Stay nimble and stay well informed!
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To define the financial markets (worldwide) as turbulent is almost an understatement. Now more than ever we must all stay very well informed and certainly nimble.
The Greater,
I have to respectfully disagree. (Not about the corruption and manipulation) but there are opportunities out there. I can attest to that by a couple of our positions.
Al I agree. Where’s the manipulation? People usually say that when their off side…
There’s companies that have soared since the melt in gold over the years. It’s called sector rotation.
The dollar index is a very poor index, in describing the US Dollar.
The Euro weighting is stupid.
Today the Euro went up a lot.
Why would you say it is a “very poor index”, Professor?
With approx 60% Euro weighting, it measures US strength against Europe strength, but there is the rest of the world out there with economies more than just 40% of total world trade.
The Euro went up today, because Greece is not going to be allowed (it appears) to exit.
I think that is a mistake for Europe and Greece, but no one takes my advice.
I agree CFS that the makeup of the index is way to skewed to the Euro, but unfortunately this is what people use most frequently as a measure of dollar strength.
The whole dollar index needs to be re-weighted and there should be a few more currencies included in it that are not currently represented. For now, it is what it is.
How would it help us if there were more currencies included? Why does the dollar index need to be re-weighted and adjusted? For whose benefit and for what purpose?
There are only 6 currencies included and it is severely tilted towards an inverse relationship with the Euro. This means that the Euro can tip the scales more so than the other 5 currencies in the index, and an index of 10-12 currencies, where the Euro is less important would be more fair in targeting the true value of the dollar.
As for who would benefit – the entire planet.
That has already been done. It’s called the Trade-weighted US dollar index which includes some 26 countries and regions. The index stands at 116 today versus 100 in 1973 when the Federal Reserve formulated the index.
https://research.stlouisfed.org/fred2/series/TWEXB
Second point….there are currently 8 Reserve Currencies, not six. The Euro’s strong influence stems from the fact that both the Mark and Franc were once in the reserve basket and it is representative of the size and strength of the European economy overall.
Despite what you may have heard Europe is still the second largest trading bloc on the planet. So there is some tradition influencing the large role of the euro and also economic factors related to depth, confidence and size.
Fundamentally though it is a decision of the financial and banking community itself that determines the role and weighting of the various reserves and much of it comes down to trust relationships, confidence in the legal systems of the countries represented and financial governance.
From Wikipedia, the free encyclopedia – U.S. Dollar Index
“The US Dollar Index (USDX, DXY) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies,[1] often referred to as a basket of US trade partners’ currencies.[2]
It is a weighted geometric mean of the dollar’s value relative to other select currencies:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight
USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008.
The make up of the “basket” has been altered only once, when several European currencies were subsumed by the euro at the start of 1999. The make up of the “basket” is overdue for revision as China, Mexico, South Korea and Brazil are major trading partners presently which are not part of the index whereas Sweden and Switzerland are continuing as part of the index.”
Guess I am the stunned Monkey today. I was off on a tangent about reserve currencies and not focused on the DXY. Usually I have better reading comprehension but you know….lately I am just overwhelmed with too much damned information and too many charts. The correction is appreciated of course.
I know the feeling. Too much info!!
My brain turns to much each night with numbers, charts, info.
Thanks, Professor
I agree with CFS. The index is a tool for deception.
Good day Matthew:
So I sold out of the remaining portion of JNUG today:
JNUG – 10:08:16
Sold shares @ $9.6001
I ended up with 33% profits from the portion I purchased at $7.22 and rolled them into Americas Silver Mining. (still nowhere close to your 100% profits on GDXJ calls, but I’m just 1/3 the investor you are amigo ๐ )
I picked up some shares of Amercias Silver Mining (SMNPF) [previously Scorpio] today. Just in case we get a continuation of the pop in PMs and the related mining stocks.
SMNPF โ 10:13:11
Bought shares @ $0.1297
We’ll see how it goes this week, but I just wanted you to know that for the first time since selling May 4th/5th (and a small 20% position I sold on June 26th) I am back in it with this Silver producer. Come on bounce!
Yeah right, I bet you’re 1.618 times the investor I am. ๐ I picked up more SPM last week and even more IPT for as low as .14 (C$). I added to TGM and one secret one today. Good job with your JNUG and SMNPF.
1.618 – Fib humor. Thanks.
Yes Impact Silver and True Gold are on my watch list, along with a slew of others, but I told myself to wait until August to take new positions. I liked the action on Thurs/Friday in Gold dipping and recovering, so I’m starting to gradually wade into a few positions for a short-term bounce in the metals in August.
