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Gold/Mining/Energy : Big Dog's Boom Boom Room (Moderated)
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From: Big Dog4/18/2005 8:48:31 AM
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RBC Capital

Uncertainty Breeds Volatility

In our view, 2005 will be similar to 2000 when the OSX experienced 8 corrections of at least 10% or more.
This would be in sharp contrast to 2004 when the OSX managed just 3 corrections of 10% or more.
To put this data in perspective, the OSX has averaged six corrections/year with an average drop of 14% since inception in 1997.

Earnings Season: The Sentiment Gauge

With BHI's positive preannouncement on Friday we received an indication that macro concerns are weighing more heavily on investors' minds than fundamentals.
By the end of next week we should get a clearer view on sentiment as 19 of our 28 companies will have reported.
If good news, i.e. upward EPS revisions and positive commentary from calls, is no news or worse, and the "rally monkey" fails to deliver new highs, it may be a signal not to fight the tape.
The moment of truth is nary a week away. Stay tuned.

Downside Support

We see downside support first at the 125-level on the OSX, which would bring the index to a 14% decline from its 145.26 peak.
The 120-122 level would be the next support with 122 being the OSX's 200-day moving average and 120 given its role as both resistance and support from September 2004 through January 2005.
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