daytrades feb 14 pre-market, page-2

The Weekly Update:

The Scorecard from Friday / The Week
Markets
XJO -33.5 points, Down 0.7% / +18.2 points, +0.4%
DJIA +44.0 points, Up 0.4% / +181.1 points, +1.5%
SPX +7.3 Points, Up 0.6% / +18.3 points, +1.4%
NASDAQ +19.0 points, Up 0.7% / +40.1 points, +1.4%
FTSE +42.9 points, Up 0.7% / +65.5 points, +1.1%
DAX +30.9 points, Up 0.4% / +155.0 points, +2.1%
Hangseng +120.3 points, Up 0.5% / -1080.1 points, -4.5%
Nikkei -12.2 points, Down 0.1% / +74.3 points, +0.7%
Shanghai +9.6 points, Up 0.3% / +28.0 points, +1.0%

Key Commodities
Gold -$6.70 to $1,357.30, Down 0.5%
Silver -$0.30 to $29.92, Up 1.0%
Oil USD -$1.45 to $85.28, Down 1.7%
Copper USD +$0.017/lb to $4.5343/lb, Up 0.4%

Market Direction XJO: The XJO managed a rise of 18.2 points or 0.4% for the week although the market did get as high as 4931.2 points on Wednesday, slightly above the 4925 points where I thought resistance would lie (this was based on the trading channel in the chart below). Following a positive lead from offshore markets on Friday night the XJO looks set to test the 4900 level again this morning. The ensuing scenarios are still similar to last week. Either the market will break out and head to 5,000 points and beyond or there will be a correction starting soon which will see a retrace possibly to around 4,700 points. The slow stochastic has just turned down as has the MACD signal line. The negative divergence between the MACD histogram and the trend in price still remains. My expectation is for a correction in the near term given the increase in the markets over the past three months.


Market Direction DJIA: The US market rallied again last week adding 181.1 points or 1.5% for the week. The chart still concerns me with the MACD histogram divergence versus price still in play. The stochastic, although falling, is still in overbought territory. The US market has had a great run during the past three months, with the DJIA adding nearly 12% over that time and the S&P500 13% so a correction is well overdue in my opinion. Given that the economic recovery has so far failed to extend into the US labour market, I still question just how sustainable the recovery in the stock markets really is. Unless we see the recovery extend into all areas of the economy then I would be really surprised if a top isn't near.

I have spent the past few months trying to identify possible triggers which could send global financial markets into a new crisis. There are several possible scenarios which I will watch out for including the spread of "people power" into other middle east nations (leading to higher oil prices), debt defaults by PIIG or other countries around the globe or a hostile house / senate in the us failing to lift the debt ceiling for the US government (expected to be reached this month) which could see the country grind to a halt. The final likely trigger which I consider possible is a third round of printing money (or QE3) leading to a substantial decline in confidence in the USD and a swift and sharp devaluation in the value of the USD. Whilst this might initially be viewed as a positive for the markets (due to lower outlay for foreigners to buy shares in US companies), the medium to longer term impacts of high inflation and lower living standards for Americans could see social unrest develop on a large scale.



Economic Data:
A big week of economic data beckons across many of the world's large economies with retail sales coming out in the US and the UK and the latest GDP data due out in Japan and Germany. There are indexes of economic activity due out in Germany and the US along with the regular weekly releases. It will all culminate with the G20 meetings which will be held in Paris next weekend, at which there will be speeches by many influential people that could move the markets.

JPY Preliminary GDP q/q - Monday 10:50am
AUD Home Loans m/m - Monday 11:30am
CNY Trade Balance - Tentative
AUD Monetary Policy Meeting Minutes - Monday 11:30am
CNY CPI y/y - Monday 1:00pm
JPY Monetary Policy Statement - Tentative
JPY Overnight Call Rate - Tentative
JPY BOJ Press Conference - Tentative
EUR German Preliminary GDP q/q - Tuesday 6:00pm
GBP CPI y/y - Tuesday 8:30pm
EUR German ZEW Economic Sentiment - Tuesday 9:00pm
USD Retail Sales m/m - Wednesday 12:30am
USD Core Retail Sales m/m - Wednesday 12:30am
USD TIC Long-Term Purchases - Wednesday 1:00am
GBP Claimant Count Change - Wednesday 8:30pm
GBP BOE Inflation Report - Wednesday 9:00pm
GBP BOE Governor King Speaks - Wednesday 9:00pm
USD Building Permits - Thursday 12:30am
USD PPI m/m - Thursday 12:30am
USD FOMC Meeting Minutes - Thursday 6:00am
USD Core CPI m/m - Friday 12:30am
USD Unemployment Claims - Friday 12:30am
USD Fed Chairman Bernanke Testifies - "Testimony on the oversight of Dodd-Frank implementation before the senate banking committee" - Friday 2:00am
USD Philly Fed Manufacturing Index - Friday 2:00am
GBP Retail Sales m/m - Friday 8:30pm
USD Fed Chairman Bernanke Speaks - "Global Imbalances and Financial Stability" - Saturday 12:00am
GBP BOE Governor Speaks - "Global Imbalances and Financial Stability" - Saturday 12:20am
ALL G20 Meetings in Paris - Friday / Saturday



