The next two weeks

[richmanch]

Another good write up this week, JDH. But I don't see how your portfolio only bumped up slightly. I clicked on it yesterday expecting jubilation and wild optimism.

David brought up this idea about JAN 2 and 3 traditionally being good buy in days. But I don't think uranium has enough of a history (and what there is has been erratic) to make those kinds of determinations. Is there a precedent in other resource/mining sectors?

Last year's year end rally was due in large part to Cigar Lake, with Dines on US National TV pumping hard also a factor. Maybe that was profit taking in the new tax year.

This year, it's the exact opposite. The credit crunch, along with some huge losses at year end, has created even more downward pressure on stocks.

Look at UEC. At 3.12, it's trading at one third of it's year high, and off about 40% from where it was a month or so ago. Who's waiting for the new year to sell that? I got in last week at 3.07, not wanting to take a chance that tax loss selling will drive it down further.

I could even make the argument that last months sell off was also due to tax selling--tax selling with the anticipation of getting back in 31 days later, by the end of the year. The downward pressure and upward pressure of some of these stocks (CHX, ASX, SAN) are roughly 30-40 days apart.

And we're still in tax loss season, there is still that selling pressure. Once that is lifted, where is the selling pressure going to come from? It's possible that these stocks could continue to do well, and the ones that are still on the mat (UEC, even UUU, and plenty of others) could bounce significantly. The next couple of days could be the best chance to get in at a good price (due your own dd, this is just my opinion).

The risk here is that there could be overall downward pressure from the market, and that swing traders might be playing precisely this action.

Anyone see other risks? Thoughts? Where's your money for these next few weeks?

Note: I took JDH's advice and clicked on the members page--I can't believe how many members there are. I thought we had about a dozen. Let's here from everyone--stop lurking and start posting! Happy holidays.

[langman57]

I'm out until '08, but I'm thinking there's going to be some dips and NLR might be on my list, as well as some PNP, GEX and GLD. But defense is my watchword. There was an article in the NY Times today about some town in Florida and how the real estate market has crushed the whole  economy for Lee County. Makes me wonder what else may be looming. And the media just loves trying to put a positive spin on all this, but I can't help but think there's still another shoe to drop. It usually happens within 24 hours after I make a big purchase. Kind of like David Lane's letter scenario!

[davidslane]

Just to clarify this January 2 thing.


I have noticed the past 3 years, that the uranium stocks tend to have a big rally on January 2 which marks a short term top.  Thus, if you were looking to sell uranium stocks for a trade, then January 2 (at market close) would be the time to do it.


January 3 tends to be quite a big pull back day.

The question for me is what happens the next two weeks from Jan 4 through Jan 18.
Typically, this is a pull back consolidation period.

But this year, if the over sold, down trodden US markets have a big rally (which I think they do), then the over sold, down trodden uranium stocks will most likely follow.

So, the pull back consolidation period may only last one day this year, January 3.


I'll be doing some buying on January 3, filling up the rest of my gas tank and topping it off too.


JDH asked what did we learn this past year.

1) I learned that in a credit crunch, with money draining from stocks is kryptonite to small cap resource stocks.  As long as the credit crunch persists, so too will our troubles.

2) I learned that a deflationary market correction in the overall markets will supercede any seasonal trends in resource stocks --- meaning resource stocks will fall and rally with the overall market against their normal calendar trends

3) I learned that the price of gold and the spot price of uranium can rally, but their underlying resource stocks can still tank!

4) I learned, or perceive, that if gold and uranium metals rally big over the next few years, there is still room for the resource stocks to, as Doug Casey says: "Go to the moon", as they have been so beaten down while the underlying metal prices have done quite well.

5) I realized that gaining 20% a year on some larger, more stable stocks (which may offer some dividends) is not so bad and quite comforting.  Diversification is good and I'm happy to have put 40% of my portfolio in stocks and ETFs like BHP, RIO, SLB, CLB, JEC, NOV, NTG, SGR, KWK, EWA, EWS, EWZ, EWY, et al.

6) Also, I have learned that nothing is going to stop the march of oil prices long term and that energy exploration and infrastructure stocks (SLB, BHI, APA, NOV, NTG, KDN, IEZ, etc) should do quite well.

7) And lastly, don't sell into a fall.  If you didn't get out on the way up, it is too late to get out on the way down as the down draft happens too fast.  Best to wait it out.  You never know when and how fast your stocks will bounce back.  And the correction will be longer than you expect and will stop when you least expect.


So, knowing what I've learned, it is crucial to have a grasp on whether the credit crunch is over or if we will see another correction like we had in August and November.


I think we get another correction --- one due to increased concerns about a US recession and the continuing housing crisis in the US.

But first, I expect the markets to rally and for people to get complacent again.  I give this phase two to three months.  But by the time we hit March, we will get earnings warnings and then April will give us earnings disappointments.  The market will act in advance and start to fall in March.

