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Not Much Happened

Daily Rap 02-16-2018

We had the now-customary amount of motion early on and the net of it was about a 0.3% gain for the stock market through midday. In the afternoon, the Nasdaq gave up its gains while the Dow/S&P held on to theirs.

Away from stocks, green paper managed a decent bounce, as did fixed income, while the metals were lower, led by silver, which lost 1.0% to gold's 0.5%. The miners were in the doghouse again, for no particular reason that I could see.

Last year's posts for Ask Fleck

Q: Hey Bill, one more question regarding NGD. Is there any reason to expect write downs in the value of their assets; or are we safe to assume those have passed?

If so, it seems like these prices are less than book value.

Fleck: I don't expect more write-downs. However, write-downs and write-ups happen all the time due to price changes. It isn't that big of a deal.
(posted: 2/16/2018)

Q: Hey Bill, I'm looking at the balance sheet etc. for NewGold and the PEA for Blackwater. Do you think the market is too highly discounting the value of Blackwater?

Since the Blackwater PEA was from 2012 it seems likely that an updated one would result in lower CAPEX for that mine. Is Blackwater the hidden gem within NGD?

Fleck: Blackwater needs prices here, or higher, to really be economic. That is my understanding.
(posted: 2/16/2018)

Q: The rally came in right on schedule, bouncing nicely off the RISING trend lines (most importantly, the 200-day MA, always "Programmed" into the robotic brains). No real surprises but I wanted to evaluate the "quality" of the rally once it got underway. So far, internal strength is impressive. However, it looks like the FAANG addiction is alive and well and the primary buying is coming in through ETF purchases, which levitates or depresses everything within the ETF's charter. As I have emphasize before, ETF activity grossly distorts traditional, "old" advance/decline statistics. Therefore, I tend to ignore that "Stone Age" squiggle that used to measure divergences. Now, we measure them a few different ways.

Meanwhile, the bonds have continued to be very weak, when they were "supposed" to enjoy a decent rally. This further confirms the bond bear thesis. and if the things keep going down, stocks will one day break hard. Right now, I think this rally will approach the old highs in the key indices, especially the "DOW", if internals start to weaken. For the time being the greater fool, trend chasing bullish players have some cover.

Fleck: Thanks to Mr. Skin for that timely update.
(posted: 2/16/2018)

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