Monday and Dr. Postma is Definitely In
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Doc the only way $1225 gets a print on the gold chart is off a very disappointing NFP data this Fri removing any suggestions the feds start the interest rate cycle sooner rather than later as the US$ will continue its decline off 100 A big positive NFP and the $ breaks above 100 sending gold to re-test $1140 as a June rate hike will be the spin.
Since late March and all April the 150MA has been an area of major resistance for gold as it sits currently at $1207 that’s a big hurdle that only an interest rate cycle pushed back into late 2015 could over come the resistance between $1207 and $1223-25
I believe you’re right on. I would be surprised if you get 2 months of poor employment reports.
Yes the biggest data any government fudges…employment!
If the Feds are looking for an excuse to start an interest rate cycle / or not, Fri is a perfect market balloon trial as it will be very telling as to whats really going on behind the curtain – interest rate spin or reality
Clive Maund’s latest thoughts on silver and gold – I am a sucker for nicely coloured charts:
Don’t you think that many of the gold stocks have been up as gold has drifted down because gold is still up in many other currencies, where some of these countries are domiciled and where they produce gold? A rising gold price in these other currencies means better cashflow potential for many of these companies.
A great point Silverbug Dave, and many mining CEOs were mentioning at PDAC and the BMO conferences earlier this year that Gold in their currency (Canadian, Australian, Mexican, etc…) was up, and their expenses were down due to their currency debasement. This has given the miners a bid, and some institution investors are starting to reallocate some funds from the general markts into commodities.
This is a great point Silverbug Dave, and one that most of the mining CEO interviewed at PDAC and the BMO show earlier this year noted as well. Their local currencies being devalued has made a huge impact on mining companies expenses, they’ve also had cheaper energy costs with oil down, and Gold is in a bull market in every other currency. Many investors and hedge funds are starting to look for value, and finding incredibly oversold positions in miners.
Silver; that’s correct and some analysts are starting to realize that fact.
(OT) Scorpio was up about 20% today an higher-than average volume.
A change in upper management is the only announcement – I need to dig deeper to understand why a new CEO really means that much higher market cap?
BNN: Jaime Carrasco (Not personally familiar with him or his analysis record)
“What is interesting is that the rock that is being produced is all low-grade production. Just by diverting to high grade, they can really kick up production when the time is right and when we need silver prices much higher. Ridiculously cheap. Good management and good locations.”
Still learning about ADX (+/1 DI) and how to best use it with the stocks I own/trade.
An amazing upturn on + DI on gap-up of 20%. The next few days should be interesting.
Sometimes, the large, unexpected spikes can be due to a major newsletter/service recommending as a “Strong Buy”. I remember a Casey Group recommendation could move a lightly traded penny stock.
I haven’t seen that Casey effect for years, except when they issue a sell like they did with TGM months ago.
Volume today for SPM was 18 times its 3 month daily average.
http://www.investopedia.com/articles/trading/07/adx-trend-indicator.asp
SPM jumped as much as 39.5% from Thursday’s close.
Yes, that is why I think it was an institutional investor taking a large position, and why I sold about half of my position today. If it pulls back from today’s spike up, then I’ll buy some of that position back in the next few days.
Scorpio is a mid-term to longer term 400%+ growth stock in my opinion.
I sold a little more Claude and some gdxj calls today, but not a single share of Scorpio.
I’d say the Casey Research team has aided the rise of Klondex to some degree, but there are a number of newsletters that have been plugging it over the last year or two…. and rightly so.
I think Casey first recommended it in 2007 or thereabouts.
Well, I just know they’ve been pushing the stock a bit harder the last 2 years and it shows.
True, others have been pushing it too.
I took some partial profits in Scorpio mining today while it was up over 25% on the day in the US over the counter ticker (SMNPF). What a jump, and I have a hard time believing it was all due to just a new CEO. It looked like and institutional investor taking a position.
Well my comments didn’t get posted because I used my work email address in error, but yes Brian, I took some partial profits in Scorpio Mining today as it was up over 25% in the US over the counter (SMNPF).
I am not so sure it had as much to do with the new CEO, as much as, just a large institutional buyer taking a position. Scorpio mining also owns 9% of Scorpio Gold that recently paid off its debt, has a small mine in production, and just hit some great exploration results lately. Scorpio Mining also is going to realize synergies now that it took over US Silver and Gold and yet another mine earlier this year.