I expect our uranium stocks to hit 52 week and all time highs by mid February.  And like last year, when the overall market corrects again, I believe our uranium stocks may crash and  retest the recent lows yet again (and for the last time).  The usual April/May highs may turn out to come early in February or March and be overridden and not come as usual in April/May this year if the overall market is correcting badly in April and May (see November 2007).

The calvery of the US Fed slashing interest rates and Sovereign Wealth Funds dumping US dollars to buy into US banks will save the markets.  And all this new money will jump start an inflationary rally that should begin after the next correction.  So if we correct in April and May, the next big rally (and I expect it to be a grand long lasting multi year rally) shoud start around June or July.  Additional investments by Sovereign Wealth Funds and more Fed rate cutting will kill the US dollar and help our stocks (long term), but won't save us in a spring correction.   Bad economic news will hurt the US dollar and will stop the most recent US counter-trend bear market dollar rally.  This may come as early as the first week of January if retail sales for December are bad (and they will be).


So commodities should rally big in January and February and set themselves up for an over bought correction come March.


I'll let people know if I change my mind, but for now, I expect one of the best rallies ever for the next two months (with a brief pull back on January 3).  And then another massive correction in the spring followed by a long, sustained, multi-year, march higher into the mania phase we have all been waiting for.


And here's an article which foretells why we will have one more shoe to drop.

Our savior in commodities will be the strength in foreign, devleoping markets which won't slow down when the US does this time around (not to mention the US Fed flooding our home market with new dollars to help us out of a recession).


http://news.yahoo.com/s/ap/20071223/ap_on_bi_ge/credit_card_crunch

Unpaid credit cards bedevil Americans

SAN FRANCISCO - Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.

An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.

Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.

"Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa," said Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk. "We're starting to see leaks now."

The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP. That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.

At the same time, defaults — when lenders essentially give up hope of ever being repaid and write off the debt — rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission.

Serious delinquencies also are up sharply: Some of the nation's biggest lenders — including Advanta, GE Money Bank and HSBC — reported increases of 50 percent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.

Rest of article:
http://news.yahoo.com/s/ap/20071223/ap_on_bi_ge/credit_card_crunch

[richmanch]

I wonder if we're hitting the winter groove: two steps forward, one step back.

Will be better than the pattern of the last 7 months: five steps back, another two steps back, half step forward....

UEC, UUU starting to show some life. I also loaded up on more URZ, which was another stock that I held through all the brutality, and that seemed left for dead at the end of tax-selling season.

Still wary of David's idea that the new year rally can quickly pull back (if not exactly on this or that day).

But that should only be a pullback, and not more wandering around in the wilderness.

That's my two cents--and my money is where my mouse is.

[Depleted]

Here we go...The uranium bull is getting restless, and is starting to move....Uranium One just got activated, same with Denison, both basically dormant/cons for the past 6 weeks...Let's hope the uranium bull got out of the barn safely, and is starting to charge! YEE HAW !!!!!
 

[davidslane]

I bought!


[So time to sell?]


(My predictions continue to suck.  Only a fool tries to predict short term market trends, so I am officially a fool.)


I like the way commodity stocks are acting and decoupling from the overall market.

So I bought some more uranium, gold, silver, energy and agriculture stocks today.


Now we can have that January correction!

[Depleted]

I agree with you David, energy, gold, silver indicies (wish we had one to track uranium), all moving up STRONG!
A good time to jump into the bigger guns in Silver,Gold...WOW! This ride won't end tomorrow....

[sidewinder]

My Jr issues went up almost 4% today.  I was holding my breath after David's prediction about the 3rd but could not make myself sell after yesterday another 2%.  Now that my hopes are up maybe I should sell a bunch or at least the ones that are in the green. 

However,  I think I will just ride until I can skim each stock for profits along the way to late march early april. Then depending upon the worlds economic situation at that point get into a cash position for the summer poised to swoop and scoop when the situation dictates

Oh and buy more gold and especially silver. 

Get ready for the I told you so in the next Dines. 

I really liked Casey's Intl Speculator today.  He tells it like it is and 102 pages of why.

Happy New Year

[langman57]

Here's that volatility everyone's been predicting. Moreover, I think most of us on this board suspected the US economy was in trouble. Only 18,000 jobs! Leave it to the talking heads to try and sugar coat this mess we're in....Happy New Year?

[richmanch]

this would be the one step back.

But watching very closely, as I have no intention of going back into the wilderness.

I thought uraniums would pull back with gold and oil, which seemed to be getting a little overheated, but instead they're falling with the rest of the market today. Could be worse, all things considered. And I think it could still get a little worse by the end of the day.

If the markets rebound next week, and oil and gold pull back, it will be interesting to see how uraniums behave.

The markets are really sucking. Along with a bunch of uraniums, I used the tax-selling bounce theory on some larger stocks. Like Motorola. Nice 5% gap down this morning. Wish I wasn't so confident that I bought my whole position all at once.

