"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Wednesday, January 20, 2010

Hunker Down or Stand and Fight?

Morning Miners!

It is 6:13 AM. The coffee's extra strong this morning, the Colonel is all for a good fight but some days it is just good to hunker down. There are two storms a brewin'; one west of here and the other east. On the weather front checkout the colors on the latest NOAA radar animation. In the markets, spot gold took a trouncing in London dropping more than $20 on further news that China is tightening its economic policy and a new housing report showed new-home construction fell far more than expected in December. Ouch, be right back.

OK, the markets are open in New York and predictably with gold down our poor miners are being taken to the wood shed. Now wait a durn minute! Yesterday the S&P 500 hit a new intraday high at 1150.45, we haven't been at these levels since October, 2008. The VIX or so-called "Fear Index" (what is this?) has been below 20 for the last several weeks and the Report doesn't start turning on warning lights until it breaks 25. This morning it is only a thin flat washer above 19. Buckle up, buckaroos!

Today, the approaching weather is probably more concerning than the fickle markets. From my view, as long as interest rates are low and the VIX is low, there is less resistance for equity and commodity prices to go up than down. I'm betting some folks are taking profits today and like storm fronts, this too shall pass. I say we stand and fight...or at least get ready to shovel snow!

Enough shaking in our boots, let's walk the walk:

4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected to continue (what's this?)

Yellow light is ON for possible adverse regulation/legislation: Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $1.51 in early trading to $77.81 (March contract, most active); Gold is down $18.5 to $1121.5 (February contract, most active); Silver is down $0.510 to $18.290 (March contract); Copper is down $0.0615 to $3.3850 (March contract); Molybdenum is steady at $15.25

The DOW is up 149.56 points to 10575.87; the S&P 500 is down 13.94 points to 1136.29. The miners are hunkered down:

Barrick (ABX) $38.22 down 3.63%
Newmont (NEM) $46.55 down 3.90%
US Gold UXG) $2.53 down 2.32%
General Moly (Eureka Moly, LLC) (GMO) $2.97 down 3.51%
Thompson Creek (TC) $13.95 down 5.49%
Freeport McMoran (FCX) $82.62 down 1.85% (a bellwether mining stock spanning gold, copper & molybdenum)

The Steels are in the same foxhole, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $44.88 down 4.63% - global steel producer
POSCO (PKX) $134.37 down 1.21% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 2.87% to $1,343,646.29(what is this?).


Colonel Possum

Headline Photograph by Mariana Titus

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