The VRTrader.com VR Silver Newsletter - Monday 4/16/2007
"Tools for the High Performance Trader"
Copyright ©2007, All rights reserved.
LEIBOVIT FILES | by Mark Leibovit
Monday, April 16, 2007
There is More than Meets the Eye!
Economic Data/Events: April 16 - 20:
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MONDAY, April 16:
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Retail Sales for March (8:30 am ET)
NY Empire State Index for April (8:30 am ET)
Treasury report on Net Foreign Purchases (9 am ET)
Business Inventories for February (10 am ET)
Treasury auctions 3 & 6-month bills (1 pm ET)
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TUESDAY, April 17:
Consumer Price Index (CPI) for March (8:30 am ET)
Housing Starts & Building Permits for March (8:30 am ET)
Industrial Production & Capacity Util. for March (8:30 am ET)
Weekly Chain Store Sales (8:55 am ET)
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WEDNESDAY, April 18:
EIA Petroleum Status Report (10:30 am ET)
FOMC Minutes Released (2 pm ET)
Treasury Budget Statement for March (2 pm ET)
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THURSDAY, April 19:
Weekly Initial Jobless Claims (8:30 am ET)
Leading Indicators Index for March (10 am ET)
Treasury announce 5-year TIPS auction (11 am ET)
Philadelphia Fed Survey for April (12 pm ET)
Weekly Money Supply (4:30 pm ET)
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FRIDAY, April 20:
No Major Economic Releases Scheduled
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The landscape has changed for the world equity markets. The simple markets of yesteryearstrongly influenced by brokerage recommendations and the free forces of 'supply anddemand' are a thing of the past. The movement in the stock market is no longer solely afunction of analysts forecasts or economic and geopolitical developments. The movement isnow controlled by forces that the average guy on the street can barely comprehend.
The infamous 'yen carry' trade which involves borrowing in Japanese yen at less than 1%to invest in riskier assets like commodities and stocks has mushroomed to an estimated$500 billion to $800 billion in size. It's made the Bank of Japan the world's top centralbanker. And, the U.S. Treasury (and along with them the Plunge Protection Team) and theFederal Reserve are key collaborators with Tokyo in guiding the dollar/yen and the DowJones Industrials. The U.S. Treasury is happy with Japan's super low interest ratesbecause they help to keep U.S. long term rates artificially low at a time when the DowJones Commodity Index is up near 25 year highs (a Fed conundrum). Meanwhile, should Japannormalize its interest rates, it would send the U.S. Treasury yield well above 5% creatinga U.S. housing trainwreck.
You don't hear about it on CNBC, but this week the Fed bought $1.8 billion of Treasurybonds, pumping permanent reserves into the banking system to keep the stock market movinghigher (not to mention overt activity by the PPT in stock market futures themselves).Liquidity and the PPT are driving the market higher not earnings or economic forecasts.
Secret talks are now underway among the Top 5 economic super powers (U.S., China,European Union, Japan and Saudi Arabia) and it is rumored that U.S. Treasury chief, HenryPaulson (from Goldman Sachs) is expected to tell other G-7 members that by mid-2007 theworst should be behind us on housing STRONGLY IMPLYING THE FEDERAL RESERVE WILL SOON BEGINLOWER INTEREST RATES.
A big story the past couple of sessions (virtually unnoticed in the press) is the sharpdecline in the U.S. Dollar Index which touched 81.96 on Friday. The BIG BIG low since the121.29 high in July, 2001 is 80.48 in December, 2004. The highest point since that low was92.53 in November, 2005. The potential now exists for a move to 80.00 and by some negativecounts to 68.00 over time! A break to new lows while bullish for stocks and gold is notunderstood by the financial press and most analysts and is contrary to common wisdompromulgated by U.S. Government officials - so you will not be hearing the truth!
I've been pounding the table regarding the fact the broad-based New York Stock ExchangeIndex has posted a series of new record ALL-TIME highs this past week. This quite profoundand more significant than the action of the S&P 500 and certainly the Dow JonesIndustrial Average. But, folks, you read it hear, first and not in Investors BusinessDaily or the Wall Street Journal and certainly not from the 'entertainers' on CNBC!
Coincident with this important breakout is the fact that the Dax (Germany'sDeutsche-Boerse) traded at new bull market high Friday on of 7212.07 up .97%. The all-timehigh formed back in 2000 is at 7600.00, but we appear to be well underway on the roadgetting there!
I am still targeting the S&P 500 to 1550 in the months ahead which should translateto the Dow Industrials around 13,200.
In Friday's economic news, Total March PPI rose 1.0% vs. consensus of 0.7%. The core rate(which is nonsense beyond belief - read below) was unchanged vs consensus of 0.2%. Thisfollows the 0.4% February rise. The March Trade Deficit unexpectedly narrowed to $58.4 bln(consensus $60.5 bln).
