A "New Normal" for Metals & Miners?

Morning Miners!

It is 6:00 AM sharp. Grab a cup of Monday-got-here-faster-than-the-World-Cup-ended java and let's get to work. The World Cup reminds us of how many players there are in the world, not only in the popular sport of soccer but in the commodities that influence our local economy. We'll look at two examples this morning then contemplate a little global philosophy for these markets.

Before we start, please note that we have a Eureka Miner's Index (EMI) update to your right. The EMI gives us the market temperature for the sectors that have the greatest impact on mining in Eureka County. You can read more about this index by clicking on the small chart icon. Last week the EMI ended above par at 111.3 (an EMI greater than 100 is good for the metals& miners). We could have some pullback today as investors await aluminum giant Alcoa's (AA) quarterly report at the close.


(a larger, more readable chart is near the bottom of this blog page)

Alcoa is the first company in the Dow Jones Industrial Average to report last quarter's earnings and expectations for the new quarter and beyond. It is important to this Report because it is also the first metal producer at bat and gives us an important data point on global growth. This Bloomberg article summarizes current expectations:

Alcoa Earnings Won’t Recover for Years, Analysts Say (Edmond Lococo, Bloomberg News, 7/12/2010)

Alcoa faces some unique challenges: aluminum prices have declined 40 percent since reaching a record on July 14, 2008 and they have idled 20 percent of their aluminum-smelting capacity because of excess global production and soaring inventories. More than one-half of their 2009 sales were in the U.S. so Alcoa is pulled by both domestic and global forces. The expectation is a report of sluggish growth for the former and improving prospects for the latter.

Another important piece of the global story was reported by Bloomberg last Friday:

Commodity Shipping Slumps for Longest in 9 Years on China Steel (Alaric Nightingale, Bloomberg News, 7/9/2010)

The decline in Chinese steel prices has diminished the nation’s iron ore demand which creates the single-biggest source of demand for dry-bulk shipping. Investors therefore monitor the Baltic Dry Index, a measure of commodity shipping costs, to gauge the robustness of steel and other commodity sensitive industries. It has fallen for the longest period in almost nine years.

The markets are now open and the Eureka Miner's Grubstake Portfolio is down but not by much (0.69%) and the Eureka Miner's Index is 110.6 just slightly below Friday's 111.3.

Two samples of scary headlines followed by only a measured reaction from the companies we follow. Predictably, our poorest performers this morning are related to the steel industry (POSCO, Arcelor-Mittal, Thompson Creek and General Moly) and falling copper prices (Freeport-McMoran). But the declines are not pronounced and could easily reverse on slightly less gloomy news from Alcoa this afternoon.

We are operating in a "new normal" as PIMCO CEO, Mohamed El-Erian, accurately coined the expression last year. The metals and miners are adjusting to slower domestic and global growth as the western world unwinds a massive debt load. Their stocks and products are being slowly "repriced" to reflect this new reality and seemingly bad news has less affect on both now that expectations are being lowered across the board. The headline of a major European bank failure or the collapse of some segment of the Chinese economy would no doubt bring a severe correction in these markets but lacking that the ole Colonel expects that we will witness bounded up-and-down adjustments for some long time to come. Price discovery is the work of stable markets and they are busily doing that now that the fear we experienced in May-June is slowly receding from the marketplace.

That's our philosophical thought for the morning as we enter earnings season. Stay tuned buckaroos and keep an eye on the EMI!

Weekly Molybdenum Update

Molybdenum prices continued to remain in a trading range with Western moly oxide price sitting above European moly and LME futures seller contracts. The Report adjusted a new mid-range price target for 2010 moly prices of $15.71/lb (see note 1); the old target was $16.50/lb.

Western Moly Oxide (FeMo65) remains at $16.00/lb (the price reported by Infomine and tracked by Base Metals on the General Moly Website)

Moly Oxide, Europe (Mo Drummed Molydbic Oxide EU) moves down to 14.00/lb (the price reported in the Metals Bulletin)

LME Futures Contracts

LME cash seller is at $31,500/metric ton $14.29/lb

3-Month (Buyer) $30,000/metric ton $13.61/lb
3-Month (Seller) $32,000/metric ton $14.52/lb

15-Month (Buyer) $30,000/metric ton $13.61/lb
15-Month (Seller)$32,000/metric ton $14.52/lb

Here is a chart of the LME 3-month contract (seller) from the February launch to the present:


Enough talk, let's walk the walk:

Our newly minted Eureka Miner's Index (EMI - what's this?) is above-par at 110.6, down slightly from Friday's 111.3 and a big improvement from the 6/7/10 low of 50.7. Remember an EMI greater than 100 is good times for metals & miners.

4-WD is ON - rough but improving roads in the marketplace; The VIX or "fear index" is slightly below 25; metals & miners remain on shaky timber with benchmark FCX trading in the the mid-$60s well below its 200-day average of $76 (our new warning level), 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 above $3/lb

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

The YELLOW light is on Investor Confidence as further market corrections are probable but less likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: (problems with the WSJ commodity link preclude reporting delta prices this morning; COMEX silver price is an estimate from COMEX gold multiplied by the LME Au:Ag ratio for this afternoon's trading):

Oil is $75.83 (August contract, most active); Gold is $1204.7 (August contract, most active); Silver is $17.990 (estimate); Copper is $3.0120 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.00; LME moly 3-month seller's contract is $14.52, LME cash seller is $14.29

The DOW is up 5.71 points to 10,203.74; the S&P 500 is up 0.36 to 1078.32. The miners are mixed:

Barrick (ABX) $44.09 up 1.19%
Newmont (NEM) $62.16 up 0.37%
US Gold (UXG) $4.88 down 0.41%
General Moly (Eureka Moly, LLC) (GMO) $3.19 down 1.85%
Thompson Creek (TC) $9.74 down 1.62%
Freeport-McMoRan (FCX) $64.01 down 2.99% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $29.71 down 1.82% - global steel producer
POSCO (PKX) $103.84 down 2.04% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.69% to $1,375,644.92 (what's this?).

