctions 3 & 6-month bills (1 pm ET)
---------------------------------------------
WEDNESDAY, January 3:
Weekly Chain Store Sales (8:55 am ET)
ISM Index for December (10 am ET)
Construction Spending for November (10 am ET)
FOMC Minutes released (2 pm ET)
Auto Sales for December
---------------------------------------------
THURSDAY, January 4:
Weekly Initial Jobless Claims (8:30 am ET)
ISM Services Index Index for December (10 am ET)
Factory Orders for November (10 am ET)
EIA Petroleum Status Report (10:30 am ET)
Chain Store Sales for December(12 pm ET)
Weekly Money Supply (4:30 pm ET)
---------------------------------------------
FRIDAY, January 5:
Employment Report for December (8:30 am ET)
---------------------------------------------
---------------------------------------------
Between New Years and President Gerald Ford's memorial service, we're about the experienceone of the shortest (if not the shortest) trading week this century. Market volatility andvolume should hit the market like a sledge hammer this week and it could come in bothdirections.
Yale Hirsch of the 'Stock Traders Almanac' popularized the "JanuaryBarometer" as one of the leading market bellwether indicators. It states that thefirst five days of trading in January can guide both the month ahead as well as the entireupcoming year. Of course, this is can seen as nothing more than incredible folklore andnow with the Plunge Protection Team active in the market, especially with TreasurySecretary Henry Paulson (formerly of Goldman Sachs) at the helm, the market is not aboutto experience any long-lasting setback - particularly when those huge year-end bonuses athis old firm are at stake.
Getting back to the "January Barometer", rather than bore you with a lot ofhistorical statistics we can report the following conclusion: An up January would bebullish for the market, especially if the first 5 trading days were up as well. As toJanuary's predictive ability, the S&P 500 has proven very dependable in odd years. Ifboth the Dow Jones Industrials and the S&P 500 decline this month, the Dow JonesIndustrials would be more likely to end lower for all of 2007!
There were some signs of distribution on Friday, while despite the advent of the long,long Holiday weekend, volume picked up slightly to the downside generating Negative VolumeReversals ™. This may have been an aberration tied to widespread expectations thatinvestors will be seeking to unload shares in the New Year having deferred tax obligationsuntil the following year. This is nothing illogical about this, but investors deciding to'take profits' doesn't equate to a market's change of trend. As previously mentioned, adecline in the SPX to 1380 or even 1330 as painful as that may be, may be a healthy eventsetting the stage for yet another higher upleg that could ultimately propel the SPX backto the 2000 highs (1550). Cyclically, there is a case that perhaps the market may correcta bit here as the Winter Solstice has come and the markets have a tendency to 'changedirection' minor or major) around these sidereal/celestial periods. The next importantsimilar timeframe occurs in March. As you know from a money-low perspective, new funds arecoming into the market at the beginning of the month and conceivable could drive indexesonce again into new highs. You may recall that in early December we pointed out a reversehead-and-shoulders' patter in the Dow Industrials and S&P 500 which, if penetrated,would take the former to 12,500-12,600 and the later to mid to high 1430s. Both haveessentially been satisifed. However, another one appears to be forming at this time whichif triggered 'measures' to 12,660 to 12,700 and 1448 to 1453, respectively.
During the Holiday break Uranium (Ux U3O8 Prices)surged to yet another bull market highof $72.00 lb. As you know, we have been a strong proponent of Uranium shares and hold acouple of representative names in our Platinum portfolio list. Since the rally in Uraniumis still relatively a well-kept secret with only minimal coverage in the financial press,especially since virtually all the companies and company shares trade outside the U.S.This is extraordinarily bullish and we suspect a buying panic of sensational proportionswill likely unfold in the months and years ahead. We are not futurists and it only makessense that fossil fuels are literally going to go the way of the dinosaur. Why pollute theatmosphere while also depending on foreign energy sources when we can produce just aboutthe energy we need with nuclear power. Here in Phoenix, we host the U.S. largest nuclearfacility - the Palo Verde plant which in part has allowed Phoenix to become the fastestgrowing city in the United States. Imagine powering your electric auto with nucelargenerated power at charging facilities placed all over the country! Cheap energy with nopollution. It is the only answer and in time the proponents of tar sands, ethanol, coal,further crude oil drilling, i.e., the Gulf of Mexico, will be distant memories. These aremulti-decade comments for sure, but the wheels are already in motion as the price ofUranium is telling you!
