"Market Monitor"-Mark Leibovit of vrtrader.com
Friday, May 26, 2006PAUL KANGAS: My guest market monitor this week is Mark Leibovit, chief market strategist for vrtrader.com. Welcome back to NIGHTLY BUSINESS REPORT, Mark.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Pleasure to be here, Paul, thanks for having me.
KANGAS: Last November when you were with us, you were as bullish as any market analyst around. The Dow as at the 10,700 level and you expected an intermediate move to 11,400 or a little bit more and it got there and then some, right.
LEIBOVIT: Yeah, we got to 11,700. I was hoping for even 12,000 or higher but our cycles played out. We were looking for strength in the spring, specifically mid-May and this is what really has happened.
KANGAS: Let`s have a look at your Dow forecast for 2006 and there we see the rally, end of the spring, where we came close to the old high. And then you`re looking for a nasty summer by the looks of it.
LEIBOVIT: A bit of a plunge lies ahead, Paul, a little bit of a technical right shoulder is developing here technically where we may bounce a little bit in June, but the model says get out in May, down until August, September, could be very sharp. I don`t have a number for you, but this is a time to be very defensive.
KANGAS: So that`s what you see as the trend, down in the summer and a little recovery in the fall.
LEIBOVIT: Yeah and a little bit toward the end of the year, a little bit of recovery. 2007 may still be good, Paul, but let`s get our 2007 forecast together before we go that far out, right there, near-term negative.
KANGAS: All right. How about for oil? What do you see there? Let`s have a look at your annual forecast model.
LEIBOVIT: Zigzagging higher. Steady zigzagging higher.
KANGAS: You got a number?
LEIBOVIT: $75 a barrel makes easy doings, as far as I`m concerned, $80, $85. KANGAS: Gold has been the talk of the town for months now. Let`s have a look at your forecast for that. That looks much higher also.
LEIBOVIT: We`ve been bullish for four years on gold. My big picture target is about $2700 an ounce believe it or not, so we have a long way to go. This year up, and the next several years up, I think we`re in a 20- year up move in natural resources and the precious metals in particular, so stick with it.
KANGAS: On your last visit with us, you liked four stocks. Let`s see how they fared since November. Microsoft can`t get out of its own way, down 15.5 percent. You still with it?
LEIBOVIT: I would sell it. The Dow`s headed down, part of the Dow, back out of Microsoft (INAUDIBLE)
KANGAS: Then the big uranium mining company, Cameco (CCJ), up almost 59 percent. That was a great call.
LEIBOVIT: Thank you. CCJ, uranium from $8 a pound to $43 a pound and probably going to $100 a pound, that`s uranium itself. CCJ is a good play there. It`s a blue chip in the group. Stick with it.
KANGAS: OK and then we have two others that you recommended, Miramar Mining (MNG), a little gold stock, up 90 percent, not bad.
LEIBOVIT: Yeah, well, the low-priced ones are generating a lot of speculative interest but stick with Miramar. As gold goes higher, this will go higher, probably the next target is around $5 to $7.
KANGAS: OK and then the ETF on the big board, streetTRACKS gold up 34 percent, great calls, Mark, excellent and I compliment you.
LEIBOVIT: Thank you, Paul.
KANGAS: How about some more winners? Do you have any new recommendation?
LEIBOVIT: I`m going to give you two more gold, silver-related plays as that`s still the big group with me, Hecla Mining is around $5, ticker symbol HL.
KANGAS: Let`s have a look at the chart there. It`s had a recent ride back down a little.
LEIBOVIT: Backed off to about 4 3/4, moving up again. I have a $9 intermediate target so I`d buy Hecla. Another one I like is Glamis (GLG). KANGAS: Let`s have a look at the chart there. That, too, has had a big rise recently which is logical.
LEIBOVIT: I`ll just pull back a little bit, but I`m looking for another 20 points to the upside of this as gold continues to break out. Hopefully if gold reaches $1,000 an ounce this year, this thing could be perhaps into the 40s.
KANGAS: OK, we have time for another recommendation.
LEIBOVIT: And finally, we`re going to go short. We`re going to short the Dow diamonds here, that`s an ETF for the Dow.
KANGAS: The Dow stocks on the big board.
LEIBOVIT: Yeah, DIA, go short. Our model which we put up a few moments ago, says down at the fall. This is a pure play on the Dow, short the DIA.
KANGAS: Especially in that summer sell-off that you`re expecting, correct?
LEIBOVIT: Right, we don`t know if we`re talking 10 percent, 15 percent, what percentage is here, but we should be headed lower, probably close to the 10,000 level at least, so it could be a lot worse than that. Cycles say down.
KANGAS: Do you own or are you short any of these securities?
LEIBOVIT: I am long the GLD, which is the streetTRACKS for the gold because that`s my big play on gold here. I`m definitely playing that one.
KANGAS: OK, I can see that you really are bullish on that. It`s been good to you, though. Anyway, Mark, thanks again for being with us. We appreciate your outlook.
LEIBOVIT: Thank you, see you in six months Paul, thank you.
KANGAS: My guest monitor Mark Leibovit of vrtrader.com.
