FSJG Index™ Review
by Frank Barbera
May 1, 2007

General Comments

After gaining slightly the week ended April 20^th, nearby Gold slumped substantially in the week just past, tumbling by $12.60 the ounce to end the week at $682.60, down 1.81% from last week's close of $695.20. Not surprisingly, other nearby metals contract slumped in sympathy with Silver falling $.50 from $14.00 to $13.50, a decline of 3.57%, while Platinum fell by $32oz from $1325 to $1293. Given the weakness in the metals, mining stocks took a beating with the XAU Philly Gold and Silver Mining Index falling 2.74% from 143.66, to end at a value of 139.73, and the AMEX Gold Bugs Index, the HUI, falling from 356.16 to a close of 344.83, a decline of 11.33 index points or 3.18%. Given the selling pressure evident in large caps, the downside disturbance was even more prominent among secondary golds where the small cap indices took a real pasting.

Financial Sense Junior Gold Mining Index Comments

For the week, the Financial Sense Junior Gold Mining Index (FSJG) fell 4.65% to end at a reading of 311.44, down from 326.65 last week. The decline was the worst weekly sell off seen since the week of March 5, 2007, when the index fell 7.07% amid the China-led global liquidity scare. On Friday, the FSJG Mining Index ended below the 50-day average at 315.12, but remained above the 200-day average at 268.88.

Among the Sub-Indices, the pain of the week was quite evenly distributed with no corner of the market left unscathed. In the case of the Junior Producer Index, which only last week recorded new all time highs, this past week's decline took prices down from a reading of 354.69 on April 20^th, to a close of 341.33 on April 27^th . For the week, the FSO Junior Producer Index slumped 3.76% to end with a loss of 13.36 index points. Nevertheless, the Junior Producer Index just barely held above the 50-day average, which ended Friday at 341.09, and with the 200-day average at 296.94.

For the Development Stocks, which have lagged badly over the last few months, the index tumbled 38.42 index points to end at a reading of 686.21, down from 724.63 on April 20^th. The loss of 5.30% left the index below the 50-day average at 709.26 while still remaining above the 200-day average at 662.15. Finally, Exploration stocks, the star performers of 2007, also set back substantially in 2007 with the FSJG Exploration Index ending Friday, April 27^th at a close of 182.25, down 9.09 index points from the prior week's value of 191.34. The decline of 4.75% depressed the Exploration Index to just under the 50-day average at 182.89, with the 200-day average at 142.25.

Overall, the technical action seen within the Junior segment of the market remains quite robust notwithstanding this week's decline, as we see that ‘breadth’, as measured by the Daily Advance-Decline Line for this space, remains comfortably within the realm of a medium-term uptrend. 

That’s all for now,

Frank

*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.