Now that’s some move. I would expect it to come back to where it gapped. I love the monthly charts—it’s the kind of stock I love to take a position in based on the technicals if there are some redeeming fundamentals to support it.
Doc, I’ve been a fan of scorpio for years and Dan Calgary, Matthew, Brian and myself have discussed it a few times over the last few months. It is being touted as another turn-around (like Claude) but it is the same kind of story….
They’ve been working their tail ends off for years to improve the economics, have a solid team that knows how to mine in mexico, they have substantial base metal credits, and just acquired US Silver & Gold w/ yet another mine earlier this year.
So now they’ll be “an over-night success and turnaournd” just like Claude. The fact is Claude was working for years since 2011 to turn their operations around and expand exploration, and really identified some key grade and resource targets at their Seabee operations and the new Santoy Gap in 2011, 2012, 2013 (poured their millionth ounce of gold and nobody noticed) and then in 2014 (it was a sudden turn-around).
If people think 3-4 years of hard work is a sudden turnaround in Claude or Scorpio mining, then more power to them, but these are both cases of where they just got waaaayyyyy oversold with the rest of the sector, were not really understood by the marketplace, and are just now being realized for the quality companies they have been all along.
Good luck to all in their investing!
I’m glad I bought a lot of Scorpio lately. It’s future is going to be a good one.
Agreed Matthew. I feel the same way about Great Panther Silver, Endeavour, and Hecla, and know you feel the same way about Alexco. Lots of room in these stocks to climb 2-4 times as high as they are now.
SPM’s EV/AuEqOz was just $17 last week, now it’s $22 (U.S.). GPL is $97; Endeavor is $69. To be fair, GPL’s ore is worth a little more than twice as much per ton as SPM’s but Endeavor’s is very close to the same at $155 vs $153.
I don’t know about Hecla.
Of course, there’s more to each than a single stat.
Interesting figures, but yes there is their unique balance sheets, pipeline of projects, recent acquisitions made, management teams, liquidity in the stocks, diversification of risk, etc… In my opinion, they can all be profitable at the current silver prices, but will simply explode in price once the silver price gets back to $19-$20 or more. You can’t go wrong owning some of each.
Hecla is my favorite due to the Aurizon takeover, cost reductions, amount of silver mined versus guidance, and just the solidity of the company. It was also touted in an article recently about their “Turnaround”. This must be the new buzzword in Jr mining for the surviving quality companies.
Could you take a couple sentences and explain this metric: EV/AuEqOz?
I realize that “AuEqOz” = Gold equivalent ounces, but I’m not sure what the ratio is telling you (me, us, them)
It’s simply the Enterprise Value per gold equivalent ounce. So, for each $22 of Scorpio’s EV, you get one ounce of gold equivalent.
At $40 Ev/AuEqOz, Claude is still very cheap when compared to many gold producers. One ton of Detour Gold’s ore is worth about 25% less than that of Claude’s, yet DGC’s Ev/AuEqOz is $98.
Unlike many producers, most of Claude’s gold equivalent ounces are actually gold -96%. Only 63% of Goldcorp’s resources are gold while Barrick comes in at 76% and New Gold 65%.
Thanks. It now makes sense.
great stuff you guys……………….. the boot
Thanks for sharing…………..
Your last paragraph describes my thoughts on Scorpio also. I took a bit of profits but am afraid to sell too much. I like the 20 times volume today on a super strong stock price day. Two bucks here we come again. (;-)
I’ll take 2 bucks a share on Scorpio Dan 🙂 Likely only 2-3 year away from that value.
You guys must have a pretty bearish outlook for silver. 😐
Shad thanks for the kind words these past few weeks! From a health perspective, I feel 100% refurbished. I will continue to drop in once maybe twice a week to give my two meaningless cents ;).
I can tell most of you that it’s quite sad that Matthew does not come around as often as before. You all are missing some great knowledge and insight.
From what I have seen, Brian and peter lead the pack in here with there calls and forward guidance. Shad your a smart lad and profits are profits but maybe you sold to early your scorpio like you did your claude. Scorpio will continue to outperform this is based on Matthew’s work as well as my own due diligence. I’ve gone through the history/charts and it’s going higher.
Doc, every time you mention you will wait for a pullback it keeps running. It happened with claude. Good companies that have been trending sideways for a good period and have there books in order are breaking out. When these companies break out, they don’t wait for retail investors to jump in on a pull back they keep marching on and on with one/two day pullbacks.
