After The Close, 08 Oct 2008
Merv’s Daily Uranium Index
Market Data
Open: 105.42
Hugh: 117.13
Low: 95.97
Close: 109.93
Volume: 10178
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
Another down day in the uranium market but it looks like things may be firming up just a little. Although this is the first time that the Daily Index hit below 100 at the end of the day we only had a 2% decline. By some standards that may be a bad day but by the uranium standards that is only a minor drop.
As a space filler, since nothing much new is happening in the Index action, I though I’d just look in on the Daily Index since the time it was first developed and see if there are any lessons easily seem.
The first thing of note is that negative divergence in the momentum indicator as the Index was moving from its late February 2007 high to its higher early April 2007 high. Shortly thereafter both the momentum and Index moved into their negative zones.
The other thing of note is that, except for a basic lateral trend in the momentum all this year we have not had a positive divergence. One suspects that there might still be more downside ahead.
One has often heard that if the volume indicator does not confirm a bearish price trend that is a positive sign. I have often stated that at a market top the volume action is often a lagging indicator. Here we see a lateral volume trend from just before the top in 2007 to just very recently. Only in the past week or so has the volume indicator dropped below that 2 year support level for a bearish confirmation.
Now, fun with numbers. The high of the Index was in early April of 2007 at 616.2. That is an 82.16% drop to today’s close. Now, if we look at the price just a little over a month ago, say in late August, the Index was down 63.06% at that point. So, it looks like the market dropped a further 19.1% in the past few weeks. Now, if we use the few weeks earlier price as our starting point the Index fell 51.73% during that time. It sure does make a difference what that starting point is. Why do I bring this up? No reason, just a space filler.
The Merv’s Daily Uranium Index closed lower by 2.47 points or 2.20% during the day. There were 16 winners, 32 losers and 2 going nowhere. Of the top five stocks, Cameco lost 3.8%, Denison lost 9.2%, Paladin lost 11.3%, Uranium One lost 2.3% and USEC, the lone winner of the group, gained 2.0%. The best winner on the day was Crosshair Exploration with a gain of 29.6% while the worst loser was Nuinsco Resources with a loss of 26.1%. With so many stocks in the low double digit price range we could expect large % daily movers for some time.
Nothing much has changed in the indicators over the past few days so I’ll just cut to the chase and rate both the short and intermediate term as continuing BEARISH. As for the immediate direction of least resistance, I must still call that as downwards but there is some sign that the Index wants to stabilize and maybe even turn up. However, we should wait for better indications.
Merv’s Daily Uranium Index
Market Data
Open: 105.42
Hugh: 117.13
Low: 95.97
Close: 109.93
Volume: 10178
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
Another down day in the uranium market but it looks like things may be firming up just a little. Although this is the first time that the Daily Index hit below 100 at the end of the day we only had a 2% decline. By some standards that may be a bad day but by the uranium standards that is only a minor drop.
As a space filler, since nothing much new is happening in the Index action, I though I’d just look in on the Daily Index since the time it was first developed and see if there are any lessons easily seem.
The first thing of note is that negative divergence in the momentum indicator as the Index was moving from its late February 2007 high to its higher early April 2007 high. Shortly thereafter both the momentum and Index moved into their negative zones.
The other thing of note is that, except for a basic lateral trend in the momentum all this year we have not had a positive divergence. One suspects that there might still be more downside ahead.
One has often heard that if the volume indicator does not confirm a bearish price trend that is a positive sign. I have often stated that at a market top the volume action is often a lagging indicator. Here we see a lateral volume trend from just before the top in 2007 to just very recently. Only in the past week or so has the volume indicator dropped below that 2 year support level for a bearish confirmation.
Now, fun with numbers. The high of the Index was in early April of 2007 at 616.2. That is an 82.16% drop to today’s close. Now, if we look at the price just a little over a month ago, say in late August, the Index was down 63.06% at that point. So, it looks like the market dropped a further 19.1% in the past few weeks. Now, if we use the few weeks earlier price as our starting point the Index fell 51.73% during that time. It sure does make a difference what that starting point is. Why do I bring this up? No reason, just a space filler.
The Merv’s Daily Uranium Index closed lower by 2.47 points or 2.20% during the day. There were 16 winners, 32 losers and 2 going nowhere. Of the top five stocks, Cameco lost 3.8%, Denison lost 9.2%, Paladin lost 11.3%, Uranium One lost 2.3% and USEC, the lone winner of the group, gained 2.0%. The best winner on the day was Crosshair Exploration with a gain of 29.6% while the worst loser was Nuinsco Resources with a loss of 26.1%. With so many stocks in the low double digit price range we could expect large % daily movers for some time.
Nothing much has changed in the indicators over the past few days so I’ll just cut to the chase and rate both the short and intermediate term as continuing BEARISH. As for the immediate direction of least resistance, I must still call that as downwards but there is some sign that the Index wants to stabilize and maybe even turn up. However, we should wait for better indications.
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