Weakness in the US markets continue
With the US markets each closing over 2% down for the day the continued signs of weakness continues. The Dow moved over 450 points consistently down. Now we are within a ball toss from the lows back in August of last year. The FANG stocks continue to disappoint and oil seems to test the sum $30 a barrel level everyday.
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I know I am going to sound like a real jerk when I say this but this whole system needs an enema starting with Wall Street. There are a whole mess of people from the tippy top all the way down to the street level that need an attitude adjustment and I think a nice big market/economy crash might bring it about. I can’t wait for the sound of the flush and I think I hear a hand on the handle now. BRING IT!
Should have been flushed …….a long time ago……..
We have murdered about 50 million babies since Roe. I expect about that many will die in the coming crash as God demands a full and just accounting for those lives.
Canadian dollar…….at 60c…….that is drastic , since , a couple of years ago it was even to the USD……
Doc, you are scaring me with NEM@10, SLW@5, and RGLD@25. Hope I’ll be brave enough to buy at those prices. How low do you think PFE, AGN, MRK, and GSK will go? Thanks.
AGN has good odds of moving down to 260—when it gets there remind me and I’ll look at it again.
BB; next stop for MRK is 48–49. Then let me look at it then.
BB; GSK is looking at sub 37—this one at least doesn’t look currently like it’s going to fall off a cliff—-but if this market does what I think, it’ll get its’ nudge soon.
BB; of course, I could be wrong. Keep me apprised going forward because there are certain things I can watch to verify what I’ve said. PFE is breaking down to 28-28.50 next.
Doc, I guess I should sell my drug stocks and wait for the bottom in the gold and silver stocks. Thanks for your ideas.
Doc, I forgot to ask you about LLY. What do your charts tell you? Thanks.
It’ll get to 75 fairly quickly and then I’ll be able to tell you more.
Could you guys please offer some advice to people that have been holding commodities stocks over the last year. Is this a time to hold? Take losses? I own some good stories that will survive but the question but they just go down every day……
I’m wondering if the banks are making money shorting commodities, or whether they will continue to outperform in Pring’s inflation/deflation index:
What this chart says is that the commodity highs were a great ride out, but that the trough has to be seen.p as well. Not the levels of the gold/solver ratio, they can break out to previous highs set in the 90’s.
A sign of the times…..Debt-laden commodity companies divest to pay down debt:
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Ex-Barrick CEO said to offer $1bn for Glencore mine
Frik Els | January 13, 2016
http://www.mining.com/ex-barrick-ceo-said-to-offer-1bn-for-glencore-mine/
South32 mulls acquisition of Anglo’s $1bn business in Brazil
Cecilia Jamasmie | January 13, 2016
http://www.mining.com/south32-mulls-acquisition-of-anglos-1bn-business-in-brazil/
Anglo American officially out of the Middle East
Cecilia Jamasmie | January 12, 2016
“The world’s number five diversified miner has been selling assets to reduce debt and said last month it would only focus on diamonds, industrial minerals including platinum, and bulk commodities such as iron ore and coal. At the end of last year, Anglo had only 55 mines left, but the goal is to reduce them to the “low 20s”.
http://www.mining.com/anglo-american-officially-out-of-the-middle-east/
I’ve been watching both Kootenay & Northair as interesting exploration and development companies. This is an interesting merger in the Silver sector. It looks like they plan on doing silver consolidation like First Mining Finance is doing:
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Kootenay and Northair Announce Transaction to Create Leading Mexican Silver Consolidator
VANCOUVER, Jan. 13, 2016
Yamana Gold Provides Preliminary 2015 Operational Results and 2016-2018 Outlook
TORONTO, ONTARIO–(Marketwired – Jan. 13, 2016)
Mandalay Resources Corporation Announces Production and Sales Results for the Fourth Quarter and Full Year of 2015
TORONTO, Jan. 13, 2016
********* RECORD BREAKING! BALTIC DRY INDEX CONTINUES TO CRASH NOW DOWN 394 PTS! *********
http://www.bloomberg.com/quote/BDIY:IND
OH…….MY…….GOD!
* JAPAN’S NIKKEI DOWN 3.29%
Wow……………keep an eye on that market!