Cheers,

Colonel Possum

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

Note 1: The Colonel hasn't developed a molybdenum price model to date since this minor metal is thinly traded. As the futures market matures and more investors are involved it may make sense to do so later on. Presently molybdenum trades on fundamentals in a tight supply condition. It's relative price stability is good for producers like Thompson Creek (TC) and encouraging for General Moly (GMO) as they enter Mt. Hope mine construction next year.

For a trading range of $30,000-$40,000/metric ton is is instructive to look at both the arithmetic and geometric means (since we have no model):

Arithmetic mean (i.e standard average) = $35,000/metric ton or $15.88/lb
Geometric mean = $34,641/metric ton or $15.71

I tend to favor the geometric mean in understanding the "middle" of trading ranges so let's choose $15.71 as a measure of where we are in the moly pricing world. I'll give moly prices a "GREEN" light on the Eureka Outlook Dashboard if Western moly oxide is above this number; "YELLOW" if it falls below (our old trigger level was $16.50/lb).

Headline photograph by Mariana Titus

The Sun Shines on Molybdenum & General Moly (GMO)

Morning Miners!

It is 5:55 AM. Scott took back his double-dip TGIF coffee and restocked the break room with good ole Red Label. Have a cup and let's close this week on a high note. Gold got a nice bounce above $1208/oz on euro weakness and our miners should have a good day as fear slowly recedes from the marketplace. We'll check on them in a moment but I can't wait to tell you a great molybdenum story, that versatile transition metal that lives just 21 miles north of town in General Moly's Mt. Hope.


This Report's favorite London correspondent, Claudia Carpenter of Bloomberg News, e-mailed the ole Colonel a lead late last night (early her time) on the progress of a growing alternative energy application for Miss Moly. Here is a Bloomberg article by her colleagues down under:

Molybdenum, Silver Link Near 12-Year High From Solar Panels: Chart of Day (By Lee J. Miller and Rebecca Keenan, Bloomberg News, 7/7/2010)

Molybdenum is used in in thin-film CIGS (Copper, Indium, Gallium, and Selenium) based solar cells which promise a real cost advantage over other competing technologies. As shown in this diagram, a thin layer of molybdenum (Mo) lies above the cell substrate and serves as an electrode on which the the CIGS layer is deposited:


The thin-film in CIGS solar cells are minuscule — angstroms to microns thick. More common silicon solar cells use a wafer of silicon that is a 10 story building in thickness compared to these thin films. The potential to dramatically reduce the cost of manufacturing with a high production yield is explained in this 2008 article from Renewable Energy World:

Why Thin-Film CIGS Solar Cells Are Poised for Big Growth (Greg Howard, Renewable Energy World, 1/7/2008)

The recent Bloomberg story reports much progress has already been made. They quote Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne:

"The solar panel market is particularly strong at the moment, and there's been an uplift for both silver and molybdenum demand for panels...I see this strong correlation continuing, and I think it will tighten up going forward."

These observations are supported by another article published in May of this year from the International Business Times:

New Markets for Molybdenum (Michael Montgomery, International Business Times, 5/5/2010)

In this piece, Anthony David, for Critical Strategic Metals, reiterates the potential advantages of this application:

"Molybdenum is also being utilized prominently in thin-film CIGS solar panels which are expected to be substantially less expensive than traditional solar cells due to their much lower material and potentially lower fabrication costs..."

A persistent theme of this Report is the importance of Northern Nevada's strategic metals (e.g. molybdenum, rhenium, vanadium, lithium) to the emerging alternative energy industry. Molybdenum use in solar panels is one of many examples. Here is a summary of Eureka Miner articles on this exciting story that may greatly benefit our future:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

More News on US Gold & Western Lithium (The Eureka Miner's Market Report, 01/12/2010)

A Third Tank on Our Hill? Lithium & Vanadium Updatee (The Eureka Miner's Market Report, 03/22/2010)

Rhenium - Will the Sun Shine on One of Earth's Rarest Elements? (The Eureka Miner's Market Report, 4/29/2010)

Is There Rhenium in Them Thar Hills? (The Eureka Miner's Market Report, 05/11/2010)

Enough talk, let's walk the walk:

Our newly minted Eureka Miner's Index (EMI - what's this?) remains just sub-par at 99.67, up from yesterday's 89.33 and a big improvement from the 6/7/10 low of 50.7. Remember an EMI greater than 100 is good times for metals & miners.