The next shift in Fed policy may be toward lower interest rates to rescue the U.S.housing market at the expense of a weaker U.S. dollar. The longer the Fed holds ratessteady, the more adjustable rate mortgages will reset at higher interest rates that manysub-prime borrowers can not afford resulting in more home foreclosures and furtherdownward pressure on home prices. The Fed is stuck between a rock a hard place, becauserate cuts to prop-up U.S. home prices can sink the U.S. dollar and send gold soaring intonew highs. Heavily sedated government statistics (the infamous 'core' rate of inflation)can mask reality only so long even with energy and food ignored in the statistics. Cornprices are 60% higher and soybeans 40% higher than a year ago, just to give you an idea. A5% to 10% decline in U.S. home prices this year will likely force the Fed to lower the FedFunds rates by 50 basis points to 4.75%. Let's not forget the Fed's shift from atightening bias to a neutral bias on March 21st sent the stock market soaring to theupside.
Precious metals soared late last week and are continuing to track along with the stockmarket. Since I am bullish on stocks and perpetually bullish on precious metals for thenext 10 to 20 years, there is only one position to take - Buy! Uranium shares continuehigh on my investment list, as you know, but we took profits last week with a view torepurchase (given the chance) on a retracement. Uranium itself soared $18 a pound to$113.00. Folks, this is one of the most unbelievable bull markets in history and is barelyreceiving the attention it deserves. Indeed, we may soon all realize that the Internetboom of the 90s may pale compared to the Uranium boom now underway as this is the onlyrealistic candidate to power humanity for the next few centuries.
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Editors note: As you may have noticed, we have been posting our daily VR list for bothSilver and Platinum subscribers. Silver subscribers who find this useful should upgrade toPlatinum where you can pull down VR charts for many securities and watch the patternsunfold for yourself.
I've extended posting this information on a complimentary basis to Silver subscribersfor now. There is no technical service on the planet that posts Positive and Negative VR!Why? Because they are proprietary to VRTrader.com!
A Volume Reversal ™ is change from a Rally day to a Reaction day accompanied by anincrease of volume or a change from a Reaction day to Rally day accompanied by an increasein volume. Volume Reversals ™ coming off intermediate lows or highs have greatersignificance in helping to define those lows or highs and important pivot points in themarketplace.
List of Volume Reversals 4/13/07 - Sectors
*** Sectors Positive Volume Reversals ***
Computer Hardware - Networking & Communication Dev
COMS - 3Com Corp
CSCO - Cisco Systems Inc
Drugs - Manufacturers - Other
BAY - Bayer Aktien
CHTT - Chattem Inc
DVAX - Dynavax Tech
NTMD - Nitromed Inc
Electronics - Semiconductor - Specialized
ASTI - Ascent Solar Technologies Inc
LSI - LSI Corporation
SOLF - Solarfun Power Holdings Co Ltd
XLNX - Xilinx Inc
Financial Services - Credit Services
ADS - Alliance Data
AXP - American Express Co
COF - Capital One Financial Cp
NNI - Nelnet Inc
SFI - Istar Financial Inc
SLM - SLM Corp
Health Services - Health Care Plans
AET - Aetna Inc
CI - Cigna Corp
CNC - Centene Corp
Health Services - Home Health Care
AFAM - Almost Family Inc
LHCG - LHC Group
Insurance - Property & Casualty
AFG - American Financial Grp Hldg
AHL - Aspen Insurance Holdings
ALL - Allstate Corporation
ASI - American Safety Insurance Group
CB - Chubb Corp
CINF - Cincinnati Financial Cp
IPCC - Infinity Property & Casualty
OCAS - Ohio Casualty Corp
PHLY - Philadelphia Consolidated
RLI - RLI Corp
TWGP - Tower Grp Inc
UFCS - United Fire & Casualty
ZNT - Zenith National Insurance Corp
Health Services - Specialized Health Services
FMS - Fresnius Medical
HH - Hooper Holmes Inc
Leisure - Resorts & Casinos
LVS - Las Vegas Sands
STN - Station Casinos Inc
Leisure - Restaurants
APPB - Applebee's International
BOBE - Bob Evans Farms Inc
CEC - CEC Entertainment Inc
CHUX - O'Charley's Inc
IHP - Ihop Corp
PZZA - Papa John's International Inc
RT - Ruby Tuesday's Inc
RUTH - Ruth's Chris Steakhouse Inc
SONC - Sonic Corp
Media - Broadcasting - Radio
SBSA - Spanish Broadcasting Sys A
SIRI - Sirius Satellite Radio
Metals & Mining - Gold
ABX - Barrick Gold Corp
AEM - Agnico Eagle Mines Ltd
AU - Anglogold Ashanti Ltd
BVN - Compania De Minas Buena
CLG - Cumberland Resources Ltd
GFI - Gold Fields Ltd ADR
GG - Goldcorp Inc
GLE - Glencairn Gold Corp
GOLD - Rangold Resources Lts ADS
KRY - Crystallex Internat Corp
LIHR - Lihir Gold Ltd ADR
MNG - Miramar Mining Corp
NEM - Newmont Mining Corp
NSU - Nevsun Resources Ltd
NXG - Northgate Minerals Corp
PMU - Pacific Rim Mining Corp
VGZ - Vista Gold Corp
Metals & Mining - Silver
CDE - Coeur D'Alene Mines Corp
EXK - Endeavour Silver Corp
HL - Hecla Mining Co
PAAS - Pan American Silver Cp
SLW - Silver Wheaton Corp
SSRI - Silver Standard Reosurce
Real Estate - REIT - Office
LSE - Capital Lease Fundings Inc
PKY - Parkway Properties Inc
*** Sectors Negative Volume Reversals ***
**** NONE ***
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TSE and TSE Venture Commentary for our Canadian Clients updated for April 16, 2007:
Following posting a record high on April 9 at 13,519.09 in the TSE, a Negative VolumeReversal ™ was formed, but at the time I told you I didn't believe it was an importantsignal for a major trend change. Indeed, on Friday, we broke out to a new high of13,581.27. Overall, our prejudice has been toward new highs. Upside potential is currentlyas high as 13,900.00 in our work through 2007.
