Gold has traded between $1,294 and $1,308 so far today…as of 10:00 am Pacific, bullion is up $1 an ounce at $1,303…Silver is 7 cents higher at $18.39…Copper, enjoying a great week, has added another penny to $2.25…Crude Oil has slipped a further 63 cents a barrel to $44.03 while the U.S. Dollar Index has retreated one-fifth of a point to 97.02…
The Saudis have denied a Reuters‘ report this morning that they have threatened to sharply hike Oil output if Iran doesn’t cooperate on an OPEC agreement to cut production…
The Saudis would never threaten other countries, now would they?…we actually believe they threatened the Iranians with something far more serious besides overflowing amounts of Oil if Iran doesn’t comply with their wishes…what this shows is that the Saudis, who have seen their stockpiles of cash dwindle to the point where they were forced to pull off a monster bond offer recently, are determined to bring OPEC members in line to help prop up prices…
Although central bank Gold purchases have been uninspiring this year, one research firm remains optimistic that this segment of the market will continue to grow…according to Capital Economics, quoting data from the World Gold Council, central banks were net Gold buyers last month with purchases totaling 13 tonnes…once again the Russian central bank was the biggest Gold buyer, purchasing 16 tonnes last month…the People’s Bank of China bought almost 5 tonnes while Kazakhstan added slightly more than 4 tonnes…Simona Gambarini, respected commodities economist at the U.K.-based firm, noted that the buying from the 3 central banks outweighed 13 tonnes of Gold sold by Turkey…central banks have bought a total of 52 tonnes of Gold so far this year, well below official purchases seen during the same time frame last year…
Jobs Report
The U.S. economy added a less-than-expected 161,000 jobs in October and the unemployment rate stood at 4.9% as investors got to digest the final payrolls report before Tuesday’s elections…but the bigger number in the report could be wages, with average hourly earnings climbing 10 cents and reflecting a 2.8% annualized increase, according to the report from the Bureau of Labor Statistics…that number – the sharpest rise in wages in 7 years – will likely be ammunition for Fed hawks to push for a rate hike in December, depending of course on how events unfold in Tuesday’s U.S. elections…a Trump victory and everything is thrown upside down…a Clinton victory may still throw things upside down as Washington could plunge into political chaos for a variety of factors, not the least of which is that Hillary has poked the FBI director in the eye to try to save her campaign at the last minute…
The VIX (Volatility Index) Has Momentum In Its Favor
Rising anxiety among global investors has propelled the swiftest weekly dash into cash since 2013 as money managers dumped bonds and drove the longest sell-off in the benchmark S&P 500 since the financial crisis…some of that cash ($205 million in the past week) is flowing into Gold…
The scrambling of positioning has pushed the VIX, a measure of expected equity volatility known as Wall Street’s “fear” gauge, to its highest level since the immediate aftermath of the U.K.’s Brexit vote…
Stocks start to seriously wobble when the VIX moves above 25…it’s holding steady at 22 this morning with RSI(14) above 70%…chances are the VIX will push higher based on multiple indicators we’ve been looking at…
The Weakening S&P 500
The S&P 500 has logged 8 straight losing sessions, only the 2nd time it has done so in the past 2 decades…the last time the large-cap index fell in 8 consecutive sessions was in October 2008 when the market dropped massively during the first 10 calendar days of that month in The Great Crash that came soon after the Lehman Brothers‘ bankruptcy…of course, the current move hardly resembles the one in 2008 in terms of intensity…while the market was 23% lower after those 8 sessions in 2008, the S&P has fallen by less than 3% during its current losing streak…
S&P 500 6-Month Chart
Technical deterioration of the S&P 500 began well before last Friday when it was announced that the FBI’s investigation of Hillary Clinton’s private email server was being reopened…
Buy pressure started waning in late July and the S&P has been struggling since falling below its 50-day moving average (SMA) in early September…sell pressure is intensifying and RSI(14) is threatening to fall below previous support around 30% on the daily chart…next week will be key…
Citigroup Pushes For Clinton
This headline on CNBC this morning should come as no surprise, just 5 days before Election Day in the U.S. – “Citi Predicts Possible 5% Drop For S&P 500 If Trump Wins, Warns On Recession” (the same fear mongering the establishment unleashed prior to the Brexit vote)…
Employees of the Wall Street bank are the single largest source of campaign donations to Hillary Clinton over the course of her political career…
In Today’s Morning Musings…
1. The Dow at the edge of a cliff – will it pull itself back?…
2. Northern Shield Resources (NRN, TSX-V) discloses a VTEM anomaly straddling the border with Clean Commodities (CLE, TSX-V) at Sequoi where drilling begins shortly…
3. Will HIT (TSX-V) turn into a Christmas hit in the market?…
4. Daniel’s Den – a stock capitalizing on MEGA trends, plus Salazar Resources (SRL, TSX-V) and high-grade in Ecuador…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
Jon – cuz.v.. have you commented on these guys before??? had a call promoting their 3 for 1 stock split .. not sure that makes sense..?? does it to you????
