Cline Mining Corporation T.CMK

Buying Opp or Epic Turning Point?

[GEEE]

Buying Opportunity or Epic Turning Point?
https://seekingalpha.com/article/268581-key-market-movers-this-week-buying-opportunity-or-epic-turning-point

Commodities Crash
Gold lost half of its April gains (though uptrend is so strong it remains in its Double Bollinger Band Buy Zone on both weekly and monthly charts)- suggesting we maintain our long bias until it leaves this area bounded by the upper orange and green bands

Silver surrendered all its April gains and about half of what it gained in March as well, at one point this past week down about 30%.:
News that George Soros and Carlos Slim have been selling silver no doubt added to the panic.
CME Raises Margin Requirements For Silver the pace of margin increases over just the past 2 weeks, is up 84%.

WTI Oil lost almost all of the past 2 months' worth of gains this past week rumors of potentially higher CFTC margin requirements for crude, similar to those recently implemented in silver, may have added fuel to the crude selloff.

USD increase, which, by the way, further undermined commodities.

Here’s a chart with a broader view of the carnage in commodities.
https://static.seekingalpha.com/uploads/2011/5/8/saupload_screenhunter_07_may._07_23.58.jpg

Why the Collapse in Commodities?
Plenty of reasons were proposed over the past week, for example from GaveKal Research:

* The Glencore IPO has everyone thinking this is a Blackstone-like top in the commodities market. (Josh Brown has been all over this one.)
* The fact that silver is sliding even with a weak dollar reminds everyone that all commodities are vulnerable.
* Across all markets, “leadership” is narrowing. (See our recent COTD)
* Fiscal stimulus is being removed in China. (See this report from China)
* A recent IMF report indicated that Asia-Pac is still very early in the tightening cycle, and still generally in an expansionary fiscal position that needs to come down.

Oil prices have a huge speculative component, of course, so we expect them to exaggerate risk aversion moves just as they overstate risk appetite. Indeed, many believe there is no fundamental justification for oil being over $100 / bbl. See here for details.

Of course, there’s also the ongoing backdrop of economic slowdown in most of the developed world.


Fundamentals

Data from the US, UK and EU outside of the core funding nations has been steadily downbeat.
In addition, US earnings season failed to provide the lift it has typically delivered in the past years.
QE2 Although the great liquidity contraction has yet to begin, the expansion is ending.

Technical Evidence:

S&P 500, EURUSD Approach Multi-Year Highs,
QE 2 End In Sight, Begs Profit Taking

The bellwether S&P 500 Index began the week at 1380, under 200 points from its pre Great Financial Crisis highs of 2007, though the global and US economy is in much worse condition.

The EU debt crisis too has only gotten worse, with Greece at the brink of default and 2 other nations on bailout life support, and too-big-to-bailout Spain’s situation has also deteriorated.
Friday’s bombshell report from Der Speigel that Greece was threatening to leave the EU and that officials were holding emergency meetings on the subject which would undermine the reliability of the 11 year old currency,

All Hell Could Break Loose

https://seekingalpha.com/article/268579-greek-restructure-epiphany-biggest-near-term-market-threat
Mostly shut down EU interbank lending
Lehman Brothers was just one bank.
A Greek restructure casts doubt on dozens of such banks, with concomitant unknown domino affects on other banks and insurance companies and those that have provided insurance again their default, just like AIG did.
Greek Restructure Epiphany: Biggest Near-Term Market Threat Today

# If Japan cut back bond buying or must even sell sovereign bonds, that opens a whole new level of risk from falling bond prices and rising yields, especially for those who sell the most bonds to Japan, the US, UK, and EU.
# Rising sovereign bond yields ultimately mean rising mortgage rates, meaning still another wave of bad mortgage debts, foreclosures, and bank failures.

WHAT A DIFFERENCE 1 DAY MAKES

COMPARE CHARTS DBC MAY 4 AND MAY 5
https://static.seekingalpha.com/uploads/2011/5/6/saupload_may62011spyanddbcsimilar_thumb1.png
https://static.seekingalpha.com/uploads/2011/5/6/saupload_may62011april5dbc.png

The close on May 4 is shown via the green arrow.
The close on May 5 is shown via the blue arrow.
The two major concerning developments were
(1) the green trendline (see C) from the November 2010 lows was violated, and (2) the upper band of potential support was broken (see A).
These developments, along with numerous other factors (slowing economic growth, the end of QE2, threat of rising interest rates, prompted selloff

HOPE : the second band of horizontal support (see point B) is still in play – commodities found their footing there in February and March 2011.
SECOND HOPE if the lower band of support breaks at point B, next support is near one of the blue base trendlines (between $27 and $28 for DBC).

In the end, fiscal market propping always fails and this time is no different.

Consumers and producers alike find themselves unable to operate efficiently in an commodities inflationary environment and needing to de-leverage
We are at a crossroads, Ben Bernanke is in the driver's seat
Will he choose deflation or hyperinflation?

May marks the beginning of a notoriously difficult 6 month period for the equity markets.
,Fidelity Investments combined several time cycle indicators into one
. The result – Sell in May:
OPTIMISTS : May isn’t necessarily a time to sell but they admit it isn't time to buy either.

