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Contrarian Investor, Commodities Speculator, Technical Trader.
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Aaron Basile
  • EUR/USD Update, Bullish Reversal In GWMGF 8 comments
    Jan 18, 2011 5:27 PM | about stocks: FXE, UUP

    aaronbasile.wordpress.com/2011/01/18/eurusd-update-bullish-reversal-in-gwmgf/

    Last week I provided the case from the long and short sides of the EUR/USD trade and it appears that perhaps the bullish sentiment behind the Euro that we saw last week was somewhat premature. The Euro appears to have run out of momentum for the moment as the dollar hangs on to the 79 level.

    The Euro/usd index met resistance at 99.65 and managed to remain flat on the day. The index has had trouble staying above this resistance level in the past and though it was all bullish last week, the momentum in the trade looks to be waning. In addition to the failed test of resistance, today as with the last 3 days, the index has opened higher than the previous close of each previous day – also known as trading gaps. In many cases, trading gaps can lead to a topping pattern. Given the information above, it appears that a top could be exactly how this coud be lining up.

    FXE closed lower than the upper, downward moving trendline despite opening higher this morning. It also tested a previous pivot point as resistance but reversed intraday to finish marginally higher. This again shows that momentum has weakened and the bullishness from last week may also have just been some institutional pumping. The 14 day Stochastic is entering a state of overbought and to have that indicator line up with failed resistance tests after 4 days of trading gaps means that it should have to regroup before making attempting another run on the highs.

    Right in line with the previous charts, the dollar index closed above support after the bears made a run at breaking both flat support and the lower trendline intraday.

    Bottom line in this trade is that the momentum appears to have shifted back towards the dollar for the moment, however it is still up for grabs and either side can win at this point.

    ________________________________________________________________________________________

    Moving on to one of my favorite REE producers, Great Western Minerals (OTCPK:GWMGF) had a very pleasing bullish reversal during the course of the trading day after being taken down hard for two consecutive days.

    Support is at $.60 and I wouldn’t be surprised to see shorts attempt to test that level within the next day or two however I do believe that it won’t close below that or the 20 day MA. Regardless of whether or not selling pressure forces a test of the lows, I believe that the stock is done with it’s brief consolidation and will likely test $.70. Assuming nothing changes in the REE market, GWMGF can easily take out that high and continue upward.

    Stocks: FXE, UUP
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Comments (8)
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  • renderus
    , contributor
    Comments (146) | Send Message
     
    Stick to the 6 Non Chinese Miners in production by 2015: Alkane, Arafura, Avalon, Great Western, Molycorp and Lynas.

     

    American Security Project 1 February 2011 links:

     

    A prestigious U.S. defense think tank says the country’s current dependence on Chinese rare earth metals will harm future U.S. military and economic needs.

     

    americansecurityprojec.../

     

    americansecurityprojec.../

     

    americansecurityprojec...
    3 Feb 2011, 01:55 PM Reply Like
  • Aaron Basile
    , contributor
    Comments (92) | Send Message
     
    Author’s reply » I agree, and I like all of those mentioned. You should also check out Stans Energy, Ucore, and Pele Mountain.

     

    Chuck Schumer (D-NY) has been also been lobbying for the US to get a move on regarding exposure to REE's. I think that by 2012 China will make another significant reduction in exports and even nations that have deposits will still fall victim to the supply squeeze as it takes years to get a deposit into production.

     

    The companies like Stans, Ucore, Pele Mountain, and the ones you just mentioned are in the best position possible.
    3 Feb 2011, 02:18 PM Reply Like
  • renderus
    , contributor
    Comments (146) | Send Message
     
    Sudden. Permanent. Game-Changing. Earth-Shaking.

     

    5 Febuary 2011:

     

    Permanent decisions about Chinese REE exports have happened.

     

    The Non Chinese world needs to come to grip with the New Reality:

     

    How to find and fund Non Chinese REE mining and manufacturing sources for all Non Chinese demand?

     

    Let me explain the change that has happened:

     

    "China and US shoot satellites in standoff" Telegraph Group Ltd. UK

     

    www.telegraph.co.uk/ne...