Bring it!
I am pretty much hanging on until the end of Sept. I think we will have a very good idea then just what is going on.
I am also curious about the “secret one”. You do realize that the more people that invest in it, the better it may do right? ๐
When you feel like divulging this secret stock, make sure the team on the blog still has enough time to make some cake with it.
1.618 is THE Golden Number:
http://www.goldennumber.net/golden-ratio/
As for buying weakness here, I would rather endure further downside in some of the juniors than to risk being forced to compete with others for shares into a rising market. These things are too illiquid for that.
I disagree Mathew. I really don’t think that wait a bit is a bad idea at all!
Yes I’m a fan of the golden number, as it is the pattern of nature from shells to pinecones. I’m also a sacred geometry geek where it plays and important part. It is also the 61.8% level of increase to develop resistance numbers in Fib levels, and I thought that was where you were going.
Just my preference, Al, I didn’t say waiting is a bad idea.
Who really knows, man?
Looks like Stewart Thomson agrees with me Al!…
“Whether an investor is bullish or bearish, now is the time to be a significant buyer of GDX, GDXJ, and of numerous individual gold and silver stocks!”
http://www.321gold.com/editorials/thomson_s/thomson_s_072815.html
Some great info on s/Thomson report……………
Yes that was a good article from Stewart Thomson. Thanks for posting it Matthew.
I do agree that this a good time to buy for the bounce, but I still think we may have one last buying opportunity at lower prices down the road. As you know, I have been starting to nibble at a few quality companies to play an August pop.
Hope everyone is well.
Tend to agree w. Chris about the USD. Although I suspect it might not necessarily be the Fed saying “no mas” on that one.
IMHO, there needs to be a bit more pain before the pendulum stops in one direction, and then starts the counter move. I say this for the USD as well as for other assets: oil, PMs, industrial metals…
Just my 2cts.
GL to all investing/trading.
LPG
I happen to agree with you two cents.
I do think that the end of Sept. will be telling the tale however.
How about you?
Hello Al,
I think the market will tell the tale. Not the Fed.
It MIGHT be that we have another Plazza Accords conference or something if things really get nasty.
But do I have an idea ? No.
What my suspicion is though, is that we need a bit more pain with a strongEEERRRR dollar. Personally, I’d love that coz it would skew the risk/reward ratio on some trades/investments even more favorably in favor of those who wanna bet against it.
My 2cts.
Best to you,
LPG
LPG – What do you think of this projected US dollar chart from Gary Savage?
It looks like the USD is in a Triangle pattern, but may actually break out in Sept. This would also explain why the dollar is back down today bouncing inside this Triangle.
http://blog.smartmoneytrackerpremium.com/2015/07/chart-of-the-day-98.html
Hello Shad,
Hope you’re well.
Sorry but I can’t bring anything re: currencies technically. I’ve realized overtime it’s not my forte.
Although hope is not a strategy, I just hope the USD moves higher so that it stretches “things” a bit further in other asserts.
Again, sorry I can’t really provide any input re: USD, technically wise.
Best to you as always,
LPG
I appreciate the honest response back. I like his projection on that chart and think it is very reasonable.
Shad,
Who said that was an honest response/answer ??? ๐ ๐ ๐
Best,
LPG
Funny! Well you are good at technical analysis, so I am confident that you can read Gary’s chart I posted, but appreciate that you mentioned currencies aren’t your forte.
Maybe the dollar will act more like gold did in 2012 and leave a lot of bulls holding the bag.
http://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=5&mn=3&dy=0&id=p13637538522&a=417764197
That is a good analogy between the current Dollar chart and the 2012 Gold chart, and it is of course definitely the path the dollar could take.
I’m leaning more towards the dollar bouncing off that support around 94, and then heading up in the fall similar to Gary’s chart here. I’ve been waiting for the blow off top in the dollar to signal the major bottom in commodities, and if the dollar keeps sinking then I don’t see how we’d get the 7 year low in the CRB, the low in oil, or the low in PMs.
http://blog.smartmoneytrackerpremium.com/2015/07/chart-of-the-day-98.html
This alternative might be a better comparison. Note the RSI and MACD. I really don’t think a meaningful new high is coming any time soon. A double top, at best, looks more likely than blowoff to me.
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&st=2008-10-27&en=2013-07-07&id=p81134694086&a=417767398
A double top seems possible, but do you think that would be enough to wash out the sentiment and finalize the bottom in commodities and PMs?
