Wednesday, June 18, 2014

Historic Breakout Will Launch The Price Of Silver To $65 / June 17, 2014
Today KWN is putting out a special piece which features a chart showing a historic breakout in the price of silver.  This is the type of chart that the big banks follow closely, as well as big money and savvy professionals.  David P. out of Europe sent us the astonishing silver chart that all KWN readers around the world need to see.
Below is the extraordinary silver chart sent to KWN by David P. out of Europe along with his commentary.
“Silver has just experienced a historic breakout.  If you look at the 7-year chart below it shows it shows a trendline which traces back to the the $50 high on silver in 2011, to this historic breakout.  This may usher in the long awaited bullish move which will take silver to new all-time highs.
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My No. 1 Gold Play: Franco Nevada FNV

The best way to buy into gold isn’t through the miners. It’s through the royalty companies.
Royalty companies make money by buying chunks of the production from the miners, and then getting paid royalties for their investment in the project.
They don’t own the mines, which means they hold zero obligations for the cost of operations, labor, etc.
And today, I’ll reveal my favorite royalty company…(more)

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Patterson-UTI Energy, Inc. (NASDAQ: PTEN)

Patterson-UTI Energy, Inc. provides onshore contract drilling services to major and independent oil and natural gas operators in the United States and Canada. The company operates through three segments: Contract Drilling, Pressure Pumping, and Oil and Natural Gas. The Contract Drilling segment markets its contract drilling services primarily in Texas, New Mexico, Louisiana, Oklahoma, Colorado, Utah, Wyoming, Montana, North Dakota, Alaska, Pennsylvania, Ohio, West Virginia, and western and northern Canada. The Pressure Pumping segment offers pressure pumping services that consist of well stimulation and cementing for the completion of new wells and remedial work on existing wells, as well as hydraulic and nitrogen fracturing, cementing, and acid pumping services in Texas and the Appalachian region. The Oil and Natural Gas segment owns and invests in oil and natural gas assets as a non-operating working interest owner located principally in Texas and New Mexico.
Please take a look at the 1-year chart of PTEN (Patterson-UTI Energy, Inc) below with my added notations:
1-year chart of PTEN (Patterson-UTI Energy, Inc)
PTEN has rallied nicely all the year. Along the way, the stock has found support and resistance areas primarily at the levels of $26, $28, $30, $32 (red) and $34 (blue). Each of those prices has been either support or resistance, or even both, multiple times. The stock is now trading just under the 52-week high resistance level of $34.

The Tale of the Tape: PTEN is currently trading between $32 and $34. A long trade could be made on a pullback to $32, or even better, on a break above $34. A short trade could be made on a break below $32.
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Gold and Oil Fuel the Canadian Stock Market Rally

One of the best performing markets this year is Canada. The Toronto Stock Exchange (TSX) has gained over 10% this year. That is more than twice as much as the SP500 which has gained 4.75
The TSX Composite Index has exceeded its 2011 peak and is about to test the 2008 high. A large part of the strength is coming from rising commodity prices. The TSX Composite is resource-weighted and this market has lagged its counterparts around the world in the last year. This means it is time for Canada to play catch-up.
These equities may hold up well when the US market starts to correct. This is because the TSX’s is heavily weighted in late-cycle stocks (resources), it’s not unusual for the Canadian
market to lag in the early stages of a bull market in the USA, catch up in the late stages, and then outperform toward the end. This appears to be happening now.
Last week's surges in gold and oil prices are fueling the rally in Canada. The two strongest Canadian stock groups were materials and energy.
price of crude oil
Gold Stocks Lead The Way Higher – GDXJ
The junior gold miners chart shows that money is flowing into these stocks this month. Because they are the most leverage way to play the price of gold, speculative traders and investors tend to put their money to work in these stocks first, before they start accumulating physical gold.
Precious metals mining stocks (GDX, GDXJ, SIL) tend to lead the price of gold by a few days and sometimes a couple weeks.
The chart below clearly shows gold junior stocks surging and breaking through key resistance levels.  I am waiting to see the larger cap PM stocks clear their key resistance levels (GDX & SIL) before I will start to get interested in building a long position again in the precious metals sector.
gold mining stocks
Trading Conclusion:
The chart below, courtesy of Donald W. Dony, shows how the market moves in terms of sectors and commodities. Our focus is on the stock market cycle below (blue cycle) and the numbers 9, 10, and 11.
In the last few months we have seen money move towards the safer investments. Utilities have performed very well, and so has the energy sector. Precious metals on the other hand are still trying to find a bottom. I feel this will happen sooner than later but until then metals will be volatile.
Typically commodities perform well in the late stages of a bull market which is where the US market feels as though it is at within its life cycle.
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PRECIOUS METALS & The Death Of The Business Cycle

The precious metals will offer one of the best safe havens as the world enters into the next paradigm… “The Death of the Business Cycle.”  Unfortunately, very few analysts, economists or investors realize the darkness that lies ahead.
While science, technology and specialization allowed mankind to advance to levels thought impossible during the 1800′s, it also destroyed of our ability to perceive the FULL PICTURE.  Basically, the left hand knows not what the right hand is doing.  (more)

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