     

    Dates: January 2007, February 2008, January 2010, February 2010.

     

    Did these international incidents cause the Chinese to change Chinese REE export policy?

     

    Did the Chinese determine that sharing REE with potential military adversaries is not in Chinese Strategic Interest?

     

    If these statements are true, how permanent is the Chinese REE export ban? Particularly of the scarce and strategically important HREE?

     

    How permanent is the Chinese ban of Dy Tb Y ?

     

    Permanent decisions about Chinese REE exports have been made as a result of this incident?

     

    Obviously there are other considerations, e.g, relative scarcity of materials, self interest in developing their own REE manufacturing sector. As the Chinese move up the technological REE manufacturing chain, they shall consume most if not all of Chinese produced REEs.

     

    Further, China claims that China is now “environmentally” concerned?

     

    These “official” explanations seemed insufficient to explain the drastic change in REE exports and total ban on Dy Tb Y.
    Addendum comments: 6 Febuary 2011:

     

    Suddenly the earth-shaking game-changing REE world events of the last year make sense.

     

    Sudden severe Chinese REE export restrictions and the Chinese ban of Dy Tb Y make perfect sense.

     

    Suddenly why are we surprised that our tiny fledging REE miners have doubled, tripled, quadrupled, or more within one year?

     

    “There are two ways to live: you can live as if nothing is a miracle; you can live as if everything is a miracle.” -- Albert Einstein.

     

    Seemed like a “miracle” didn’t it? Guess what? That’s how things appear until more facts are revealed?

     

    Finally the China and USA “star wars race” conflict was revealed 2 February 2011 by UK Telegraph. (See attached links to numerous articles).

     

    This conflict extends to the rest of the Western world. For example, China’s fear of Strategic Missle Defense Shield in Japan by the USA.

     

    A major change in policy is often due to a significant incident. Why are we surprised?

     

    Please do not take my opinion as fact for yourself. Please review the maze of documents just released by UK Telgraph. Come up with your own judgements. (Links attached).

     

    Please spend 10 minutes or 10 hours doing your own analysis of the just revealed UK Telegraph documents, and decide in your own mind the permanent consequences to REE Mining/Manufacturing.

     

    The Chinese shall ban most rare earths and certainly any HREE that have military applications. The West shall never again trust the Chinese for vital REE resources.

     

    Yes the REE world is forever changed. Irreversibly. Permanently.

     

    The Non Chinese REE mining and manufacturing world is suddenly called upon to deliver 50 percent of the world’s REE supply.

     

    Impossible REE demands shall be placed on the Non Chinese REE Miners/Manufacturers. Can we deliver? I doubt we can.

     

    Severe pressure shall be placed upon each and every Non Chinese Miner to produce. Currently, only 7 Non Chinese REE miners are expected in production by 2015 (Alkane, Arafura, Avalon, Great Western, Molycorp, Lynas, and Dong Pao of Vietnam).

     

    Personally I doubt that these 7 select companies can replace 50 percent of the world’s rare earth needs, even at current levels.

     

    Perhaps with more warning, more awareness of the 2 February 2011 revelations, our Non Chinese miners could have geared up faster, expanded more rapidly, more money could have been raised, more workers trained, etc.?

     

    We have been living in a world based on old assumptions. China: The Rare Earth Monopolist would be our REE “Mama”. China would provide any shortfall that the Non Chinese miners could not provide in the next few years?

     

    New Reality: Virtually all of the Non Chinese demand needs to be supplied by Non Chinese Mining and Manufacturing companies, i.e., 50 percent of the world’s total use of REEs. Virtually all of the already Chinese banned REE: Dy Tb Y. China has already banned 41 REE manufactured products. How soon!

     

    The progression to a total Chinese REE ban is inevitable and may happen at any time.

     

    Is the Non Chinese world prepared for severe shortages? Shortages that the US Department of Energy said in December 2010 shall last at least 15 years? (See attached link).

     

    The world’s most successful businesses: Siemens, General Electric, Toyota, Honda, Apple, etc. and governmental needs: Japan, USA, EU, South Korea, India are all threatened.