If you haven't notice, interest rates have again been upticking. Specifically, Platinumsubscribers have been short TLT (the ETF reflecting the Lehaman 20+ year Treasury Index).Tracking as well the decline in the 5 year, 10 year and 30 year Treasuries all confirm thesame pattern. Believe it or not, we've been slowing deteriorating since December 1 andcould be slowing heading back to the June lows. This all comes at a time when the 'Street'was looking for lower interest rates. Indeed the Fed may stand pat at its January 31meeting, but as the expression goes 'the tail wags the dog' and the bond market may bedictating the Fed's ultimate course of action which is not pleasant news if investors werehoping for just the opposite.
Along with the decline in the bonds may come continued strength in the Dollar much tothe chagrin of currency bears. We're certainly not pounding the table regarding ascreaming rally in the Dollar by no measn, but the potential does exist for continued (andunexpected) strength.
We have no particular reason to be anything but bullish on gold and silver, buthistorically, it is important that we see resiliency this month. Just as the 'JanuaryBarometer' tends to forecast the year ahead for stocks, the same pattern has some validityfor precious metals. A weak January would not be a good sign for 2007.
Copper is a problem spot. We've experienced a sharp correction in the Copper market inrecent weeks with pricing now touching $2.82 lb. down from $4.16 lb back in May.Technicals support the possibility of seeing $2.30-$2.60 lb over the near-term. A weakCopper market implies weak construction demand both domestically and offshore withtentsv;rd stretching to both the residential and commerical markets and into the generaleconomy as well. Perhaps this is nothing more than a desirable technical correction in amarket that experienced a buying panic or climax. The big question, of course, is whetherdemand from the Far East, especially China as waned and, if so, what the implications willbe for U.S. markets.
Insofar as energy is concerned, we've been prematurely bullish. The positive technicalaction of the XLE and OIH since October flew in the face of relatively weak Crude Oil andNatural Gas prices. Our feeling was that the underying commodity would do as well whichhas not been the case. Standing aside for now.
WATCHLIST: LONGS
GERN - Geron Corporation 5.87
COMPANY PROFILE:
WHY WE LIKE IT: GERN has been in a solid downtrend for 2006. Our downside pricetargets have been hit and we are seeing some bullish divergences on our momentumindicators.
Geron Corporation operates as a biopharmaceutical company in the United States. Itdevelops and commercializes three groups of products: therapeutic products for oncologythat target telomerase; pharmaceuticals that activate telomerase in tissues impacted bysenescence, injury or degenerative disease; and cell-based therapies derived from itshuman embryonic stem cell platform for applications in various diseases. The companydevelops anti-cancer therapies based on telomerase inhibitors, telomerase therapeuticvaccines, as well as through its licensee, telomerase-based oncolytic viruses. It alsodevelops drugs that activate telomerase for cell repair/function in senescent tissuesimplicated in certain diseases. The company intends to use human embryonic stem celltechnology to enable the development of transplantation therapies by providing startingmaterial for the manufacture of cells and tissues; facilitate pharmaceutical research anddevelopment practices by providing cells for disease models and screening, as well as forassigning function to newly discovered genes; and accelerate research in humandevelopmental biology by identifying the genes that control human growth and development.Geron Corporation has a collaboration and license agreement with Corning, Inc. for thedevelopment and commercialization of synthetic surface matrices for the growth of humanembryonic stem cells. The company was incorporated in 1990 and is based in Menlo Park,California.
POTENTIAL TRIGGER: Buy at market with risk back to the August 2004 low of 5.15.Looking for 7.50.
