Daily Blog - Tiger Software

               September 19, 2007

           Gold Breaks Out with Power
      as FED Cuts Interest Rates by 1/2% 

           William Schmidt, - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

      No reproductions of this blog or quoting from it
      without explicit written consent by its author is permitted.

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                     Gold and Gold Stocks' Breakouts Are Powered
                 by FED Cut in Interest Rates by 1/2%
 
              Gold's rate of ascent is rising faster and faster.  Look at the chart of GLD, the bullion ETF.
          Two weeks ago it moved past $68, as Gold went over $680/ ounce.  Back in 1980, it peaked
          near $725.  We are on the verge of an all-time high.  Our Tiger chart shows very bullish (blue)
          levels of Accumulation.  GLD's Least Squares Regression Line shows a rate of ascent that
          is now 14% per year.  An all-time high will surely cause a buying stampede. (Note- 9/20/2007:
          Gold made an all-time high today.)

               As long as the Fed is willing to add liquidity (a euphemism for printing greenbacks), like
          it has for the last 6 weeks, gold will be very strong.  I have talked about the decline in the
          dollar elsewhere.  The continued reckless wastage of US tax dollars in Bush's insane war on
          and occupation of Iraq virtually guarantees a dollar collapse!  What this will do to retired
          people living on a fixed income is CRUEL!

                              See http://www.tigersoft.com/Tiger-Blogs/9-13-2007/index.htm


           
               Gold stocks, as measured by the Philadelphia Stock Exchange's XAU Index, have today made
           a 20 year new high past flat resistance formed by more than a ten earlier peaks between 150
           and 160.   Here is the Yahoo long-term chart of the XAU.  Its close of 164.78 is not shown
           yet in the Yahoo longer-term chart. This is a reliably very bullish development for Gold.
           It is a baleful sign for the Dollar.

          

                    More than a week ago, Tiger Software recommended traders buy Gold bullion and
          the gold stocks, ABX (Barrick Gold of Toronto - http://www.barrick.com ) and
          GOLD (Randgold Resources Ltd - http://www.randgoldresources.com )   Both are
          now running in all-time high territory, where technical resistance is light, because
          traders cannot bunch their orders at an obvious earlier level.

                                       ABX - American Barrick Gold

  

                                     GOLD - Randgold Resources Ltd
 

            Why did we choose these stocks to recommend? Tiger Software's Power Ranker gave
      them the highest marks for accumulation and insider buying and they were "the first-out-of-the-gate",
      that is, they made new 12-month highs before the others this past month.

           A good way to go now, is to buy the highest gold stock with very high current reading from
      the Tiger Accumulation Index, provided there is not technical resistance just overhead.  Using this
      approach, one should look at AZS (11.42, but at resistance), FCX (103.3, which looks like a Buy. ),
      ABX (38.86) and EZA (131.59 - South  Africa ETF).

          Silver stocks should enjoy this run, too.  But sliver prices are often more dependent on the level
      of economic strength, though.  They will top out sooner than gold if a recession is looming.  Here is the
      current "perpetual futures contract" chart of silver.  It shows red distribution and is just below
      the expected resistance posed by declining 30-week and 200-day moving averages.  Perhaps, it
      will breakout and catch up with Gold.  But the charts say otherwise.  Almost three months ago,
      I pointed out that "silver stocks were starting to tarnish".


   
                    Two very fine silver stocks, PAAS and SSRI are only doing as well as silver.
         I hope they play catch-up.  That will mean that a recession is farther away than some
         of the pessimists think.  Red sell signals have appeared on this rally.  But I think they will
         keep rising if the XAU stays as strong as I expect and Gold can get past $725 an ounce
         and keep going.





                                

                  The ending of the XAU trading range, will mean a lot of short covering.
             Jim Sinclair says that "there is a huge illegal short in each and every one of the
            (gold stock) juniors. Those shorts are going to run for cover."  And he points out that many
            companies have limited how much they can make if there is a steep rise in gold, because
            of the extent to which they themselves hedge with derivatives. 

                 Watch the top 10 holding of Fidelity Gold on FSAGX on Yahoo.  They have a new fund manager there.
             The one before could not beat the performance of just owning GLD (Gold bullion).  Here are their
             reported holdings now.

                    Top 10 holding of Fidelity Gold, FSAGX

            Here is the chart showing Fidelity's FSAGX and a relative strength comparison with GLD (gold bullion)
       In fairness to FSAGX, most gold stocks have not done as well as GLD. And it ranks higher for the
       last month than 38 of 47 gld and sillver stocks.   Note that if Gold continues to run, the automatic red Sell
       signal will finally be bested.  But they served us very well for nearly two years.

       Fidelity Gold Fund's  Breakout and Under-Performance Relative to Gold Bullion




              Best Performing Gold and Silver Stock for Last 3 Months (65 trading days.) 

