Gold and oil getting a buy with the dollar selling off … Again
For the second trading day in a row we are seeing the US markets open higher and sell off. Besides this gold is getting a nice buy and oil is breaking the $40 / barrel level. Traders are moving out of the US dollar and into the precious metals. Doc has some comments on the action today and what May could bring.
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Ditto as always.
Cory you’re all gentlemen on this site. Ever appreciated., A
Agreed Andrew and completely understood about G.S. – Big Al.
Cory – no problem on Golden Queen. I was just giving you a friendly jab because you had mentioned on Weekend show you’d never heard of it, and I’d posted on it about 20 times 🙂
I know you’re very busy man, and personally really appreciate all the hard work you and Al do to bring us all the speakers each day.
Golden Queen was one of John Doody’s top 10 GSA picks for 2015, and tried to give everyone a heads up that they would be going into production in a year, along with Romarco and Torex Gold (2 other picks on the GSA top 10 last year). We also discussed Asanko and True Gold as 2 others that would make it into production [but I have to give Matthew the credit on True Gold as he really put it in the spotlight on KER with his many charts. I was following the W. African development scene and didn’t own True Gold before it took off]
Then throughout the development process in all these companies, I kept writing about Golden Queen as one I was a shareholder in that was going to be a near term producer, was making good strides, and was really under-valued last year and going into this year.
I posted their press releases regularly, included them on the near term producers lists,, and I included them on some of the 10 company composite charts I posted for the near term developers. Matthew and I even debated the jurisdiction of California because they are bit wacky out there. 😉
When Golden Queen finally made it into production we also had a few posts discussing their success, and recapping the Romarco takeover by Oceana Gold, that True Gold made it into production and their takeover by Endeavour Mining, that Torex Gold had graduated from development to small producer, and that Asanko has transition from development to production most recently.
My goal was simply to alert KER readers to smaller companies with big upside that didn’t get as much air-time on Kitco or the traditional gold websites. I already had shares in Golden Queen, Romarco, and Torex, so I was only posting so that others could catch the arc between developer and production. I have sold my OceanaGold shares, and trimmed back most of my Golden Queen and Torex Gold shares at this point looking for new opportunities.
Cheers!
Thanks Excelsior. No problem. As I said, “nothing against him personally. Like most folks he has to make a living.
I’m not seeing any sea-change in commodities, except for precious.
Because you are looking in the wrong place CFS!
Check out my chart. Its a monthly of the Euro. Now take a very close look at the last bit of that chart representing 2015 and 2016 and tell me what you see…….It’s a camel, man! …..I have finally found the most rare and lucky double hump “Camel pattern” that technical people live and die for.
The double hump makes all the difference of course. Go see for yourself.
http://www.finviz.com/futures_charts.ashx?t=6E&p=m1
So nobody can see that little camel? Ha! I though it was pretty funny.
You still smoking?
Smoking Camels Al.
I saw the little camel. If you watch the Morris Hubbart video posted on the weekend show you’ll see a number of the gold stocks have a camel formation where the head is the bull pennant. What is wild is how many gold stocks have the camel pattern in them all at the same time.
OK Thanks Shad. So its not a hallucination after all.
IMHO, Oil will oscillate around a mid-point $38-$40 for the next 18 months.
Not likely, it will bankrupt most small and medium oil companies. Supply will drive up. Chindia is increasing oil demand at an alarming rate and Saudi is exhausted.
unlike gold, oil does not have much much above ground supply.
This might!!! be an early heads-up to those of you on here, who invest in the gold sphere.
http://www.reuters.com/article/us-gold-australia-india-idUSKCN0X80SN
NICE POST IRISH………thanks
Don’t egg him on Jerry. Next thing he will want to get paid!
Irish……..does not need the money……..just the silver…….
Doc. I am back in NUGT again today. Been flipping this one for years along with DUST. Really looking forward to a retrace in miners since I have a bigger bet over in DUST at the moment. Got kicked out of UWTI today for a 63 cent loss in principle. Still riding a small position in DWTI.
On an unrelated note. We really miss He Who Shall Not Be Named! 🙂
I would suggest that you subscribe to his service.
Lord Voldemort
Voldemort is the archenemy of Harry Potter, who according to a prophecy has “the power to vanquish the Dark Lord”. Nearly every witch or wizard dares not utter his unmentionable name, and refers to him instead with such expressions as “You-Know-Who”, “He-Who-Must-Not-Be-Named” or “the Dark Lord”.
