"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.

Friday, December 17, 2010

Uh-oh, Ho-ho or Ho-hum? Miss Moly Caroling

Morning Miners!

It is 6:04 AM. There's still some of Scott Raine's delicious Jingle Bell Java in the cupboard so I brewed a fresh pot. Pretty quiet in the ole break room, pour yourself a cup and let's see what's going on in the world...

Uh-oh, Ho-ho or Ho-hum?

Uh-oh, North Korea is threatening to attack South Korea if Seoul goes ahead with plans to test-fire artillery from Yeonpyeong Island. The broader markets are now open, I wonder what this news is doing to our favorite South Korean steelmaker and 20% owner of Mt. Hope? POSCO (PKX) opens the morning at $102.90. The ole Colonel bought some at $102.89 on Wednesday (Buy POSCO?) - I guess I'm up 1 cent, that doesn't seem too scary.

Hmm, here's a bad story in the Wall Street Journal:

LONDON—Moody's Investors Service Inc. downgraded Ireland's debt to Baa1 from Aa2 Friday, warning the government's financial strength could deteriorate further if economic growth were to miss its projections. (WSJ, 12/17/2010)

Let's see if copper is getting whacked on this news. COMEX copper is up $0.031 to $4.147/lb, that's a relief. Here's what the indefatigable metal reporter Maria Kolesnikova has to say from her Bloomberg perch in Moscow:

Copper Gains on EU Debt Accord, Rise in German Business-Confidence Gauge
(Maria Kolesnikova, Bloomberg, Dec 17, 2010 5:34 AM PT)

Gee, things are rosier in Europe after all (maybe). Oh, what about $90/bbl oil stirring about with the Christmas mouse? Here's another tidbit from the Wall Street Journal:

NEW YORK—Oil prices crept lower in thin trading, as market participants sold positions ahead of the year-end holiday season. (WSJ, 12/17/2010)

Nuts, there's nothing to get all tied up in knots about! Even Miss Moly is caroling, European Moly Oxide popped 15 cents yesterday to $16.30/lb. Let's close the shop early buckaroos - where's that Friday Christmas party?

Daily Market Roundup

Enough talk, let's walk the walk:

Eureka Miner's Index(EMI)

The Eureka Miner's Index(EMI) is above-par at 614.62 getting a nice bounce up from yesterday's 555.15. The 1-month moving average is 552.39. The 2010 record high for the EMI is 739.13 set 12/7/2010; the low was set 6/7/2010 at 50.7. An EMI greater than 100 signals better times for the metals & miners relevant to Eureka County, the EMI re-established an upward trend on Friday, 12/3.

200-day averages are used in the EMI to normalize current mining company share price and are updated monthly. Upper and lower trend lines are updated weekly.

Eureka Outlook Dashboard

4-WD is OFF - Markets are stable; The VIX or "fear index" is below 25; bellwether Freeport-McMoRan (FCX) in the low-$100s above its 200-day average of $79.39 (our new warning level, 12/06 update); 10-year Treasurys are safely below 4% preserving a low-interest rate environment.

The GREEN light is turned back on for Commodity Reflation with copper trading comfortably above $3.50/lb

The GREEN light is turned on for Stable Markets with the VIX below the 30 level (what's this?)

The YELLOW light is turned on for Inflation Watch as the Federal Reserve resumes buying Treasurys (aka QE2)

The GREEN light is turned back on for Investor Confidence as investment returns to the equity markets

The YELLOW light is turned on our Fuel Gauge with oil above $80

A ORANGE light is ON for possible adverse regulation/legislation: Mine Safety Violations, Miner's claim fee, Miner taxation, Cortez Hills, mercury emissions , General Moly Mt. Hope Water Rights, U.S. House committee debates miner workplace safety bill

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

Commodity Market Morning Update

NYMEX/COMEX: Oil is up $0.08 in early trading at $88.48 (February contract, most active); Gold is up $1.7 to $1372.7 (February contract, most active); Silver is up $0.173 to $28.995 (March contract, most active); Copper is up $0.0310 to $4.1470 (March contract, most active)

Western Molybdenum Oxide is $16.00; European Molybdenum Oxide is $16.30; LME moly 3-month seller's contract is $15.88, LME cash seller is $15.74

Stock Market Morning Update

The DOW is down 33.68 points to 11,465.57; the S&P 500 is down 2.02 to 1240.85. Miners are mixed and headed for the Christmas party:

Barrick (ABX) $51.071 down 1.08%
Newmont (NEM) $59.40 down 0.83%
US Gold (UXG) $7.19 up 0.56%
General Moly (Eureka Moly, LLC) (GMO) $5.44 down 0.91%
Thompson Creek (TC) $13.43 down 0.89%
Freeport-McMoRan (FCX) $112.81 up 1.23% (a bellwether mining stock spanning copper, gold & molybdenum)

The Steels are up (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $38.26 up 1.27% - global steel producer
POSCO (PKX) $102.78 down 0.13% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.19% to $1,822,923.47 (what's this?).


Colonel Possum

Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market

Headline photograph by Mariana Titus

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