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Don’t get too excited about these moves in the markets

August 12, 2015

Doc is back with some words of wisdom to tell us all to not expect the increase in gold to last for a long period of time. He says the metal could run for another couple weeks but nothing major. What could support gold for a while is a continued weakening in the US dollar.

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Discussion
77 Comments
    Aug 12, 2015 12:17 PM

    Doc, is it too late to jump onboard EXK, given its run over the last few days. Thanks.

    Aug 12, 2015 12:20 PM

    Good intervew Cory , Rich !

    Aug 12, 2015 12:39 PM

    Doc/Charlie,
    I think you’re right about gold topping this week. We could see a fairly big drop starting next week. The dollar looks like it’s going down, and the emerging markets and CRB looks like they are at the bottom. You said we could see a QE type event, but it would be different. I think that looks like this weekend. The CRB and emerging markets are telling us that liquidity is about to hit the global markets.

    Also, the emerging markets will be a good place to look when the stocks get creamed. And gold still going down.

    Aug 12, 2015 12:48 PM

    I thought we would hit 1225 this week ( pipe dream I guess.. )

      Aug 12, 2015 12:56 PM

      Whadaya think…this is a casino or sumthin! 🙂

        Aug 12, 2015 12:14 PM

        Of course it is… That’s what makes it so fun!
        ( the week ain’t over yet either )

    Aug 12, 2015 12:51 PM

    Doc thanks for your work,
    I know you don’t like Elliott Wave (and I am not a big fan) but we can be in a wave 4 (retracement) with a wave 5 going down for the final leg in the next weeka/months.
    On the other way, gold was in an ending diagonal (technical pattern) and usually
    it is the final move before going up. If you read this article, I think that is a good
    possibility.

    http://www.safehaven.com/article/38394/gold-and-mining-stocks-bottom-is-imminent

    Jay Talor did an interview recently with McHugh.

      Aug 12, 2015 12:59 PM

      Gabriel, I probably should study Elliot Wave even more deeply but frankly, I’ve just seen the waves defined in retrospect and I believe there is even more variability then other cycle theory. i’ve been studying some cycle theory and it’s been helpful to validate what I look at. I continue to believe that we’re going to have to patient into next year which I look forward to with anticipation—-especially toward the end of the year.

        Aug 12, 2015 12:08 PM

        Gabriel, I just read the article and it makes some valid points. He mentions the declining bullish wedge which I’ve mentioned on our webinars for a number of weeks. However, what he doesn’t realize is that we can get another jump in gold toward the upper resistance of the wedge and then settle down further. Frankly, I favor that scenario for a number of technical reasons not considered. Another point he doesn’t make is the fact that when you see the kind of long move down we seen, it rarely ends by taking off and never looking back. What you get is usually an attempt of a double bottom at least. I would say to enjoy this run and take some profits if you bought miners down here in the next 2-3 weeks.

          Aug 12, 2015 12:39 PM

          Thanks Doc.

          Aug 12, 2015 12:50 PM

          Doc, I completely agree with both points you just made:

          – “we can get another jump in gold toward the upper resistance of the wedge and then settle down further.” – Bingo. I believe we are just heading up a part of a counter-trend rally inside that wedge, and then will fall again in a Wave 5 Down to lower lows to put in the major bottom.

          – “…when you see the kind of long move down we seen, it rarely ends by taking off and never looking back. What you get is usually an attempt of a double bottom at least.” – Agreed, and it isn’t always the V-shaped recovery people have experienced in the general stock markets, but in Gold and Silver it will be a back and forth grind along the bottom and then a gradually forming U-shaped or irregular recovery with fits and starts.

          Good thoughts today Doc Charlie – like usual.

    cfs
    Aug 12, 2015 12:51 PM

    The plunge protection team was buying today!

    Clearly, it is dangerous to bet against the Fed. (Until the collapse.)

    Aug 12, 2015 12:54 PM

    Good interview.