KGC - Kinross Gold 12.38
COMPANY PROFILE:
WHY WE LIKE IT: Kinross Gold Corporation engages in mining and processing goldand silver ore; and the exploration and acquisition of gold bearing properties primarilyin the Americas and Russia. It has 100% interest in Fort Knox mine located in Fairbanks,Alaska; 49% interest in Porcupine Joint Venture located in Timmins, Canada; 50% interestin La Coipa and Refugio located in Chile; 100% interest in Paracatu located in Brazil; and50% interest in Round Mountain located in Nevada. The company also holds a 98.1% interestin the Kubaka mine in Magadan Oblast, Russia; a 50% interest in the Crixas mine in Brazil;a 31.9% interest in the Musselwhite mine in Ontario, Canada; a 100% interest in theBlanket mine in Zimbabwe, Africa; a 100% interest in the Kettle River mine in Washington;a 100% interest in the Lupin mine in Nunavut Territory, Canada; a 50% interest in the NewBritannia mine in Manitoba, Canada; and other mining properties in various stages ofexploration, development, reclamation, and closure. As of December 31, 2005, it had provenand probable reserves, including 24.7 million ounces of gold and 24.4 million ounces ofsilver. The company sells its products to banks, bullion dealers, and refiners. It hasjoint venture with High River Gold Mines, Ltd. The company was founded in 1972 and isbased in Toronto, Canada.
POTENTIAL TRIGGER: Gold appears to have put in a bottom and KGC has foundsupport at 11.00. Upside potential is back to or through 15.39. Mental stop should beunder 11.00 unless you play to hold (as we do) for the long haul.
SAI - SAIC INC. 19.85
COMPANY PROFILE:
WHY WE LIKE IT: SAIC, Inc. provides scientific, engineering, systemsintegration, and technical services and solutions to the U.S. military, agencies of theU.S. Department of Defense, the intelligence community, the U.S.
POTENTIAL TRIGGER: Upside target 27.00. Ideal buy in the 15.00-17.00 range.
SLGLF - Silverado Gold Mines 11
COMPANY PROFILE:
WHY WE LIKE IT: JACKSON, MS, Dec. 19 /PRNewswire-FirstCall/ - Silverado GreenFuel Inc. announced plans today to build the first low-rank coal-water fuel ("GreenFuel") facility in the United States. The $26 M project, to be located on 14-acresoutside of Ackerman in the Red Hills EcoPlex in Choctaw County, Mississippi, is designedto utilize the state's vast supply of low-rank coal reserves by converting them into GreenFuel, a new form of coal-based, environmentally friendly, low-cost, alternative fuel. Thefacility will create local jobs, inject a sizable capital investment in the local economy,and highlight Mississippi as a national leader in alternative energy and clean coaltechnologies.
The company has signed a Memorandum of Understanding (MOU) with the State of Mississippias represented by the Mississippi Development Authority (MDA); Choctaw County Board ofSupervisors; and the Choctaw County Economic Development District to build a facilitydesigned to demonstrate the economic feasibility and environmental superiority ofconverting low-rank coals into a stable liquid fuel that can be used efficiently, whilealso defining exact parameters for a commercial facility.
"This project is a key step toward full commercial production of green fuel and theculmination of our work over the past six years to develop advanced, efficient and cleanercoal technologies," said Silverado Green Fuel Inc. CEO Garry L. Anselmo. "We arepleased to have worked with the state of Mississippi and Choctaw County officials sinceJuly of 2005 to make this facility a reality. We look forward to further strengthening ourrelationship with a state that is paving the way to energy independence by takingadvantage of America's vast coal resources as an alternative fuel source and supportingnew technologies designed to economically utilize those resources."
Under the terms of the agreement, Choctaw County Economic Development District willprovide Silverado Green Fuel Inc. a 14 acre site at their Ecoplex. Choctaw County willclear the site in preparation for construction. The County has also agreed to constructthe facility building based on Silverado's specifications. The State, through MDA willprovide for the infrastructure through a series of grants.
Silverado Green Fuel Inc. will provide the proprietary technology developed by Dr. WarrackWillson, Vice President of Silverado's Fuel Technology Division. Silverado will run thefacility, which is expected to produce 45 permanent jobs and hundreds of additional jobsduring the construction phase. Once this two year phase is complete, Silverado will beproducing 110,000 barrels of Green Fuel per year.
Gray Swoope, MDA's Chief Operating Officer, noted, "The State of Mississippi is proudto welcome Silverado as our newest corporate citizen. With its innovative technologies,Silverado will produce vital energy while stimulating the economy of Choctaw County with45 new jobs."
Also welcoming Silverado Green Fuel Inc. to Mississippi is Senator Trent Lott. "I'mpleased to help welcome Silverado Green Fuel Inc. to our State," Senator Lott said."Mississippi is developing a diverse portfolio of companies producing alternativeenergy which will not only help our State in places like Choctaw County, but alsostrengthen our nation's national security and preserve America's status as the world'spremier economy, making us less dependent on foreign oil."