     

    China: No safety valve for the world. See Zhang Anwen statement: Video attached.

     

    Solutions happen when actions are taken.

     

    May I ask a question? How can we come to our own personal interpretations, and merge our collective interpretation of the New Reality? What actions can we take? How can we “spread the word” of real shortages, real need to increase Non Chinese REE supply capability?

     

    What obligations do governments have to mitigate potential damage to their National Defense, and potential crippling of businesses?

     

    Is there a true REE crisis? A true emergency?

     

    If there an impending disaster of supply shortfall, what can we do to make a difference? Individually? Collectively? Individual REE companies? REE companies collectively? REE industry collectively?

     

    The future is in our hands. Our collective hands. We will be judged as an industry by our actions.

     

    Yes these are great opportunities for the Non Chinese REE mining/manufacturing industry, but at the same time severely difficult times ahead even working together.

     

    Can we accomplish a nearly impossible task: fulfilling our call to provide the modern world with a sufficient supply of REE?

     

    How will history judge us?

     

    Attached links:

     

    2 February 2011 UK Telegraph Ltd:

     

    www.telegraph.co.uk/ne...

     

    www.telegraph.co.uk/ne...

     

    www.telegraph.co.uk/ne...

     

    www.telegraph.co.uk/ne...

     

    www.telegraph.co.uk/ne...

     

    www.telegraph.co.uk/ne...

     

    USA Department of Energy Report: Critical Materials Strategy December 2010:

     

    www.energy.gov/news/do...

     

    Zhang Anwen a leading Chinese government advisor and Deputy Secretary General of Inner Mongolia Rare Earth Guild who in Beijing conference Spring 2010 said:
    “Foreign countries should calmly and logically think about this and develop their own mines for their own needs. Our (China) resources are diminishing and we (China) need these minerals for our own use.”
    (Minutes 2:46 to 3:20 in the 6:19 minute video)
    www.youtube.com/watch?...
    6 Feb 2011, 08:26 AM Reply Like
  • renderus
    , contributor
    Comments (146) | Send Message
     
    Just sent you a comment.

     

    We need to get the word out.

     

    This is truly a earth-shaking event.

     

    The real reason behind the REE Crisis and 200 to 400 percent upward moves in our Non Chinese Companies.

     

    Haven't seen anything yet!

     

    Permanent seismic shift.

     

    Cheers

     

    renderus
    6 Feb 2011, 08:29 AM Reply Like
  • Aaron Basile
    , contributor
    Comments (92) | Send Message
     
    Author’s reply » I've said before that the Chinese are likely to cut all exports in the next year - year and a half. There's no company or set of companies worldwide that can meet demand save perhaps Molycorp if in fact they receive government funding.
    7 Feb 2011, 11:06 PM Reply Like
  • renderus
    , contributor
    Comments (146) | Send Message
     
    Saw this article today. "Japan spending billions in Africa".

     

    Link: in.reuters.com/article...

     

    Think: GWMGF in South Africa.
    9 Feb 2011, 01:30 AM Reply Like
  • Aaron Basile
    , contributor
    Comments (92) | Send Message
     
    Author’s reply » Yep, Japan has been looking in third world countries in Africa and Asia. Even though those countries present a lot of risk to mine in, they are convinced that they have a problem accessing REE's thanks to China and are desperate to find anything they can get.
    9 Feb 2011, 09:56 AM Reply Like
  • renderus
    , contributor
    Comments (146) | Send Message
     
    jim Engdahl, that is great news to be in the mining business in S. Africa within 2 years!

     

    Did you see the Reuters article yesterday?

     

    "Japan is keen to spend billions in Africa"

     

    in.reuters.com/article...

     

    Glad we have one of the REEs richest deposits in the world!

     

    Personally I love Gary Billingsley video on Youtube. Gary is a perfect example of the straight-forward chief executives I see in our industry.

     

    As shareholders we have confidence in you and Gary's leadership.

     

    www.youtube.com/watch?...
    10 Feb 2011, 12:06 AM Reply Like
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