Silver is acting like the dollar could plunge further sooner rather than later. Here’s ETF UUP. Notice the lack of volume-based support just under the current level:
Matthew be cautious.Price of silver has touched the upper trendline (resistance) projected from april 2015 high and touching the oct 2012 high on the monthly log chart.You owe me one buddy 🙂 Take care and remember that this has been the mother of all bull traps.Commercials are smart and they funnel the money in bundles not to draw attention.It is a trick of the trade.Don corleone has his contacts 🙂
Matthew I meant the weekly chart not monthly.
Buy the dips, Don. There, now we’re even. 😉
tuna dip or salmon dip 🙂 which flavour?
Go with the silver dip to avoid the mercury. 😉 😮
You guys are too much. Very funny.
I just hope that silver can finally get through $16 and not look back.
Agreed. I’m watching for the same thing Lewis.
Looks interesting Tony. Have you considered the Northern Ireland mine of Dalradian Resources? I’m thinking of putting a second toe in the water with this company. Best, A
Hi Andrew…I don’t trade the market. I just buy & sell the physical metals.
I heard some talk about that mine, sounds interesting. So you are thinking of dipping a second toe in, well in for a penny, in for a pound.
But if I were you I would ask the lads on here what they think. Matthew/CFS/ Shad ETC.I am sure one of them could give you sound advice….Good Luck.
Irishtony – Funny, I just now realized that you had already weighed in on this one. I was posting at work and just jumping on here sporadically earlier.
You were going to be our secret weapon…..
“We want to send IrishTony on a mission to scout it out…..”
Maybe you can do a site visit and film and we can start a new KER series:
“IrishTony – On the Road to Riches”
Andrew
Brent Cook said about Dalradian”I Think Dalradian is one of the very few deposits out
there that make sense,i looked trough 135 deposits with 43-101resources that were put
out by SNL,and out of that i pulled out 12 that might work and out of that,i pulled out really i Think Three that were good enough to own”Brent Cook says.
Look at the drill results at Curraghinalt,very hig grade.
I am a shareholder of (DNA.TO)
I dig it, and have posted on Dalradian before because it looks like a quality deposit. We want to send IrishTony on a mission to scout it out…..
Excelsior
With lot of hard work doing your DD one can identify the good pm companies,but i also like to have a couple of pm lottery tickets,like Banro BAA(debt issues)they have a mountain of gold(Ok,maybe not)13,5moz,1,6g/ton,open pit,low cost,cash flow and they have huge exploration upside.Do you have any pm lottery ticket ideas?
Hi Pete. I’m not very good at short answers because I’m an over-analyzer and mostly do stream-of-consciousness posting. Hang with me on this lengthy post and I’ll throw out a few different kinds of Lottery Tickets as I see them, but I don’t think I can answer that question by just throwing out a few stocks. To me PM Lottery Tickets types change depending on where we are in the metals cycle, and I also believe there are different types of PM lottery tickets.
There are so many different investing philosophies and strategies that one must identify their time horizons, risk tolerance, goals, and whether this is “funny money” that you can afford to lose a big chunk of, or whether you want medium risk and medium returns, or if you want a conservative dividend paying stock to hold onto without as much risk that pays you while you wait for valuations to improve.
________________________________________________________________________________
If I’m understanding your question, then I believe the “PM Lottery Tickets” you mentioned may be in reference to what Rick Rule was discussing on his most recent Palisade Radio interview. Correct? If memory serves, he was discussing the “Optionality” concept and that you bet on 10-12 optionality plays that may make a discovery or are sitting on a deposit and hope 2-3 hit it big and go all the way.
That is a nice concept, but really this is more of a buy and hold strategy, and for many retail investors, without a geology or economics degrees, it is really more like throwing darts. I call it spraying and praying.
So I could just put up a ton of Development companies and Explorers and say good luck, but there are a number of factors to look at when evaluating companies, and times in the cycle when these companies will have their day.
***** I will be posting a big list of the Near-Term producers & Development companies, the Project Generators, and the Jr Explorers lists on this next weekend show. Stay tuned, as those are probably the ones you are asking about.******
Until then………
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My personal strategy is to adjust my short-duration or medium-term trades to the current market dynamics, as they change depending on what part of the cycle the market is in. For example, the stocks I may consider lottery tickets are much different in a Bear market , than a new “BabyBull” market, or than a mature Bull market.
> In 2014-2015 we were still knee-deep in a Bear Market, so my primary strategy was to swing trade the more conservative names in the Mid-Tier space, because of the Bear market conditions, and I used primarily technical analysis to time entry and exit positions. Whereas, the “Lottery Tickets” during a Bear Market are in targeting takeout candidates. (actually targeting takeout prospects are Lottery Tickets in any market, but in a Bear Market they are small producers and Near-term producers more so than exploration plays).
In a Bear Market good exploration discoveries don’t result in much price movement in Jr. Explorers, because they need to raise money to get the drills turning, or if they press the issue, they dilute the snot out of their existing shareholders just to keep the lights on.