Nearly half of the world's coal reserves are in the United States. Fully half of thosereserves are low-rank coal - coal that has high-water and low-energy levels. Low-RankCoals are a relatively untapped resource in America. Silverado's new technology will allowfor the conversion of this coal into Green Fuel. Silverado projects the cost to produceGreen Fuel on a barrel-of-oil-equivalent basis at $15 per barrel.
Locally mined lignite coal will be treated through a hydrothermal process at the facilityand converted into liquid Green Fuel that can be used efficiently in oil-designed boilers,integrated gasification combined cycle (IGCC) power plants, and other advanced combustors.Green Fuel has a higher energy content than the original coal, but retains the desirablelow rank coal combustion characteristics needed for boilers and advanced combustion andgasification systems.
Silverado's Green Fuel is an ideal candidate for use in the processes of Texaco (now G.E.)'Gasification' and Fischer Tropsch 'Liquefaction' which creates the feed stock for theproduction of low-cost fuels and products which are free of carbon dioxide, sulfur,particulate matter, and heavy metals. These fuels and products include jet fuel, gasoline,diesel, synthetic natural gas, naptha, explosives, fertilizers, ammonia, urea, plasticsand many others.
Silverado Green Fuel Inc. is a wholly owned subsidiary of its publicly traded parent,Silverado Gold Mines Ltd. To learn more about Silverado Green Fuel Inc., please visithttp://www.silveradogreenfuel.com and the parent public corporation athttp://www.silverado.com
This Press Release may contain, in addition to historical information, forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E of the Securities Exchange Act of 1934, as amended. These statements arebased on management's expectations and beliefs, and involve risks and uncertainties. Thesestatements may involve known and unknown risks and uncertainties and other factors thatmay cause the actual results to be materially different from the results implied herein.Readers are cautioned not to place undue reliance on the forward-looking statements madein this Press Release.
CONTACT: Press Contact: Denyse Dabrowski, Avalanche Strategic Communications, OneUniversity Plaza, Suite 407, Hackensack, New Jersey, 07601, denyse@avalanchepr.com, Cell:(201) 916-7122, Tel: (201) 488-0049; Silverado Green Fuel Inc., Mailing Address - 505 -1111 W. Georgia Street, Vancouver, B.C., V6E 4M3 - CA, (800) 665-4646 or (604) 689-1535,F: (604) 682-3519, pr@silveradogreenfuel.com, http://www.silveradogreenfuel.com; FieldAddress: P.O. Box 83730, Fairbanks, Alaska, 99708, USA
------
Silverado Green Fuel Inc. Inks Deal with Mississippi for $26 M Investment in Clean CoalTechnology
Company's Green Fuel will Harness the State's Untapped Coal ResourcesSILVERADO - OTCBB:SLGLF/Frankfurt: SLGL/Berlin: SLGL
JACKSON, MS, Dec. 19 /PRNewswire-FirstCall/ - Silverado Green Fuel Inc. announced planstoday to build the first low-rank coal-water fuel ("Green Fuel") facility in theUnited States. The $26 M project, to be located on 14 acres outside of Ackerman in the RedHills EcoPlex in Choctaw County, Mississippi, is designed to utilize the state's vastsupply of low-rank coal reserves by converting them into Green Fuel, a new form ofcoal-based, environmentally friendly, low-cost, alternative fuel. The facility will createlocal jobs, inject a sizable capital investment in the local economy, and highlightMississippi as a national leader in alternative energy and clean coal technologies.
The company has signed a Memorandum of Understanding (MOU) with the State of Mississippias represented by the Mississippi Development Authority (MDA); Choctaw County Board ofSupervisors; and the Choctaw County Economic Development District to build a facilitydesigned to demonstrate the economic feasibility and environmental superiority ofconverting low-rank coals into a stable liquid fuel that can be used efficiently, whilealso defining exact parameters for a commercial facility.
"This project is a key step toward full commercial production of green fuel and theculmination of our work over the past six years to develop advanced, efficient and cleanercoal technologies," said Silverado Green Fuel Inc. CEO Garry L. Anselmo. "We arepleased to have worked with the state of Mississippi and Choctaw County officials sinceJuly of 2005 to make this facility a reality. We look forward to further strengthening ourrelationship with a state that is paving the way to energy independence by takingadvantage of America's vast coal resources as an alternative fuel source and supportingnew technologies designed to economically utilize those resources."