I do believe that it would be enough. I think we’re very close right now. Here’s a monthly chart of GNX if you can view it:
http://stockcharts.com/h-sc/ui?s=%24GNX&p=M&yr=20&mn=11&dy=0&id=p02391232072&a=417785453
S&P Materials Sector Bullish Percent:
http://stockcharts.com/h-sc/ui?s=%24BPMATE&p=M&yr=20&mn=11&dy=30&id=p75997344981&a=417784967
S&P Energy Sector Bullish Percent:
http://stockcharts.com/h-sc/ui?s=%24BPENER&p=M&yr=20&mn=11&dy=30&id=p13490522555&a=417786374
Good charts. Yes, I agree that we are getting close. I guess a double top in the dollar may be enough to put in the bottom, but it really wouldn’t surprise me to see the dollar dip down for another 4-6 weeks and then surge in the fall due to people exiting the general equity markets for the perceived “safety” of cash, and Fed policy with small potential rate hikes looming (or at least the perceived concern of rate hikes in the general markets).
In terms of diversification, country-wise, I would suggest folks start looking at Brazilian Agriculture related stocks. They have taken a hit over the last year and are close to turning around in general, as China invests and world population is still increasing. Even in a depression people still have to eat!
Good idea Professor!
Well said…AGRO is one such company
May I respectfully disagree on AGRO, because of its lack of dividend and high P/E.
I can think of 3 or 4 stocks in this connection that are superior potential purchases.
I am about to buy a couple, but the timing is not quite there yet.
Can you name your favourites CFS?
Potential friendly takeover of Silver Crest (up 16 c)
Thanks Reverend, I was not aware of that!
I wasn’t aware of that either. Thanks for posting it Rev.
Now we need to see if the market approves, or gives them the smack down.
I just took a small position in SVLC @ $.85 because I could see it getting to $.98-$.99 if all goes well with the takeover and depending on how the USD and CAD intereact.
If it jumps up anywhere north of $.92-$.93 I’ll probably sell it back for a quick swing trade.
Up to $.87 today. We’ll see if it climbs further along with the First Majestic share price. I did more digging and found out holders of Silver Crest actually get .2769 shares of AG per share they hold and the estimated value was around $1.30 Canadian. However, if First Majestic gets a nice bump due to rising metal prices, then SVLC will jump in tandem.
Hello Rev,
Trust all is well on your side.
The stock is beaten up today. Conf call at 2pm EST if I am not mistaken.
Me interested in getting some… but I’ll wait to see the stock reaction during and after the conf call.
Coz so far, the mket doesn’t like this transaction at all for AG/FR.
Best to you and GL to all investing/trading.
LPG
I hate takeovers. They tend to buy me out and take away my potential future profits.
Sometimes!
It depends on if you like the company acquiring the stock you hold, and if the combined company makes more sense. If a stock isn’t going to recover, or can’t raise funds, or will take years to move forward, then a merger will release the value in their assets. I’ve been on both sides of the scenario, but have done well picking companies that will be acquired at a good share price and then selling on the news.
First Majestic Silver (NYSE:AG) agrees to acquire Silvercrest Mines (NYSEMKT:SVLC) for C$1.30/share, a 35% premium to SVLC’s Friday closing price.AG says the acquisition enhances its leading position in Mexico, adding SVLC’s Santa Elena Mine to its portfolio of Mexican projects, and will be accretive to net asset value per share, reserves and total resources per share and production per share.AG says it will issue ~32.8M shares in the deal, for a value of ~C$154M.
1.3 per Canadian share ( x .7674 exchange rate) = $.9976 for the US SVLC equivalent.
Currently they are priced at $.85 so I picked up a small position and plan on trading the delta in the current price versus the merger price per share. It may not get up all the way to $.99 but if it gets up in the mid $.90’s then I’m happy.
Rev Andy:
First Majestic closed much, much, much lower today at the close. Their cost of production is somewhat astronomical and all their operations are in Mexico. I’ll take a pass but thanks for the info.
Keep the Faith…………….
Al,
I apologize but I have am a little uncomfortable with hearing repeatedly the “being informed” mantra. It’s just that I feel something is always missing when I hear that.
Let me explain quickly:
IMHO, while “being informed” is indeed a pre-requesite in successful investing, it is simply not enough.
Having a good/sound/valid analysis of the information available (due to the fact of being well informed) is what is, IMHO, more valuable in the investment process. “Valuable” in the sense that it is what creates the “value” (= $$$$) as the outcome of the investing process (as long as the analysis is followed by an appropriate plan – but let’s assume for simplicity that it is a given).