In Bear Markets “Optionality” plays like Pretium, Seabridge, Novagold, Internaltional Tower Hill Mines, Exeter Resources, Midas Gold, Rye Patch, Minco, Excellon, etc… don’t move much because they need a larger company to JV a project or to buy them out to move their defined projects forward.
Another laggard in Bear Markets are Project Generators like: Strategic Metals, Eurasian Minerals, Transition Metals, Millrock Resources, Typhoon Exploration, Inca One, First Mining Finance, or Altius Minerals. Companies like this don’t usually move much in Bear Market because their JV partners are out of money or none of the larger companies will be buy their projects yet, because they are repairing damaged balanced sheets….not making acquisitions.
Once the Bull market gets rolling full steam ahead, then we see just the opposite price action where investors go too far and greatly over-value drill results or the reality of whether a deposit will actually make it into production.
At the end of a Bull market investors are just thowing money at anything that says it is Gold or Silver related, and they fund the really huge low grade deposits and get in over their heads (Think 2010-2011).
Explorers, Optionality plays, and Project Generators need a rebounding PM market to get investors excited again. We are just now finally getting back to the point where the metals prices are improving and many of those companies have seen some nice movement lately. I feel pretty good that we’ve entered a new Bull market, but until I get confirmation in Gold closing above $1307.80 and $1321.50, then I’m cautiously optimistic, and not going all in on these types of Lottery Tickets.
For now, since I’m not still not sure if this Baby Bull is for real, then I’m sticking with smaller producers that are unloved or way undervalued, and the near-term development stage companies that have exciting stories and anticipation.
Here is the list of the Smaller Gold Producers on this last Weekend’s show and there are a number of companies that have already de-risked their properties, have their permits, are mining ore, and have reduced down their costs. It is my opinion that they are going to be the subsector that moves next, because we already see nice moves in the Majors and Mid-tiers.
GOLD SMALL PRODUCERS Symbol
ABM RESOURCES NL ABU.AX
ASANKO GOLD INC AKG
ALKANE RESOURCES LTD ALKEF
AUREUS MINING INC ARSMF
BEADELL RESOURCES LTD BDREF
CALEDONIA MINING CORPORATION CALVF
DORAY MINERALS LTD DRM.AX
EXCELSIOR GOLD LTD EXG.AX
GOGOLD RESOURCES INC GLGDF
GOLD RESOURCE CORPORATION GORO
GOLDEN QUEEN MINING COMPANY LTD GQMNF
GUYANA GOLDFIELDS INC GUYFF
GOLDSOURCE MINES INC GXSFF
HAVILAH RESOURCES INC HAV.AX
INCA ONE GOLD CORPORATION INCAF
KIDMAN RESOURCES LTD KDR.AX
LUNA GOLD CORPORATION LGCUF
COMSTOCK MINING INC LODE
MEDUSA MINING LTD MDSMF
METANOR RESOURCES INC MEAOF
MILLENNIUM MINERALS LTD MOY.AX
MAYA GOLD MYAGF
ORVANA MINERALS CORPORATION ORVMF
PATAGONIA GOLD PLC PATAF
PERSEUS MINING LTD PMNXF
RAMBLER METALS & MINING PLC RBMTF
REGIS RESOURCES N.L. RGRNF
RESOLUTE MINING LTD RMGGF
RAMELIUS RESOURCES LTD RMLRF
SARACEN MINERAL HOLDINGS SAR.AX
SANDFIRE RESOURCES NL SFR.AX
STARCORE INTERNATIONAL MINES LTD SAM.TO
SULLIDEN MINING CAPITAL SMC.TO
SCORPIO GOLD CORP SRCRF
ST BARBARA LTD STBMF
TERANGA GOLD CORP CDA TGCDF
TIMMINS GOLD CORPORATION TGD
TOREX GOLD RESOURCES INC TORXF
GRAN COLOMBIA GOLD CORP TPRFF
WESDOME GOLD MINES LTD WDOFF
Since I didn’t post the Silver stocks on the weekend I’m mention a few of the small Silver Producers like Silvercorp, Impact Silver, Americas Silver Corp, Arizona Mining, Avino Silver & Gold, and Great Panther.
Finally I’ll leave you with my favorite Lottery tickets at this time, but these are NOT Optionality plays. These are near term producers or small producers still under the radar to most. I’ll throw out some optionality plays in a few days.
