The Dow has risen six out of the last nine sessions, and basically it has accomplished nothing. As I write the Dow is still 94 points below its June high and 94 points below the 10355 halfway level of the 50% Principle. In other words, a lot of fluctuation in the Dow signifying nothing.  I continue to believe we’re in a bear market upward correction that is in the agonizingly slow process of topping. Richard Russell Dow Theory Letters

Back 2 Back Reversals for the Stock Market

The market continues to become quicker and fiercer as it move up and down 2+% on a regular basis This week we have seen some wild price swings due to earnings, events and the Fed’s which just makes trading that much more intense.

I have pointed out yesterday that this market only gives you a brief moment to take profits before it starts going wild shaking traders out of positions. This increased volatility is caused from a couple of things:

1.    Traders/Investors know the financial system is still riddled with unethical practices/manipulation. This causes everyone to be extra jumpy/emotional and causes volume surges in the market as the herd starts to get greedy or fearful.
2.    Volume overall on the buying side of things just isn’t there… I see some nice waves of buying but it doesn’t move the market up much… then it only takes a small wave of sellers for the market to drop… Investors are just scared to buy stocks and that is not a good thing…

I keep a close eye on the buying and selling volume for the NYSE as it tends to help pin tops and bottom within a 2-3 day period. In short when we get panic buying meaning 75%+ of volume is from buyers then I know the general public is jumping into the market buying everything up and that’s when the smart money starts to scale out of their position selling to these retail investors. These retail investors are buying on news and excitement much like what we are seeing now with earnings season. Stocks have run up for 5-10 days, as the smart money buys in on anticipation of good news, then the earnings are released which are better than expected and the stocks pop and drop. Well the pop higher on BIG volume are all the retail investors buying and are generally the last ones in. The smart money is quickly selling into this buying surge so they end up getting out at high prices.

My point here is that in general I see 4-6 of these panic buying or selling days a year which I find are tradable. The crazy part is that we have seen 11 of these panic days (both buying and selling) in just 8 weeks… We are seeing more selling than we did at the bottom in 2009! Something big is about to happen and I want to make sure we get a price of it once the moves starts.

Anyways, below is a chart of the SP500 showing how its trading under some key resistance levels. Today the market gapped up testing the 50 day moving average and above the 5 day moving average then sold down very strongly during Ben Bernanke’s speech. This is not a good sign for the overall health of the market.

On the commodities side of things we are not seeing much happening with gold or oil at the moment. Gold is still in a short term down. And gold took an $8 drop today when Ben Bernanke said inflation would remain low for an extended period of time.

As for crude oil, yesterday afternoon I pointed out to members that oil had a big run up on virtually no volume Tuesday and it would most likely give back those gains today. We saw this today with oil dropping from $78 down to 76.50 per barrel. Overall Oil looks like it wants to go higher but has some work to do before that can happen.

Mid-Week Trading Conclusion:
In short, the market remains choppy and we are getting more than normal news/events which are moving the market and this is causing extra noise and volatility for traders. Cash is king during volatile times and if you are doing some trades be sure to keep the positions small for another month or so.

If you would like to receive my detailed trading analysis and alerts be sure to checkout my websites at www.TheGoldAndOiGuy.com or www.FuturesTradingSignals.com

This Excerpt from Mark Leibovit’s VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE

The stock market settled into a trading range yesterday morning following mixed earnings reports, but then fell sharply after Federal Reserve Chairman Ben Bernanke told Congress the U.S. economy is “unusually uncertain.” The Dow fell 109.43 to 10120.53, the S&P dropped 13.89 to 1069.59, and the NASDAQ declined 35.16 to 2187.33. Breadth was negative and volume rose.

Looking at the charts, the S&P was again repelled by the 50 day moving average. Though this market has staged some nice rallies, it has shown a complete inability to break through resistance. At the same time the S&P 500 remains in a braod 1010-1100 trading range and despite my bearish bias, it could theoreitcally go either way.

