FSJG Index™ Weekly Review
by Frank Barbera
March 10, 2006

General Comments

It was a negative week for both Gold and the Senior Mining stocks. Gold tumbled $25.50 to close at $541.50 down from $567.30 the prior week. At the same time, the leading Gold Indices tumbled with the XAU falling from 137.14 last Friday to a close of 126.81 this week, down 10.33 index points or 7.53%. In addition to the XAU, the widely watched HUI – Amex Gold Bugs Index – also plummeted, falling from 319.01 last week to a reading of 292.57 this week for a decline of 26.44 index points or 8.28%. Both the XAU and the HUI have now been down three of the last five weeks, with both indices more than 15% below their January highs. Who ever said Gold Stocks weren’t loads of fun? Where highly-leveraged mining companies are concerned, volatility is always the watch-word of the day. In both uptrends and downtrends there is rarely a dull moment.

Financial Sense Junior Gold Index

Turning to the Junior sector, this week's action once again showed the Junior to be an ongoing bastion of relative strength with the FS Junior Mining Index slipping from 256.91 last Friday to a reading of 252.21 this week, a decline of only 4.7 index points or just a mere 1.83%. Where did the strength come from in the FS Junior Gold Index?

Above: the FS Junior Gold Index ended at 252.21, above the 50-day average at 233.15 and the 200-day average at 173.81.

Hold onto your hats...

The strength this week was NOT in the Producing companies and NOT in the Development companies. Oh, No! This week the strength came from a hefty 4.75% increase in the FS Junior Exploration stocks, which were sharply higher with the FS Exploration Index moving from 121.53 to a close of 127.31.

Does this indicate a final wave of speculative leadership? Perhaps, but only time will tell. In past cycles, Speculative Exploration stocks are always the last to begin and advance and always the last to tumble even after the larger cap brethren have turned down. Only time will tell if this cycle is repeating the pattern. But for now, it sure looks like the Exploration stocks are signaling yet another down cycle for the medium-term. On Friday, the FS Development Index closed at 708.56, down 5.70% from last week's close of 751.40, while the FS Junior Producer Index finished at 258.91, down 6.66 from last week's close of 265.57 for a weekly decline of 2.50%.

Financial Sense Junior Gold Index™
Development Companies

Above: The Junior Development Index ended at 258.91, above the 50-day average at 664.99 and the 200-day average at 496.19.

Above: The Junior Producer Index ended at 258.91, above the 50-day average at 250.38 and the 200-day average at 192.07.

At week's end, the FSJG Summation Index for Junior Gold Stocks ended at 1213.16, down from 1340.77 last week and is now very close to undercutting prior lows at 1158.11 seen on February 22^nd.

*Please note that the individual companies in this index are proprietary and will not be disclosed due to compliance and regulatory issues resulting from the relationship of FinancialSense.com, Puplava Financial Services, Inc., Registered Investment Advisor and Puplava Securities, Inc. Member Firm FINRA/SIPC.