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March 17, 2011

BMR Morning Market Musings…

Gold has traded between $1,390 and $1,405 so far today…as of 8:10 am Pacific, the yellow metal is up $2.50 an ounce at $1,404…Silver is 32 cents higher at $34.58 while the U.S. Dollar Index has fallen sharply, down over half a point to 76.01…some encouraging signs on the U.S. labor front this morning, along with a report on inflation, have given the Dow a lift after yesterday’s 200+ point drop…new U.S. claims for unemployment benefits fell as expected last week and the four-week moving average has dropped to its lowest level in more than two-and-a-half years, pointing to a strengthening labor market…meanwhile, U.S. consumer prices rose at their fastest pace in more than a year-and-a-half in February, driven by higher food and energy prices, but underlying inflation pressures remained generally contained…the Labor Department said its Consumer Price Index rose 0.5%, the largest gain since June, 2009, after increasing 0.4% in January…Core CPI, excluding food and energy, increased 0.2% after advancing by the same margin in January…inflation continues to be a problem in Asia, however…the Reserve Bank of India has hiked key interest rates by a quarter of a percentage point and says it will continue to fight inflation while citing new risks arising from crude oil prices and demand-side pressures…this is the eighth time in a year that India’s Central Bank has lifted rates…more monetary tightening is expected in China where authorities are determined to cool inflationary fires…the CDNX is up 37 points this morning to 2169…significant technical resistance exists at 2200…the CDNX correction began March 7 and is now in its ninth trading day with the Index currently down 12% from the 2465 high…while the overall CDNX bull market remains intact, there’s no question we’re currently in the midst of a major correction that by historical standards still has a considerable way to go in terms of both magnitude and duration…the fact the CDNX has been leading the broader markets and precious metals lower over the last couple of weeks is very troubling and suggests potential major losses are on the horizon for the Dow, the TSX and commodities across the board…this could lead to some incredible buying opportunities during the second quarter of this year, so right now our view is that cash is king…with careful planning, fortunes could be made if we are correct in our analysis…for some historical context, let’s look at other major corrections the CDNX has experienced since 2004…

2004  – 19% drop over 31 trading sessions from early April to mid-May (1890 to 1530)

2005  – 21% drop over 50 trading sessions from March to May (2025 to 1590)

2006  – 29%  drop over 22 trading sessions in May (3300 to 2350)

2007  – 29% drop over 17 trading sessions in August (3320 to 2350)

2008  – 18% drop over 12 trading sessions in January (2875 to 2350)

2010  – 21% drop over 45 trading sessions from May to July (1688 to 1343)

If you were a buyer toward the end of the six major corrections cited above, you likely made A LOT of money…the CDNX rebounded sharply after each of those corrections…excluding the extraordinary fall of 75% over the last half of 2008, which we’ve left out as it was an anomaly, the average percentage decline in the six major corrections cited above between 2004 and 2010 was 22.75% over an average duration of 29.5 trading sessions…again, as of right now, the CDNX is off 12% over nine sessions…this implies the Index likely has further to go on the downside – a 23% drop would take it down to about 1900, the November low and very close to both the 200-day and 200-week moving averages…in our worst-case scenario, the CDNX could erase nearly half the entire gains from the low of 2008 and plummet to around its 500-day moving average (SMA) to about 1650…in otherwords, this is a time to be cautious and patient for the potential to make boatloads of money later this year…over the coming days, John is going provide charts and outline support levels for the CDNX companies we follow most closely…today, John begins with Adventure Gold (AGE, TSX-V) which is currently up a nickel to 56 cents….

