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FSJG Index™ Review
The Gold Stock Technician Newsletter
June 18, 2007
General Comments
It was something of a ‘rebound’ week for the Precious Metals which bounced in tandem with a recovery in the major capital markets. On the week, the Dow Jones Industrial Average gained +352 points from its Tuesday low of 13,287 to finish the week at 13639.39, a gain from the Tuesday low of 2.64%. At the same time, the S&P 500 gained +39.94 index points or 2.67% off its Tuesday low, both indices ending the week near their highs. The rising equity markets signaled a positive ebb in what has been the more erratic ebb and flow of capital markets these last few weeks with the DJIA having lost 244 points the week before.
For Gold, the opening of the liquidity tap this week helped prices recover a portion of the prior weeks $25/oz loss with spot Gold closing this week at $654.50, up $9.00/oz from last week's close of $645.50. At the same time, Gold Stocks received a boost from the broad stock market rally with the widely watched XAU Index climbing $5.40 to end at 140.78, up from 135.38 for a gain of 3.98%. Here again, the recovery, while acceptable, has only been part of an erratic price-pattern in which the previous week lost 5.20% with the XAU falling from 142.42 to 135.38.
Financial Sense Junior Gold Mining Index Comments
Among the smaller cap Gold and Silver Miners, the past week saw a very modest rebound with the Financial Sense Junior Gold Index (FSJG) of 40 mining stocks gaining 2.42 index points to close the week at a reading of 283.35, up from 280.93 for a gain of 0.86%. On Friday, the FSJG Index ended below the 50-day average at 304.03, and just 1.41% above the 200-day average at 279.36.
Financial Sense Junior Gold Index™
50-day & 200-day Moving Averages
Above: the FS Junior Gold Mining Index just above the 200-day moving average.
Among the various Sub-Indices, we saw a mixed picture with the Junior Producers and Junior Exploration indices gaining ground, while the Development stocks pressed ever lower. For the Junior Producer Index, the week produced a gain of 7.37 index points with the index closing at 304.76, up 2.47% from last week's reading of 297.39. For the Exploration Index, the week yielded a gain of 2.95 index points to end at 178.96, up from 176.01 for a gain of 1.67%. On the downside, the Development Index plunged yet again, ending with a loss of 10.54 index points at a reading of 570.33, down from 580.87 the prior week for a loss of 1.81%. The Development Index is now closing fast with its low on June 28, 2006 of 528.09 -- not far from a 52-week new low.
Financial Sense Junior Gold Index™
Producer Index
Financial Sense Junior Gold Index™
Development Companies
Financial Sense Junior Gold Index™
Exploration Companies
Moving average readings for the sub-indices as of Friday’s close were as follows: for the Junior Producer Index the 50-day ended at 326.62 with the 200-day at 306.15. For the Development Stocks, the 50-day ended at 658.35 with the 200-day at 661.31. For Exploration Stocks, the 50-day ended at 182.67, with the 200-day at 154.11. Only the Exploration Index remains above the 200-day average.
Financial Sense Junior Gold Index™
vs. XAU Relative Strength Ratio
Finally, the last few weeks have shown a marked deterioration in the relative strength of Small Caps versus Large Caps, which had previously been a one way ticket in favor of the Small Caps. As of Friday, the Relative Strength Ratio of Small Cap Miners to Large Cap Miners closed right on its 200-day moving average, suggesting that the larger trend is in danger of going more seriously negative. In addition at this point, while the Small Cap Gold Stocks are mildly oversold on a short-term basis, on a more medium-term basis, the ARMS Index is still a long way from fully oversold territory and readings above 1.35, the upper horizontal line. The Medium Term ARMS for Small Cap Golds ended last week at 1.21.
Financial Sense Junior Gold Index™
Medium Term ARMS Index
That’s all for now,
Frank
© 2007 Frank Barbera. All rights reserved.
Financial Sense Junior Gold Index Archive
*Please note that the individual companies in this index are proprietary and will not be disclosed due to compliance and regulatory issues resulting from the relationship of FinancialSense.com, Puplava Financial Services, Inc., Registered Investment Advisor and Puplava Securities, Inc. Member Firm FINRA/SIPC.