– Alexco – prior producer with mine on care and maintenance, have an environmental division. When Silver prices rise they’ll have big upside
– Aurcana – prior producer, made a ton of terrible decisions, fired all the management, still have their TX mine, and will be going back into production with higher Silver prices
– Nicola Mining – prior producer as Huldra Silver, went into credit protection and came out with the mine & mill. Hardly anyone realizes the money they invested to build at the exact wrong time in the cycle, but when the cycle takes back off they have their mine, and can do tolling agreements for other companies because two other processing centers had environmental problems the last few years and closed. They also can process contaminated soil
– Bakerville gold – Prior producer in 2014 and 2015, retooling for higher prices, and they can easily go back into production
– Gold Stand Ventures – used to be a producer until 2012, and CFS mentioned their strong attention lately by the marketplace.
– Luna Gold – they were in production, ran into all kinds of problems, and put their mines on care and maintenance, and people left them for dead. Sandstorm bailed them out and over time I believe they’ll be going back into production and surprise the markets with their return
– Jaguar Gold – they are really a mid-tier producer that had a huge fall from grace, went into credit protection for a long time, improved their operation efficiencies and costs, and still have a mining complex on care and maintenance that will propel them forward in higher metals prices.
– Scorpio Gold – this company was spun out from Americas Silver , made a few good acquisitions, ran into a potential hostile takeover situation in 2014, but survived, and most people just forgot about them, yet they continue to crank out the production.
– Alkane Resources – they were a rare earth company, but rebranded as a Zirconium company, but what is insane is that they produced 69,000 ounces of Gold last year and hardly anyone realized it.
– Metanor Resources – few investors even realize they are Gold producers, but Eric Sprott just did and made a sizeable investment
– Comstock Mining – have been working on a historic mine and producing small amounts for years, but recently have reinvigorated their approach, built a new access tunnel, and have a rising production profile in a huge Gold/Silver resource
**** Really, just go check out the list of small producers up above for now. There are all kinds of Gems on that list that should move up nicely and on a larger percentage basis when metals prices returns. There are a ton of small producers nobody is really following like Troy Resources, Kingsgate Consolidated, Ramelius, Rambler, Resolute, Areus, Caledonia, Beadell, etc…. but eventually they’ll get more attention, or will get gobbled up by larger companies just wanting to purchase producing assets.
In the near future I’ll be throwing up more development and exploration companies
Good luck everyone in your investing.
THANKS FOR THE LIST………….
Everyone knows the Majors and Mid-tiers, but these small producers haven’t received as much love from the investing community (yet). They’re up to bat next.
Then when gold is in the mid 1300’s+ the Project Generators, Optionality plays (takeover targets), and Jr Explorers will come back into vogue….
Andrew, I do not own DNA but the chart looks good and several credible sources have been impressed with the company.
I consider it a buy right now if you think gold is going higher. If you’re bullish but not sure about the short term, you might consider buying one-third to one-half of your intended position now and then wait for gold to show us which way it is going to go before buying the rest.
DNA daily:
Thanks guys!
Hello Andrew,
If you check DNA’s corporate presentation, i think it will give you a very good glimpse of what the company is about and does.
If i am not mistaken, also, there is a slide about the things to watch for this year in terms of newsflow for the months to come.
Also take a look at the large shareholders: I think some are mentioned in the pres too.
Best as always,
LPG
Excelsior
Great detailed answer as always,much appreciated.Sorry for my undefined question.I made my “hitlist” of pm stocks ca2014 and bought most of them around tax loss season 2015(still holding most of them)because i do not have the TA,keltner channel etc skills to get in/out (working on it)i Think i got them cheap enough,maybe i will be a pig and ride them back down,but feeling the bottom with my toes,i will hold them for the long term.About my question, in a full blown pm bull market as you know some companies with poor fundamentals will outperform the ones with good fundamentals,i Think BAA is one of those.My criteria in this case was Companies in production and with a known deposit.BAA could have 20moz of gold(my guess)Thanks Excelsior.
Never mind the question Excelsior,i realize it still have to many variables,Thank you
“feeling the bottom with my toes”That did not sound right…
If my toes feel the bottom then I may stand there for a moment before going long again and taking the leap 🙂
Good thoughts Pete. Yes, I believe you are correct that once the bull markets picks up the pace that companies that are not quite economic here, will shoot up with a lot of torque and surprise investors. The point of my long-winded answer was that during each phase different companies tend to shine. In the initial bull, the Majors and Mid-tiers take off first as institutional money returns to the space. The mid-tiers were my 2015-early 2016 strategy and then in mid Jan-Feb I got more into the smaller producers, and have still been camping out mostly in that area. When retail investors return and funding returns to move forward exploration and acquisitions (the hot money) then it will pour into Project Generators, Optionality plays and the Jr Explorers. That is why I’m spending this week looking over a number of them. Now is probably the time to start making a list of those PM lottery tickets.