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" is above 25; metals & miners remain on shaky timber with benchmark FCX trading in the the mid-$60s well below its 200-day average of $76 (our new warning level), 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 above $3/lb

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

The YELLOW light is on Investor Confidence as further market corrections are probable but less likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: Oil is up $0.04 in early trading to $75.48 (August contract, most active); Gold is up $12.3 to $1208.4 (August contract, most active); Silver is up $0.208 to $18.080 (July contract, most active); Copper is up $0.0240 to $3.0395 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.00; LME moly 3-month seller's contract is $14.97, LME cash seller is $14.74

The DOW is down 8.25 points to 10,030.74; the S&P 500 is down 1.34 to 1068.91. The miners are having a good day:

Barrick (ABX) $43.63 up 2.47%
Newmont (NEM) $61.69 up 2.24%
US Gold (UXG) $4.86 down 1.46%
General Moly (Eureka Moly, LLC) (GMO) $3.13 up 0.32%
Thompson Creek (TC) $9.37 up 0.64%
Freeport-McMoRan (FCX) $64.00 up 1.33% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $29.63 down 0.24% - global steel producer
POSCO (PKX) $105.45 up 1.74% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 1.04% to $1,366,956.21 (what's this?).

Cheers,

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
CIGS Solar Cell Diagram - The International NanoScience Community (Sanjay)
Solar Panel Array - UberReview

The Colonel's Oil & Metal Roundup for July - General Moly Good News

Morning Miners!

It is 6:00 AM sharp. Have a cup of Thor's Double-Thunder java and let's chase the double-dip demons out of the break room once and for all. There have been so many negative economic headlines lately that it's high time to ask the metals what they think. The ole Colonel has avoided metallic prognostication for the past two months given high market volatility and a constant Cassandra chorus of doom from the media talking heads.


Doug Kass, a legendary market bear, called a bottom this week on the broader markets and is buying stocks. Why has this grizzly joined the petting zoo? By his account the markets are way oversold on headline news of gloom and doom. To his credit, Kass nailed the S&P 500 bottom last year at the Devil's Triple-Six (S&P 500 intraday bottom was 666.79 on March 6/09) so I tend to listen when he speaks. Kass wisely reminds us that markets are not economies and repeated the adage that "Wall Street is paved by geniuses that were right once." I don't expect that he will be part of the Manhattan pavement anytime soon.

Yesterday we took a tour of the Colonel's charts (Gold Hits 6-Week Low - What's Going On?) and discovered that oil and copper futures have been in an inverted state when compared to gold over the last three months of data. This means that (on average) oil and copper have trended lower as gold has risen higher. A persistent level of fear in the marketplace has driven investors to gold and put downward pressure on these two important commodities of global growth. The good news is that both inversions have peaked and it appears that oil and copper are re-establishing their normal positive correlation with gold even though gold prices have retreated from their recent highs.

When making predictions on oil and copper prices, this Report typically chooses a nominal price for gold for the month then determines the fair value and range from each of these commodity models. Because the oil/gold and copper/gold models are inverted and in flux, I believe it makes more sense to choose a nominal price for both gold and oil and predict copper price from the latter. Copper and oil have both been traveling down the mineshaft hand-in-hand for May-June as we saw in yesterday's chart (the yellow wiggly line shows current price movement, see note 1):



(A larger, more readable chart can be found at the bottom of this blog page)

I'll stick my neck out and say that NYMEX oil will not plunge into the $60/bbl territory this month as claimed by some bearish commentators but will bounce around $75/bbl on improving global growth news. For a nominal oil price of $75 here is my copper price prediction for July:

The July fair value of copper is $3.0531 in a range of $2.7718 to $3.3341

This morning the COMEX copper September contract (most active) is $3.0455 just below fair value, a positive sign for metals & miners since $3/lb is a key level for this Report.

Picking a nominal for gold is a bit more dicey given the recent downward pressures. Jim Wyckoff, whose analysis this Report greatly admires, gave us his thoughts on gold price yesterday afternoon:

P.M. Kitco Metals Roundup: Comex Gold Ends Higher as Bargain Hunters Step in to Buy Price Weakness (Kitco News, 7/7/2010)

Based on his thoughts and a little horse sense, the ole Colonel is going to fix a nominal price for July's COMEX gold of $1195/oz. Since silver has remained positively correlated with gold through May-June, I feel fairly comfortable with predicting silver price from my model of silver/gold:

The July fair value of silver is $18.340 in a range of $17.464 to $19.217



This morning the COMEX silver and gold September contracts (most active) are $18.045/oz and 1200.5/oz respectively. It makes sense that silver is presently undervalued with respect to gold because we have been experiencing higher than usual gold/silver ratios (Au:Ag ratio). This can be explained by the heightened level of fear in the marketplace since silver has a broader industrial use than gold and is therefore a precious metal more sensitive to bad economic news. As fear recedes from the markets, silver price should rise relative to gold for a lower Au:Ag ratio.

Another way to say this is to expect silver to regain her more typical greater-than-unity "beta" . Here's a simple way to think of a metal's "beta" with respect to a reference metal such as gold. If beta = 1.0, a 1% move in gold should produce (on average) a 1% move in silver. For beta = 2.0, a 1% move in gold gives a 2% change in silver. If beta is greater than 1.0, we say silver is "high- beta" and ready trot; if less than 1.0, silver is "low-beta" and headed back to the barn. The 3-month beta for silver has been a dismal 0.51 (as of 6/30/10); expect an increase.

Molybdenum prices have stabilized in a fairly narrow range throughout this whole May-June fear cycle. In fact since the LME molybenum futures kicked of in February of this year the 3-month seller contract has remained within $30,000-$40,000/metric ton ($13.61-$18.14/lb) except for a brief exuberant bounce in the first week of trading.



The Colonel hasn't developed a molybdenum price model to date since this minor metal is thinly traded. As the futures market matures and more investors are involved it may make sense to do so in the future. Presently molybdenum trades on fundamentals in a tight supply condition. It's relative price stability is good for producers like Thompson Creek (TC) and encouraging for General Moly (GMO) as they enter Mt. Hope mine construction next year.