Same pattern here. New highs following what essentially a one-day sell signal in theTSX which touched a new high on Friday at 3319.40. Upside technical projections point to3700.00.
It is important to keep in mind, however, that distribution in the marketplace is aprotracted affair and legitimate sellers may have indeed acted in both these marketslegitimately taking some profits. Whether it is an early warning of an impendingsignificant top I cannot say at this time without seeing further technical confirmation,i.e., more selling on volume. For now, I will continue to give the upside the benefit ofthe doubt as I have up to this point in time.
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I've been invited back to appear on 'The Nightly Business Report' with my old friend, PaulKangas, Friday evening, May 25. Unsure whether I will do it via satellite or in person inthe Miami studios, but in either event I don't think it will be as exciting as my Octoberappearance at the Nasdaq Market Site in Time Square.
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The Las Vegas MONEY SHOW is back again this year, May 14-17 - this time at the MandalayBay Resort and Casino. I will be there giving two workshops. Don't miss it!
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TIMER DIGEST has named Mark Leibovit of VRTrader.com 'TIMER OF THE YEAR' for 2006 andcurrently stands in the #1 Position for 2007!
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Ux U3O8 Prices*
NEW BULL MARKET HIGHS
April 9, 2007
Spot: US$113.00/lb (+18.00)
The truth is that nuclear power, despite its disadvantages, is the only realisticcandidate to power humanity for the next few centuries.
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WATCHLIST LONGS
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.
GERN - Geron Corp. 7.97
COMPANY PROFILE:
WHY WE LIKE IT: GERN has been in a solid downtrend for 2006, but turned higherhas turned higher Our downside price targets have been hit and we are seeing some bullishdivergences on our momentum indicators.
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 14.00.
FRG - Fronteer Development Corp $8.55
COMPANY PROFILE:
WHY WE LIKE IT: Fronteer Development Group, Inc., an exploration stage company,engages in the acquisition and exploration of mineral properties. The company's propertyportfolio comprises Agi Dagi, Kirazli, and Biga properties located in Biga Peninsula ofnorthwestern Turkey; Wernecke Breccias property located in Yukon Territory, Canada; andClara and San Pedro properties located in Jalisco State, Mexico. It has joint venture withAltius Minerals Corporation to explore for iron oxide-uranium-copper-gold mineralizationin central Labrador, Canada. The company was incorporated as 13344970 Ontario, Inc. inJanuary 1999 and changed its name to Fronteer Development Group, Inc. in February 1999.Fronteer Development Group is headquartered in Vancouver, Canada.
The Company is a discovery stage mineral exploration company with exploration propertiesin western Turkey, Canada and Mexico. The Company also owns 47.25% of Aurora EnergyResources Inc. ("Aurora") a company focused on exploring for uranium inNewfoundland and Labrador, Canada, which is listed on the Toronto Stock Exchange under thesymbol "AXU". The Company accounts for its investment in Aurora as an equityinvestment.
POTENTIAL TRIGGER: Buy all pullbacks in this hot Uranium group! Upside target of12.00 satisfied, but holding due to strength in sector and in Uranium itself.
SLGLF - Silverado Gold Mines 11
COMPANY PROFILE:
WHY WE LIKE IT: Silverado Green Fuel Inc. announced plans today to build thefirst low-rank coal-water fuel ("Green Fuel") facility in the United States. The$26 M project, to be located on 14-acres outside of Ackerman in the Red Hills EcoPlex inChoctaw County, Mississippi, is designed to utilize the state's vast supply of low-rankcoal reserves by converting them into Green Fuel, a new form of coal-based,environmentally friendly, low-cost, alternative fuel. The facility will create local jobs,inject a sizable capital investment in the local economy, and highlight Mississippi as anational 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.
POTENTIAL TRIGGER: A 'Las Vegas' play. Buy and hold. Stop would be 2 cents. Idealentry 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.
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