Quebec unveils its budget later today and we’ll be watching for any potential changes regarding mining industry policy…uranium plays should be avoided like the plague right now, given what has occurred in Japan…a terribly unfortunate but once-in-a-lifetime disaster such as that, played out now over live television and through the Internet, is going to invoke a lot of unnecessary fear and silly government decisions…it will play nicely into the agenda of certain activists around the globe…Germany has said it will shut down all seven of its nuclear power plants that began operating before 1980 (ultimately they may never re-start them)…40% of all the world’s new nuclear reactors are currently being built in China and Beijing is now signaling a slowing of that program…in the United States, there is already mounting political pressure to delay or cancel construction plans for the 20 or so nuclear reactors that were expected to be built by 2020…Hathor Exploration Limited (HAT, TSX-V) is just one of many quality uranium plays that is down sharply this week, losing nearly half its value…

18 Comments

  1. BMR

    So based on your analysis of the market going considerably lower, what is an investor to do that has their investment budget tied up in mining stocks with only one stock that is in the green and the rest in the red, take the smaller loss now and sell all of them and wait for the market to go lower? I know you cannot give investment advise but hypothetically speaking what would you do? Also what happens to your analysis if the CDNX breaks back above 2200? Then what?

    Comment by GREG H — March 17, 2011 @ 7:25 am

  2. Greg, there are two ways to play things right now….either just sit tight and do nothing and hold long-term……as the overall bull market is still intact (that’s important to remember)……or try and be a trader…….it’s not easy doing the latter……those who held through the weakness May through early July last year may have had a few gut-wrenching moments but the market recovered very strongly…..the same will happen again if we get a drop to 1900 or lower……..so I don’t think this is a time to panic………the odds do favor further downside…….I know that’s not what most people want to hear but I’m not going to go against a leading indicator that has been so accurate for so long……..but the same leading indicator (CDNX) confirms the long-term bull market remains intact, the primary trend is up…….right now we have a secondary trend (negative) within a primary trend (positive)……….the CDNX can break above 2200 and encounter more resistance……..2200 is the first major resistance level we’re looking at………..the CDNX’s 50-day SMA has turned negative while that has yet to occur with the broader markets…..I suggest that will soon happen with the TSX and Dow….the weakness we’ve seen in the CDNX since March 7 is really bearish short-term for precious metals….I think what we’re seeing overall is selling of assets across the board and smart money going into cash…….the fundamentals look scary – too many problems out there all over the world right now….

    Comment by Jon - BMR — March 17, 2011 @ 7:51 am

  3. Thank Jon

    Not panicking. I just want to maximize my returns, and also take advantage of some possibly great deals on good companies, been going back and forth on how I want to do that, all of my companies are real close to my 25% stop loss, and if I am positive they are going lower I will get out now and buy them back later or I have been thinking of keeping the positions I really like selling some others and buying the ones I really like at lower levels and averaging down. anyways thanks for the feedback.

    Comment by GREG H — March 17, 2011 @ 8:04 am

  4. This fella at TSI Trader thinks that since the buck broke 76, (and for other technical reasons) the precious metals will soon rocket higher. Any opinions?

    Thanks….Carl http://thetsitrader.blogspot.com/2011/03/same-all-over-again-q1-2008-vs-q2-2011.html

    Comment by Carl — March 17, 2011 @ 8:51 am

  5. WOW! VGN is taking it on the chin again today, albeit with relatively low volume. management better come out with some very encouraging news soon or this thing will just continue to drift lower and lower.I cant believe I didnt sell this when I had the chance. I wonder if BMR will still proclaim that it is still up since they 1st mentioned it..LOL Just like SD.v and CUI.v The only thing I am willing to invest in right now is potash stocks.
    John

    Comment by john — March 17, 2011 @ 9:42 am

  6. Hi Carl, the dollar’s weakness is interesting, especially at a time when you would think the greenback would be attracting safe-haven buying interest. Having said that, Gold’s not exactly rocketing. And the CDNX has broken down technically though it’s strong today. These are interesting times. I don’t have a good feeling about things for the near-term based on what we’ve seen in the CDNX.

