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Friday, August 15, 2008

TGIF -- Charts and News

Man, this has been such a wild week, Friday couldn't come soon enough. Let's look at some charts, starting with one we've been following all week -- the US dollar.

The US dollar has definitely broken above that weekly downtrend. A pullback and test of that support wouldn't surprise me. This breakout opens the door for a rally in the dollar to the 80+ level.

And naturally, the rally in the greenback is kicking gold lower ... Gold could make a stand here. But the bullishness in the dollar tends to tell me that gold will go down to test that weekly uptrend I've marked as (2).

Now, let's look at the CRB Index, a broad commodity index (though it is weighted heavily toward energy) ... It is testing support as well. So, maybe this will bring a rally early next week. I think I've pointed out why that rally could fade quickly.

And sure, energy could lead the rally. But pay attention to agriculture -- that's where I'm seeing some real bullishness right now. IN OTHER NEWS ...


Cameco Cuts Production Target by 1 Million Pounds
Cameco said its share of uranium production for 2008 is now projected to total about 19.6 million pounds of U3O8, down from the previous forecast of 20.6 million pounds of the fuel used to power nuclear generating plants.

XX Sean’s note – good thing Cameco got that
sweetheart, hush-hush deal to resell 550 tonnes of Iraqi uranium, or it might have to cut its production target even more, eh? Now, how’s your money bet on Cameco cutting its production target again? Do you feel lucky?

Uranium One Reduces Production Targets Of Dominion Mine
The company said that it expected to produce 320,000 lb of uranium from Dominion this year, compared with a previous forecast of 590,000 lb.

XX Sean’s note – A slew of companies have cut production targets. Keep an eye on the spot market over the next couple weeks and let’s see if utilities are getting nervous.

Raids Suggest Russia Targeted Energy Pipelines
A neat row of large craters in a field in southern Georgia strongly suggests that Russia dropped bombs near oil and gas pipelines bringing fuel to the West.

XX Sean’s note – this story is in the Wall Street Journal, which hands its political reporting over to crackpots and wingnuts, so take it with a grain of salt. Also, while Russia won the war on the ground, Georgia has won the information war hands-down. On the other hand, would you put it past the Russians to bomb Georgian pipelines? I sure wouldn’t – I think Russia is trying to build a new Empire of Energy. The only question in my mind is, if this is true, why didn’t Russia follow through?

US Economy

U.S. Industrial Production Unexpectedly Gains 0.2%, Led by Cars, Metals Industrial production in the U.S. unexpectedly rose in July, helped by gains in automobiles, metals and machinery.


China's Factory, Property Spending Growth Quickens on Disaster Rebuilding China's factory and property spending growth accelerated, fueled by rebuilding after the Sichuan earthquake in May and snowstorms in January and February.


Silver, Oil, Wheat, Copper Plunge as Dollar's Rebound Saps Commodity Boom Gold plunged below $800 an ounce, platinum posted the biggest drop in almost seven years and oil, corn and copper slumped as the dollar's rebound reduced the appeal of commodities after a six-year boom.

OPEC Leaves 2009 Oil Demand Growth Estimate at Lowest Rate in Seven Years The Organization of Petroleum Exporting Countries, the supplier of more than 40 percent of the world's oil, left its forecast for 2009 oil demand growth unchanged at the lowest rate in seven years and warned that consumption may fall further.

OPEC's 2008 Oil Revenue to Exceed U.S. Income Tax Receipts: Chart of Day OPEC is pulling in more money from oil sales than the U.S. government is raising from individual taxpayers.

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