Weekly Outlook - Filling In The Gap

For Monday, probably starting 6pm in the futures market, you would want to take in the action on the long-dated treasury bond price.

I speculate that bond prices will continue to soften for the week, even though momentum indicators are at an extreme. We are nowhere near the bottom, since the RSI is still in the 40's on the weekly chart.

I would expect that the 89-week EMA would be tested. This is important as GBN.V shares are strongly inversely correlated with the long dated U.S. treasury bond price.

Something very important happened on the Thursday the week before, where we saw the share price run up to either the 89-week EMA or the 300-day moving average. This was on the same day where an immense move in the futures markets occurred, and traders rolled over for the June contract, rather than hold their March contracts for expiry in the money.

This is more than a co-incidence, since on the same day, you saw a panic move into the stock on Thursday last week, which can only denote somebody closing their position, well in advance of the rest of the crowd. No new developments in ownership of the stock was published on SEDAR.

The result was a quiescent stock for last week, as bond markets saw the rout. Nobody is really taking notice, or perhaps shrugging it off a a mere correction, though larger traders in the GBN.V playing the intermarket relation with the U.S. treasury bond are probably concerned for the outcome. The move in the long dated treasury is certain to have raised red flags.

So I expect the following to occur: a steady gold price, a further decline in the treasury bond price to test the 89-week EMA, and perhaps settlements in the intermarket play between long-dated treasury bond prices and GBN.V.

GBN.V will probably be tabling financial results in the last week of March, in order to conform with the legal due date for reporting financials. (I think its supposed to be 60days max.) Its anybody's guess when they will be reporting results from the Lloyd mine development. We haven't heard hide nor hair about the TIA since October.

It must be said much as I am scandalized by information not forthcoming to shareholders and financial results published just prior to their due dates, the company has followed disclosure laws to the letter, perhaps almost too literally.

The silver lining is that bond markets have come off, and results will be posted after the anticipated bond market rout, giving a fairer chance that stock price will advance on news. If the advance in the stock is anything like previous advances during these times, then the volume in the stock will simply astound.

Remember the last time bond markets were in a rout, no news whatsoever was released that could be said to raise the stock price, but it went relentlessly upwards. The huge problem in the stock was the permitting issue, which has since been resolved. This was the great impediment to development.

Remember Mt. Milligan(a Goldcorp. spin-off) went through the same process, it took four years in all when they were finallly bought out by Thompson Creek. The Prosperity project was turned down, as was Kemess.

The big question, of course are just when buyers will enter the market.

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-F6