    Comment by Jon - BMR — March 17, 2011 @ 10:58 am

  7. Oil goes up, Gold goes up, and VGN?? Down for the count it seems.

    Comment by john — March 17, 2011 @ 12:22 pm

  8. John – stick to Potash… dont come here and whine will ya?? you know where you can go to do that..

    Comment by Jeremy — March 17, 2011 @ 12:37 pm

  9. Definitely not going to lose the plot over this correction. The thing is to go through every company you own and see if you can really see the value behind them. If not then sell them at a profit or loss not too important. The rest will have their day and if that happens in one month or one year it will happen. Trading never works long term and as Jesse Livermore said ” be right and sit tight “

    Comment by Patrick — March 17, 2011 @ 3:05 pm

  10. Livermore – great advice….
    ALso Libya UN issue.. Oil and Gold jumped due to this.. Japan nuke issues waning (which is just freaking awesome for everyone concerned), Nikkie is up early.. should lend itself to a good friday here..:)
    Jon…. if the CDNX closes above the 100 day… then is the 1900 off the table????? Thx in advance mate… and as Patrick (St Paddy’s Nephew I hear) says the plot hasnt changed… the fickleness of the market and its participants will always keep you off balance.. as will CNN and CNBC:)

    Comment by Jeremy — March 17, 2011 @ 4:42 pm

  11. Jeremy, the simple answer is no…..after months of leading the markets higher, the CDNX is now under-performing and in effect is saying there is trouble on the horizon for the Dow and the TSX…….a declining 50-day SMA has always brought problems for the CDNX and even a temporary move thru the 100-day is not going to change anything……it will be a bear trap…..too much resistance in this market………1900 minimum is now my target…….nice move today on the CDNX but no volume, bad sign……also, keep in mind, Gold could even move higher here for a bit without the CDNX joining in…..same thing happened last year when the CDNX turned……..the Libyan situation is fraught with all sorts of potential trouble and I have zero faith in the UN……this is going to get ugly IMHO……..

    Comment by Jon - BMR — March 17, 2011 @ 5:29 pm

  12. Is it fair to base this correction on past corrections ? Not so, says me, different scenarios, different times,
    different this & different that !!! The index may well fall to 1900, but i feel it will not fall, based on the
    percentage declines in the past, instead will fall or rise based on daily events, whether positive or negative. R !

    Comment by Bert — March 17, 2011 @ 5:56 pm

  13. You have a point, Bert…….every situation can be a little different…….I think the past, however, serves as an excellent guide for the future…..
    nobody of course could have predicted the extent of the 2008 crash……..but one could have predicted that a major correction was starting in early July, 2008, based on the indicators we use……… based on the six other major corrections in the CDNX since 2004, as outlined this morning, the greater probability is that we are now in the midst of another major correction that should fall somewhere within the range of the others……..and if that’s the case we haven’t yet seen the bottom…….

    Comment by Jon - BMR — March 17, 2011 @ 6:25 pm

  14. I think that it is a very prudent move to raise cash in this current market environment. I’m on BMR’s side with regards to seeing a decline in the CDNX. I’ve noticed the declining volume as well which signals a red flag for me. I think that you can successfully trade in and out of this market quickly but stops should be implemented cause the market can whip around quickly.

    Comment by Seamus — March 17, 2011 @ 6:31 pm

  15. Thank you Jon… a voice of reason and of caution is never bad..:) we all want to think that its straight up and nothing will stand in the way of gold 1650:) Sprott talks of 100 silver.. road is never smooth.. and being realistic is always better with clear glasses and not beer goggles:)
    Thx mate.. input and guidance appreciated!!

    Comment by Jeremy — March 18, 2011 @ 4:51 am

  16. Market Manipulators

    In every profession, there are probably a dozen or two major rules. Knowing them cold is what separates the professional from the amateur. What the professionals and the securities regulators know and understand, which the rest of us do not, is this.