I remain bearish, but, as you know, have been seeking opportunities to purchase inverse ETFs on rallies. I’ve been a little too cautious short-term because of the possibility of a July/August rally. The market could just as easily nosedive and ignore that cyclic possibility. The ‘safe’ strategy is to remain in cash until we get to 8900 in the Dow Industrials and S&P 500 950 and see if the market can form a more meaningful bottom. If that occurs, I think we would see that result in the fall. Meanwhile, I have no idea what the market is going to do in 2011-2012 and beyond, despite the Mayan warnings. My timeframe is 3 to 6 months at best and I’m grateful if I can succeed there! Market manipulation has never been greater and we have constantly watch our back. With the Dow Industrials swinging in 500 to 1000 points ranges several times since the end of April, I don’t how you can draw any other conclusion. It’s a trader’s market. Period.

Gold was weaker yesterday as the deflation theme continued to gain traction with Fed Chairman Bernanke’s cautious remarks regarding the economy. Gold was off 6.20 at 1186. Silver was off .02 at 17.68, platinum was off 2 at 1513, and palladium was off 5 at 446.

Until volume improves and/or we take out the resistance levels I’ve written about, I’m assuming Gold will trend lower, BUT, WITHIN THE CONTEXT OF ITS HUGE 20-YEAR UP CYCLE.

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE The VR Gold Letter is available to Platinum subscribers for only an additional $20 per month, while for Silver subscribers the price is only an additional $70.00 per month. Prices are going up very shortl, so act now! Separately, the VR Gold Letter retails for $1500 a year! The VR Gold Letter is published WEEKLY. It is 10 to 16 pages jam-packed with commentary and charts. Please call or email us right away. Tel: 928-282-1275. Email: mark.vrtrader@gmail.com

When I was at school in England and about 15 years old I opted to play golf on sports day, in order to get out of playing rugby, and one of my happy memories, apart from using the same sick note forged by a friend about 17 times to get out of sports altogether, is strolling around the golf practice area at school, which happened to be adjacent to a rugby pitch, occasionally whacking a ball idly with a 7 iron while the rugby teams charged around like oxen after an oval shaped ball, play being interrupted occasionally for one of them to be carried off with concussion or a broken ankle or whatever. If this seems like irrelevant rambling bear with me for we are soon going to get to the point.

After taking us through the basics the golf teacher, Mr Furlong, used to drive us to a very good golf course in Bristol, but whatever else he knew, he wasn’t much good at predicting the weather. One afternoon he took us there and it was boiling hot and very humid and hazy. I told him there was going to be a thunderstorm, but he ignored me because I was just a kid so what did I know, and marched us all off a huge distance from the clubhouse to a practice area. The sky grew dark and threatening but no thunder, and I grew exasperated knowing that I was going to get soaked and that we might possibly be struck by lightning, and that he wasn’t going to apologize later for me having to cycle home soaked to the skin. He carried on hitting the silly ball around until there was a massive flash of lightning not more than a mile away and the heavens opened. “I think we’d better go” he said. “Yeah – right” I thought and off we trudged in lashing rain and hail.

I relate this story to you because most market commentators right now are just like that Mr Furlong moments before the storm broke – “Don’t worry, everything is going to be alright, earnings have recovered and companies are paying dividends – the stockmarket has recouped most of its 2008 losses so everything’s back to normal – that drop in 2008 was just an aberration and now everything’s back to normal and its business as usual.” According to our interpretation of the charts if you fall for this spin you are going to get seriously fleeced in short order, and this could also apply to those who listen to the siren calls of those exhorting the virtues of Precious Metals stocks at this time. So let’s make this as clear as possible – if there is another market crash soon as expected, investors are going to do what they always do, which is go into blind panic and toss almost everything overboard, and that can be expected to include gold, silver and PM stocks. Yes, we fully understand that the fiat money system is rapidly approaching its nemesis and that gold is the ultimate safe haven and is set to soar as currencies become worthless, but that won’t help it much short-term during the crash phase, which is likely to result in a heavy reaction in gold back probably to its long-term uptrend support line. Silver will be treated as a base metal and will plunge precipitously as in 2008, which it is now perfectly set up to do. PM stocks will tank and many PM stock investors will be devastated as their cheerleaders slink into the shadows. All of this looks very, very close.