Under the terms of the agreement, Choctaw County Economic Development District willprovide Silverado Green Fuel Inc. a 14 acre site at their EcoPlex. Choctaw County willclear the site in preparation for construction. The County has also agreed to constructthe facility building based on Silverado's specifications. The State, through MDA willprovide for the infrastructure through a series of grants.
Silverado Green Fuel Inc. will provide the proprietary technology developed by Dr. WarrackWillson, Vice President of Silverado's Fuel Technology Division. Silverado will run thefacility, which is expected to produce 45 permanent jobs and hundreds of additional jobsduring the construction phase. Once this two-year phase is complete, Silverado will beproducing 110,000 barrels of Green Fuel per year.
"America needs a safe, economic and environmentally friendly fuel. Silverado'sLow-Rank Coal-Water Fuel Project is designed to provide that as well as economic growth inMississippi," said Gray Swoope, Executive Director of the Mississippi DevelopmentAuthority. "Mississippi is rapidly garnering a reputation as a leader in clean coaltechnology and this project utilizes our existing coal resources to propel us closer toour goal of becoming an energy hub in the United States."
Also welcoming Silverado Green Fuel Inc. to Mississippi is Senator Trent Lott. "I'mpleased to help welcome Silverado Green Fuel Inc. to our State," Senator Lott said."Mississippi is developing a diverse portfolio of companies producing alternativeenergy which will not only help our State in places like Choctaw County, but alsostrengthen our nation's national security and preserve America's status as the world'spremier economy, making us less dependent on foreign oil."
Nearly half of the world's coal reserves are in the United States. Fully half of thosereserves are low-rank coal - coal that has high-water and low-energy levels. Low-RankCoals are a relatively untapped resource in America. Silverado's new technology will allowfor the conversion of this coal into Green Fuel. Silverado projects the cost to produceGreen Fuel on a barrel-of-oil-equivalent basis at $15 per barrel.
Locally mined lignite coal will be treated through a hydrothermal process at the facilityand converted into liquid Green Fuel that can be used efficiently in oil-designed boilers,integrated gasification combined cycle (IGCC) power plants, and other advanced combustors.Green Fuel has a higher energy content than the original coal, but retains the desirablelow rank coal combustion characteristics needed for boilers and advanced combustion andgasification systems.
Silverado's Green Fuel is an ideal candidate for use in the processes of Texaco (now G.E.)'Gasification' and Fischer Tropsch 'Liquefaction' which creates the feed stock for theproduction of low-cost fuels and products which are free of carbon dioxide, sulfur,particulate matter, and heavy metals. These fuels and products include jet fuel, gasoline,diesel, synthetic natural gas, naptha, explosives, fertilizers, ammonia, urea, plasticsand many others.
Silverado Green Fuel Inc. is a wholly owned subsidiary of its publicly traded parent,Silverado Gold Mines Ltd. To learn more about Silverado Green Fuel Inc., please visithttp://www.silveradogreenfuel.com and the parent public corporation athttp://www.silverado.com.
POTENTIAL TRIGGER: A 'Las Vegas' play. Buy and hold. Stop would be 2 cents.Ideal entry point is 9 cents. Target? Anyone's guess, but let's target it to .40 for now.
WATCHLIST: SHORTS
Sorry, no Short Watchlist to Report
Suggestions? Comments? on the newsletter service. We would like to hear from each andeveryone of our subscribers. Our email is mark@vrsurvey.com.
DISCLAIMER
This newsletter is a publication dedicated to the education of stock traders. Thenewsletter is an information service only. The information provided herein is not to beconstrued as an offer to buy or sell securities of any kind. The newsletter picks are notto be considered a recommendation of any stock but an information resource to aid theinvestor in making an informed decision regarding trading in stocks. It is possible atthis or some subsequent date, the editors and staff of VRTrader.com may own, buy or sellsecurities presented. All investors should consult a qualified professional before tradingin any security. The information provided has been obtained from sources deemed reliablebut is not guaranteed as to accuracy or completeness. VRTrader.com staff makes everyeffort to provide timely information to its subscribers but cannot guarantee specificdelivery times due to factors beyond our control.
