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Rick likes the move in GDXJ today

April 23, 2014

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Rick joins us to chat about gold but we quickly get into the move in GDX, GDXJ, and HUI as well as some of the stocks that we currently hold.

Discussion
36 Comments
    Apr 23, 2014 23:18 AM
      Apr 23, 2014 23:21 PM

      Rick Ackerman ! Thanks to COMPLEMENTING AL TO STAY THE CORES !

    Apr 23, 2014 23:32 AM

    Spoken as a true day flipper Rick as your locking in partial profits on a $3 gain….nobody will be able to spin that into a call for Gold to da moon….not even the Kool-Aid drinking Goldbuggers!….lol

    You probably do more trading in a week than most here in 1 year

    Apr 23, 2014 23:39 AM

    Just out of curiosity, are we all agreed here that the commodity supercycle is nowhere near dead but rather just in hibernation awaiting its cyclical breakout? I ask that of course because it really gets to the heart of why many of us follow gold so closely. Or will the next part of the cycle only include the commodities like corn and wheat (drought and Ukraine triggers) plus Crude (Ukraine, Middle East and other wars as triggers) and soft commodities? Gold should benefit from sovereign defaults and mixed currency crisis that are impending while the likes of platinum and uranium will rise due to shortages. The wildcard is still China which could dampen enthusiasm for pretty much everything else if that country keeps slipping. Does that kind of sum up the sentiment of everyone else?

      bb
      Apr 23, 2014 23:56 AM

      Bird, personally, I buy gold simply to preserve purchasing power, which I believe it will do. That’s a concern for me due to printing.
      Silver? I have some, enough I think,(so Im not buying) maybe it will increase.
      Shares, gold and silver, there are more of just those than I have time to research.
      I don’t know about “supercycles” but Gary seems to be pretty good with using cycles as a trading guide.
      Maybe I could cover more bases if I used technical and read charts, but that seems beyond me at this point.

      Good to see you back posting.

        Apr 23, 2014 23:39 PM

        Thanks bb. Good to hear from you too.

      Apr 23, 2014 23:46 PM

      In response to your question, Birdman, here are my thoughts…

      When it comes to China, I remind myself that the growth in the US during the 20th Century was off the charts and yet contained the great depression and several nasty recessions. So for me, it is not a question of whether the growth rate in China will stumble at times. It undoubtedly will. But on balance, simply looking at the population and the long-term trend — the number of people that will move into the middle class and the demand they will have on resources — it boggles the mind.

      Then you add India and the rest of the developing world and now Africa. Yes, I see a commodity boom the likes of which has never been seen.

      With regard to gold — for me it is real money and the price is once again out of whack with the amount of money printing that went on. Therefore, I don’t see a gradual climb with regard to the commodity bull or inflationary trends. I believe we are due another re-set on the order of what took place from $35 to the hundreds and from the hundreds to $1000 plus. I think the reset is going to take place within a concentrated period of time, brought on by the next crisis (whatever it may be).

      If I am right, then mining stocks will provide the best leveraged return that I am likely to see for the remainder of my investment years. I’d love to live to see a day when the miners’ biggest problem is a public discussion on whether there should be a windfall profits tax. :o)

      Best to you and the rest of the contributers and lurkers.

        Apr 23, 2014 23:49 PM

        You may well be right Eric. My feeling is gold will build slowly over the next two years but there certainly is the possibility that we get a rapid price increase depending on how credit creation and inflation play out with regards to the dollar. A quick devaluation of the buck could be in the cards or alternatively a sharp spike in inflation driven by energy and food cannot be ruled out. I will be betting on the miners along with you but not on gold and silver exclusively. Like some others, energy appeals to me as do uranium and platinum as mentioned above. I have just taken an interest in coal after hearing Doc discuss it many times recently. Honestly, it has never really been on my radar but I will keep an open mind. If commodities do catch fire again we will not want to miss out.

          GH
          Apr 23, 2014 23:03 PM

          Eric and Birdman, we’re of like minds.

          People talk about slowing growth in China, down to 7%. Who knows what it really is. But if we take 7%, that’s much bigger in absolute terms than double digit growth 20 years ago, as it’s starting from a higher base. Honestly, given the growth I’m seeing in my part of the developing world, I’m bewildered by the 2-3 year lull in the commodity bull. I guess it got ahead of itself, and needed a breather.

            Apr 23, 2014 23:58 PM

            My part of the world too, GH. What is happening here in East Africa is absolutely startling. This is China of 25 years back. If you could see Addis Ababa (capital of Ethiopia) today you would be shocked as the city is undergoing a transformative process that is quite unlike anything happening elsewhere on the planet right now.

            This is a construction zone from one end of the city to another. Thousands of new structures are being built simultaneously, new roads are being paved, old communities are being bulldozed to clear the way for the new city plan and rapid transit with overhead guideways are fast approaching completion.