Even with today’s carnage the Dow, S & P 500 and Nasdaq are still above their August lows. These markets have much further to fall before we can even begin to start talking about a bottom.
************** OKAY, HERE’S THE TRUTH!……..OBAMA KNOWS THAT THE ECONOMY IS TOAST! ***********
He is not stupid, he hates Hillary so in order to save the DEM PARTY she will not become the next president to take the fall for this MAJOR COLLAPSE that is coming! Obama wants that to fall on Donald Trump, therefore Hillary will be prosecuted to the fullest extinct by the FBI……..afterward BIDEN will get back in and run and so will believe it or not Jerry Brown of California! Neither one will win so THE DON WILL BE YOUR NEXT PRESIDENT AND THE FALL GUY!
IT’S ABOUT TO GET CRAZY!…………………STAY TUNED!
IF the stock market goes into a drought……….Jerry B. would be the man….. 🙂
Not all is bad news… There are good investments laying around everywhere. The emerging markets (almost all of them, take your pick) are bottoming right now. So are the industrial commodities, take your pick…!
All of these charts are oversold on the daily AND the weekly charts!
Slam dunk!
The emerging market and industrial commodity boom starts next week!
What countries & economies are you most interested in regarding the emerging markets? Are you buying stocks or targted ETFs in those countries , or their bonds, or doing just positioning in general emerging markets ETFs with a blanket of countries, sectors or stocks in their holdings?
Richard & Cory, Great interview as usual. Richard, you mentioned margin debt as a potential problem. You probably know this, but loans against collateralized brokerage accounts aren’t included in the reported margin numbers. It has been very tempting for high net worth individuals to set up a collateralized lending arrangement with their brokerage during this era of low interest rates and rising markets. Why not borrow at LIBOR plus a couple points? Works great while the market is rising but the the same reg-t requirements apply to these loans as conventional margin. As Warren Buffett says, when the tide goes out you find out who’s swimming without a bathing suit. I have no idea how much this adds to conventional margin as reported. One thing’s for sure, if a high net worth individual gets a margin call on one of these types of accounts, the wealth effect for that unfortunate person is going to disappear quickly.
When you consider the action in stocks so far this year, gold’s strength relative to silver has been unimpressive.
Silver is getting ready for at least a short term rise. The volume pattern this year is bullish so far — rising with price for the first four days and falling with price for the following three followed by higher volume on today’s gain.
Gold is positioned to go higher. How much higher is the question:
There’s some resistance at $1123 tomorrow:
There’s also some Fibonacci fan resistance at today’s close:
Good charts as per usual Matthew.
I agree with your $1123 area of first resistance for Gold. I was using $1121, but close enough to the same area for me. After that I see the upper trend line on the falling wedge coming in around $1142-$1146, and there was also a prior peak on Sept 25th at $1146.30, so that zone will be strong resistance. I could see Gold breaking out of this funk and making it up there in the next week or two, and pulling Silver along for the ride. Eventually I expect Silver to outperform Gold, but we’ll see how the rest of January develops. My gut feeling is that we still have this final grind down in PMs to get out of the way, but it needs a relief-rally to get sentiment up a little more for the final wash out.
I warned that all the intervention last year to keep the market artificially propped up would just result in a crash.
If the Oct. low breaks there’s nothing but air until the S&P reaches 1550-1600.
Gold closed November and December above the 150 month EMA (currently $1059.84) and the 50% retracement of the ten year bull market (based on monthly closes; @ $1042).
I don’t want January’s close to be below either of those levels and it would be nice if the absolute (intraday) 50% retracement ($1088.45) were taken out.
Gold:CRB – starting a blow off or double topping?
(I think it could spike 20%)
SPY:GLD looks bad for SPY:
Gold buy vs SPY:
S&P 500 sitting on neckline support of huge H&S top. Looks sure to break very soon:
Your projection there Matthew, lines up with Gary’s targets too iirc.
Yep a break-down in the S&P seems very plausible in the not so distant future.
Big Al;
It is possible (and in my belief safer ) to cover a potential market collapse by hedging…….i.e. having part of a portfolio containg shorted stocks.