We already seen the marketplace starting to reward some discovery like the Canasil & Orex pop, or the Silvercrest pop. I had a really nice ride on Mexus Gold in the first quarter because they are looking for a new JV partner or may get taken out. It has begun…..
The CEO of DNA recently said:
“Test stoping is one of the key factors in producing a high quality feasibility study for Curraghinalt and being confident that our mine plan will be realistic and achievable. The stoping program compliments other completed and ongoing works in support of our feasibility such as infill drilling and grade reconciliation studies comparing face sampling with the block model.”
The program will commence on the V-75 vein, which is approximately 90 metres below the surface and 1,000 metres horizontally into the hillside at the deepest point of our development and therefore believed to be most representative for mining purposes of the bulk of the resource at Curraghinalt. The program will consist of a minimum of two test stopes averaging 1,000 tonnes each and may include up to four stopes. The test stoping program has been modified to include a ramp down of approximately 190 metres in length and 18 metres in depth to more accurately replicate planned mining techniques for a full-scale mine (refer to figures at http://www.dalradian.com/news-and-events/news-releases/news-releases-details/April-6-2016-News-Release-Figures for more details). The additional development has the advantage of including backfilling and provides the option to add up to two more stopes. The development completed to date has demonstrated sound rock mechanics and is yielding important data on the grade and metallurgical characteristics of the veins. Total development for Dalradian’s underground program is now expected to total 950-1000 metres, up from approximately 885 metres.
Preparatory development for the test stoping commenced in March and the stoping program should be completed during the second half of 2016. Definition drilling for the planned stopes is underway and is expected to be finished by the end of April. The expansion of the test stoping program is expected to have a negligible effect on the budget for the overall underground program as well as the anticipated timing for release of the FS, which remains in the second half of 2016.
So it’s a long term buy.
Yes it is long term CFS,personally i like to get in early if it is a solid Project.
In case it was missed in the ocean of weekend show comments, here’s this again:
On April 10, 2016 at 10:28 pm,
Matthew says:
Gold’s EMAs show just how well gold has held up when compared to the miners. We can see how important the 233 EMA has been lately (now 1258). Once gold gets through that level, all the moving averages will be below it. This is likely to cause an impressive surge right through 1308 with little trouble.
Notice that gold has stalled at 1258 this morning, so far.
As Rick would say, take it one step at a time. The next level to beat is 1271 and then 1287. The daily chart is showing a breakout over the continuation pattern, though it is roughly approximated, and will be updated after the close:
Yes, “one step at a time” is the old mantra, and it is a fine one, but I like to share what I really think.
Speaking of Rick, his hidden pivot method is as legit as they get but I never gave that gold to $800 target any credibility.
I have to agree Matthew as it just did not feel right. No disrespect to Rick.
Will Rick be around this week Al? He’s been missing for awhile now.
$1259.70 right now!
Is Bentley trying to tell us something with this new gold and silver Mulsanne?
Matthew…I got a call from the big fella AL. Said he just ordered one, asked me if I could be his driver, I said yeah sure AL , he then said I would have to put on a posh British butler type accent……………………………….told him to feck off.
That’s the spirit 😉
Irish rose……is always feckle……. 🙂
You forgot to mention the black cap! And absolutely no Guinnes on the job!
funny.
I tried to order one and then Kathy found out!
She’ll soften up Al once you get her her Bugatti!
Doc,
I am going to ask you the same question re the commodities that I asked you last week (And which you graciously answered.) about the base metal commodities – is the sea-change you mentioned today also now beginning in copper, iron, coal, etc, or are you still referring to just agriculture and precious metals?
I found what you had to say about the conventional markets to be very interesting – I have been leaning towards a move down, but if the USD is going down then I suspect that a lot of commodities will get a bid. But heck, what do I know 🙂
BOB, I should clarify myself—I’m more interested in soft commodities like agriculture at this point.
Thanks Doc.
Actually you know a lot!
I am just winging it Al 🙂 I’ve told God that I am not coming back.
! TELL YOU ALL! a while back ! OIL IS UNDER CONTROL ! https://www.youtube.com/watch?v=4jAPWsxvNzc
I don’t know what to think about this.
I hope day kill Monsanto .
Monsanto is a killer………….
Chinese population is scared of GMO like a plaque. I am not sure it is true or not. We eat it here.
I see two reasonable courses of action:
1) Dig into the research a bit–I haven’t really done this in earnest, but have seen enough to be very wary;
2) Just refuse to be a lab rat for Monsanto.
A lot of GMO is about making it highly tolerant to glyphosate. Glyphosate will ruin your gut flora, hence your digestion, hence your health.
One thing you can be sure of: the regulatory process in the USA is broken and corrupt. So nothing the FDA or CDC has to say on the matter is to be taken without a big grain of salt.
