Saturday, 3 October 2015
After a long break we are back talking markets, the Marco picture remains uncertain with the micro markets becoming the frog like science project that many 80s kids endured at school. Mining seems hot on the agenda for 2015/16 with a murmuring of positivity towards the buy side of blown out resource stocks. The catalyst to change is the complete grounding of all normal correlation as trading pairs appear to have divorced one another over the last year. Gold,Oil and currencies all look disconnected which paints a perfect picture of anarchy.
As the years draw on we flip from understanding market mechanics to applying them which is actually two different concepts. I accept that some people follow the blogs etc and get it... Others however do not which leads them to believe there is a more sinister outlook of the markets. I want to be crystal clear when I say '' I have made the bulk of my money in the markets from technical analysis coupled to a clear vision of market mechanics '' the latter I see as following short term momentum & sentiment which by its very virtue is nothing more than a technical extension. Call this what you will but the testament of time has proven this works time and again.
Lets look over the markets and perhaps evaluate the movers & losers across the small cap markets as well as a quick look at the bigger fish in the pond. Remember we have to be able to forage in other areas otherwise we handicap ourselves, forcing us back into the net when the trawlers about to haul.
Paragon Diamonds: Caught my eye this week, the confirmation that a heavy weight bear raid was underway was quickly addressed by the company with a bullish sounding RNS which suggested the company were very nearly there. However a number of points remain unclear, how will they fund the PLC costs as this is not a part of the debt facility with the balance sheet looking thin at £300,000 with an outstanding loan £500,000 now overdue to suit. PRG needs another $80-$100m (By PM admission here) with the mines not due to get into full production for 18-24 months. ITGT are still apart of the future plans but not in the financing at this early stage. Finally Friday we're informed a significant shareholder was selling as of 23/9/15, I must add PM sounded extremely confident which mirrored the RNS they put out. I get the feeling there is more to this than meets the eye however should Paragon navigate this difficult period then the business offers real gem stone potential '' Time will tell whether its a 1p or 10p company ''.
CEB Resources: We first flagged these up at 0.25-0.30p, many investors attended a P.I get together in London where we were fortunate enough to hear a little about Whitby's plans moving forward. Dancing Dave did not disappoint as he described his plan to farmin into producing (revenue yielding) wells in which CEB would optimise and increase production & revenues. I've covered much of this over the many months yet feel important to recognise a guy who stands outside the office and personally greets (by shaking hands) each and every attendee whether or not a shareholder.This says a lot about the man, I anticipate the market shall not have to wait much longer, it just leaves us waiting to see if they still have enough rock & roll to get the market to its feet.
New World Oil: New was a taboo company for quiet sometime however one of the most major events over recent months has taken place. Aside from short comings of a self professed oil analyst accidentally spending his mums pension buying half a company. The alliance trust who acted as a brake on the stock by consistently selling into the market at 0.07p has now been taken out, which will mean that on any consistent buying we will see the companies share price rise like a salmon at spawning season. I have it on good account that the vote is with Adam Reynolds joining the board '' I'll be pledging my 1% of the company to that vote '' however to me it makes no odds. If they want to drill the market will speculate on it's outcome as recently witnessed with Red Emperor from 1.5p to 7p before its duster. To further compound the unofficial vote, I believe the Reynolds call has 35% or more of the vote as we speak, if the Board don't walk I'd look to carry out a full forensic review of the companies books and practises as clearly there is a reason these guys are clawing at these positions.
Glencore: Wow what can we say other than that collapse from 350p to 180p before bombing out at 66p was a real wake up call for the big boys in the game. Billions has been wiped away from the companies market cap and we as investors are left perplexed at who'll be next. The rebound has been strong although I anticipate another scorpian sting down to 45p area should there be a sniff of further bad news.
Keep your pecker up