C:\gold       Days back= 65 
 6 / 15 / 2007 - 9 / 18 / 2007 
Rank          Symbol        Name                         Price        Pct.Gain     
---------     -----------------------------------       ----------    ------------   
 1            SA                                         29.61         65%            
 2            AEM           Agnico-Eagle Mines Ltd.      49.98         35%            
 3            ABX           Barrick Gold Corp.           38.76         33%          
 4            GOLD          ---                          29.84         30%          
 5            FCX           Freeport-McMoRan C & G       103.3         22%                      
 6            ANO           ---                            3           21%             
 7            MDG           Meridian Gold Inc.           31.61         20%            
 8            XAU           GOLD STOCK INDEX             164.78        17%            
 9            GG            Goldcorp Inc.                 28.9         16%            
 10           FSAGX         FIDELITY GOLD                 39.65        15%            
 11           SLW           Silver Wheaton Corp.          12.99        14%           
 12           AU            Anglogold Limited             46.5         13%           
 13           NEM           Newmont Mining Corp.          45.99        13%              
 14           AGT           Apollo Gold Corp.               .45        12%             
 15           GLD           StreetTRACKS Gold Trust       71.63        10%                   
 16           IAU           iShares COMEX Gold Trust      71.7         10%         
 17           KGC           Kinross Gold Corporation      14.43         9%         
 18           IAG           IAMGOLD Corp.                  8.17         7%         
 19           GFI           ---                           17.24         5%         
 20           AZS           ---                           11.42         4%         
 21           CEF           Central Fund of Canada         9.48         3%         
 22           EZA           ISHARES MSCI SOUTH AFRICA    131.59         2%         
 23           HL            Hecla Mining Company           8.33         1%         
 24           EGI           Entree Gold Inc.               2.24        -1%           
 25           EGO           Eldorado Gold Corp.            5.69        -1%           
 26           MGN           ---                            3.66        -2%           
 27           RBY           Rubicon Minerals Corp.         1.58        -2%            
 28           ASGMF         ---                            1.65        -3%            
 29           SLV           ---                          128.68        -3%            
 30           PAAS          Pan American Silver Corp.     26.71        -4%            
 31           MNEAF         ---                            1.92        -5%            
 32           GBN           Great Basin Gold Ltd.          2.51        -6%            
 33           GSS           Golden Star Resources Ltd.     3.48        -6%           
 34           CDE           Coeur d'Alene Mines Corp.      3.49        -7%           
 35           NGD           New Gold                       6.38        -7%            
 36           SSRI          Silver Standard Resources Inc. 34.6        -7%             
 37           TIE           Titanium Metals Corp.          31.52       -8%           
 38           RDIAF         ---                              .55       -9%            
 39           SIL           Apex Silver Mines Limited      19.09       -9%            
 40           CALVF         Caledonia Mining Corp.           .136     -12%            
 41           HMY           Heilig-Meyers Company          11.61      -17%           
 42           SWC           Stillwater Mining Company       9.85      -19%            
 43           GRS           Gammon Lake Resources Inc.      9.97      -24%            
 44           PAL           ---                             7.43      -29%           
 45           EXK           ---                             3.3       -30%           
 46           KRY           Crystallex International        2.73      -39%          
 47           MGH           ---                              .8       -44%           
 48           BMD           ---                             1.53      -51%          

                  Another tool Tiger Software offers is the ability to build your own index of any
               group of stocks.  Here is the Tiger Index of 48 gold and silver stocks.  It is a
              composite of all of them weighted by price times average volume.  It lets us
              see Accumulation and an A/D Line.  Right now the Tiger Gold Stock Index's
              cumulative A/D Line is not making a new high. So, most gold and silver stocks
             have not yet made new highs.  There is still red distribution.  And aggressive
             buying was stronger in July.  The XAU breakout still needs to prove itself.  I
             think it will.   The Dollar is very weak now.  And seasonality for gold stocks is
             good until at least January. 

                     Tiger Index of 48 gold and silver stocks.

 
   

                                                  Want to speculate?

                      "Richmont (RIC) has a market cap of $50MM with $10MM in cash and a mill worth $30MM. They are
              buying back stock and selling at 10 times 2007 earnings estimates. At today’s price, the market is predicting
              more problems. They are un-hedged. They are leveraged to gold prices and the Canadian Dollar."            
              (Source: http://seekingalpha.com/article/24948-gold-stock-earnings-to-shine-in-2007 )
              News from Yahoo - September 13, 2007 - http://biz.yahoo.com/iw/070913/0302074.html
              Gold sales increased by 28% in 2nd Qtr, while production costs declined $147 per Ounce. 
                                           http://biz.yahoo.com/iw/070802/0285606.html

                   

                          From Yahoo message Board:
                                             2.84 at the time of the Tiger Blog's posting of RIC..
                                                        POG (price of gold) @$720 will provide Additional
                                                      $50/oz profit to bottom line.
                                                       22,000 oz X Extra $50/oz = $1,100,000.00 Extra Profit
                                                       24 million shares = $0.0458/sh added profit 
                                                       @ P/E of 8, added $0.36/share

                                                        $2.75 + $0.36= $3.11/share and adding.

                                                        So at POG $720, looks to me like you're losing $$$$ if you sell RIC below $3.11.
                                                        What happens if they hit on one or both mines this autumn?
                                                        BOOM! +100,000 ounces mined and a stock price +$5.25
                                                        Are you as intrigued as I am? "
                                                                Author: Goldisgoldisgoldisgolden  
                                                   http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_R/threadview?m=tm&bn=15480&tid=5567&mid=5567&tof=3&frt=2


                                                                                                         CANADIAN DOLLAR

                  Another way to play the prospects of a very weak dollar is to buy the Canadian Dollar.  Canada,
              of course is a major producer of natural resources.  The trends we see will not change as long
              as Bush's trillion dollar blunder in Iraq continues to ooze blood, honor, prestige and dollars.

                 

                                                 EZA - SOUTH AFRICAN ETF

                                South Africa, long known as the world's biggest producer of gold is lagging.  I would
                    look elsewhere for a good gold investment, though it will probably play catch-up.  It is underperforming
                    bullion (GLD)
                   

         
===================================================================================
                                                Let Tiger Boost Your Investments
                    
                  These are some of the tools Tiger offers to analyze and pick from a group unoverse
          of 48 gold and silver stocks, whose data we provide each night.  Seasonality studies and whether
          to buy and the opening or at the close and the projected next day;s highs and lows give you
          still more reasons to use TigerSoft.  Give us a call - 858-273-5900.