Much the same can be said of groups like the American Medical Association, American Cancer Society, American Dental Association, etc. Dentists are still putting mercury in peoples’ mouths and saying it’s harmless, for crying out loud. Sorry if I stepped on any toes here, but it can be backed up by massive evidence. Look at the horrible health outcomes in the US relative to its highest-in-the-world spending on health.
Agreed with all comments on this thread regarding Monsanto as a killer and the dangers of GMOs.
GH………IS SPOT ON………………..
GH is typically spot on. S-H-A-R-P!
+3 GH is spot on & sharp
Thanks guys 🙂
I see that Chris Vermeulen has posted an article today on his blog stating that he thinks oil is going to go up for this week, taking conventional US stocks with it, before a major crash in the stock market this month or in May.
He writes ‘large institutions are starting to distribute huge amounts of shares to these undereducated investors who don’t know technical analysis and stock market cycles’.
I don’t have the expertise to judge his thinking. Might be of interest though:
http://www.thegoldandoilguy.com/energy-sector-set-to-save-the-stock-market/
Bob, chris’ thoughts are right in my line of thoughts—
Chris Vermeulen has just posted a video re that above article – has some VIX info also that may be of interest to you Doc:
A major crash would take miners down too Doc. So it does not make sense to be buying a gold bull if you also believe there is going to be a market crash. Not trying to be difficult here but don’t you think staying in cash is a better option if you are not playing the short side of the market?
The current setup has a lot more in common with the 2000 top for stocks than 2008. The miners are more likely to come under pressure if conventional stocks surprise to the upside. The gold miners will be great if stocks fall.
2000-2002:
I was asking Doc since he seems to agree with Chris Vermeulen that oil will take stocks up before a major crash that could be coming soon. The reason I ask is because he just said he is bullish miners again. But Matthew, in a genuine stock crash very little gets spared and even then, NOBODY can tell in advance what might escape unscathed. Not even you.
When I said that the setup is more like 2000 than 2008, I intended to get across is that I expect conventional stocks to fall substantially but not crash; and therefore, the miners would be fine.
Markets can fall quite steeply without being a bonafide crash.
Ah, I get you now. Btw, I too have concerns about the potential for a stock crash just as a few others have been mentioning. And as you know I am not one of the “crash” people calling doom every other day but I do harbour concerns right now. Its because we are nearing the end of the commodity cycle declines and the shift that takes place from equities into resources can sometimes start with a bang. In this case it would be people moving from one overpriced asset and migrating into another that’s undervalued. The other one being hard assets of course….in other words near money alternatives. Anyway, I am not calling for a crash but I am a little more in cash than usual and not pushing too hard to buy back into gold miners either because while many see them as a buy right now, to me it looks like we are teetering on an edge with both conventional’s and PM equities…..and I prefer to take my chances by just letting the action play out a little longer without me!
THM up 26%! Are you kidding me? This is fun.
MGN up 28%
What a rip your face off rally. Glad I added when I did and didn’t wait.
The Canadian dollar looks great.
Too bad as I like spending with a 30% discount!
You lucky border-dwellers with your Canadian subsidy. Enough!
Bob, chris’ thoughts are right in my line of thoughts—
As I said on the earlier post………………SILVER LOOKING REALLY GOOD…. 🙂
“SEA CHANGE”……..per Doc…..finally…………….
THANKS GUYS………
zerohedge is out with the news TUES………….”.silver 8th month high”…….I guess they read this blog………… 🙂
It’s a SEA and SAND day
So Doc if I understand you correctly you think that a sea change is coming in the agricultural commodities. This would probably be more connected to money flow rather than just the fundamentals?
Lewis, you’re spot on. When you look at supply fundamentals for instance on coffee, they look good for the rest of the year and 2017. However, you often miss turns based on fundamentals versus technicals and I’m watching the technicals. And th money flow is exactly what I’m thinking of as well.
We do need that shift in a lot of them to get the ball rolling. Thank you Doc!
Doc: speaking of agriculture, any thoughts on POT? It hasn’t been this low since the depths of 2008. Near a bottom? Or do you think it will test prior 2005 highs of $12.75? Surprised they haven’t cut their dividend.
Tom, it appears POT wants to head down to test a double bottom and it wouldn’t surprise me then if it decides to have one more leg down. Let me know when it gets down to about to about the area of 12-13 which I think it well see—then I’ll look at the chart again and try my best to tell you where I think it’s headed at that time.
Anyone thinking about taking a position in TVIX? Or is it too early. My gut says perhaps tomorrow or later in the week.
I’m still in June UVXY calls bought in late March and early April. I was a bit early, so of course got attacked by Savage for it.
He loves to troll and imply that people betting against this market have been all in short since the February lows.