For a trading range of $30,000-$40,000/metric ton is is instructive to look at both the arithmetic and geometric means (since we have no model):

Arithmetic mean (i.e standard average) = $35,000/metric ton or $15.88/lb
Geometric mean = $34,641/metric ton or $15.71

I tend to favor the geometric mean in understanding the "middle" of trading ranges so let's choose $15.71 as a measure of where we are in the moly pricing world. I'll give moly prices a "GREEN" light on the Eureka Outlook Dashboard if Western moly oxide is above this number; "YELLOW" if it falls below (our old trigger level was $16.50/lb).

Another bit of good local news for General Moly and subsidiary, Eureka Moly LLC, was announced yesterday:

EUREKA MOLY, LLC RELEASES EUREKA CANYON SUBDIVISION LEASE TO ALLOW FOR MORE RAPID HOUSING DEVELOPMENT (7/7/2010)


This is a rather creative solution to a critical housing shortage in our town. In the words of our Commissioner Chairman, Lenny Fiorenzi:

"We are very pleased with the support we have received from Eureka Moly and we acknowledge the $5 million it has spent at the site to date; it will make housing more affordable for homebuyers. It's a win-win-win for the County, the mine, and the housing authority."

and...

"By involving Nevada Rural Housing Authority we open doors to federal loans and grants for housing, and bring home buyer financing to Eureka. When the development makes a profit, that money goes back into the community for development of the town's choosing. This will become a true economic development project for us."

On that thought, let's walk the walk:

Our newly minted Eureka Miner's Index (EMI - what's this?) remains sub-par at 89.33 but up from yesterday's 83.31 and a big improvement from the 6/7/10 low of 50.7. Remember an EMI greater than 100 is good times for metals & miners.

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" is above 25; metals & miners remain on shaky timber with benchmark FCX trading in the the low-$60s well below its 200-day average of $76 (our new warning level), 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 above $3/lb

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

The YELLOW light is on Investor Confidence as further market corrections are probable but less likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: Oil is up $0.97 in early trading to $72.95 (August contract, most active); Gold is down $1.5 to $1193.6 (August contract, most active); Silver is down $0.042 to $17.815 (July contract, most active); Copper is up $0.0220 to $2.9930 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.00; LME moly 3-month seller's contract is $14.97, LME cash seller is $14.74

The DOW is up 39.43 points to 10,057.71; the S&P 500 is up 1.68 to 1061.95. The miners are up except for the gold diggers:

Barrick (ABX) $42.73 down 2.61%
Newmont (NEM) $58.86 down 1.88%
US Gold (UXG) $4.71 down 1.05%
General Moly (Eureka Moly, LLC) (GMO) $3.21 up 0.94%
Thompson Creek (TC) $9.17 up 0.33%
Freeport-McMoRan (FCX) $62.81 down 0.24% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $29.32 up 0.83% - global steel producer
POSCO (PKX) $102.80 up 1.64% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.27% to $1,343,622.48 (what's this?).

Cheers,

Colonel Possum

Note 1: the Colonel's charts are a scatter plot of recent NYMEX/COMEX futures prices (last 3 months) for a commodity (e.g. copper) versus a reference commodity (e.g. gold). The models are updated every month (magenta line) for each commodity pair. The aqua lines show a statistical boundary for current price variations (dark wiggly line) from the model. The most recent prices (last 20 days) are the yellow wiggly line. The blue line is a 20-day moving average of these commodity prices.

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

Gold Hits 6-Week Low - What's Going On?

Morning Miners!

It is 6:10 AM. Have a cup of hump-day-sure-got-here-quick java and let's get to work. London spot gold hit a six-week low this morning at $1184.20/oz and some of you may be wondering what has taken some of the glitter off our pan dust lately. There are at least three explanations for this decline and my favorite is the liquidation theory.

For many months there has been a bet against the euro and an upsurge in gold investment. As the euro now grows stronger, many global investors are dumping gold in favor of a U.S. Treasury safe haven causing the 10-year note to stay in sub-3% yield territory. Not to worry, there is a chorus of euro-doubters that predict that the Euro-zone's embattled currency will resume its downhill march to parity with the U.S. dollar. This is a gold bullish group; currency instability is typically good for gold.

Another theory is macro-economic. Some of the steam is coming off global growth now that countries are throwing fewer stimulus logs in the boiler which may lead to a period of disinflation (disinflation is a slowing rate of inflation). If this continues for too long, inflation becomes deflation and we may really be in the soup (or soup line). Disinflation is usually bearish for gold and commodities; deflation is historically supportive of gold but may portend the end of the world - at least in the eyes of gold bugs. Gold bugs are a curious lot, I often wonder what they will do with all their gold as they feverishly celebrate the arrival of Armageddon.

Finally, gold may be coming down because it is summer, the least lustrous period for our lustrous friend. This argument, although historically correct, seems a little weak to me. With all the central bank and safe haven investors in the gold market these days does the gold-buying cycle in in big consumer nations like India really have the impact on gold price that it once did?

Whatever theory you prefer it appears that commodities are in a rough patch. Whether this is just summer road repair on the highway to global recovery or a detour to a county road that leads us to double-dip recession (or worse) is at the center of heated debate. Being an optimist, I prefer to wait for the road crew ahead to flag us on to smoother roadways - we may be waiting for here awhile but hopefully not directed to a double-dipper detour. Too early to tell buckaroos.