    “RULE NUMBER ONE:
    ALL SHARP PRICE MOVEMENTS — WHETHER UP OR DOWN — ARE THE RESULT OF ONE OR MORE (USUALLY A GROUP OF) PROFESSIONALS MANIPULATING THE SHARE PRICE.”
    This should explain why a mining company finds something good and “nothing happens” or the stock goes down. At the same time, for NO apparent reason, a stock suddenly takes off for the sky! On little volume! Someone is manipulating that stock, often with an unfounded rumor. In order to make these market manipulations work, the professionals assume: (a) The Public is STUPID and (b) The Public will mainly buy at the HIGH and (c) The Public will sell at the LOW. Therefore, as long as the market manipulator can run crowd control, he can be successful. Let’s face it: The reason you speculate in such markets is that you are greedy AND optimistic. You believe in a better tomorrow and NEED to make money quickly. It is this sentiment which is exploited by the market manipulator. He controls YOUR greed and fear about a particular stock. If he wants you to buy, the company’s prospects look like the next Microsoft. If the manipulator wants you to desert the sinking ship, he suddenly becomes very guarded in his remarks about the company, isn’t around to glowingly answer questions about the company and/or GETS issued very bad news about the company. Which brings us to the next important rule.
    “RULE NUMBER TWO:
    IF THE MARKET MANIPULATOR WANTS TO DISTRIBUTE (DUMP) HIS SHARES, HE WILL START A GOOD NEWS PROMOTIONAL CAMPAIGN.”
    Ever wonder why a particular company is made to look like the greatest thing since sliced bread? That sentiment is manufactured. Newsletter writers are hired — either secretly or not — to cheerlead a stock. PR firms are hired and let loose upon an unsuspecting public. Contracts to appear on radio talk shows are signed and implemented. Stockbrokers get “cheap” stock to recommend the company to their “book” (that means YOU, the client in his book). An advertising campaign is rolled out (television ads, newspaper ads, card deck mailings). The company signs up to exhibit at “investment conferences” and “gold shows” (mainly so they can get a little “podium time” to hype you on their stock and tell you how “their company is really different” and “not a stock promotion.”) Funny little “hype” messages are posted on Internet newsgroups by the same cast of usual suspects. The more, the merrier. And a little “juice” can go a long way toward running up the stock price. The HYPE is on. The more clever a stock promoter, the better his knowledge of the advertising business. Little gimmicks like “positioning” are used. Example: Make a completely unknown company look warm and fuzzy and appealing to you by comparing it to a recent success story, Diamond Fields or Bre-X Minerals. That is the POSITIONING gospel, authored by Ries and Trout (famous for “Avis: We Want To Be #1” and “We Try Harder” and other such slogans). These advertising/PR executives must have stumbled onto this formula after losing their shirts speculating in a few Canadian stock promotions! The only reason you have been invited to this seemingly incredible banquet is that YOU are the main course. After the market manipulator has suckered you into “his investment,” exchanging HIS paper for YOUR cash, the walls begin to close in on you. Why is that?
    “RULE NUMBER THREE:
    AS SOON AS THE MARKET MANIPULATOR HAS COMPLETED HIS DISTRIBUTION (DUMPING) OF SHARES, HE WILL START A BAD NEWS OR NO NEWS CAMPAIGN.”
    Your favorite home-run stock has just stalled or retreated a bit from its high. Suddenly, there is a news VACUUM. Either NO news or BAD rumors. I discovered this with quite a few stocks. I would get LOADS of information and “hot tips.” All of a sudden, my pipeline was shut-off. Some companies would even issue a news release CONDEMNING me (“We don’t need ‘that kind of hype’ referring to me!). Cute, huh? When the company wanted fantastic hype circulated hither and yon, there would be someone there to spoon-feed me. The second the distribution phase was DONE….ooops! Sorry, no more news. Or, “I’m sorry. He’s not in the office.” Or, “He won’t be back until Monday.” The really slick market manipulators would even seed the Internet news groups or other