Positives

Still, compared to the roughly 10% shredding many commodities got this past week, stocks can take their modest losses as a relative victory, even if it’s on the remaining fumes of final QE and the Fed’s hard working POMO and plunge protection operations.

Good news : it is so bad the politicians will save us in 2011 with another round of TARP, banks nationalization,money printing QE3 etc.( rising further sovereign debt to max and inflation)

The question is, in 2011, will they manage to avoid a market panic?
Lehman brothers was just one large bank. Now, we have tens of potential such banks, in addition to multiple sovereign states on the brink of insolvency.

US Dollar might see an unanticipated long term bull market.

Conclusion: Buying Opportunity or Start of Deeper Pullback?

The plethora of bearish news, signs of slowing growth, combined with valuations very near stock market peaks just before the beginning of the current Great Financial Crisis, in addition to valuations at all time highs for many commodities, suggest a pullback is due.

So what?

Most risk assets remain within long term up trends
The bias is still to stay long.
Tightening has begun in much of the EU, China, and UK, but mostly only just begun and rates remain historically low.
# support at this level around 1330 and that momentum is still strong enough to suggest the odds favor more upside.(though not much)
# Shorter term moving averages continue to rise higher
Uptrend in risk assets remains alive, though at a tipping point.
Bearish Fundamentals vs. Bullish Charts, PHONY TRADE is still in play BUT:
next few trading sessions are very important for the intermediate-term outlook for stocks and commodities

When the leaders of a bull market become weak, it is prudent to become concerned about the entire market.
it cannot hurt to be prepared and alert for general market weakness in the coming weeks.

SPY chart looks identical to commodities chart which is concerning
https://static.seekingalpha.com/uploads/2011/5/6/saupload_may62011spyanddbcsimilar_thumb1.png

++++++++++=====

Amid all above CMK chart looks pretty bad ,
50 week DMA at 2.73 ( 15% more to go ) looks like first support.
https://stockcharts.com/h-sc/ui?s=CMK.TO&p=W&yr=0&mn=6&dy=0&id=p27972355752

THE COMING DILUTION SHOULD BRING IT MUCH MORE DOWN

Jennings have ,in their report, 0.25 cents EPS for 2011
After 20 % dilution in 2011 = 20c EPS x P/E 5 =$ 1 target
Less,because looks, they won't sell even 600kt 2011.( ZERO in first 5 months GEEEESUS vs promised whatever BS)

1 rail car a day according to miner 8740 loool
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=29678257&l=0&r=0&s=CMK&t=LIST

2 PEOPLE WITH $20 SHOVELS ( NOT $ 120M INVESTMENT ) CAN LOAD 1 RAIL CAR A DAY .

I see the same 3 daytraders and 5 losers here sitting on their DEEPENING LOSES
for 4 months already . Giving each other expired hope / "hang-in there" pills. LOOOL
Time is money ...honey .

===========================

By 2014 China coal imports will disappear=-END OF WESTERN MINES STORY
They will be stuck with 50mt met OVERCAPACITY.
Equivalent of ALL US or more than all Canadian met exportes going dark.
God forbid China will start BIG export.by 2015.
https://www.ft.com/cms/s/0/c1bb90ce-71c0-11e0-9adf-00144feabdc0.html#axzz1LoECLLhx

Ouch, they do it already
25 Apr 2011
As international coking coal prices have surged since late 2010, China has cut its coking coal imports and raised its exports in the first quarter of 2011,

This chart fomHSBC shows the China coal import story lasted 2 y and is over now
https://agmetalminer.com/wp-content/uploads/2011/05/Slide1.jpg

CHINA WAS AND WILL ALWAYS BE SELF SUFFICIENT IN COAL LONG TERM.
https://cdn.wallstreetpit.net/wp-content/uploads/2011/04/image292.png

Just slight, few years-long deviations OF LESS THAN 1% between domestic suply and demand
(caused by closing thousands of small mines - and consolidating= RE-OPENING them now as bigger ones
or transportation bottlenecks)
created western mines euphoria.
Euphoria will turn into depression just in time CMK will be ready for prime time.

In between
China 'to cut rail spending in 2011= less steel
https://www.google.com/hostednews/afp/article/ALeqM5hoMGWpHcjpQoEZhtdDrApooN_DjA?docId=CNG.d52d510170bd9583e846ebb448b9e5c7.811

Chinese coal prices were back to a discount to world prices in February
, encouraging buyers to switch to domestic material, a trend that is likely to continue this year
in the bank’s (HSBC) opinion.
While coal supply may not be a problem, prices are, DEMAND DESTRUCTION
According to Reuters,small to medium-sized steel, aluminum, zinc, lead and cement plants can not produce profitably due to high coal prices and closures may result.
For now the 3 mt lower China imports of met will be replaced by 3mt higher Japan and others imports with overall small growth in seaborne market.

Bloomberg - 14 Apr 2011
China wants to triple the use of natural gas to about 10 percent of its energy consumption by 2020 as it cuts reliance on more-polluting coal

Thursday, 05 May 2011
Mr Xu Lejiang chairman of Baosteel said that the growth in vehicle sales may slow to 10% in 2011 after rising 32% in 2010
He said that a flurry of investment in mining in recent years will result in an end to the global iron ore shortage, and the consequent oversupply will severely weigh on prices in the near future.