I seriously doubt the deflationary bust “single digit GDX” scenario is off the table, but if it is, silver should begin to seriously outperform and catch up with the miners. Bought more physical last week.
It has already bottomed. I follow the vixy and that bottomed near 11.30 or so and it is now 12.52 in the after market. We are overdue for a good spike higher.
Agreed.
Theralase (TLTFF) up 16% on higher-than normal volume.
Oil just went flat for the whole day and I sensed last week that the VIX has bottomed and it spiked sharply higher after 3pm. S&P did not hold 2050. I sold my big oil position to take profits as the Vix wants to spike much higher and the market drop can pull oil down again. Keeping my VIXY shares.
Band plays on, as global oil glut leaves supertankers in a huge jam
Reuters 25 minutes ago
http://finance.yahoo.com/news/band-plays-global-oil-glut-130103301.html
Paul L – the spike up on Oil today has been very impressive. I may be asking for trouble, but I just shorted Oil with DWTI at $115.98.
Ouch. That didn’t work out too hot. Shame on me for trying to catch a falling knife.
Paul, I believe you’ll make out well on that trade.
For those in the crowd leaning towards the idea that long VIX positions are going to be the place to be soon then I have a chart for everyone today that is highly instructive if not damned worrisome.
What this is the comparison of Yen to the S&P. Please take note of the recent severe divergence between the two and while you are at it also note that S&P and Yen typically trade together. I think we have reasonable evidence here that a sharp decline is both probable and imminent for US equity markets if the Yen does not turn tail and go in the opposite direction soon.
For gold bulls, this is also going to be music to their ears as the Yen has been such an excellent indicator of golds relative trend. It has one of the highest correlations available to us today. So we may just be seeing that the moment of a rotational shift from general equity markets and into commodities has arrived, so watch these closely.
I copied the chart below from a ZeroHedge article today titled “”Mr. Yen Warns USD/JPY May Hit 100 By Year-End”. The arrows are suggesting what the implications for a Yen at parity to USD means for the S&P. Hint….about 1550 which is substantially lower than my own estimate for the S&P to fall to 1650 in the coming two months.
Have a look and judge it for yourselves. Do you REALLY believe stocks are about to slingshot into the heavens? Even Martin Armstrong now doubts that outcome and has written just days ago that the slingshot pattern has been violated and could be pushed off for a couple years.
Implications for the S&P should the Yen fall to parity with USD…..Note the current divergence!
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/04/08/20160411JPY.jpg
I only post this chart (above) btw to highlight the problem I have with one particular numb-nut who keeps stupidly insisting that he knows better than everyone else and that we here at KER are contrary indicators while he is somehow the blessed one who miraculously knows all. Balderdash!
On another note, bullishness among the retail crowd (dumb money) is at special highs and one just wonders what sort of delights beckon if stock markets do indeed take a May tumble. Anyone here follow margin account numbers that can give an update on those readings? Its been awhile since we worried over broker margin but now seems a good time to get up to date on it again.
Found something!
OK, this is a chart of “Net Free Credit” which tells us how much cash investors have on hand to defend against a stock market correction should one come. As you can see investors are pretty much fully deployed already (in the red actually due to margin) and in no position to do anything other than sell to raise capital should the market go sour.
Net Free Credit and the S&P 500 on a monthly chart.
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/04/11/20160411_BAML12.jpg
Oh great. Just what we needed. A reason to drive prices even lower than might otherwise be expected.
Here is another. OK, this one is interesting for a couple reasons so let me explain. This is the chart of NYSE margin debt updated to March this year. What I want you guys to look at is what happened in the year 2007.
What is notable is that margin debt hit its peak at that time and then dropped sharply months before the market itself took a swan dive. That’s interesting because it tells us margin debt is a leading indicator of what will happen to stocks.
Now look at the current readings and in particular the middle of 2015. See that? Margin debt again collapsed and is in sharp decline despite the fact stocks are still hovering at relatively high levels.
We have a red flag warning on our hands here folks. And this one should not be ignored.
NYSE Margin Debt versus the S&P500 — Please note the close correlation of the two and then note the divergences before sharp sell offs. If you have never heard of this indicator before now is a good time to get familiar with it. Margin declines LEAD market declines. Just that simple.
And one special note for the technical guys. Notice that margin debt (red line in chart above) has formed a classic head and shoulders pattern during 2015 / 2016….that the neckline has been broken and that the direction is down. It damning evidence a serious market correction could be at hand.
Now please note, I am not calling for a crash. I am only saying that some key pieces of evidence point to a sell off coming. In another post I will try to time when it will arrive but today I am too busy.