I agree with matt that any pop in silver and 2 bucks can be had faster then most think. I will leave you guys with a tip from glen, keep a close eye on the cad/loonie. It has a date with .86 hands down. Fridays number may be the disappointment that launches cad into .86. BOC has made it clear, no reduction on rates for now.
Lastly wti range bound here is going to increase miners margins. That is of course the one’s who did not hedge at much higher prices. This is good for the sector as a whole. Even if gold did break to new lows, miners have already begun there cost cutting goals and oil prices continue to be very reasonable.
cheers
glen
Glen, your right about Claude. I’ve been wanting a nice “minor” correction so I could add a healthy amount to my already good position. Since it hasn’t pulled back, I continue to add “here and “there” as it’s moved up. I have a goal on how many shares I would like to have by the time the stock hits $1.00 in the future. Then I’ll let it ride. I find the discussion on this site extremely valuable since it affords me the chance to be somewhat lazy and not have to go and solo “mine” for the undervalued stocks like Claude. When I find these occasional gems, I’ll attempt to take positions just like in Claude. Over the next few weeks to months, you’ll start to see some of these others start their journeys just like Claude. Over time you can establish a nice portfolio—-and then can you imagine what will happen to these companies when the next bull move for gold begins?
Glenfidish ya rascal….good to hear from you sir! Yes, I agree that Matthew has been missed by many, and I value all his thoughts whether we are in agreement or not, because he’s a mad scientist of technical analysis and a professor of the profound.
You may be correct that I sold a partial position in Scorpio a little too soon, but I needed the funds to allocate to another area and still have a nice position it…. and yes, I’m never too apologetic about taking profits.
I’ve been in and out of Scorpio Mining since 2010, so don’t worry, I’ll add to my position regardless of which way it is going on the pullbacks, and think it has years to rise. Personally I think it will drop about $.03 on the US over the counter (SMNPF) in the next day or so, and I’ll add to my stash there before Friday’s Job numbers.
You are definitely correct that I sold out of my Claude position too early though. Again, I made a nice profit, but definitely left money on the table, and I honestly thought it would pullback when gold prices tanked in March, but it kept blazing higher, and was an early indicator that mining stocks were starting to diverge from the underlying metals price. Trust me, I was kicking myself in the rear for weeks watching it climb higher, but it’s strength compared to its peers really surprised me.
I think you made a great point when you said this:
“When these companies break out, they don’t wait for retail investors to jump in on a pull back they keep marching on and on with one/two day pullbacks.”
That is very true in my experience as well, and hind-sight is always 20/20.
Discussions like this one, about Scorpio, is THE reason I regularly frequent this site.
Lot’s of knowledge about a company for free (money and time).
Wildcat Silver is another silver stock with a low P/B Ratio.
Wildcat (WS.TO) has seemed to have a leverage to the price of silver. I am more interested in the price action as other people know more about the stock itself.
Wildcat is breaking out today.
Dan watch the 150MA on WS as it was support during the first half of 2014 then it broke down and it has been resistance since Aug 2014 now at .36 that’s the area (150ma) that has held back all advances for 10 months now, so odds suggest selling a portion as you can always add more if a confirmed breakout of resistance takes place
good luck!
I sold claude at 0.55. Been waiting for a pullback that may never come.
NEWS…………..ABX COMING………ALLOCATED BULLION EXCHANGE, to arbitrage global gold prices………….per miles franking today.
oh, that is miles franklin , not franking around.
Since, the ABX , will deal in PHYSICAL DELIVERY, this should put the SHORTIE PAPERS SMASHERS on their back heals, which have been playing through the COMEX AND LBMA.
Notice it will be GLOBAL arbitrage, not just NY AND LONDON paper players anymore.
doc-
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May 05 Wealth Building 101: Gold Stock Ratios Stewart Thomson 321gold
Is AL eating too much APPLE PAY ! ? AL DOC CORY ! THE POPE IS COMING TO THE USA NO PROBLEM ONLY HAPPY SLAVE’S ! DRAEM’S IN EUROPE ECONOMY UNDER POPE’S IS NORMAL ! POPE’S KING’s AND CORRUPTION IS OK HAPPY SLAVE’S ! https://www.youtube.com/watch?v=eCWzBEstHx8