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Commodities in general are starting to struggle and an update on Sarepta

June 7, 2016

Chris Temple and Cory first address the aspect of the US markets inching closer to all time highs. There are a number of articles that say it is just a matter of time before the markets exceed these highs but also articles that state the markets need to pull back very shortly. We then take a look at commodities with a focus on the base and industrial metals. These commodities are starting to pull back and quite frankly look weak. An update on Sarepta is provided before wrapping up.

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Discussion
43 Comments
    Jay
    Jun 07, 2016 07:48 AM

    Found a great little channel on YouTube with brief interviews with junior miner execs. Some programs in Deutsch but most interviews in English

    Here’s one with CEO of Midas Gold if you want to check out the channel. https://youtu.be/4t4lLmGp9U4

      Jun 07, 2016 07:59 AM

      Yes I check out commodity tv quite often and get a kick out of Jochen’s overly jovial interviews. There is one with Rick Rule I posted a few weeks back that had me cracking up.

        Jay
        Jun 07, 2016 07:02 PM

        Yes! His enthusiasm is great 🙂 Some of the interviewees would do well to catch a little of it lol.

          Jun 07, 2016 07:14 PM

          ha! Agreed.

    Jun 07, 2016 07:00 AM

    This might be of interest.

    Sky News is leading with the headline story in the UK tonight that, in March, there were record outflows of cash from the UK. They reported the story, from Bank of England figures, that people are positioning to be out of Sterling assets re the coming BREXIT vote.

    If that was March then what has happened in April, May and now June. Similarly, is the same thing happening in Europe with people getting out of the Euro.

    Makes me think that people will be seeking to move into US denominated assets, be they stocks or PMs, as the BREXIT vote nears.

    Jun 07, 2016 07:51 AM

    I believe that oil and commodities in general have put in long term lows versus most currencies including the U.S. dollar.

    WTIC weekly:
    http://schrts.co/lD1Yu2

      Jun 08, 2016 08:33 AM

      Matthew:

      We had a 5000 year low in the price of commodities in the Dec-Feb period. I happen to agree they have put in their lows and after a perfectly normal and reasonable correction, will resume their climb. Perhaps the banks will finally get the inflation they have worked so hard for. It comes under the “Beware of what you wish for” rule.

        Jun 08, 2016 08:08 AM

        Precisely Robert. Whether this is the very bottom and maybe so.
        You make fatal assumptions though. A major war like the world
        has never experienced in a total game changer. We are very close
        to a nuclear exchange. Your 5000 year history is great analysis but
        not with the deadly perilous poisonous times we are now entering.
        You can spin it anyway you want but until this world war has passed
        the outcome is not only very uncertain, its impossible to predict the
        consequences. We have never been so deeply in debt and leveraged
        to avoid a “fatal” catastrophe we are now faced with.

        But ya Robert, keep telling yourself a major war will never happen.
        Inflation hedges will keep you safe and rich even though planet
        earth has been covered in radioactive muchroom clouds.
        Thank you for your comments too. My analysis covers the real
        future events and possibilities. Everything you left out !!!!

    Jun 07, 2016 07:54 AM

    Commodities are short term overbought but still look strong and ready to go higher.

    GNX daily:
    http://schrts.co/1QNzg3

    Jun 07, 2016 07:00 PM

    I am giving up on the resource sector and going all in on comic books……..
    __________________________________________________________________________

    High-value comic books are outperforming traditional investments
    Seana Smith,Yahoo Finance 23 hours ago

    https://www.yahoo.com/finance/news/comic-books-alternative-investment-plays-batman-superman-171845937.html

    Jun 07, 2016 07:03 PM

    “People right now who are getting all ga-ga over a CRB index that is up about 20% from its lows at the beginning of the year, disproportionally due to the jump in crude oil, I think are really ahead of themselves if they are looking at the breaking of this commodity downtrend in prices overall. And If they are saying that this is the harbinger of of a new secular upswing, then I think they’re nuts”. ~~ Chris Temple
    —————

    Right on!!! Thank You Chris!!!!!!!

    You got it man. Shoot, i was really thinking that nobody on this site could see it but today’s interview confirmed you and Cory are both tuned in and paying attention. The nice part is that the analysis works from a fundamental basis this time as well and that takes precedence over technical’s which appear to be giving a wrong signal at this time.