Company Reporting Season:
Monday: Atlas Air, Daiwa Industries Ltd, Fosters Group
Tuesday: Qwest Communications, BHP Billiton, Dell Inc, Westfield Group
Wednesday: Daimler AG, Heineken NV, ING NV, Qantas Airways, Santos Limited, Societe General, Wesfarmers Limited
Thursday: Billabong International Limited, BNP Paribas, Hyatt Hotels Corp, Nestle,
Friday: Bridgestone Corp, Campbell Soup, Eldorado Gold Corp,



Stocks To Watch

Black Range Minerals: BLR/BLRO: The December quarterly for BLR alluded to some potentially significant news which is due in the near term. Firstly the company anticipates finalising definitive agreements for the acquisition of the 51% interest in the 30m lb Hansen Uranium Project which it does not control. Once completed, the resources at this project will form part of a larger pre-feasibility study utilising the resources from Hansen and the 60mlb Taylor Ranch Uranium Project, which is adjacent. News Due: Finalisation of the acquisition of the 51% interest in the Hansen Uranium Deposit which BLR does not own. Plans to progress pre-feasibillity study once acquisition is completed. Approval of mining permit at the Jonesville Coal Project in Alaska which will allow trial mining to commence. News on acquisition of additional uranium projects. Number of Feb 2011 options exercised. Price Target: The stock broke out on Friday on significant volume. The slow stochastic is rising strongly, the MACD has turned up but is yet to cross and the volume is increasing. A break of 6.0 and 6.5 cents would give a target of 7.9 cents. Disclosure: No Stock Held
]


Muting Gold Limited: MYG/MYGO/MYGOA Muting gold remains on my stocks to watch list this week because drilling at the company's Deflector Deposit, which has now been underway for 2 weeks, should ensure that the level of interest increases in coming weeks. I also will not forget that NY firm RB Milestone is now covering MYG, so any positive results may result in an updated release about MYG being released. The target for Deflector is 1.65-2.50m oz of gold and 40-80K tonnes of copper, which is a sizeable resource. News Due: Drilling results from the extension drilling program at the Gullewa Project which contains the Deflector Deposit. Price Target: The chart still shows the pennant is in play and if the breakout is to the upside then the target is 25 cents, however there might be some resistance at the recent high of 20 cents. Disclosure: No Stock Held



Peak Resources: PEK Results announced two weeks ago from the Ngualla Project in Tanzania were outstanding including 64m @ 5.48% REO from surface and 34m @ 7.30% REO from surface. All 13 holes reported intersected more than 1% REO. Further results from another 8 holes are awaited. The next round of drilling will have the goal of progressing to a JORC resource as rapidly as possible. News Due: Results from a further 5 RC and 3 diamond holes are due from drilling at the company's Ngualla Rare Earths Project are due some time in the next 1-3 weeks. Outline of further drilling plans at Ngualla which is scheduled to commence after the wet season ends in late April. Price Target: From Thursday the price began to rise strongly again, most likely in anticipationof the receipt of further drilling results from the Ngualla project. Based on a measured move shown on the chart below the target price for the current move is $1.04 Disclosure: Holding PEK



Silver Mines Limited: SVL/SVLO The quarterly report had some significant intersections of mineralisation from RC holes which hadn't been previously reported including 9m @ 210 g/t Ag and 10m @ 164g/t Ag. The report also reported on the Diamond drilling program which began late last year, the results of which are yet to be reported. All holes to date have intersected visible mineralisation so I would expect some good results from the diamond drilling when results are announced which is scheduled to be soon. The level of interest in the stock should also increase in coming weeks in the lead up to the commencement of a 12,000m RC drilling program. Once the program is underway a continuous stream of results should come from the company. News Due: Results from diamond drilling at the Webb's Silver Project, most of which are scissor holes which will primarily be used to confirm existing mineralization thereby increasing the confidence in the existing resource and to provide samples for metallurgical test work. The commencement of the 2011 drilling program, which will involve 12,000m in RC holes, 8,000m of which will be centred on the Webb's project. Price Target: The share price looks like it is set to break out from a four month consolidation period. Volume picked up during the second half of last week with the slow stochastic rising and the MACD crossing. There has been positive divergence between the MACD histogram and the price which began from the second half of December. The breakout level is a close above 25 cents with an initial target of 30-32 cents to be followed by new all time highs and possibly heading for 44.5 cents based on a similar measured move compared to the last uptrend. Disclosure: Holding SVL/SVLO



Good Luck this week everybody.