One thing for sure is the carnage we've experienced to date in commodities important to local mining. I thought I'd share a few of my charts with you to illustrate how the ole Colonel reads the tea leaves in these markets.

Each chart below is a scatter plot of recent NYMEX/COMEX futures prices (last 3 months) for a commodity (e.g. copper) versus a reference commodity (e.g. gold). I update my model every month (magenta line) for each commodity pair. The aqua lines show a statistical boundary for current price variations (dark wiggly line) from the model. The most recent prices (last 20 days) are the yellow wiggly line. The blue line is a 20-day moving average of these commodity prices.

Let's start with COMEX copper versus COMEX gold (a larger, more readable chart appears at the bottom of this blog page):


The first thing to note is that the above lines move from the upper left to the lower right of the chart. This is called an "inversion" where the price of copper has (on average) been in decline as gold price has increased over the last three months. The most recent copper prices (yellow) are at the bottom right-hand corner struggling to get above the key $3/lb level. More typically, copper and gold move together and the lines would go from the lower left to the upper right. This is the case for COMEX copper when compared to NYMEX oil:


I call this the "China Chart" because oil and copper prices are heavily influenced by Chinese demand for these commodities. You'll remember this is the reason copper and oil are included in the Eureka Miner's Index (EMI - what's this?). Again we see both copper and oil prices are in decline with the recent prices lying in the lower left corner. The plot of NYMEX oil versus COMEX gold is similar to our first; oil and gold are experiencing inversion - almost never a good sign for markets.


Finally, here is a chart of COMEX silver versus COMEX gold:


Silver nearly always tracks gold but in rougher times the ratio of gold to silver (Au:AG ratio) increases. On this chart, an increasing Au:Ag ratio causes the slope of the model lines to "flatten". This means that a change in gold price does not yield as large a change in silver price as we more typically expect when the slopes are steep and commodities are on a roll.

Ideally we would like to see all four charts without inversion and with nice steep slopes (i.e. small changes in the reference commodity yielding large changes in the commodity of interest). The one possible exception is oil versus gold unless you are an oil trader. For that case, a moderate slope is the best for gold miners so that the cost of oil doesn't outpace the price increase of their product.

Thanks for taking a quick tour with me of my world. The good news is that oil/gold and copper/gold inversions have peaked and are now diminishing. A return to positive slopes for both may mean the flagman will wave us ahead in the coming months for smoother travel.

Enough talk, let's walk the walk:

Our newly minted Eureka Miner's Index (EMI - what's this?) is sub-par at 83.31; at bit down from yesterday's 84.75 and but a big improvement from the 6/7/10 low of 50.7. Remember an EMI greater than 100 is good times for metals & miners.

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" is above 25; metals & miners remain on shaky timber with benchmark FCX trading in the the low-$60s well below its 200-day average of $76 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment

The YELLOW light is turned back on for Commodity Reflation with copper trading slightly below $3/lb

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

The YELLOW light is turned back on for Investor Confidence as further market corrections are likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: Oil is up $0.97 in early trading to $72.95 (August contract, most active); Gold is down $1.5 to $1193.6 (August contract, most active); Silver is down $0.042 to $17.815 (July contract, most active); Copper is up $0.0220 to $2.9930 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.50; LME moly 3-month seller's contract is $14.97, LME cash seller is $14.74

The DOW is up 86.51 points to 9,830.13; the S&P 500 is up 10.97 to 1039.03. The miners are up except for the senior gold diggers:

Barrick (ABX) $42.97 down 0.02%
Newmont (NEM) $58.57 down 0.09%
US Gold (UXG) $4.50 up 0.45%
General Moly (Eureka Moly, LLC) (GMO) $3.01 up 1.28%
Thompson Creek (TC) $8.81 up 0.57%
Freeport-McMoRan (FCX) $60.68 up 2.52% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $28.25 up 0.46% - global steel producer
POSCO (PKX) $98.88 up 0.59% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.61% to $1,304,605.30 (what's this?).

Cheers,

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

The Death Cross & Armchairs - Freeport & Thompson Creek

Morning Miners!

It is 5:50AM. Have a hot cup of sure-feels-like-Monday coffee. I hope you had a good Fourth and the ole Colonel can't wait to show you his latest addition to the break room. Let's step into the shop for a minute - there she is...ain't she a 'beaut. "What the heck is that, you say?" Why this is our very own market forecaster armchair.

Over the weekend I got a good deal on a La-Z-Boy recliner up in Battle Mountain. Eric helped me outfit it with the rear view mirrors from his old Pete and John donated the windshield from one of his retired chevys. Now we can see where we're going and where we've been. Let's see if we can apply a little armchair wisdom to the metals & miners.

Looking in the rear view mirror we see a troubling sign. The journalist of business news programs were all in a stir Friday that the S&P 500 had crossed the dreaded "death cross" signaling that we were headed for even worse times in the broader markets. The so-called death cross is a technical condition when the 50-day price average crosses below the 200-day average; a bearish indicator that says near term performance is in decline with respect to a longer term trend. Before you run for the exits, let's try and understand what this really means. First of all, these averages are in "market days", roughly five days to a week less an occasional holiday. So, 50 days really represents 10 calendar weeks and 200-days, 40 calendar weeks putting us somewhere around last October.

The second part to grasp is the average itself. If you slow down form 60 mph to stop at a light, your average speed is 30 mph. Unless you ran the light, your present speed is zero; if it took you 30 seconds to stop, your 30 mph average speed occurred at one-half the averaging time or 15 seconds ago. By this logic, hitting the "death cross" Friday really tells us something about the markets five weeks ago (i.e. 50/2 = 25 market days or 5 weeks, see note 1). Market averages are a look in the rear view mirror, pardner.

