"Market Monitor" -Mark Leibovit, Chief Market Strategist for Vrtrader.com
Friday, April 24, 2009PAUL KANGAS: My guest "Market Monitor" this week is Mark Leibovit, chief market strategist for vrtrader.com and welcome back to NBR Mark! Good to see you.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Always a pleasure to be here, Paul.
KANGAS: From your technician's vantage point, give us an idea of how you think this market has shaped up.
LEIBOVIT: Back in November we were looking for 6500 in the Dow, Paul. That was our downside target. It was met. We staged a rally here which I believe is a bear market rally but still it's tradable. The 200 day moving average in the Dow Industrials is around that 9200 area. A halfway retracement of the entire 7700 point decline is about 10,000. I'm not quite sure if we will see that but it could happen later in the year. Our short- term work says don't chase the market here. We're already rallied a couple thousand points, but we pull back into May and have a little bit of a rest. I think you can jump in for another wave higher, but keep in mind it's a traders' market and it's still a bear market.
KANGAS: But it sounds like you feel the worst is behind us. No more 6500?
LEIBOVIT: Not for now, maybe a year or two later. We will take our annual forecast year to year and we'll deal with the next year as it unfolds. That's always possible. If we find resistance and the 200-day moving average could come down, it could come right back there but that's not for this year, I don't believe.
KANGAS: In this volatile market are you buying anything?
LEIBOVIT: Gold is my favorite. I think we've begun a new rush in gold. This is a new rush like we saw in Internet stocks. I think this is a tremendous opportunity for investors and the move is only beginning. In fact there's a comparison I make to the Dow back in 1982 where it traded between 800 and 100 and when it finally broke through, 1000 became the floor. That's what's going to happen to gold here. When it gets to 1,000, that's the floor.
KANGAS: We have your annual forecast model for gold and it looks very bullish, especially toward the end of this year.
LEIBOVIT: Very bullish, a little setback here in the summer but the model is designed to give you an overall impression of what's coming, so any weakness, that we just broke out of a 20- day channel to the up side, a wedge to the up side. We just experienced a four month cycle low and we're getting volume to the upside so it could be happening now, Paul and you got to be in there.
KANGAS: Your target is $3000 an ounce.
LEIBOVIT: Yes, I'm using that 10 times multiple theories. Stocks went up 10 times, Dow from 1,000 to 10. Real estate went up and we're going to do the same for gold, 3,000 is a reasonable target the next couple years.
KANGAS: I want to tell our viewers that our web site has more of Mark's technical analysis on gold. That's NBR on pbs.org. Now on your last visit in November Mark, you recommended a gold stock. Let's see how it's done since then. We have it up here, Central Fund of Canada (CEF), a gain of 21.3 percent, very nice move. Thank you for that good advice.
LEIBOVIT: And I would stick with CEF.
KANGAS: Is that a new recommendation? We have now charts of your new recommendation.
LEIBOVIT: OK, keep CEF at 60 percent gold, 40 percent silver. I would add Hecla Mining (HL), which is a tremendous opportunity. Stock's down from 13 to $1, now trading around $2.50.
KANGAS: Let's get that chart up there.
LEIBOVIT: Double or triple on Hecla Mining, at $2.50, buy Hecla.
KANGAS: OK. That's two gold and silver stocks. Now we have Denison Mines (DNN).
LEIBOVIT: Denison Mines, also a very similar situation. Stock's way down from $9 to $1 turning higher. Strong volume to the upside, easy double or triple in Denison. Good play in energy as well as metals, mostly metals.
KANGAS: DNN on the American exchange, correct?
LEIBOVIT: Correct and our final recommendation is Northern Dynasty (NAK), which is a gold stock trading around $6.75, easy double here, a pure gold play and nice leverage there as well, trying to keep them to the low price side, Paul because of the leverage potential and I own all of these just to let you know. I love all of these stocks.
KANGAS: All right, very good indeed. I want to thank you once again for sharing your views with us Mark. Mr. gold lover, I guess we could call you.
LEIBOVIT: Yes. Gold bug for sure.
KANGAS: For sure. Thank you for being with us, Mark.
LEIBOVIT: Thank you.
KANGAS: Mark Leibovit of vrtrader.com.
