Global markets rallied today on news that ECB President Mario Draghi stated that the ECB will do everything it can to bolster periphery credit markets. The street took the statement with a fair amount of skepticism but I didn't. Draghi is no EU bureaucrat from Brussels. He's a man of character who means what he says and he won't be bullied; especially by the Germans. The two LTRO's (Long Term Refinancing Operations) he implemented as ECB President prove my thesis. The Germans were not pleased with these operations yet he moved forward with them nonetheless.
It's been two weeks since I posted a full commentary and for all the volatility during that time stocks have managed to stay in a trading range. Everyone was getting excited about Friday's rally and questioning whether it was a turning point for stocks. And while I anticipated Friday's rally any follow thru early next week will largely depend on whether the rumors of a massive Chinese liquidity intervention being announced this weekend are true and whether Mr. Bernanke makes some dovish remarks when he testifies before congress on Tuesday.
Junior Gold Stock, Evolving Gold (TSX: EVG) Makes List of Top Percentage Gainers on TSX
New York, NY - July 13, 2012 (Investorideas.com Newswire) Investor Ideas, www.InvestorIdeas.com, a global investor research portal for independent investors, issues a trading alert for junior gold stock, Evolving Gold (TSX: EVG), trading up at $0.34, gaining 0.08 or (28.30%) as 10:56AM EDT. EVG is one of the top percentage gainers on the TSX in morning trading.
Well, my thesis that, in the absence of any big news stocks would drift lower this week, is coming to fruition. After a slightly down day yesterday, we started out today with a mild rally which quickly turned south. The selling accelerated this afternoon after engine maker Cummins (CMI) gave some terrible future guidance on its business prospects for the rest of the year. Cummins, which had started the day up over a dollar ended the day down almost 9%. All the major averages swooned as a result. Here's a daily chart of the Wilshire 5000, the broadest US stock index:
Gold Stocks; Gold Bullion Development Corp. (TSX-V: GBB) files counter-claim against Genivar Inc.
We just finished one of the most momentous weeks in the market since Ocotber 2008 when it appeared the global financial system looked like it was becoming unglued. We had a landmark decision by the Supremes on Obamacare and we ended up the week with a delirious market reaction to the EU Summit.
This will be an abbreviated commentary and there will be no commentary next week as I take a much needed rest from the ordinary weekend regimen.
I honestly thought the market would drift higher after Monday's sell off but believed that folks would be squaring positions before Thursday. We had a better than expected durable goods report which served to goose the markets. On top of that, housing reports are looking the brightest they've been since 2008 which is fueling the short term optimisim.
Gold and silver have taken more of a back seat over the past 12 months because of their lack of performance after topping out in 2011. Since then prices have been trading sideways/lower with declining volume. The price action is actually very bullish from a technical standpoint. My chart analysis and forward looking forecasts show $3,000ish for gold and $90ish for silver in the next 18-24 months.
Now don’t get too excited yet as there is another point of view to ponder…
Gold Stocks; Gold Bullion (TSX-V: GBB) announces additional positive drill data update
VANCOUVER - June 19, 2012 (Investorideas.com Mining stocks Newswire) - Gold Bullion Development Corp. (TSXV: GBB, OTC PINK: GBBFF) (the "Company" or "Gold Bullion") is pleased to announce additional drill results from several holes located throughout the mineralized area of the Granada Gold Property. The subject property is located along the prolific Cadillac trend in northwestern Quebec , 5 km south of the city of Rouyn-Noranda.