Rear view mirrors are great for historians but the rest of us need to look out the windshield occasionally or we're going to going to crash. I believe a predictive measure like the Eureka Miner's Index (EMI - what's this?) should be used in combination with backward looking averages to achieve a balanced view of where we're headed in the marketplace.

How is the EMI predictive? First of all it uses present, not past data to provide a daily assessment of where we are. Secondly, bellwether miner Freeport-McMoran (FCX) and benchmark moly miner Thompson Creek (TC) used in the EMI have a solid track record of sensing upcoming trends in the metals & miners. Remember that Freeport and Thompson Creek rolled over in early April while copper prices and the broader markets were still rising. Copper topped out 4/12 (COMEX $3.6910, July contract) and the S&P 500 hit its high 4/26 followed by significant declines in both for a miserable May and June. Interestingly, Freeport and Thompson Creek hit their "death crosses" long before the S&P 500, on 2/24/2010 (FCX = $75.99) and 5/25/2010 (TC = $12.55) respectively.

Both FCX and TC are highly correlated with the FXI, an index that is designed to represent the performance of the mainland China equity market and is available to international investors. The tight relation is no surprise because their products (copper and molybdenum for FCX and molybdenum for TC) have seen significant demand growth in China in the recent past. Although often maligned for their volatility and government control, the Chinese stock markets have predicted declines in our domestic markets with regular accuracy. Here is a chart of the FXI (black) and the S&P 500 (orange) for the past year:


Notice how the FXI has anticipated the winter and spring declines in our own markets ending up only a few percent above its level one-year ago. The S&P 500 has fared better up some 13% but down considerably from its April high. What's next? There were some bullish talking heads Friday that claimed recovery from the "death cross" (i.e. 50-day average rises above the 200-day) was historically six months. I'm always skeptical of these ballpark numbers and did some checking of my own. I didn't have to dig back too far to dispute this claim:

Death Cross & Resurrection for the S&P 500

7/18/2006 to 9/6/2006 1.6 months
12/21/2007 to 6/19/2009 18 months
7/2/2010 to ????

Phooey on death crosses! Let's spend the rest of this short week looking out our armchair windshield and less time worrying about what's behind us. Looks like we're having a good day today with copper back over $3 with the steelmakers on a roll - Yee-ha!

Before we go let's check on our ever courageous Miss Moly and last week's EMI...

Molybdenum Weekly Summary

Molybdenum prices remain in a trading range with Western moly oxide price sitting above above European moly and LME futures seller contracts.

Western Moly Oxide (FeMo65) remains at $16.00/lb (the price reported by Infomine and tracked by Base Metals on the General Moly Website)

Moly Oxide, Europe (Mo Drummed Molydbic Oxide EU) moves down to 14.30/lb (the price reported in the Metals Bulletin)

LME Futures Contracts

LME cash seller is at $32,500/metric ton $14.74/lb

3-Month (Buyer) $31,000/metric ton $14.06/lb
3-Month (Seller) $33,000/metric ton $14.97/lb

15-Month (Buyer) $31,000/metric ton $14.06/lb
15-Month (Seller)$33,000/metric ton $14.97/lb

Here is a chart of the LME 3-month contract (seller) from the February launch to the present:



Last week's Eureka Miner's Index (a larger, more readable chart is near the bottom of this blog page):


Enough talk, let's walk the walk:

Our newly minted Eureka Miner's Index (EMI - what's this?) is sub-par at 84.75; but well up from Friday's 72.67 and the 6/7/10 low of 50.7. Remember an EMI greater than 100 is good times for metals & miners.

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" is above 25; metals & miners remain on shaky timber with benchmark FCX trading in the the low-$60s well below its 200-day average of $76 (our new warning level), 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 above $3/lb

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

The YELLOW light is turned back on for Investor Confidence as further market corrections are likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: Oil is up $0.94 in early trading to $73.08 (August contract, most active); Gold is down $5.0 to $1202.7 (August contract, most active); Silver is up $0.146 to $17.865 (July contract, most active); Copper is up $0.0940 to $3.0100 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.50; LME moly 3-month seller's contract is $14.97, LME cash seller is $14.74

The DOW is up 156.74 points to 9,843.22; the S&P 500 is up 18.01 to 1040.59. The miners are up except for the gold diggers:

Barrick (ABX) $43.06 down 0.42%
Newmont (NEM) $58.52 down 0.41%
US Gold (UXG) $4.60 down 0.65%
General Moly (Eureka Moly, LLC) (GMO) $3.15 up 2.94%
Thompson Creek (TC) $8.92 up 1.25%
Freeport-McMoRan (FCX) $61.30 up 4.71% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $28.57 up 4.61% - global steel producer
POSCO (PKX) $100.25 up 5.82% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 1.65% to $1,321,392.13 (what's this?).

Cheers,

Colonel Possum

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

Note 1: In this example, the time delay of the averaged data is an approximation assuming a constant rate-of-change in the market or stock. In practice the frequency content (related to volatility) of the parameter being averaged affects the lag time.

Headline photograph by Mariana Titus

Inconclusive Jobs Report - Dollar Down , Metals & Miners Up

Morning Miners!