    That also makes you guys part of the minority. But it does not make you wrong.

    Some time ago I had pointed out that one of the key commodities I was watching was copper as, like gold and silver, had risen strongly since late January. My contention then was that it had formed a giant double top that warned copper would fall all the way back to its lows and then likely drop lower.

    That does appear to be what’s happening and so its a big, fat amber warning that precious metals will NOT stage the new bull market so many guys keep calling for. There are several other indicators I am also watching that give similar tell-tale warning signs that this bounce (since January) was nothing more than a dead-cat but my message to readers on that subject has mostly been falling on deaf ears.

    I continue to believe caution is warranted investing too heavily in precious metals and miners. In fact today might be the last day of the bullish mood as it looks like a sharp price decline is in the offing.

    It won’t be long before we know. Tonight we could get a price smash in the PM’s.

      Jun 08, 2016 08:36 AM

      When you have commodities at the lowest prices they have been in history it means that you understand neither history nor economics to actually believe they are going even lower.

      You have been wrong on your call for gold since you first made it and you are going to be wrong on your call for even lower prices for commodities. When something like oil doubles it is hardly the end of the world for it to move from overbought to oversold. It’s called a correction.

      So much for your call for an overnight smash in the metals. I’m starting to see a pattern.

        Jun 08, 2016 08:07 AM

        Precisely Robert. Whether this is the very bottom and maybe so.
        You make fatal assumptions though. A major war like the world
        has never experienced in a total game changer. We are very close
        to a nuclear exchange. Your 5000 year history is great analysis but
        not with the deadly perilous poisonous times we are now entering.
        You can spin it anyway you want but until this world war has passed
        the outcome is not only very uncertain, its impossible to predict the
        consequences. We have never been so deeply in debt and leveraged
        to avoid a “fatal” catastrophe we are now faced with.
        But ya Robert, keep telling yourself a major war will never happen.
        Inflation hedges will keep you safe and rich even though planet
        earth has been covered in radioactive muchroom clouds.
        Thank you for your comments too. My analysis covers the real
        future events and possibilities. Everything you left out !!!!

    Jun 07, 2016 07:19 PM

    UUP going DOWNN…

    http://schrts.co/nHjucl

    Jay
    Jun 07, 2016 07:25 PM

    URANIUM!!

    Thanks Chris for the rec. on UUUU. I already owned some of it, but bought more after seeing your analysis and recommendation.

    Looks like the market is starting to wake up to the potential in uranium?

      Jun 07, 2016 07:15 PM

      Yes, Uranium miners were on an absolute tear at the end of last week and also the last 2 days. There have been startling amounts of volume suddenly pouring into the US based Uranium stocks and even the ETF (URA). Based on the volume it seems like the big boys are getting into position. Today, the Canadian explorers got into the mix with higher volumes and a few nice bumps in pricing. Interesting…..

      _________________________________________________________________________

      As for the volume flows in the US Uranium miners I felt this was worth noting Yesterday on the US Uranium miners volumes from Monday:

      –> Uranium Resources, Inc. (URRE)
      Volume: 1,449,508
      Avg Vol: 125,294

      –> UR-Energy Inc. (URG)
      Volume: 4,729,012
      Avg Vol: 370,342

      –> Uranium Energy Corp. (UEC)
      Volume: 4,997,012
      Avg Vol: 810,206

      –> Energy Fuels Inc. (UUUU)
      Volume: 682,354
      Avg Vol: 298,795
      ________________________________________________________________________

      Volume was up again today in the Uranium space as things are really picking up:

      Uranium Resources, Inc. (URRE)
      Day’s Range: $2.01 – $3.74 ** I’m including the price range because this thing was all over the map today on insane volume compared to the normal volume.
      Today’s Volume: 3,392,507
      Avg Vol :125,294

      Uranium Energy Corp. (UEC)
      Volume: 8,566,364
      Avg Vol: 810,206

      UR-Energy Inc. (URG)
      Volume: 3,005,354
      Avg Vol : 370,342

      Energy Fuels Inc. (UUUU)
      Volume: 673,238
      Avg Vol : 298,795

      Global X Uranium ETF (URA)
      Volume: 201,117
      Avg Vol: 92,098
      __________________________________________________________________________