This is especially due to the fact that successful investing is about good ANTICIPATIONS of the future – ie the “information of now” is almost useless: it’s being able to anticipate the “info to come” with sound analysis that is more rewarding.
So again, while I agree that being nimble is typically a decent idea, that being informed AT ALL TIME is somehow necessary… I’m afraid that the later will be totally useless in investing if sound analysis is missing/lacking.
As an example, 2 investors can have access to the SAME information yet will process it in opposite ways. Doing so will result in one investor making more money than the other. The reason for that is the quality of their analysis of the info, not SOLELY of being “well informed”.
Case in point #2: I am intimately convinced 90% of us on the site read or hear the same news everyday. Exactly the same. Yet some of us make money and some of us lose money. Why ? The variable is the quality of the analysis after receiving the info.
My 2cts and best to you as always,
LPG
I stand corrected, LPG!
You are obviously correct!
I love you too Al.
๐
Just reminded me of “Me luv you long time. Five dollaaaaa'”.
Guess, I have to rephrase that and say: “Me luv you long time. 2 cents”.
๐ ๐ ๐
Best as always,
LPG
Good thoughts and very well said LPG.
As you guys have; I have been studying this stuff for years and years……there is only one constant – cash for everyday living;an emergency fund for capital controls and bank systematic failures,etc; emergency food/water storage etc; gold and silver as a store of value for an EVER increasing indication that some sort of reset or adjustment of the global economic system is coming – THE REST IS NOISE!!!
Marc:
I agree with your analysis but should Obama have his way with us, we’ll all be wearing 666’s on our forehead………………………
I wouldn’t personally be quite that extreme!
OK Al, perhaps bit of hyperbole but then again……………
And Dai Uy, perhaps not. But, really, just who knows for sure!
Al:
Didn’t reply to your enquiry several days ago as I just discovered it.
Overall, things in Eastern Washington doing fairly well except soft white winter wheat production way off due to lack of moisture. Ritzville, a short distance away suffered a 1/3 drop in production but inexplicably our operation yielded almost 20% more than last year.
The prices for AG products remain weak and are further dropping. The market for our type of wheat (noodles, pastries etc) has really dried up in the Orient and India is having a bumper crop( India use to be a purchaser but in the early 70’s we exported our Cougar AG expertise to them and now they are a major producer). China now gets theirs from Brazil or maybe they are eating more cake! Russia just undercut us in a large cargo to Egypt.. France heavily subsidizes their producers. The lower prices are a manifestation of our strong dollar and our difficulty in competing.
Sorry about the length of this epistle but you did ask……………..I tried sending you a note and article on your gmail account but am uncertain it went through……….
Thanks, my friend!
……there is only a FEW MAIN CRITICAL constants……(I should have said)
Excellent advice by some very knowlegdeable people on this site. When I however hear some people claim that they have moved to a cash position I am sure that they only mean dollars in a bank account. This move is nothing more than a move to dollars that actually don’t exist. Real diversication in a deflationary environment is surely not non existing dollars in a bank account.
I wonder how many people here did the real diversication in stead of the diversication that doesn’t make any sense.
Monthly expenses only in a bank account………………………….
Dai Uy
I dont know if you caught my response to you the other day…..doing well…ALL THE VERY BEST TO YOU AND YOURS…..Aztecs will be hovering around the top 25 again this year……peace and blessings…Dai Uy!!!
Marc:
No, I missed it. Best wishes from the Inland NW !
Do you mean your monthly expenses before or after your bail-in?
Before obviously however being fleet of foot may not always offer protection given the ubiquitous transfer of funds electronically……………..
Yes but the question is will an electronical transfer to a dollar bail-in be any more beneficial than an electronical transfer to a Euro bail-in, a Yen bail-in or a British Pound bail-in? Or should we actually prefer a Russian Ruble bail-in or a Chinese Yuan bail-in? I myself am still very much in doubt. I would have thought to have an answer by an expert of this site by now already.
Sorry European.
That is the best you’ll get from me as obviously Bud, I’m not an European nor a currency expert. Have you no pride in your European heritage? Where are you from? Are you from Brussels?
By the way, care less about our dollar than your rather sorry Euro…………
RUSL letting me down today. I’m down almost 10% to the penny.
Sorry to hear that Jason. Tell Putin to quit wrestling bears and to get his economy on track so you can prosper ๐
Maybe our resident Russian – Frank From Moscow…..The Claw…. can have a few choice words with Putin for ya.
They don’t call Frank “Bear Claw” for nothing…..