It is 5:52AM. Have a welcome cup of Raine's New Double-Dip TGIF coffee. What's that you say? Scott told me last night his latest brew is twice as good if you add an extra dip in the filter. Maybe some of you were thinking about a double-dip recession looming on the horizon. That has been the buzz from talking heads all this week given a crescendo of downbeat economic data leading up to this morning's Labor Department Nonfarm Payroll Report. I just came back from watching the jobs report on CNBC Business News which a lead reporter characterized as "confusing and inconclusive". A noted equity trader called it "lame but also lame for Armageddon." I like this second characterization which was reinforced by a PIMCO bond trader who noted that the latest jobs numbers reduced the likelihood of the dreaded double-dip.

OK, so what did the report say? The "confusing" part comes from the loss of 225,000 temporary government workers that were hired for the 2010 census. On a positive note, the data shows that this is the sixth consecutive month of private sector jobs growth. The "inconclusive" bit arises from a growth rate that falls below expectation. Here is how the Wall Street Journal reported the news:

WASHINGTON -- The U.S. economy shed jobs in June for the first time this year and the unemployment rate remained high, moves that will likely add to concerns that the pace of the recovery could slow in the second half.

Nonfarm payrolls fell by 125,000 last month, as 225,000 government workers that were hired for the 2010 census in recent months lost their temporary jobs, the U.S. Labor Department said Friday. Only 83,000 private-sector jobs were added last month...The jobless rate, which is calculated using a separate household survey, edged down to 9.5% in June from 9.7% the previous month. Economists were expecting it to edge up to 9.8%. (WSJ, 7/2/2010)

Here's what Doctor Copper thinks about the report:



A nice bounce but still below our key $3/lb level. Some of this is no doubt dollar weakness as the euro continues to rally ($1.2578). Gold has been hit pretty hard too (COMEX gold $1204.2/oz) as the "short euro, long gold" trade unwinds on improving economic news coming from Europe this week. European Banks borrowed less money than expected; American-style stress tests on these banks will be the next event to watch. Interestingly, the dollar and gold are now back to moving in the same direction - this time the trend is down. We are also entering the summer period which is typically lackluster for our lustrous friend. I've been throwing a bit of pan shine in the buckboard throughout the week - just in case things go bad, pardner.

So the morning before the big holiday weekend metals & miners are up for the most part and our newly minted Eureka Miner's Market Index (EMI - what's this?) has popped up to an encouraging 73.1 from yesterday's dismal 57.1 - an EMI of greater than 100 signals a return to good times for our sector. We've got a bit to go but still have a good margin from the 6/7 low of 50.7. Stay tuned buckaroos and have a great Fourth of July!


Enough talk, let's walk the walk:

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" is above 25; metals & miners remain on shaky timber with benchmark FCX trading in the the high-$50s well below its 200-day average of $76 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment

The YELLOW light is turned back on for Commodity Reflation with copper trading below $3/lb

The YELLOW light is turned on for Stable Markets the VIX above the 30 level (what's this?)

The YELLOW light is turned back on for Investor Confidence as further market corrections are likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: Oil is down $0.40 in early trading to $72.55 (August contract, most active); Gold is down $2.5 to $1204.2 (August contract, most active); Silver is up $0.015 to $17.805 (July contract, most active); Copper is up $0.0595 to $2.9365 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.50; LME moly 3-month seller's contract is $15.42, LME cash seller is $15.19

The DOW is down 2.45 points to 9,730.08; the S&P 500 is up 1.17 to 1028.54. The miners are up except for TC:

Barrick (ABX) $43.52 up 0.97%
Newmont (NEM) $59.46 up 0.79%
US Gold (UXG) $4.87 up 1.46%
General Moly (Eureka Moly, LLC) (GMO) $3.13 up 1.95%
Thompson Creek (TC) $8.97 down 1.32%
Freeport-McMoRan (FCX) $58.73 up 0.95% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $27.72 up 1.46% - global steel producer
POSCO (PKX) $96.10 up 1.51% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.80% to $1,319,492.28 (what's this?).

Cheers,

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

Two Heavyweights Help the Eureka Miner - GMO drops below $3

Morning Miners!

It is 5:56AM. Pour yourself a cup of Thor's thunderous java and in a moment we'll meet two heavyweights that have dropped by the break room to give us a hand. On the first day of the second-half of this year and a Thursday before tomorrow's big Labor Department report and national holiday, it's pretty silly to read market tea leaves. In the words of the London Metal Exchange (LME) morning report, "Metals adopt holding pattern after edging lower..." Holding pattern, pardner, let's do some house cleaning.

So who are this morning's guests? Our old friends gold and silver, no strangers to our state - the former a big part of our local economy; the latter, our history. They are going to help tune up the Eureka Miner's Index (EMI) so we can be even better prepared for upcoming market events that may influence our future. Now I know some of you think I'm backtracking from an argument I made for not including gold in the EMI:

"Gold as we have seen in the past six months wears many hats: fellow traveler with commodities during rallies, safe haven during crisis, alternative to fiat currencies to hedge inflation fears. To build a mining index, I'd rather track Barrick whose share price rolls up gold price together with all the realities of mining (fuel and labor cost, government regulation etc.)" (Eureka Miner's Market Report, 6/8/2010)

I still stand by this thinking but the addition of gold to the EMI may make good sense if we normalize its price relative to silver. "What the heck do you have up your sleeve, Colonel? This sounds like more of your smoke and mirrors!"