      Here are the Canadian Uranium miners getting into the mix today……. (US tickers)

      CanAlaska Uranium Ltd. (CVVUF)
      0.5033 Up 0.0561(12.54%) 3:32PM EDT
      Volume: 87,603
      Avg Vol : 36,070

      Fission Uranium Corp. (FCUUF)
      0.5274 Up 0.0254(5.06%) 3:56PM EDT
      Volume: 495,428
      Avg Vol : 229,205

      NexGen Energy Ltd. (NXGEF)
      2.11 Up 0.09(4.46%) 3:47PM EDT

      UEX Corp. (UEXCF)
      0.1796 Up 0.0096(5.66%) 3:47PM EDT

      Denison Mines Corp. (DNN)
      0.5590 Up 0.0190(3.52%) 4:02PM EDT
      Volume: 1,157,781
      Avg Vol: 491,198

      _________________________________________________________________________

      I’ve been waiting to see this kind of commotion in the Uranium space for a while and find it very encouraging action.

      Has the worm has turned in the Uranium sector?

      Jun 07, 2016 07:04 PM

      Yes, but painfully slow process still. Long-term remains very bright, however.

        Jun 07, 2016 07:00 PM

        Buy now or be left behind forever.

          Jun 08, 2016 08:18 AM

          Actually buy when these parabolic moves correct back down. Since all this volume has flooded in over the last 4 trading sessions it has forced the prices up in a parabolic move.

          I’ve been selling into this strength, but did buy back some UUUU, UEC, and URRE near the close when the pulled back down really hard, but I already have insanely low cost basis’s in those companies. If they jump any further, I’ll trim them down again, but am anticipating a brief pullback.

          With some of the key Uranium companies breaking out above key moving averages and recent peaks, it is definitely a wake-up call to pay attention to this sector and buy on the weakness moving forward.

          Jun 08, 2016 08:28 AM

          Jokes aside, I can appreciate how anyone in the business of selling investment advice would be loathe to make comments contrary to the beliefs of a large portion of their subscribers who might happen to be gold bugs.

          Nobody in this business ever got rich alienating their subscribers.

          But we are not in normal times. There is a reasonable possibility that needs to be considered that gold and silver may run down for years to come before staging another rise that even comes close to those we saw in the 70’s or 2000’s.

          Even the very long term chart of the CRB is now suggesting that it will fall all the way back to pricing we saw 4 decades ago as that chart has also broken down. The globe is debt-addled at exceptionally high levels.

          McKinsey is saying that a “normal” deleveraging period runs for 6 to 7 years following a large build of credit in the system. But that does not mean we will escape this current period by suffering slow or negative growth for such a brief time.

          We know of course that the Depression saw deleveraging in the global economy that went on for more than a decade without respite and I suspect this is going to be much closer to our fate. For what reason will gold appreciate during that time if all commodities are in retreat or just treading water and trading sideways?

          That’s why I say that fundamental analysis is meaningful again. If global aggregate demand is falling because of demographics issues, too much automation, an excess build up of debt and a surplus of mining supply flooding the market then we have a long road ahead of us still.

          Gold won’t decouple. Neither will silver. Not in the absence of a confiscation anyway. Why would they? We need to keep our heads screwed on and not fall for all the idiotic reasoning of the gold-bull artists who will say absolutely anything to make their La-La Land happy case for precious metals.

          If Europe breaks down the dollar is going to soar. By default oil will stay down as will most of the commodity sector, gold included. So there is just no point fantasizing about a new bull market when what we are really looking at was just a nice seasonal bounce.

          Anyway, for an avowed gold bug I thought your comments were pretty refreshing yesterday Chris even though I think you still lean towards the bull arguments (subscribers notwithstanding).

          I won’t start taking metals seriously until I start seeing a lot more mine closures, more bankruptcies in the sector, more buyouts….in short…..a lot of supply being taken off the market. That is going to take time though.

          We are not there yet.