Comment by Jeremy — November 4, 2016 @ 9:47 am
Yes we have, Jeremy, as part of our Cobalt coverage…tightly held stock, has had decent liquidity but will have even better liquidity due to the split…makes some sense…
Comment by Jon - BMR — November 4, 2016 @ 10:30 am
MITK – Hi Daniel.
Today is your 3rd detailed report on MITK. Thanks. After the first report I followed the stock closely but not purchased and was sorry for that as it shortly hit $8.50. I continued to watch in a hope the price would come down and make an entry point. Last week the price had come down close to the $7.00 level and I entered in at $7.10 and few days later I doubled down at $6.70. With the Q4 news released I am discouraged that the price has come down again on good news.
Please provide your take on the Q4 report and what your feelings may be going on with the share price.
Comment by Vepper — November 4, 2016 @ 1:09 pm
Vepper, I too am surprised with MITK’s decline and also added more around $6.40. The pullback appears to be “technical”
(RSI-14 indicates MITK is extremely oversold now) and not related to the “fundamentals” (most important) of the company.
Mitek dominates the mobile check deposit market with 5,400 banks. All Top 10 largest banks in U.S. use Mitek, and promote it heavily (70 million users now). It’s also in discussion with large European banks.
“Mobile Identity Verification” (a $3.8 billion opportunity!) business is now around 25% of total sales and grew at 400% this year.
Pretty amazing technology – “machine learning and algorithms” get better with every ID it sees. Auto Insurance companies can give a quote when someone takes a picture of DL and insurance card (extracts all info automatically). Mastercard is rolling out pay by taking a “selfie”.
Consumers are demanding “mobile” and “self service”, taking a picture of Passport/Driver’s license using Mitek is the legal equivalent of physically presenting it! Businesses love that b/c people often don’t “show up”.
+30% growth year after year. Strong balance sheet of $36M cash and no debt. Pure play on the 2 MEGA trends. For me it’s a long-term growth story. Great bargain IMO. Hopefully it doesn’t get acquired b/c I think it will be a billion dollar business eventually.
In short, frustrating to see stock going down, but I’d encourage you to listen to Mitek’s conference call. Will give you great insight on how well things are going.
http://investors.miteksystems.com/eventdetail.cfm?EventID=177177
Comment by Daniel — November 5, 2016 @ 10:08 am
Hi Daniel and Vepper…re MITK.
TA shows strong support around 5.60. This is where FIB, Chart and bottom of Down-sloping Channel Support coincide. Price is nearly at the end of a 3 wave correction. Quite natural actually….just a little more patience.
Hope this helps.
Comment by John - BMR — November 5, 2016 @ 11:13 am
Daniel and John re: MITK
Thanks very much. Daniel, I agree it is a long term growth play. Someone, in my eyes, is playing with the stock price. I’m going to have to wait this one out until MITK turns around and heads north. Can’t afford to double down again unless CLE hits with The Labrador Trough in Quebec.
Comment by vepper — November 5, 2016 @ 12:07 pm
Vepper, no disrespect but why wouldn’t you play the real play on the Labrador trough – NRN? They are the ones drilling in two weeks and only 15 cents per share. I will guarantee you this, if NRN hits it’s going a lot higher than CLE. CLE will benefit but NRN will skyrocket.
Comment by Dan1 — November 5, 2016 @ 12:52 pm
Dan1, on the other hand CLE has many more irons in the fire. If NRN doesn’t hit (I sure hope it does) then NRN will plummet and CLE will be marginally affected. I prefer a play with several horses in the race.
Comment by Danny — November 5, 2016 @ 3:02 pm
Dan1 – I feel that: NRN has way to many outstanding shares, also that the PGE’s will carry over into CLE property, I like the lower price of CLE over NRN (NRN was at 20 cents when I purchased CLE at 10 cents at the end of July). Boy I wish I sold at .17 cents and bought back in at these lower prices. Also, as Danny says, CLE has a number of lithium properties as well. This could offset a miss in the Labrador Through.
Comment by vepper — November 6, 2016 @ 7:43 am