Actually not, the ratio of gold to silver is a well established metric for tracking the performance of precious metals. Here is a three-year chart of the gold/silver or Au:Ag ratio:


For this morning's COMEX data the Au:Ag ratio is 66.98 (i.e. gold @ $1233.6/oz divided by silver @ $18.415/oz). Before the Great Recession which began 12/07, the ratio was fairly constant, just north of 50. Let's look at the same graph (green line) together with the S&P 500 (red line) over the same period:


Near the S&P 500 pre-recession high in the Fall of 2007, the Au:Ag ratio was roughly 55-56. As the financial crisis worsened the ratio blew up to 75 after the collapse of Lehman Brothers (9/08) and peaked around 85 when folks feared a run on the banks beginning that October.

The Au:Ag ratio is therefore a pretty good "market fear" gauge. This Report already relies on the S&P volatility index or "VIX" (what's this?) to measure the level of fear in the marketplace - how are these two different? It's important to first understand why the Au:Ag ratio tends to widen during crisis. In less traumatic times, silver faithfully tracks its lustrous cousin as a precious metal. However, silver is different from gold because of its broader industrial application and tends to feel more downward price pressure when economic output declines. This causes the ratio to increase.

Another factor that occurs during extreme crisis is asset liquidation. Silver had become the darling of many hedge funds when times were good because it tends to rise in price faster than gold (often referred to as a "high-beta" metal). Since the opposite is true in declines, silver is often the first treasure overboard when it's time to lighten the boat. Silver has a much smaller market than gold, so liquidations have a greater impact on price. Extreme times can therefore cause the ratio to increase dramatically.

If the VIX is a decent "fear index", the Au:Ag ratio may be considered a good "hyper-fear index". Looking at our comparison chart, the ratio remained in the 50-56 range before, during and after the collapse of Bear Stearns (3/17/08). Only after the S&P 500 entered bear country (mid-2008, see note 1) did the ratio start its upward trend accelerated by Lehman's collapse followed by banking solvency fears. Here is a summary of the VIX and a range of Au:Ag near those key events:

03/17/2008 VIX=35.6 Collapse of Bear Stearns, Au:Ag 50-56
09/15/2008 VIX=31.9 Collapse of Lehman Brothers, Au:Ag 65-75
10/23/2008 VIX=96.4 Highest VIX, fear of a run on the banks, Au:Ag 75-85
03/09/2009 VIX=51.3 S&P 500 March closing low 676.53 ("the bottom"), Au:Ag 68-75

The broader markets opened this morning with a VIX around 34 and the Au:Ag (that we just calculated) at 67. Judging from the our past history, we are in scary times buckaroo. For this reason, I've decided to include the Au:Ag ratio in the Eureka Miner's Index by the following formula:

EMI (w/Au:Ag) = 68.33 x (COMEX silver/COMEX gold) x EMI

The Au:Ag ratio was 68.33 on 6/7, the recent low for the EMI - it's inclusion in the formula therefore causes the EMI with and without Au:Ag to be the same on that day. Here is a plot of both for the month of June (a larger, more readable chart is included at the bottom of this blog page):



We notice that the inclusion of the Au:Ag ratio has only a slight influence on the EMI to date. If there is something really scary ahead, I would expect the difference to widen noticeably giving us a little more accurate assessment of where the metals & miners may be headed. Today's EMI (with Au:AG) is a sub-par 57.07 compared to yesterday's 75.31 and heading quickly towards the 6/7 low of 50.67. Remember, an EMI greater than 100 is good times for metals & miners. Ouch!

Enough talk, let's walk the walk:

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" is above 25; metals & miners remain on shaky timber with benchmark FCX trading in the the high-$50s well below its 200-day average of $76 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment

The YELLOW light is turned back on for Commodity Reflation with copper trading below $3/lb

The YELLOW light is turned on for Stable Markets the VIX above the 30 level (what's this?)

The YELLOW light is turned back on for Investor Confidence as further market corrections are likely

The GREEN light remains turned on our Fuel Gauge with oil below $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

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

NYMEX/COMEX: Oil is down $1.00 in early trading to $74.63 (August contract, most active); Gold is down $12.3 to $1233.6 (August contract, most active); Silver is down $0.293 to $18.415 (July contract, most active); Copper is down $0.0560 to $2.8945 (September contract, most active)

Western Molybdenum Oxide is at $16.00; European Molybdenum Oxide is at $14.50; LME moly 3-month seller's contract is $15.42, LME cash seller is $15.19

The DOW is down 105.84 points to 9,668.18; the S&P 500 is down 15.54 to 1015.17. The miners are hurting:

Barrick (ABX) $43.97 down 3.17%
Newmont (NEM) $60.05 down 2.74%
US Gold (UXG) $4.81 down 3.99%
General Moly (Eureka Moly, LLC) (GMO) $2.98 down 3.25%
Thompson Creek (TC) $8.52 down 1.84%
Freeport-McMoRan (FCX) $57.50 down 2.76% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $26.82 up 0.22% - global steel producer
POSCO (PKX) $92.68 down 1.74% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 2.48% to $1,299,695.19 (what's this?).

Cheers,

Colonel Possum

Note 1: The closing high for the S&P 500 was 1,576.9 on 10/11/2007 just prior to the The Great Recession which began that December. The bear market officially began the following July when the S&P 500 fell 20% (on 7/7/2008 the S&P 500 closed at 1252.31); although there was some recovery in August, the S&P 500 continued its downward trend plunging to the "Devil's Triple-6" on 3/6/2008 (S&P low of 666.79 on an intraday basis). The S&P closing low ("the bottom") followed several days later at 676.53 (3/9/2008). The closest we've come to date of reaching the 1252 level was on 4/26/2010 when the S&P 500 hit an intraday high of 1219.8.

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