    Jun 07, 2016 07:29 PM

    Will the Loonie have the strength to get through immediate resistance? I think so…

    http://schrts.co/h4R4SD

    Jun 07, 2016 07:31 PM

    Demographics, aging population, debt implosion (highly deflationary),
    robotics entering the work employment space, refugees flooding The
    West and prices are plunging for many goods.

    ALL OF THE ABOVE IS HIGHLY DEFLATIONARY. Take a look around.

    Inflation hedges will prove to be a bad investment. IMHO.

    OR YOU CAN BELIEVE YOUR LYING EYES. !!!!!!!!

      Jun 07, 2016 07:37 PM

      I would agree with that. I had not given much consideration to the deflationary effects of robotics but that’s an excellent point Jake. Keep bringing the great ideas.

        Jun 07, 2016 07:57 PM

        It’s just very simplistic and plain vanilla analysis. Which can
        serve as a better tool to forecast the future than these way
        overblown technical strategies. The latter can be highly useful
        but we need to look at the entire picture.

        I read your commentary above Birdman and you are definitely
        not in the conventional wisdom camp. There is so much hype
        you can cut it with a knife.

        Eliminate all the heavy smoke screen and you have to keep pushing
        back like you do. The Western Imperialists are still in control. The
        US dollar is not going to disappear like the gold crowd pitches.

        THE DOLLAR IS STILL THE ONLY GAME IN TOWN.

        However, there is always a chance something remote happens.

          Jun 07, 2016 07:14 PM

          The gold crowd will ignore the facts because they are
          blinded by mostly greed. Soon as you get a spike high
          the johnny-come-latelies come pouring in thinking the
          boom will return. So far gold can’t break out and is very
          over extended offering no bargain value. Quite the
          opposite.

          If gold can’t break out, its must go down. I heard all
          the silly bull arguments in the 80’s and 90’s.

          All of it was hype, myths and people living in a gold
          cult fantasy world.

            Jun 07, 2016 07:46 PM

            Nothing has changed. Only the players. For 20 years
            from 1980 to 2000 gold was going to explode.

            NEVER HAPPENED !!!

            The big promoters in the business all those names
            have changed now. We have the same hype and its
            never changed. Soon as those spike tops come into
            play the crowd will think gold is the way to riches.

            1980 top $ 850 gold. 20 years later $250 gold.

            2011 top $ 2000 gold. 6 years later $1250 gold.

            Uncle Harry says $700 gold is coming. You bet !!!

            It’s a very real possibility and 25 years ago $250
            gold was unthinkable. DJIA is now 18000.

            Unthinkable 8 years ago. Gold is not going to please
            the crowds who is late to the party 6 years ago.

            Mr. Johnny Lately !!! I got news for you .

            Jun 07, 2016 07:13 PM

            THE SMACK DOWN !!!

            Here’s what’s going to happen when the bubble bursts.

            https://www.youtube.com/watch?v=QXmoo7Eb1Ng

            Listen in at the 11.00 minute mark on the video.

            FOLKS, PRECIOUS METALS WILL BE HIT HARD.

            It might be swift, fast & furious and a total surprise.

            Jun 07, 2016 07:08 PM

            It’s not greed as much as it is a kind of religious belief, actually. I’ve been in/around gold bug circles all my adult life. The average “investor” there (and I use the term loosely) is an idealist and devotee more than “greedy.” Indeed, many believe that when they lose money by overstaying their welcome in upswings that they are suffering for a righteous cause; kind of like the faithful who, during Holy Week to this day, will go down the streets of a major Catholic city whipping themselves.

            “Cult”? — Maybe. But not in as negative a sense as some say. Again, these people are all by and large well-meaning. They believe in honest money, etc (though they should get away from Ayn Rand and Milton Friedman and their like, and focus more on legitimate Christian social/economic teaching; but that’s another story.)

            Jun 07, 2016 07:42 PM

            Sounds about right Chris. If someone wants to
            really deeply analyze the subject.

            However, in the end greed prevails. Everyone likes
            money with few exceptions. Some a little more than
            others. Regardless, your comments are those of
            someone who is sophisticated and has far reaching
            knowledge in the gold trade. I was listening to the
            show today with you and Cory. Birdman hit the nail
            on the head. I mirror Birdman’s commentary above.

            Chris, you must have a lot of satisfied subscribers.
            It’s no wonder you have been an analyst here with
            Kereport for so many years. Mutual beneficial
            business relationship for all parties.

