Financial Sense Junior Gold Mining Index Review by Frank Barbera

General Comments

Punch-Drunk – Definition: - a colloquial expression meaning ‘dazed from, or as if from repeated blows’; "knocked silly by the impact"; 1. Showing signs of brain damage caused by repeated blows to the head, used especially of a boxer. 2. Behaving in a bewildered, confused, or dazed manner.

Oh yeah, that’s the term I was looking for — “Punch Drunk” — as that about describes it when discussing anything traded on a major exchange last week. What a week, what an awful week! Looking back, the statistics really show the week for what it was, a severe decline for most markets starting with the equity markets of course, where the DJIA fell -585.61 index points or 4.22% to finish at 13265.47 and with the NASDAQ 100 falling 3.99% or 79.69 index points to close at 1956.19.

Only 7 days ago, the DJIA recorded its all time high of 14000.41 and now it is over 700 points lower. For the S&P 500, the peak value for 2007 was seen at 1534.10 on July 20^th last Friday, with the index tumbling a whopping 75.15 index points this past week. That decline, good for 4.89%, chopped the S&P 500’s YTD gain —which at its best was 9.50%—to a gain as of Friday of just 2.86%. It's pretty incredible what a difference a week can make! The nearly 5% massacre on the S&P, as has historically been the case, pulled the rug out of virtually all markets, sending the both physical metals and mining indices sharply lower.

Among the Precious Metals, Spot Gold fell $21.93 to close at $661.00 a loss of 3.21%, Spot Silver fell $.59 to close at $12.68, a loss of 4.44%, while Spot Platinum fell $52/oz to close at 1275.00, a loss of 3.91%. For large cap mining indices, the pain was even more extreme with the XAU, the Philly Gold and Silver Mining Index cascading lower by 13.56 index points from 158.38 to a close on Friday of 144.82, a loss of 8.56%. For the Amex Gold Bugs Index, the week produced a decline of 32.23 index points, or 8.70%. Looking back, last week the XAU wiped out 60% of the gains seen during the prior three weeks, while the HUI wiped out 78.84% of its gains accrued during the prior three weeks. Again, a very ugly week, making it no wonder so many investors are likely dazed, uneasy, confused and bewildered.

Financial Sense Junior Gold Mining Index (FSJG) Comments

For the Financial Sense Junior Gold Mining Indices (FSJG), the results were predictable as this week's decline left few stones unturned. On the week, the FSJG Index of 40 Small Cap Mining stocks ended down 5.97%, a loss of 19.27 index points falling from 322.44, to a close this Friday of 303.17. At 303.17, the index remained above the 50-day average at 295.62 and the 200-day average at 290.40. The Junior Producer Index was really crushed, falling 8.73%, a decline of 27.63 index points from 316.20 to a close on Friday of 288.57. For the Junior Producer Index, the 50-day average closed at 305.45, with the 200-day average at 314.95.

Financial Sense Junior Gold Index™

50-day & 200-day Moving Averages of 40 Stocks

Above: the FS Junior Gold Mining Index just above the 200-day moving average.

Financial Sense Junior Gold Index™

Producer Index

Financial Sense Junior Gold Index™

Development Companies

Financial Sense Junior Gold Index™

Exploration Companies

Among the other FSJG Sub Indices, the Junior Development Index fell by 27.10 index points from 611.42 to a close on Friday of 584.32 for a loss of 4.43% on the week. The 50-day average ended at 595.85, with the 200-day average at 658.46 for the Development Index. Exploration stocks, the bulwark of the FSJG Indices these last many months, also succumbed to the selling pressure falling 5.42% from 222.43 to a close this week of 210.37, with the 50-day average ending at 191.08, and the 200-day average at 167.33. We can only hope, next week is a better week.

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.