journalists to plant negative stories about that company. Or start a propaganda campaign of negative rumors on all available communication vehicles. Even hiring a “contrarian” or “specialPR firm” to drive down the price. Even hiring someone to attack the guy who had earlier written glowingly about the company. (This is not a game for the faint-hearted!) You’ll also see the stock drifting endlessly. You may even experience a helpless feeling, as if you were floating in outer space without a lifeline. That is exactly HOW the market manipulator wants you to feel. See Rule Number Five below. He may also be doing this to avoid the severe disappointment of a “dry hole” or a “failed deal.” You’ll hear that oft-cried refrain, “Oh well, that’s the junior minerals exploration business… very risky!” Or the oft-quoted statistic, “Nine out of 10 businesses fail each year and this IS a Venture Capital Startup stock exchange.” Don’t think it wasn’t contrived. If a geologist at a junior mining company wasn’t optimistic and rosy in his promise of exploration success, he would be replaced by someone who was! Ditto for the high-tech deal, in a world awash with PhD’s. So, how do you know when you are being taken? Look again at Rule #1. Inside that rule, a few other rules unfold which explain how a stock price is manipulated.
    “RULE NUMBER FOUR:
    ANY STOCK THAT TRADES HUGE VOLUME AT HIGHER PRICES SIGNALS THE DISTRIBUTION PHASE.”
    When there was less volume, the price was lower. Professionals were accumulating. After the price runs, the volume increases. The professionals bought low and sold high. The amateurs bought high (and will soon enough sell low). In older books about market manipulation and stock promotion, which I’ve recently studied, the markup price referred to THREE times higher than the floor. The floor is the launchpad for the stock. For example, if one looks at the stock price and finds a steady flatline on the stock’s chart of around 10 cents, then that range is the FLOOR. Basically, the markup phase can go as high as the market manipulator is capable of taking it. From my observations, a good markup should be able to run about five to ten times higher than the floor, with six to seven being common. The market manipulator will do everything in his power to keep you OUT OF THE STOCK until the share price has been marked up by at least two-three times, sometimes resorting to “shaking you out” until after he has accumulated enough shares. Once the markup has begun, the stock chart will show you one or more spikes in the volume — all at much higher prices (marked up by the manipulator, of course). That is DISTRIBUTION and nothing else. Example: Look at Software Control Systems (Alberta:XVN), in which I purchased shares after it had been marked up five times. There were eight days of 500,000 (plus) shares trading hands, with one day of 750,000 shares trading hands. Market manipulator dumping shares into the volume at higher prices. WHENEVER you see HUGE volume after the stock has risen on a 75 degree angle, the distribution phase has started and you are likely to be buying in — at or near the stock’s peak price. Example: Look at Diamond Fields (TSE:DFR), which never increased at a 75 degree angle and did not have abnormal volume spikes, yet in less than two years ran from C$4 to C$160/share. Example: Look at Bre-X Minerals (Alberta:BXM), which did not experience its first 75 degree angle, with huge volume until July 14th, 1995. The next two trading days, BXM went down and stayed around C$12/share for two weeks. The volume had been 60% higher nearly a month earlier, with only a slight price increase. Each high volume and spectacular increase in BXM’s share price was met with a price retreat and leveling off. “Suddenly,” BXM wasn’t trading at C$2/share; it was at C$170/share…. up 8500% in less than a year! In both of the above cases, major Canadian newspapers ran extremely negative stories about both companies, at one time or another. In each instance, just before another share price run up, retail investors fled the stock! Just before both began yet another run up! Successful short-term speculators generally exit any stock run up when the volume soars; amateurs get greedy and buy at those points.