            Good to hear from you Chris. Your always one to
            eliminate the noise and put things in their respective
            places. Thank you for all you do !!!!

            Jun 07, 2016 07:53 PM

            URGENT NEWS – NATO IS PLANNING TO ATTACK RUSSIA

            MSM news in USA is not reporting. Newweek had reported on it.

            The Russian news has been reporting it and the Russians are on
            high alert. Americans are completely unaware. Whats new eh !!!

            https://m.youtube.com/watch?v=AFHs0J6zjfY

            A MUST WATCH FOR THOSE WHO SEEK THE TRUTH.

            Otherwise, go back into your deep deep sleep.

      Jay
      Jun 07, 2016 07:59 PM

      Good points, but IMO we will get a large dose of inflation first (actually we can have a mix of both, depending on basket of goods/ assets being referenced), then more deflation.

      I just think there is no way the central banks and governments are going to let a major deflation (something obvious to the masses) kick in without burning out the printing presses first.

      Jun 08, 2016 08:38 AM

      Trader Jake:

      I was taught the market discounts the future. What you say about deflation is perfectly true and perfectly meaningless at the exact same time.

        Jun 08, 2016 08:52 AM

        +1!

        Jun 08, 2016 08:05 AM

        Precisely Robert. Whether this is the very bottom and maybe so.

        You make fatal assumptions though. A major war like the world
        has never experienced in a total game changer. We are very close
        to a nuclear exchange. Your 5000 year history is great analysis but
        not with the deadly perilous poisonous times we are now entering.

        You can spin it anyway you want but until this world war has passed
        the outcome is not only very uncertain, its impossible to predict the
        consequences. We have never been so deeply in debt and leveraged
        to avoid a “fatal” catastrophe we are now faced with.

        But ya Robert, keep telling yourself a major war will never happen.
        Inflation hedges will keep you safe and rich even though planet
        earth has been covered in radioactive muchroom clouds.

        Thank you for your comments too. My analysis covers the real
        future events and possibilities. Everything you left out !!!!

          Jun 08, 2016 08:36 AM

          You people see a major war developing and you don’t
          even acknowledge any consequences.

          Its inevitable and certain. Blinded by dollar signs.

          Reprobate minds who refuse to see coming destruction.

          Walking zombies !!!

    Jun 07, 2016 07:36 PM
    Jun 07, 2016 07:50 PM

    Trader Jake must has missed the move in AEM from $23 a share to $50. lol

      Jun 07, 2016 07:21 PM

      The only people who buy at the bottom
      and sell at the exact top are liars.

      You can’t believe anything anyone tells
      you on a forum especially.

      Many investors in the gold trade are still
      suffering major financial losses.

      Very few seized the opportunity ( close to
      a lotto ticket ) and all the gold bugs are still
      in deep losses.

      HUI from 600 to 100, ya right !!

      Very few and far between have anything.

        Jun 07, 2016 07:58 PM

        That’s right Jake. Some of these believers held stock that went from a buck to just a few cents during the bear but then would have you believe they found the Ark itself when those exact same stocks jumped from 3 cents to 18 “proving” what a bunch of genius’s they were.

        What you hear them say………”I’m up times 6!!!!!….rah rah rah”
        What you don’t hear them say……..(“But I’m still down 75% since the start”)

          Jun 08, 2016 08:13 AM

          Precisely Birdman. On the B.S. meter, the needle is all
          way on down to the right. Then they post perma gold
          bull analysis from guys like Stew for years and to stay
          fully invested. They ride it down and all the way back
          up. Oh ya, I’m multiplying my money. Just another
          blowhard success story. That’s all it is. This perfect
          timing and holy grail trading claims never happened
          either.

    Jun 08, 2016 08:27 AM

    Definition : Arch`dea´con ( The Andrew Hoax )
    n. 1. In England, an ecclesiastical dignitary, next in rank below a bishop, whom he assists, and by whom he is appointed, though with independent authority.

    ” High ranking title !! Is your congregation aware of your activities here on this site ? Absolutely not or you would be removed from the congregation you claim to be a dignitary in.
    If you were a dignitary, you wouldn’t be here.”