See that drop in the Yen today? Not so surprisingly gold immediately went as limp and flaccid as a Romeo who just got caught out by his Juliet’s Mama. If the Yen has topped on an interim basis (and I think it has because a retrace is now due) then the air is going to come hissing out of the gold market and mining equities in a hurry. Yesterdays sharp ramp up in so many gold and silver miners may have just been the typical (and cynical) spike before the pop. With the gold chart posting a H&S that is best seen on a daily chart you really have to wonder how much gas is still in the tank. Especially as so much of the spectacular ramp up in price since January was just short covering to start with. What we need is genuine buying to press gold higher from here but I doubt that is in the cards for the moment. Meanwhile, DUST has fallen so much in the last 100 days that it is almost irresistible after having plummeted 86% just this current year. s it too much to ask that this one might turn tail and go back up? Odds seem to favour that right now and I suspect risk is low given that gold has become tired these last weeks. Currently DUST trades at 2.16 cents……it was over 20 dollars as recently as January 19th. Hmmmmmmm.
OK, look……I know most of you guys here think gold is going up, up and away. And maybe you are right. Bullish sentiment is high and the blog world is all adoring and in love with metals. But for right here, right now today the Yen is going to take a breather by my calculations and that means gold will fall. So the risk / reward on a DUST trade or similar bet against our favourite precious metal is relatively low. In a most extreme case for example, should gold retrace most of its move up then DUST would be a multi-bagger in a short period of time. Should gold rise instead then at most I might lose 10% of the capital invested. Minus 10% versus 5 times my money are odds I like. And technically speaking those odds are in my favour (depending on how one reads the tea leaves of course….but there are also bullish reasons to stay invested in gold so this can obviously be a coin toss).
Any thoughts from the crowd here?
I like the part where you say…………”and maybe you are right”….”up, up and away”
Dust seems kind of risky……….but, a one day shot …..why not………
LOOKING in the basket of the HUI…………miners still looking good.
Risky? How so Frank? If it drops to a dollar that’s a 50% loss.
If it returns to its January peak that’s a gain of times 10.
I don’t know that I would bet the bank on this but to me that DUST chart hit bottom and the upside could be rewarding.
Anyway, the dollar is about to reverse higher and the Euro decline which is a negative for gold. You can see it in action right now on the hourly chart. So the pair reversal is here.
A little Birdy told me.
Keep in mind Frank that miners and gold are two different trades. I am playing to a belief gold will weaken here rather than trading on the companies which do indeed look to have hit bottom some time back. At this stage the miners are going up regardless of gold for the reason that they were beaten down so long it made no sense anymore.
So I am not disparaging the companies or the HUI in any way by getting short gold.
Re: “So the risk / reward on a DUST trade or similar bet against our favourite precious metal is relatively low.”
&
“At this stage the miners are going up regardless…”
—————–
Only one can be true, Bird.
Fwiw, I agree with OOTB…CCF. I wouldn’t touch DUST yet unless you’re a very good day trader.
With regards to miners Matthew I suspect you probably know that what I was talking about is a disconnect between recent metals prices and miner performance. I am not saying that the two are going in entirely different directions or anything crazy like that. Just that there is not a perfect correlation between the two. Recent bullishness on the equity side has pressed many miners higher whereas in the past when gold started to fall miners would just drop off a cliff. That is a notable difference. in general I am bullish the mine equity markets although I will admit I sold too early. Sorry, I should have been more clear with my comment (but i assumed nobody was reading anyway since i have left a number of posts with great charts that got no responses).
If, you think you can double your money …………go for it……a 50% loss, means you need to make a 100% gain on your next investment. Although 10x the money….does sound nice…………………… 🙂
FIC……….I understand that miners and phyz are two different animals……That is why, the Miners are appealing at this stage of the game.
FIC……..you know we already realize the disconnect, which we indicated the same when we started mentioning the HUI….., THE CRIMEX, can not control the value play in the miners…. any longer….. The worm has turned……(don’t tell the chickens in the barn yard yet)…………….. 🙂
Honestly, I am not all that worried Frank. I am playing the probabilities that’s all. If I am wrong then I get to exit with a small loss. If I am right I will hold for a respectable gain. What more can we do? EVERY trade has risk. I just think this one has great potential right now and I don’t think I am too early. I especially like how so many banks (RBC, HSBC et al) are suddenly bullish gold (after the big run it already made). As usual they are playing catch up and so they are behind the curve. My record is pretty good overall though. Better than most of the banks. I timed the bottom fairly precisely just before gold took a rocket ride and now I hope to cash in on the corrective decline. Nothing more too it than that really…..its just another day in the market and crazy-ville.
DITTO …..on the crazy-ville……..HOPE YOU MAKE A TON ….happy trading…best 🙂
Thanks for the intra-day update Doc.