            That is a lot of cement, copper, rebar, glass and asphalt for a fast growing city of maybe four million. Nobody seems to have a good handle on how many even live here but anecdotally speaking the population is soaring if the sharp rise in rents and shortage of good accommodation is any indication. This is no sleepy third world city anymore, that’s for sure.

            The urban middle class is rapidly expanding and there is no shortage of work for the locals who are willing. Just a few years back there were innumerable beggars on the streets here. Lately though the changes have become quite pronounced as many have become employed and a growing intolerance towards that lifestyle has emerged since work is so plentiful.

            It is much more crowded now too as fresh young workers flow in from the country by the thousands every month. I don’t know exactly how quickly the population is increasing but was told that this city is amongst the top ten fastest growing metropolitan areas in the world.

            It is a clash of the modern meeting the old world as lands are aggressively being bid up and competition for free building space becomes fierce. People dress better too. Western style coffee shops, bars, clubs and restaurants are appearing everywhere. Five years back you were hard pressed to find a Supermarket here as the city was dominated by small Mom and Pop shops that all sold the exact same thing. Now there is a Western style supermarket in almost every neighborhood.

            There are many more cars on the streets as well. Modern glass towers, banks and hotels seem to be sprouting like flowers after a desert rain as new cobblestone roads are paved where once just rutted muddy tracks stood as major thoroughfares. This is not just happening in Addis though. A boom in construction is underway in cities all across the continent and it cannot be ignored anymore as that much activity much surely be registering on the global commodity consumption numbers despite China’s slowing growth.

            I wish I had numbers to put on copper usage as just one example but that data is not available easily when you try to tabulate for 54 countries. Somebody no doubt has taken the time to add it all up and will no doubt publish the statistics in good time. What part of the developing world are you in by the way?

            Apr 23, 2014 23:41 PM

            And on that note…..I think it is time people started waking up to what is going on over here. Not that many years back, any crackpot with a hair-brained idea could lease land in the capital of Addis on a 99 year terms for prices so low it would make you cry. These days though the suits are showing up and everyone with a sharpened pencil is trying to cut a deal before he gets left behind for good. The competition is growing increasingly fierce and only those packing real financial weight get to play anymore. The speed with which this has happened has taken many locals by complete surprise. Just saying…..that if you were thinking of showing up and investing here one fine day that the curtain is already coming down on the easy pickings and now it is getting serious as better financed players arrive on the scene. I know a lot of people who have been surprised by the rate of growth and kept thinking that this was a “one day” destination for possible investment while in the background others struck while the iron was hot and the easy opportunities slipped right through the fingers of the guys who could not make a decision. You absolutely must put Africa on your investment agenda now though because this is becoming the new focal point for the global growth story. The rest of the world may be slowing but you would never know it after living here for a week. And the best part is that as much of Africa is still isolated from the rest of the world with regards to trade and financial connections it will be relatively immune to any of the global distortions that threaten so many other countries. This is certainly a good place to grow wealth in my opinion as so much of the economic activity is internally driven and not yet so intertwined in the globalized theme that is a double edged sword for other export reliant nations. For me, the obvious signs are showing up in real estate and lands as that seems to be the best measuring stick for what is happening on the ground.

        Apr 23, 2014 23:23 PM

        Eric,
        Hear, hear and right on.

    Apr 23, 2014 23:43 AM
    Apr 23, 2014 23:48 AM

    It is part of what I’m watching Birdman, if China has its own liquidity crisis from loan defaults and with China being the major driver of the commodity complex we could see a waterfall event as we did in 2008 where everything was sold off, except the US$ which rose 12 full cents vs the $ index as positions reverted back to their carry trade in $’s

    Japan’s currency devaluation last year did not boost golds price so its not a given that continued sovereign defaults will boost gold…Cyprus bail-ins and bank runs didn’t either.

    Imagine if a story came out that Gold was going to be dumped like copper recently as its collateral for some Chinese loans….if the BS rumour would certainly topple gold….

    China should be the #1 issue to watch just as it was on the upward growth demand and now with their bond defaults.

      Apr 23, 2014 23:01 PM

      JJ, have you heard that gold exports from China are illegal? I picked that up in a couple different articles recently but have not yet seen what the source of the info is whether a specific law or just related to PBOC holdings. The thought came to me that if anybody might face gold confiscation it would actually be the Chinese public who cannot send it abroad once it has been acquired. There would be no other buyers in other words except domestically and perhaps the government would demand all of it. Maybe just a crazy thought. The thing is, that country is heading for deep waters that even a few trillion in FX reserves cannot contain. If the system broke down due to a credit or banking crisis (Lehman X 5) we can only speculate on what reactions might flow from on high to hold the system there together.