It seems to me we are in the equivalent of a post roaring twenties parallel situation at this moment in time.
The roaring twenties resulting from the excessive money printing of the first world war; the recent bull market in stocks mostly created by TARP, QE worldwide, etc.
As I stated over a week ago when Cory listed a bunch of energy stocks, that it would be moronic to expect anything other than a further drop in oil price, as more supply came on line, I am now expecting a small dead cat bounce followed by further decline until at least October.
My biggest current worries are a derivatives collapse or a general world insolvency. With derivatives at now over $2.5 quadrillion in total, it would not take much for a single banking bankruptcy to collapse the whole system.
Hi CFS, could you provide a link for that $2.5 quadrillion figure? It’s a new one for me, and quite noteworthy.
Estimates were as high as $1.5 quadrillion 6 years ago. So a huge increase since then is plausible but I couldn’t find a source.
THAT IS HUGE………….$2.5quaddrillion………
I agree with you CFS, Ive mentioned a time or two I found it odd that people here have not been talking about shorting. (being traders and all)
People were really resistant to shorting gold for so long too, so maybe people just plain dont like to short.
In theory, shorting is the opposite of going long, but in practice, it take special skills to do well consistently. One certainly does not need to do it to be successful. In this Fed fiat frenzied world, there’s always a long opportunity with the wind at its back.
One reason to expect a down-market this year would be the effect of Obamacare sucking over 10% out of the US economy; this not being uniform in effect, as it enhances health related profits.
SLV filled yesterday’s gap and was stuffed below resistance in the process:
Now it needs to fill its gap vs GLD:
Matthew, You might also consider the Commodity Channel Index for your charts since it’s an oscillator designed for the higher volatility of commodity prices?
Thanks. I actually do use it and other indicators often but tend to use one whittled down group or another for the charts I post.
Fortuna just put out their quartlery release. Since we’ve been reviewing different Silver producers it is noteworthy that their Consolidated AISC per Silver equivalent ounce is $11.1/ oz Ag. That’s the same as Fresnillo, so pretty impressive.
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Fortuna reports 2015 production of 9 million silver equivalent ounces and issues guidance for 2016
Vancouver, January 14, 2016-
This release is just a strange Silver mining update where explosives were stolen. I remember 2 years ago when a mob broke in and ransacked the place, including going through female employees clothing drawers. They need a better security company….. 🙂
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Great Panther Reports Theft Of Explosives From Its Guanajuato Mine Complex
January 14, 2016
Here is one more annual 2015 recap from Tahoe.
All-in sustaining cost per Silver oz produced net of byproduct credits $10.00 – $11.00
All-in sustaining cost per Gold oz produced net of byproduct credits $950 – $1050
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Tahoe Reports Record 2015 Gold & Silver Production
Peter schiff believes the bottom is in on gold! It’s a tuff call but he may be bang on. I know a few in here including Matt believe it’s in if I’m not mistaken. Wit makes sense that the hike by the fed in rates after so many years helped gold get a spike in here. There are many patterns out there that look like double bottoms in miners or w formation in the miners etc. Wti also looks very attractive at these prices however I remain skeptical and that’s just fine with me. I’d like to here the fed eventually come out and say we are launching another stimulus program first before I make a move. Who knows when that will be. I think it’s ok here and now to by deep bottoms like this on miners on a mo they program. Maybe 1/4th lot and then wait for another major take out above to out in a second lot. Just my two cents.
I believe there’s a good chance the bottom is in but am not making the call. I do, however, think it will be going up very soon. If it does, the action will tells us about the odds that we’ve already seen the low.
$1088 is the 50% retracement of the entire bull move and the 600 week EMA. I want gold to finish the week above that level but it’s more important for the monthly close.
ah,,,,,,1088 , there is the number I was thinking someone mentioned……
Gotcha. I remember you mentioning that when I was highlighting 1083 as my line in the sand, but didn’t know where the $1088 figure was coming from.
It doesn’t really matter now as Gold plunged down to $1077. Bummer.
But there’s two weeks left in the month. I think it will be fine.
The 144 month EMA is now $1073, btw & fwiw.