I might enter into some foreign etf's today.

Is Dines coming out today?

[sidewinder]

Richmanch

The last IWB said the Jan forcast will be out in mid Jan. and would be quite a bit larger that the usual.  It went on to say that e-mail recipents will get a notice a couple of days prior to the issue.  I guess the usual 17 pages will be 25-30.  Not that volume incicates substance, but the last Case International speculator was 102 pages.  This is because each recomendation Has all the whys for each stock including Buy Sell Hold and prepare for exit suggestions. 

If Gold corrects anytime before going past 900 I would like to have trimmed my Uranium exposure quite a bit keeping only the strongest of the Dines-Casey recomendations.  Like many here I should have made the exit after the run at the begining of '07 but I was either lazy, greedy, complacient or just stupid and held most of my Jr. uranium stocks. 

The roller coaster is once again giving us the wild ride.  I was up almost 5% yesterday and today with the jobs report out I'm out 2-3% of that.  Two step forward one step back is OK with me as long as the trend is in place.

The U.S. economy added only 18,000 jobs to non-farm payrolls in December, well below expectations and November's revised number of 115,000. Unemployment jumped to 5%, from 4.7%, after analysts had predicted a modest rise to 4.8%.  Not good numbers and I think it will get worst as the year goes on. 

I saw a survey somewhere the other day that ask "do you think the US economy will be in a recession in 2008?"  59% of the 15,000 respondents said yes.  So the investor confidence is waning.  This market will not be business as usual. 

I think keeping a core investment in Uranium, with a good block of solid Gold and Silver producers for about 20% of my portfolio will make me more comfortable.  This will leave me about 50% for regular position trading in the general market (TA only) and 30% attack capital in case of unusual happenings.
Of course that is what I think now today.   

[richmanch]

Thanks Sidewinder,

I don't subscribe to Dines anymore, and I was just asking about the issue because I was looking for something positive. In fact, MGA and PNP are holding up OK in this environment.

I get Casey's Energy Newsletter, but not the Speculator. My thinking was that I had enough speculation on my hands with uranium, and I didn't need to start worrying about 20 tiny gold companies too. I have some bigger gold and silver, but not a lot, maybe 5% of my overall portfolio. And what little I have I have to credit to reading this board, because I'm not much of a gold bug.

My exposure to the mainstream market is down to about 30% of my portfolio, and most of that is foreign. I just can't help myself sometimes (like with Motorola).

But that's just one of the trades--not sure why I feel compelled to tell everyone about it. Guess it keeps me humble. Besides, I'm holding it for now--if it starts exploring below it's 52 week low, I'm cutting my losses.

UUU, UEC, ASX, CHX have all been decent short term trades, and I'm not going to give back the gains that I've made over the last few weeks. I already sold my trading position of LAM (keeping my core position).

[davidslane]

I guess I was off a day.

Thunk, thunk [David hitting head against keyboard].


I was figuring the market would correct during the first two weeks of January.

But I am inspired by the fact commodity stocks are holding up better than past blood letting days.  More and more people are putting money into commodity stocks from tech and other main stream areas and that is propping up our commodity stocks.



We're now in that no mans land time period I was predicting where the market is weak on weak economic news and waiting on the US Fed to induce a rate cutting market rally.

At some point in the next two to three weeks (before or after the next set of US inflation numbers in a week and a half), the market will realize a lot of rate cuts are coming and will rally big (especially commodities).


But until then, this market could remain weak.


I would continue to nibble on gold stocks on pull backs.


I have decided to remove EWS (Singapore) and EWY (South Korea) from my core positions.  I rather concentrate on gold and commodities the next 2 to 3 months and both countries are slowing down.

I'll stick with EWA (Australia) and EWZ (Brazil) as both countries have strong commodity exporting industries.


The markets should bottom next week and start an over sold rally.

Eventually, the US Fed will come to the rescue and commodities will really take off.

[john77]

Casey's the Room was interesting this week. They put it best by describing the gold bull as a marathon, and not a sprint. I am thinking the same applies to uranium, though uranium was not mentioned in this week's Room.

They also make a good point of how Gold has appeared in two mainstream publications now, and that the mania phase may just be getting started. It seems that our uranium's follow oil and gold somewhat, so it will be interesting to see what happens. To me, it does not seem like uranium's have set themselves apart yet, and thus while they might occasionally ride or fall on gold or oil, they have yet to define a character of their own.

Rough day !

[davidslane]

Is Dines coming out today?

Dines first issue of the year comes out around Jan 21, give or take.

It is only mailed, not e-mailed.

Last year's first issue was 44 pages.
Mostly charts though.

The written content isn't that much more deep than a regular issue.
And last year's issue didn't even have much in the way of formal predictions.



Casey's 102 page quarterly update issue for his International Speculator (all writing, very few charts) had 30 pages on content and 70 pages of company write-ups.

Now that's what I call getting your money's worth.