    When I look at the charts for the precious metals there are clear rounding bottom formations that should be interpreted as bullish (in my opinion) for the next while. A lot of strength is developing even if tomorrow is perhaps going to be a flat day. So i agree Doc that we probably have a run shaping up that should go on a couple weeks at least before the next larger downturn.

    No way is this the final bottom though. Not in a hundred years.

      Aug 12, 2015 12:59 PM

      PARTY POOPER………………………………………LOL

    Aug 12, 2015 12:57 PM

    Wow! Shock! Horror! Gold’s up! Who would have thunk it?

    Aug 12, 2015 12:58 PM

    MINERS LOOKING GOOD TODAY…………..GREEN EVERYWHERE………

    Aug 12, 2015 12:58 PM

    Maybe in a hundred days, eh?

    Tom
    Aug 12, 2015 12:03 PM

    Doc: Thoughts on shorting on the 10 year treasury?

      cfs
      Aug 12, 2015 12:09 PM

      With Fed buying treasuries, that is a dangerous idea. Specially as they might restart QE.

      I am thinking of SJB.

      Aug 12, 2015 12:14 PM

      Tom, personally and technically, just not yet. Possibly in about 3 weeks and that’s a big possibility. Keep me awake on this trade and I’ll try to remind myself to focus on it as well.

        Tom
        Aug 12, 2015 12:23 PM

        thanks. will do.

    Aug 12, 2015 12:03 PM

    Doc/Cory:
    Agree with your comments on the conventional markets and especially bonds.
    Rick would probably disagree. I was dismayed that the subject of a black swan in the form of the Chinese surprise devaluation was not even mentioned. When that bird flew by me yesterday, it almost took my head off. I don’t think we’ve seen all the repercussions yet.
    It’s hard to comprehend things sometimes when we have ultra chartist Gary and technician Doc with somewhat differing views on markets. Only time will tell and in the meantime, gentlemen…..place your bets!

      Aug 12, 2015 12:21 PM

      Silver; one of the charts I find very fascinating is the VIXY. On the daily, the BBs are narrowing. The RSI on the weekly chart has been scratching the oversold area for weeks and the directional lines of the ADX are pointing at each other. Pricing on the charts is sitting right on the lower BB. Something big could be in the offing.

        Aug 12, 2015 12:14 PM

        Good thoughts Doc. Check out (UVXY)…. very similar pattern to (VIXY) with the narrowing BBs, but more potential upside if we get a volatility breakout.

        Aug 12, 2015 12:56 PM

        Doc:
        Thank you for your comment. VIXY does look like something to nibble at during these times. Parabolic SAR looks like it is positioned for a buy also. We’re in interesting times.

    Aug 12, 2015 12:05 PM

    The Iran peace deal is done, regardless of what the war hawks want. Switzerland lifts sanctions tomorrow!

    http://www.huffingtonpost.com/entry/switzerland-iran-sanction_55cb6f90e4b0f73b20bb5390

      Aug 12, 2015 12:58 PM

      Thanks for posting this Chartster. Hadn’t heard. Hope you’re right on how you see the deal passing. Wish I was as convinced.

    Aug 12, 2015 12:25 PM

    Bernie Sanders leading the Hildabeast in the democratic poles! Trump leading all the war hawks in the republican poles! I do believe America is starting to wake up!

      Aug 12, 2015 12:59 PM

      Oh Chartster, Chartster, Chartster, please tell me you’re joking! Both of those guys are unprincipled pretenders. Neither would upset what TPTB have going; not a chance.

        Aug 12, 2015 12:07 PM

        Charts are Jocks ! Sinners how beter pray ! The devil markets will eat maybe no your money $ ore day will ! Day will eat your soul ! I need jesus you ?

          Aug 12, 2015 12:09 PM

          That is incorrect, but thank you for playing!

        Aug 12, 2015 12:24 PM

        Matthew,
        The hawks in the GOP are puppets for the PTB! And if they are trying to make him step down, and the media is trying to discredit him? He’s doing the right thing!
        I thought he was a pawn, but now I think he’s real.

          Aug 12, 2015 12:26 PM

          Sanders is a socialist.