Yes, there is still time for Gold to rally and pull Silver along for the ride. As we discussed on a different blog yesterday, I’m looking at first resistance in the $1121 range (but am fine with the $1123 resistance target you mentioned), and then I see a top of the descending wedge in the $1142-$1146 zone (with Sept 25, 2015 peak at $1146.30 being strong resistance).
I expected a bit more strength this week leading into next. Maybe this is just a consolidation that will fuel the next rally, but Gold is looking a bit weak to me and doesn’t seem to have much conviction the last few days.We’ll see how the rest of January goes….
$1130 also probably has some significance since it was the last low that was sure to hold. After that, I agree with your 1146 area and will add 1155. When you consider the challenge that this resistance will probably hold, it is probably a good thing that gold is getting wrung out a little further before the bulls attack.
Matt
Thanks as always as I value your a opinion a great deal! Thanks for the tips.
Glenfidish, I value your opinion a great deal as well.
Peter Schiff calls the bottom? ok
Rick has been quite a bit more accurate than Mr Schiff for the last few years.
(dont get me wrong I like Mr Schiff)
I believe Ricks 817 call is still possible?
I will be more sure the bottom is in when Rick says it.
Shad sorry for delay! Exxon mobile and imperial oil are the two I like followed by shell a shares. I may get this wrong and they are off to the races but I will wait to see if they hit my targets.
Thanks Glenfidish. Imperial Oil is on my watchlist as well.
In Oil I am looking a number of companies presently to build my top dozen oil-related plays (producers, oil services, pipeline, storage, etc…). Here are some of the companies I am currently evaluating if you or anyone has any thoughts:
Advantage Oil & Gas, PrairieSky Royalty, Raging River, Whitecap Resources, Peyto Exp & Dev, Bonterra Energy, Crescent Point, Delphi Energy, Gibson Energy, Enbridge, Precision Drilling, Torc Oil, Trican, Encana, Conch Resources, Pinoneer Natural Resources, Imperial Oil, Weatherford Int’l, Bolder Energy, Energy Transfer Partners, Marquee, Pioneer Energy, Husky Energy, Athabasca Oil, Renegade Petro, Cequence Energy, Pan Orient Energy, Comstock Resources, Divergent Energy, and Cameron (who is currently acquiring Schlumberg ….another company I was watching).
I think we are about to see a pickup in Takeovers/Mergers as well as bankruptcies in the very near future. Did you see what just happened to Sandridge?
Shad,
That’s a very nice list you have compiled and thanks for sharing it. No I have not seen what happened to sand ridge can you enlighten me?
I would add that I’m looking at enbridge as well but want much lower prices if they come. By the way, I’m looking more to play the Canadian ticket as I want price appreciation compounded by cad/loonie appreciation. The double whammy affect is always a bonus.
Yes that is a good point on the Canadian ticket for Oil so that there is a commodity and a currency “double whammy” multiplier. Many of those are Canadian.
Enbridge is intriguing and I’ve watched about 3 different dissection discussions from analysts on BNN that had me add it to the list a while back. In fact most of that list came from hours and hours of watching BNN and trying to cherry pick out the interesting stories or ones that had fundamental strengths, or that were unfairly punished by the marketplace.
As for Sandridge it was high flying Oil company in the US, went on a death spiral, there was a hostile takeover of the board (the owners and management were quite corrupt with insane expenses and salaries), then they came out with new management and a HUGE debt load, made some acquisitions at the end of last year, and went belly up and just got delisted. They are now trading on the OTC but most investors lost everything, and they are dead (yet), but their debt burden is too cumbersome to pay off at these low prices. I saw an article that Sandridge will need $80-$90 Oil to survive……
Another one like them is Halcon Resources….. It was a $35 stock in 2014….and now it is around $.59……Bad management decisions, growth and expansion just for the sake of growth, huge debt burden, and now spiraling the toilet bowl.
My point was that we are going to see a lot more of this in 2016, so buckle up!
Wow did not know that shad! Doesn’t it always come down to board of directors, management team and jurisdiction.
Absolutely!
I need auto correct! Excuse me spelling and grammar. My fingers are to big for this iPhone.
THANKS for all the great work …..gentlemen.