-- Posted Wednesday, 6 December 2006 | Digg This Article

Grandich Letter Special Alert

December 6, 2006

9:00 a.m. EST

For all practical purposes, December 15th is the last real trading day of the year. The last couple of weeks in December are historically thin trading and movements take place in very illiquid markets. The markets worldwide really don’t return to normal until the second week in January (that’s why I’ll be on vacation –more details later).

It’s my plan to have a look back at 2006 and outlook for 2007 edition by the second week in January. In the meantime:

U.S. Stock Market –

As mentioned several weeks ago, I’m looking for a major top between Thanksgiving and the third week in January. The “Don’t Worry, Be Happy” crowd on Wall Street has record bonuses due them, so don’t look for any meaningful declines between now and year’s end.

North of The Border –

While clearly a much better place to invest versus the U.S., it is likely to at least sneeze as the U.S. economy catches a very bad flu in 2007. While the bulk of the oil correction is over, the belief that oil is going to trade between $55-$65 for the foreseeable future should make aggressive Canadian equity stances (not related to precious metals) only after sustained weakness.

Gold –

I’m looking for a significant bottom today or tomorrow, followed by a rally above key resistance at $650 before year’s end.

Silver –

Consolidating from an overbought condition but its least resistance is to the upside.

PGMs –

The talk of a platinum ETF has died down, thankfully. Any short term run-ups from such an event becoming real would be a net negative for platinum as users would look to switch to palladium if an ETF added several hundred dollars more to the current difference between platinum and palladium.

Uranium –

$100 a question of “when?”, not “if.”

Copper –

The bearish argument grows stronger — for the first time in recent memory both consumption and imports fell in China. I would love it to go back towards the old high as it would be one of the best all-time shorting opportunities, but I suspect we’ll stay between $3-$3.40 until year’s end. Next year, look for a price below $2.50.

U.S. Dollar –

Once 80 basis the U.S. Dollar Index is taken out to the downside, the world will get a sell signal and the Fat Lady will have sung. She’s already in the building and warming up.

Oil –

A broad trading range of $55-$65 appears in the cards for at least the first few months of 2007.

Editor’s Note – Please note our offices will be closed from December 16, 2006 until January 8, 2007.

The holiday season is joyous for many but for some, it can be a difficult time. While I can’t respond to individual investment related questions, I will attempt to answer any emails from anyone facing difficulty due to high anxiety and/or depression. I know what that can be like and you to know there’s an open ear here for you.

God Bless To All!

                Peter Grandich

-- Posted Wednesday, 6 December 2006 | Digg This Article

Peter Grandich is the Managing Member of Grandich Publications, LLC (www.grandich.com).
The company publishes The Grandich Letter (first published in 1984) which covers the metals and mining industry, follows world markets and economies, and covers the Canadian markets from an American prospective.

Grandich also provides a variety of corporate finance and development services to publicly-held companies.

Peter Grandich is also the Managing Member of Trinity Financial, Sports & Entertainment Management Company, LLC (www.trinityfsem.com), a Registered Investment Advisor in the State of New Jersey. Trinity provides investment advisory services to individuals, small to mid-size businesses, professional athletes and entertainers.

Peter is a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.

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