            Aug 12, 2015 12:27 PM

            At least the dems got smart about Hillary..

            CFS
            Aug 12, 2015 12:34 PM

            No. He is Marxist.

    Aug 12, 2015 12:01 PM

    In other news… AXU jumped 15.15% today and now sports a 21 day EMA that is finally pointing up.
    http://stockcharts.com/h-sc/ui?s=AXU&p=D&yr=0&mn=7&dy=0&id=p95839254698&a=409986122

      Aug 12, 2015 12:42 PM

      Matthew

      I’m wondering if you have an opinion on the silver price that would trigger the start-up of silver production at Alexco again (US$20 maybe)? The 25% Silver Wheaton stream @ $4 is a HUGE weight on this company. And don’t get me started with the CEO’s insistence that all profits from AEG (plus reserve cash) be re-directed to drilling rather than saving for the mining that must be done to re-start. I’m starting to think this company is NOT the best place to bet on a Silver miner.

      Thanks in advance for your comments
      Brian

        CFS
        Aug 12, 2015 12:42 PM

        Alexco Resource Corp.
        $ 0.38 0.05 (+15.15%) Volume: 345.31k 3:59 PM EDT Aug 12, 2015
        Current Target Price
        High Target Price Estimate 1.00
        Low Target Price Estimate 0.36
        Mean Target Price Estimate 0.68
        Standard Deviation 0.45
        Date of Most Recent Estimate 08/04/15

          CFS
          Aug 12, 2015 12:43 PM

          3 analysts following AXU

        Aug 13, 2015 13:25 AM

        Brian, I think the price needed to restart operations might be as low as $18.50 if/when management feels confident that the low is in place and that higher prices are coming.

        I still like AXU for the value I think it represents based on my outlook for silver over the next few years and for its exploration upside. The Silver Wheaton deal and other concerns seem to be more than fairly priced-in already.

        I think there’s reason to be optimistic that the share price will be much higher when the time comes to raise money through a share offering so dilution should be limited. However, even if the dilution is much more than I would like, I don’t think it will be a huge deal to anyone who’s invested with the big picture in mind.

        Anyone who thinks silver is likely to languish below $20 for years to come should probably not bother with it or most silver plays for that matter.

        I want to add that I think your due diligence has probably been every bit as good as mine so my two cents is just that.

          Aug 13, 2015 13:45 AM

          Good thoughts on Alexco. Yes it is a similar story for most of the smaller silver producers.

    BDC
    Aug 12, 2015 12:09 PM

    NEM breached its 37 year uptrend,
    then burst back above its 17.25
    mathematical line in the sand.

    It will retest this zone and hold.

      Aug 12, 2015 12:23 PM

      I added to my NEM position today. Odds are very good that we at least see 20 1/2 in this run.

        Aug 12, 2015 12:11 PM

        NEM is sometimes a little late to the mining party but when it shows up it really likes to party. It is a little stronger on the balance sheet and has been around a long time but doesn’t hedge against a downside in gold prices. …looks like they are really giving FCX a public execution.

          Aug 12, 2015 12:43 PM

          Careful ! Gold can drop the DOW is O ! Diss is the battel ( GOD GOLD ) & ( EVIL DOLLAR ) !

          Aug 12, 2015 12:02 PM

          According to a formula I use to value stocks in general, NEM is one of the stronger PM stocks at this time.

    Aug 12, 2015 12:25 PM

    The Dow Jones start the day 17.402,52 the day is over Now 17,402,52 ! And a BLA BLA CHINESE Devaluation ! HA HA HA BUY BUY BUY GOLD IS REAL ! STOP LOOKING TV CNBC IS A THE 9 / 11 CROOKS STOP LOOKING BUY GOLD !

