GPR.TO Great Panther Resource is........ Great. Bounces back over 12%.

A sizable shakeout occurred on Thursday where the stock collapsed.  This size of this was not expected  but as the price action was trading above the bollinger bands it would make sense for a correction to bring the price action back within these bands.  This would have been an amazing time to buy as the price dropped to the previous all time high back Dec 7th @ 2.90.  Price came within 1 cent with a low of 2.91 on the 24th.

As price action is still at bollinger band I don't expect continued 12 % jumps in this stock.  However, it was one of the strongest silver play recoveries on Friday February 25th, 2011.

Previous article here.

Eating volitility for breakfast

Charts from Kitco

Silver clawed back progress from the bears today.  The key is to just take the volatility for what it is.  Overall trend is up for these metals, however corrections are expected and healthy.  Nothing can go straight up, so pull backs that continue to prove there are buyers at these levels are important for the overall market behaviour.

Yamana Gold Inc. TSX: YRI - Q4 earnings + Annual report. RECORD REVENUE, RECORD EARNINGS, RECORD CASH FLOW & RECORD PRODUCTION

Production mining companies are in for massive moves.  This has been the expectation of this blog for some time now.  And 2011 is going to be a big year.  We have tracked AXR.TO go from a $4 stock to $8, FVI.TO go from a $2 to a $5, SBB.TO go from a $3 to a $6, GPR go from a $1 to a $3, the list can go on.

So of the bigger players such as Yamana Gold Inc are starting to report earnings.  This was released after the bell on Wednesday.  See full report here.

Highlights quoted from report are as follows:

HIGHLIGHTS FOR THE FOURTH QUARTER 2010

    -   Record revenues of $535 million, more than 34% higher than the same
        quarter in 2009
    -   Net earnings of $160 million or $0.22 per share, more than 340%
        higher than the same quarter in 2009
    -   Record Adjusted Earnings of $173 million or $0.23 per share(1), an
        increase of more than 70% from the same quarter in 2009
    -   Record fourth quarter operating cash flow of $265 million, $0.36 per
        share,(1) an increase of 71%
    -   Production of 286,682 gold equivalent ounces (GEO)(1)(2) in the
        fourth quarter at cash costs of negative $34 per GEO, which included
        record production at El Penon of 113,800 GEO

HIGHLIGHTS FOR THE FULL YEAR 2010

    -   Record full year revenues of $1.7 billion, an increase of 43% over
        2009
    -   Record net earnings of $451 million or $0.61 per share, an increase
        of more than 130% from 2009
    -   Record Adjusted Earnings of $451 million or $0.61 per share, 30%
        higher than 2009
    -   Record full year operating cash flow of $747 million, or $1.01 per
        share, representing an increase of 51%
    -   Record production from continuing operations for the year of
        1,047,191 GEO at cash costs of $50 per GEO
    -   Positive construction decisions made on three projects during 2010;
        Ernesto/Pau-a-Pique, QDD Lower West at Gualcamayo and Pilar. These
        projects are on track for production start-up in 2012/2013
    -   Cash and cash equivalents of $330 million at December 31, 2010, an
        increase of $160 million from 2009
    -   Debt decreased in 2010 by $45 million

The way I decided to play these annual announcements is via options.

Option expiration March 19th contract.
Strike price: $13
Premium paid: $0.15
Current premium: $0.19

Above, the vertical line is the expiration date, and the horizontal lines are the likely targets based on fib projects of wave 1.  The key is how the market will react to the annual report tomorrow. Given the fact that they made record profits on record production etc.... The market has only one way to take this..... very bullish especially with the fact that silver and gold prices are still hanging around their highs.

Markets get shaken up - a Look at SPY

Using the SPY as a proxy for the S&P500 volume.  It has been noted by many that any time there is real volume spikes they only occur on sell days. And strong sell days.  2% today.

Just like in January when Egypt's situation spooked the markets, it is hard to call this the turning point.  However, I believe that these type of strong sell days demonstrate how fragile the US markets are.  It should be noted that the MACD crossover has occurred and the Slow stoch has broke its embedded nature.  However, technical analysis seems to have lost its role in the current market.  That happens when billions of dollars are pumped into the market bi-daily.

Gold / Silver had a correction today which was expected as they have had huge gains. Silver is still holding above $33 which is the highest point since last year.  All eyes seem to be turning to $50 silver as the next likely stop.

What is interesting to note is that the metal markets and the stock markets have been rising together and today they fell together however, this correlation doesn't hold always. The metal markets have corrected the past 2 months from their highs leading me to be more bullish on them over the general market simply because the market has just gone straight up without digesting gains.  This means that when sell pressure flocks to the markets a deep correction could be in the works baring any QE3 talk... June is the end date to the QE2 program so expect discussions to get heated as this deadline approaches.