    “RULE NUMBER FIVE:
    THE MARKET MANIPULATOR WILL ALWAYS TRY TO GET YOU TO BUY AT THE HIGHEST, AND SELL AT THE LOWEST PRICE POSSIBLE.”
    Just as the manipulator will use every available means to invite you to “the party,” he will savagely and brutally drive you away from “his stock” when he has fleeced you. The first falsehood you assume is that the stock promoter WANTS you to make a bundle by investing in his company. So begins a string of lies that run for as long as your stomach can take it. You will get the first clue that “you have been had” when the stock stalls at the higher level. Somehow, it ran out of steam and you are not sure why. Well, it ran out of steam because the market manipulator stopped running it up. It’s over inflated and he can’t convince more people to buy. The volume dries up while the share price seems to stall. LOOK AT THE TRADING VOLUME, NOT THE SHARE PRICE! When earlier, there may have been 500,000 shares trading each day for eight out of 12 trading days (as in the case of Software Control Systems), now the volume has slipped to 100,000 shares (or so) daily. There are some buyers there, enough for the manipulator to continue dumping his paper, but only so long as he can enlist one or more individuals/services to bang his drum. He may continue feeding the promo guys a string of “promises” and “good news down the road.” (Believe me, this HAS happened to me!) But, when the news finally arrives, the stock price goes THUD! This is entirely orchestrated.
    “RULE NUMBER SIX:
    IF THIS IS A REAL DEAL, THEN YOU ARE LIKELY TO BE THE LAST PERSON TO BE NOTIFIED OR WILL BE DRIVEN OUT AT THE LOWER
    PRICES.”
    Like Jesse Livermore wrote, “If there’s some easy money lying around, no one is going to force it into your pocket.” The same concept can be more clearly understood by watching the tape. When a market manipulator wants you into his stock, you will hear LOUD noises of stock promotion and hype. If you are “in the loop,” you will be bombarded from many directions. Similarly, if he wants you out of the stock, then there will be orchestrated rumors being circulated, rapid-fired at you again from many directions. Just as good news may come to you in waves, so will bad news. You will see evidence of a VERY sharp drop in the share price with HUGE volume. That is you and your buddies running for the exits. If the deal is really for real, the market manipulator wants to get ALL OF YOUR SHARES or as many as he can… and at the lowest price he can. Whereas before, he wanted you IN his market, so he could dump his shares to you at a higher price, NOW when he sees that this deal IS for real, he wants to pay as little as possible for those same shares… YOUR shares which he wants to you part with, as quickly as possible. The market manipulator will shake you out by DRIVING the price as low as he can. Just as in the “accumulation” stage, he wants to keep everything as quiet as possible so he can snap up as many of the shares for himself, he will NOW turn down, or even turn off, the volume so he can repeat the accumulation phase. In the mining business, there seems to always be another “area play” around the corner. Just as Voisey’s Bay drifted into oblivion, during the fourth quarter of 1995 and early into 1996, the same Voisey Bay “wannabees” began striking deals in Indonesia. Some even used new corporate entities. Same crooks, different shingles. The accumulation phase was TOP SECRET. The noise level was deadingly silent. As soon as the insiders accumulated all their shares, they let YOU in on the secret.
    “RULE NUMBER SEVEN:
    CONVERSELY, YOU WILL OFTEN BE THE LAST TO KNOW WHEN THIS DEAL SHOWS SIGNS OF FAILURE.”
    Twenty-twenty hindsight will often show you that there was a “little stumble” in the share price, just as the “assays were delayed” or the “deal didn’t go through.” Manipulators were peeling off their paper to START the downslide. And ACCELERATE it. The quick slide down makes it improbable for your getting out at more than what you originally paid for the stock… and gives you a better reason for holding onto it “a little longer” in case the price rebounds. Then, the drifting stage begins and fear takes over. And unless you have serves of steel and can afford to wait out the manipulator, you will more than likely end up selling out at a cheap price. For the insider, marketmaker or underwriter is obliged to buy back all of your paper in order to keep his company alive and maintain control of it. The less he has to pay for your paper, the lower his cost will be to commence his stock promotion again… at some future date. Even if his company has no prospects AT ALL, his “shell” of a company has some value (only in that others might want to use that structure so they can run their own stock promotion). So, the manipulator WILL buy back his paper. He just wants to make sure that he pays as little for those shares as possible.
    “RULE NUMBER EIGHT:
    THE MARKET MANIPULATOR WILL COMPEL YOU INTO THE STOCK SO THAT YOU DRIVE UP ITS PRICE SHARES.”
    Placing a Market Order or Pre-Market Order is an amateur’s mistake, typifying the US investor — one who assumes that thinly traded issues are the same as blue chip stocks, to which they are accustomed. A market manipulator (traders included here) can jack up the share price during your market order and bring you back a confirmation at some preposterous level. The Market Manipulator will use the “tape” against you. He will keep buying up his own paper to keep you reaching for a higher price. He will get in line ahead of you to buy all the shares at the current price and force you to pay MORE for those shares. He will tease you and MAKE you reach for the higher price so you “won’t miss out.” Miss out on what? Getting your head chopped off, that’s what! One can avoid market manipulation by not buying during the huge price spikes and abnormal trading volumes, also known as chasing the stock to a higher price.
    “RULE NUMBER NINE:
    THE MARKET MANIPULATOR IS WELL AWARE OF THE EMOTIONS YOU ARE EXPERIENCING DURING A RUN UP AND A COLLAPSE AND WILL PLAY YOUR EMOTIONS LIKE A PIANO.”
    During the run up, you WILL have a rush of greed which compels you to run into the stock. During the collapse, you WILL have a fear that you will lose everything… so you will rush to exit. See how simple it is and how clear a bell it strikes? Don’t think this formula isn’t tattooed inside the mind of every manipulator. The market manipulator will play you on the way up and play you on the way down. If he does it very well, he will make it look like someone else’s fault that you lost money! Promise to fill up your wallet? You’ll rush into the stock. Scare you into losing every penny you have in that stock? You’ll run away screaming with horror! And vow to NEVER, ever speculate in such stocks again. But many of you still do…. The manipulator even knows how to bring you back for yet another play. What actors! No wonder Vancouver is sometimes called “Hollywood North.”