    Aug 12, 2015 12:40 PM

    wow chartster hes a socialist whoa…and what are all the others….. huh?!
    do you know the difference between Hitler & Stalin…different yes but shared the same common denominator..no respect for humanity or democracy. Sanders is a darn sight better a human than most in DC…..which isn’t saying much…

    Aug 12, 2015 12:56 PM

    China is the wild card, I am not exuberant about the North American economy. The Chinese banks have been devaluating their currency but if this doesn’t work, look for them to encourage credit expansion. Business is entering into a period of readjustment and if Chinese industry is declining this fact won’t be lost on their Central Government. When you need that many jobs you won’t what even small retractions in your economy. DT

    cmc
    Aug 12, 2015 12:52 PM

    I’m wondering if I should take profits now in the PMs made over the last few days rather than risk a surprise attack.

      Aug 12, 2015 12:32 PM

      This is the ultimate question CMC, and the same question I had earlier today. So I locked in profits, and then some of the companies I haa held surged higher to end the day. It always is a bummer to sell and watch the positions you just held move up even if you think you picked a topping pattern, but it is even worse when you hold on too long and watch you gains evaporate completely.

      I’ve heard several veteran investors mentions they rarely get the bottom or the top, and leave the bottom 10% and top 10% for the other guys and just try to hit the middle 80% of the move. That has always stuck with me, and while detrimental at times, it has served me well on many occasions.

        cmc
        Aug 13, 2015 13:22 AM

        Thanks, Shad. That’s reasonable and thanks for keeping me grounded. I’ve heard it said that no one ever got hurt talking profits, too.

          Aug 13, 2015 13:37 PM

          absolutely!

            Aug 13, 2015 13:40 PM

            BTW….I did take a position back in a minor today on the pullback, and if things pull back harder tomorrow, will take some more positions as I think there is longer to run in the bull trap counter-trend bounce still.

            cmc
            Aug 13, 2015 13:30 PM

            I sold some on the downswing today but kept half of a significant part made all the up to half of yesterday’s huge gains. I still hold a reduced position in SIL. I bought none today, but may put in some buy stop orders in case we rise more from here. I like to get in only when there is an upswing starting, as I can never time low points well. Best wishes on your trading!

    Aug 12, 2015 12:09 PM

    There goes China devaluing again.

      Aug 13, 2015 13:30 AM

      I don’t know if anyone here follows history much but I though it was odd that the biggest Yuan devaluations in years (if ever) began on the 70th anniversary of the date Fat Boy was dropped on Nagasaki.

      Actually, the first devaluation came one day after that important anniversary of the nuclear bombing of Japan. But that was because the Nagasaki anniversary landed on a Sunday this year.

      I am sure there is nothing to it. China is not bothered at all that Japan has been working overtime trying to devalue the Yen into a pile of rubble to take a regional economic trade advantage from the Chinese.

      And since there was nothing they could do to stop the Japanese from their suicidal Yen mission then the obvious answer was to hack almost 5% off their own relative to the US dollar.

      But are competitive devaluations really a form of warfare? And do the Asian leaders place value on dates of major consequence when sending a message that they might not say in actual words?

      You decide.

        Aug 13, 2015 13:51 AM

        Jim Rickards got the picture right. Currency devaluation has been and will be used in the future to gain competitive advantage and ease the debt burden. It makes saving so difficult and it is the people who sacrifice. This trend was identified by a Chinese Economist many years ago. Mr. Hongbing Song published a book called Currency Wars (货币战争) in 2007, several years earlier than Rickards.

        https://en.wikipedia.org/wiki/Currency_Wars

        This leaves US a dilemma, join the war or hold out to see draining out of its economy.

        Aug 13, 2015 13:25 AM

        MYTHS ..SIGNS …..AND WONDERS…………have been around FOREVER.

          Aug 13, 2015 13:27 AM

          7 BILLION people on the planet….and 1 billion in China believe in numbers.

            Aug 13, 2015 13:29 AM

            The year of the SNAKE, FROG, RAT, etc give you any other clues.

            Aug 13, 2015 13:35 AM

            Year of FROG? Never heard it. 🙂

            Aug 13, 2015 13:04 AM

            For Real Only Gold……..FROG…………. 🙂

        Aug 13, 2015 13:43 AM

        fukKin wooWoo dude