Think I’m joking, or have “lost my marbles”? – it’s time for a little mental exercise then. Take a look at the 2 charts below, one a 2-year chart for the S&P500 index and the other a 3-year chart for the large PM stock XAU index. Having given a Dow Theory bearmarket signal at the turn of the month by dropping to clear new lows, the market has rallied as expected and predicted to alleviate the short-term oversold condition, back up to a target near its falling 50-day moving average. Whilst acknowledging that there is an outside chance of it rising up as far as its January high at about 1150 before turning lower, it looks very close to rolling over to complete the Head-and-Shoulders top shown on the chart, breakdown from which will lead to a severe decline. This rally is therefore regarded as presenting a final chance to get out, and is also viewed as an excellent shorting opportunity. The MINIMUM or rather first downside target is the early 2009 lows below 700, but this time it won’t come back up again, as governments around the world have used up all their options (no pun intended) and blown their credibility to boot. The likes of Bill Gates and Warren Buffett can afford to lose a third or a half of their fortunes on the next plunge like they did the first time round – after all if you are only worth $20 billion compared to $40 billion the year before it doesn’t make much difference to your lifestyle, but most of us can’t afford this kind of complacency. Pensions Funds invested in stocks will be trashed.

Now here’s where you are asked to exert your grey matter a little. Look at these 2 charts, one then the other and ask yourself where you think the XAU index will be if the S&P500 drops to the bottom – or off the bottom of its chart THIS YEAR. Get my point? – it’s not likely to be up is it? The XAU index HAS NOT CONFIRMED GOLD’S BREAKOUT TO NEW HIGHS, NOR HAS SILVER – AND BOTH ARE CLOSE TO FAILING BENEATH MASSIVE RESISTANCE. Watch out for a heavy down day to confirm that the 2008 style crash has started.

Remember all those poor fools who froze like bewildered sheep in 2008 and were then summarily fleeced – that doesn’t have to include you this time round, does it?

Rather than putting your trust in an army of so called “experts” whose unstated mission and objective is to turn you into a bagholder for their masters, you would do well to instead take a look at a rock solid lead indicator like the little followed Baltic Dry index. On our 3-year chart we can see that it started to drop in July and August of 2008 and accelerated into a plunge that preceded the stockmarket crash. It bottomed in December of that year and then rose strongly, thus also presaging the stockmarket recovery that began after it bottomed 3 months later. The Baltic Dry Index has broken down from a top area and has been falling steeply for weeks, so that it has ALREADY DROPPED BY MORE THAN 50% FROM ITS MAY PEAK. What this means is that the second major downwave has already begun, it’s just that the stockmarket doesn’t yet realize it – and you sure don’t want to be around when it does. There’s trouble ahead, big trouble. Why does recent action in the Baltic Dry presage this? – because this index reflects international shipping prices of a range of dry bulk cargoes, and is thus an accurate monitor of the state of the world economy. The message could not be clearer – a severe deflationary contraction lies ahead that is expected to precipitate a stockmarket crash.

The great thing is that you can do more than just protect your interests and watch idly from the sidelines as all hell breaks loose, you can position yourself to reap massive profits from bear ETFs and Puts etc, as set out on www.clivemaund.com as the market plunges – we just have to hope that the markets survive long enough for you to cash in your gains.

From CliveMaund.com Gold, Silver & Energy Updates

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities.

Better Value: Mint Silver Coins Versus “Junk” Silver Coins

“‘Ain’t it purty’ is not a good reason to buy.”

When the U.S. Mint launched the Silver Eagle, their marketers knew exactly which buttons to push to excite collectors/investors.

It’s no wonder that when it launched the Silver Eagle, the Mint copied the A. A. Weinman design for the Walking Liberty half dollar. Millions of those coins were minted between 1916 and 1947 and are still prized by collectors to this day.

It’s no surprise, therefore, that the one-ounce Silver Eagle was an immediate success. It quickly grabbed a large percentage of the legal tender silver coin market from the one-ounce Canadian Maple Leaf and the Australian Kookaburro.

But the success of the Eagle is another example of emotion overruling good investment judgment.

To understand why, let’s compare the one-ounce Silver Eagle to the top contender for the silver heavyweight championship – our old standby, the 90% silver coins that Uncle Sam minted until 1965. These dimes, quarters and half-dollars are known affectionately as “junk” silver. But there’s nothing “junk” about them.