Was Elvis onto something when he said “only fools Russian?” Sorry. That was bad. ๐
Shad;
Thanks for the clarification as along I thought Frank was from Moscow, Idaho rather than Moscow Russia….Best
FRANK IS CLAWING HIS WAY BACK TO REALITY…………….FRANKLY SPEAKING….the Claw, was let OOTB…………….beware………………………………
๐ ๐
Do not forget to read my new book…………..THE GLUE FACTORY INVESTMENT REPORT
He’s actually from Indiana not Moscow or Idaho, but we prefer to think of Jerry….The Long……Out Of The Box…..Contrarians Contrarian….Frank From Moscow…..The BOOT…..and now The Claw…… as worldly and cosmopolitan ๐
thanks Shad for the intro….. :0
๐
Yesterday I brought up copper. i think its in free-fall based on the look of the monthly charts and I mentioned there is really very little in the way of major support all the way down to 1.50 and below.
Take a look at this chart Chris and maybe offer a comment if you have time.
I think what we are really looking at is a commodity collapse brought on by the slowdown in China and that it looks to be accelerating. A very significant decline still lies ahead of us during 2016 based on the look of this chart.
Copper — 40 year chart — Moore Research
http://www.mrci.com/pdf/hg.pdf
Copper is oversold on the daily chart:
http://stockcharts.com/h-sc/ui?s=$COPPER&p=D&yr=1&mn=6&dy=0&id=p67312695693&a=385055785&listNum=1
No Matthew, I am talking about the trend direction here rather than the immediate trade. Did you look at the chart I posted? My instincts tell me it is damning and it speaks to the whole metals complex. Perhaps silver, platinum and palladium more than other metals. Copper has a date with destiny that anyone should be able to see without a whole lot of effort.
My whole point is that copper has no support anymore. It is going down and as it does so go many of the metals we might currently believe are ready to re-enter a bull market again.
It is even possible the secular bull is dead (as I have been asserting for three years already!!!!)
You can’t lump copper together with gold. Copper does have some moving average support; Fibonacci and trendline support in the $2-$2.25 area. If $2 does not hold I think $1.65 will.
As with gold, the secular trend is intact.
As far as the secular trend on gold goes….well, we shall see.
But as I have been pointing out in a number of other posts on the resources sector that when we get price retracements all the way back to the year 2001 when the bull began we can kind of conclude the secular trend is indeed dead.
The Hui is not that many dollars from doing just that Matthew. A full retrace. And it is undeniably linked to gold. That in itself should give you pause but if it does not I have much more material.
Meanwhile, it is indeed possible to lump copper in with gold just as it is possible to lump platinum and silver with gold. We know those two latter metals are both industrial and yet they still fall within the PM sphere.
So if industrial metals are in decline (copper, platinum, silver) and if gold and silver have a 92% average correlation it is pretty easy to conclude that where one goes the other will follow.
In fact, it is very rare for silver and gold to go in opposite directions for very long.
The other point is that we do know factually that commodities tend to move as a group. It is why we got the so-called commodity super-cycle during the years following 2001 when the dollar went into steep decline.
Since 2011 we have had this idea reinforced as almost all commodities have been in decline together. Those included gold, silver, copper, platinum and palladium. So there is a relationship between these that cannot be dismissed.
So when I see a chart like copper’s (or platinum) that is telling me in no uncertain terms that a steep decline is still ahead I sit up and take notice. There is no point lying to ourselves about what we are seeing.
Just read the charts and try to stay objective.
Just scanned all posts
Copper broke a decade plus up trend and that’s telling of the global situation.
I’ve got 95% in cash. Most economies are in poor condition and the dollar should stay firm with an upward bias. My cash performed well as gold stocks were smeared and some economies rattled. Bought some ZJG for now as it looks like a bounce at least.
Then general indices look at premiums.
Scary out there. Do I develope my land into a RV park or mini industrial? I dunno. What a crappy investment environment.
Trail parks will return as the new McMansion on wheels…………as the new $15 per hour will be the norm income of the masses.
remember to deflat the tires if they get behind on the rent…………..
Deflate Gate strikes again.
funny shad……..
LOL
Shanghai is getting pounded. When a bubble burst there only one way to go.
People don’t believe me that China could have a major wipeout. It will happen in time put that on the fridge next to my gold going lower in the years ahead call. They are guilty of over consuming over building and the gov there thinks they can control market forces as well. No one can. I feel sorry for the guy that had his shares locked up so he can’t sell out while the market poofed. That is BS. Once bitten twice shy. They will never reinvest.
Let’s stop with this stay nimble no sensense.
These markets are as corrupt and manipulated as they come.
Let this whole house of cards come crashing down