FSJG Index™ Review
by Frank Barbera
March 3, 2007

General Comments

Global Stocks market tumbled in the wake of ongoing concerns in the US Sub-Prime Mortgage market and ongoing speculation about loan losses accumulating at major financial institutions. As a result, major stock market indices had their worst week since September 11, 2001 with the DJIA down 571.92 index points or 4.50%, the S&P 500 down 69.21 index points or 4.75%, and the NASDAQ Composite down 155.98 index points or 6.17%. Major world markets such as London, Paris, Frankfurt, Hong Kong, Singapore, and Tokyo were down comparable amounts. With concerns about carry-trade liquidity spearheading the selling orgy, virtually all markets except US governments tumbled as leveraged long positions were unwound.

In the case of the Precious Metals, nearby Gold was down $36.10/oz ending at $644.90, down from $681.00 the prior week for a total percentage decline of 5.30%. In keeping with the sharp decline in Gold, nearby Silver fell $1.20 or 9.15% from $14.20 last week to end Friday at $12.90. Platinum also retreated ending at $1203, down $27/oz or 2.19% from last week's close of $1230. An ugly week to be sure and one which showed no quarter. In the case of the high beta Senior mining stocks, the XAU fell 13.46 index points or 9.23% to end at 132.36, down from 145.82 the prior week. Also down approximately 9.00%, was the Amex Gold Bugs Index which tumbled 9.30% from 356.38 last week to a close on Friday of 323.23, a loss of 33.15 index points.

Financial Sense Junior Gold Mining Index [FSJG]

Reaching deep into the vast recesses of the financial universe into the tiny space occupied by Small Cap Miners, this week's savage decline rippled right through the FSJG Mining Index sending the index down a hefty 7.73% to end at 300.64, down 25.26 index points from last week's close of 325.84. On Friday, the FSJG Mining Index ended above the 50-day average at 291.54 and above the 200-day average at 250.89.

Within the Junior Mining Index, the Junior Producers -- the most liquid of the sub-sectors -- ended down the most, finishing with a loss of 9.45% at a close of 322.36. On the week, the Junior Producer Index tumbled 33.67 index points from last week's close of 356.03 and ended just below the 50-day average at 323.96, but still above the 200-day average at 279.25.

Within the Development Sector, the FSJG Index tumbled 6.45% to end at 686.75, down 47.38 index points from last week's close of 734.13. On Friday, the Development Index remained above the 50-day average at 677.35, and above the 200-day average at 644.59.

Finally, Exploration stocks yielded some of the recent gains, ending down 14.23 index points or 7.57% to finish at a reading of 173.53, down from last week's close of 187.76. For the Exploration Index, the week's decline still left it comfortably above the 50-day average at 161.83 and the 200-day average at 126.46.

Updating the Relative Strength chart, we find that at least through Friday’s close, the Ratio of Juniors to Seniors continued to rise with the FSJG Index falling 7.73% on the week, less than the 9.23% decline seen in the XAU and the 9.30% decline seen in the HUI. The Junior stocks still appear fairly bullet proof, all things considered.

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.