The standard trading unit for “junk” silver is a bag of such coins with a $1,000 face value. Each bag contains 712 ounces of .999 silver. And as the price of silver has increased, so has the price of a bag.

With silver at $18 per ounce, a bag now retails for about $14,000.

This may be more than you wish to spend. Therefore, Asset Strategies International offers smaller quantities, too. You can purchase $100 face-value bags, which contain 71.2 ounces of silver. The premiums for these smaller quantities will be a bit higher, but they’re still less than the premiums for Silver Eagles. The following chart shows the comparison between the two…

Why This “Junk” Can Be Your Treasure

We consider both silver Eagles and “junk” silver as perfect “core holdings” for your precious metals portfolio. They both satisfy the criteria of being well-recognized and are legal tender.

Where they differ dramatically is the cost per ounce of the premium. For silver Eagles, it is common to see a premium of $2.50 per ounce or more. On the other hand, “junk” silver current sells for spot, plus a premium of approximately $1 per ounce. The premium can fluctuate depending on supply and demand, just like the spot price of silver.

So given a choice, which should you purchase for physical possession – silver Eagles or “junk” silver?

It’s clear to me that “junk” silver is the better buy, by as much as $1.50 per ounce.

It’s our job to teach our children and grandchildren the lessons we’ve learned. A $100 bag of “junk” silver would be a great way to start. In fact, I recommend that every family own at least one $1,000 face-value bag of “junk” silver, plus a $100 bag for each child.

What better way to pass on your appreciation of “real money” to the next generation? The coins are pretty to look at, lovely to hold and make a marvelous ringing sound when dropped on a table.

And by the time your children have children of their own, they’re likely to have grown substantially in value, too.

Glen O. Kirsch
Asset Strategies International

P.S. For more information about “junk” silver, please send us an e-mail, or call us at: 800.831.0007. We’ll be happy to answer any questions you may have and have also prepared a “junk” silver fact sheet with more details.sus “Junk”

It’s no wonder that when it launched the Silver Eagle, the Mint copied the A. A. Weinman design for the Walking Liberty half dollar. Millions of those coins were minted between 1916 and 1947 and are still prized by collectors to this day.

It’s no surprise, therefore, that the one-ounce Silver Eagle was an immediate success. It quickly grabbed a large percentage of the legal tender silver coin market from the one-ounce Canadian Maple Leaf and the Australian Kookaburro.

But the success of the Eagle is another example of emotion overruling good investment judgment.

To understand why, let’s compare the one-ounce Silver Eagle to the top contender for the silver heavyweight championship – our old standby, the 90% silver coins that Uncle Sam minted until 1965. These dimes, quarters and half-dollars are known affectionately as “junk” silver. But there’s nothing “junk” about them.

The standard trading unit for “junk” silver is a bag of such coins with a $1,000 face value. Each bag contains 712 ounces of .999 silver. And as the price of silver has increased, so has the price of a bag.

With silver at $18 per ounce, a bag now retails for about $14,000.

This may be more than you wish to spend. Therefore, Asset Strategies International offers smaller quantities, too. You can purchase $100 face-value bags, which contain 71.2 ounces of silver. The premiums for these smaller quantities will be a bit higher, but they’re still less than the premiums for Silver Eagles. The following chart shows the comparison between the two…

Click on Image to Enlarge

Chinese purchases in Canada bullish for Canadian Dollar – David Rosenberg

In the global hunt for mining assets, China has emerged as the buyer to beat: Just a few years after suffering high-profile failures to close big acquisitions, Chinese buyers of all sizes are sealing more sophisticated deals at a higher rate of success.

Companies based in China or Hong Kong participated in $13 billion of outbound mining acquisitions and investments last year—100 times the level in 2005, according to data tracker Dealogic.

China-based companies are on a similar pace in 2010. Last week, Shandong Iron & Steel Group Co. announced a $1.5 billion investment into an African Minerals Ltd. iron-ore project in Sierra Leone, the latest of 76 outbound mining deals announced by China-based buyers so far this year, valued at $8.3 billion, according to Dealogic.

….read more Chinese Firms Snap Up Mining Assets