    “FINAL RULE NUMBER TEN:
    A NEW BATCH OF SUCKERS ARE BORN WITH EVERY NEW PLAY.”
    The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one place where the newest amateurs are generally fleeced the most brutally…. usually by those who KNOW the above rules. Just as I have a duty to ensure that each of you understand how this game is played, YOU now have that same duty to guarantee that your fellow speculator understands these rules. Just as I would be a criminal for not making this data known to you, YOU would be just as criminal to keep it a secret. There will always be an unsuspecting, trusting fool whom the rabid dogs will tear to shreds, but it does NOT have to be this way. IF every subscriber made this essay broadly known to his friends, acquaintances and family, and they passed it on to their friends, word of mouth could cause many of these market manipulators to pause. IF this effort were done strenuously by many, then perhaps the financial markets could weed out the crooked manipulators and the promoters could bring us more legitimate plays. The stock markets are a financing tool. The companies BORROW money from you, when you invest or speculate in their companies. They want their share price going higher so they can finance their deal with less dilution of their shares… if they are good guys. But, how would you feel about a friend or family member who kept borrowing money from you and never repaid it? That would be theft, plain and simple. So, a market manipulator is STEALING your money

    Comment by Peter — March 18, 2011 @ 5:00 am

  17. I see alot of companies on the junior board that simply have not managed to match the pace of the commodities they represent.
    It seems that the market charge has largely been led by large and mid tier producers with a few exceptions.

    Most of my portfolio (which is and always will be heavily weighted in juniors) still looks like gold is at 750$ and silver is under 20$.

    I can recall at least a few of the historical corrections being discussed here and in all cases to my recollection, most juniors were overvalued and had been through quite formidable runs making a strong case for their retracement.

    I look at too many deals that are fundamentally undervalued based on commodity prices and this makes me feel quite positive that the canadian markets, with juniors in particular still have a lot left to give investors.

    Any thoughts on this?

    Thanks kindly.

    Comment by Kennedy — March 18, 2011 @ 7:46 am

  18. Peter – thx.. Kennedy – I agree.. I bought 100K worth of stock in Dec 2008… at the high in July, their worth was 1.3 million… imagine being the guy holding that.. it is now worth 430K.. great return… but gold and silver have doubled.. and the relationship with stock is not linear… gold in July 2008 was around 1000… so in theory my portfolio should be 2mill or so.. I concur that we have some ways to go!!:)

    Comment by Jeremy — March 18, 2011 @ 8:50 am

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