    Apr 23, 2014 23:51 AM

    As long as the true gold supply remains obfuscated the banksters may be able to paint the chart of gold because of it mostly being a store of perceived value rather than a life-saving commodity like silver that holds its own monetary value.

    I only believe there is more to come for the supercycle because participation was low and it wasn’t very super IMHO. Good start to a thread BM…

      Apr 23, 2014 23:01 PM

      Agree Dan, I have no idea where the top in gold and silver will be eventually but I’m with you the last highs in 2011 did not have the making of the 1980 tops….nobody really owned the sector it was hated all the way up and its hard for goldbugs to realize not everyone is focused on gold, meaning the average town idiot missed the whole run from 2000-11….but I don’t think they will get involved until higher highs as they are always the last to the game and create the parabolic top

        Apr 23, 2014 23:05 PM

        I should add there are some that could correctly call silver topping action in 2011 as parabolic but as Jim Roger’s says he’s more partial to owning silver as gold did make new highs and silver did not…FWIW

      Apr 23, 2014 23:26 PM

      Dan,
      You are absolutely right….the “SUPER” in the commodity super-cycle hasnt even happened yet….we say a “spurt” but that is about it. I heard one “expert” say it died in 2011….WHAT? It never really started – per se

    Apr 23, 2014 23:17 PM

    Gap fills in the miners today, gdxj included.

      Apr 23, 2014 23:23 PM

      Yes and then weren’t 1/2 gap fills but a full fill….Thurs action will be very interesting especially if everything turns down…chalk it up to another gap filled reversal.

      You’ve got a chartist eye TenYear

        Apr 23, 2014 23:44 PM

        In filling that gap, gdxj also tested the broken neckline of a head and shoulders pattern.
        $26 here we come? Either way, I’m glad I bought AXU at $1.21 the other day. It hit $1.40 today.

          Apr 23, 2014 23:51 PM

          and what of the potential to build a reverse head and shoulders on the weekly chart?

            Apr 23, 2014 23:08 PM

            I think that is more likely than $26. The MACD is now embedded as I previously mentioned would happen. Ideally, price will chop in a range until the TRIX 15,9 “kisses” or comes close. Then, a rise into late May or early June wouldn’t surprise me –’09 style.

          Apr 23, 2014 23:25 PM

          Matthew fwiw I sold my DUST position late this am @ $24 which I bought March 19 @ $20…I live by the chart and it brokedown….still short Gold and Silver bullion.

          Will sit and watch the miners to see if a breakout takes hold and get long….either bullion catches up or bullion will take the steam out of the miners and its short time again.

          Apr 23, 2014 23:15 PM

          Matthew looking at the weekly on GDX if a close above est $27.50 unfolds than a trend line off the May 2012 lows across the March 2013 lows shows resistance at $30.+ then the upper trend line in place since Sept 2011 comes into play @ $34…that’s the hurdles that need to fall as basically $30.65-98 has capped GDX since last April

    Apr 23, 2014 23:18 PM

    birdman – i am not in that camp.

    50% gains…%40 gains…you could get that anywhere with the conventional markets with a lot less risk.

    You could have thrown a dart at a board and made 50%, 100% gains…
    facebook
    netflix
    tesla
    caterpillar
    the list goes on and on

    who needs these penny stocks casino plays when you can get the same returns with the broad market

      Apr 23, 2014 23:23 PM

      A GAIN off 40 % 50 % Will by a JOKE IN THE NEXT 5 YEARS ! BY STRONG !

    Apr 23, 2014 23:33 PM

    It blows me away that gold shares and indices can rise so much in 2 days when there is another $20 drop in the gold price expected.

      Apr 23, 2014 23:40 PM

      The basters Bankers are buying ! all the way down ! All a basters GAME !

    Apr 23, 2014 23:36 PM

    Thanks for your input Rick, I’m glad I subscribed to your site…I’m also looking forward to hearing from doc and Gary

    Apr 23, 2014 23:08 PM

    why in the world would anyone buy penny stocks? I ofte see and hear advertisements for penny stocks particularly mining stocks on the internet and radio.

      Apr 23, 2014 23:15 PM

      Penny stocks are great, but never buy based on heavy promotion. They aren’t for people who don’t know what they are doing.
      Btw, did you know that any stock that trades under $5 is considered a penny stock? This segment got its name based on their bid/ask INCREMENTS not PRICE. Until the late ’90s, anything over $5 trade in increments of 1/8 of a dollar. So ALL stocks are penny stocks today –technically.

        Apr 23, 2014 23:59 PM

        YES TOTAL INSANITY ! And TRILLIONS OFF DOLLARS AND EUROS AND ALL GRAP BUY SAME GOLD !!!!!!!! BUY