Is now the time to play defense and take money off the table?
To kick off today Chris Temple and Cory discuss the continued fall in oil and the struggles of copper. The story continues to be that of slow to no growth around the world and sectors bogged down by debt. The continued unwind of positions across the board needs to be on the minds of investors as we approach a time when traders get back to their desks next week.
Here is the story on the struggling Saudi economy that was mentioned in the interview.
Click download link to listen on this device: Download Show
Some very good, free advice from Chris this morning. If one has ever looked at a chart, they all fall from all time highs, eventually. Don’t know if I agree with Chris that Chaney was the brains of the past administration but that’s neither here nor there. Thanks for the show.
https://www.voiceamerica.com/channel/247/voiceamerica-business#
Ellis Martin on Mexican mining.
or for silvercrest:
https://www.youtube.com/watch?feature=player_embedded&v=vLFpvmQ4F8I
Thanks CFS Nothing but success for Silvercrest.
CFS – Thanks for posting the Silvercrest interview.
BTW – I thought Mr T had a great point about how some of the smaller Exploration mining companies that have been active drilling, have not sold off nearly as hard as the larger miners & ETFs like GDX & GDXJ. This is because the smaller exploration or drill plays don’t typically have as much institutional or hedge fund momentum money that can move in an out so quickly like the case with a Goldcorp, Barrick or Newmont.
Personally, I rotated much of my allocations out of the larger and mid-tier names an into the Jr miners. The smaller producers did sell off on the pullback, but the Development-stage/ Project Generators/ and pure Exploration companies haven’t been get hit so bad, and some even continued to climb as the metals have sold off.
When the metals finish their corrections, I’ll be adding to the smaller producers more because I expect them to bounce more than the development stage or prospect generators to the upside, just like they had more torque to the downside in the correction. The small producers are more sensitive to the metal prices because of their unique leverage to rising or falling underlying asset prices (which affect revenues and free cash flows). For example, if Silver were to rise up 20-50%, then you’d see the small Silver producers go up about 3-4 times that on a percentage basis.
Having said all of that, each stock and company is still a unique business, and so there are companies in each of the subsectors (Majors, Mid-Tiers, Small producers, Streaming companies, Development-stage companies, Advanced deposits, Prospect Generators, and pure Exploration companies) that are undervalued relative to their peers, or simply better run and more efficient than their peers. Each should be evaluated on their own merits…
Good luck everyone in your investing, and start taking a look at your shopping list as the miners are back on sale again, and the corrections will likely be more shallow than many of the more bearish commentators are expecting. There are large pools of money that have been on the sidelines most of the year that will likely put a floor under the metals and miners. Remember all those people just a waiting on a pullback….. well the pullback has arrived. Ding ding ding……
Sorry. These were repeat broadcasts on Voiceamerica!
Depends on what table. I already took oodles of profit off the table with USLV, ASM, ECA, and BABA. Took more profits yesterday on DUST. Gonna bag even more today on DWTI. I took some nibbles into long positions on NAT and ASM this week.
Great show guys. Have either of you by any chance read that recent essay from Stockman called the Red Ponzi Ticking? It’s in three parts and well worth the time. Davids got some amazing facts in there about just how extreme the credit bubble got and some pretty stern words of warning about where it may all take us in the future. His outlook is pretty deflationary and since that’s what was being discussed today I though you might take a look.
David Stockman Contra Corner — Red Ponzi Ticking -China And The Dark Side Of The Global Bubble, Part 1
http://davidstockmanscontracorner.com/?s=red+ponzi
I have read it. Good, sobering stuff. The one advantage China has, however, is systemic. Its central bank is a tool of the overall government; and by decree they can extend and pretend without the turmoil of the “west” where central banks are the ones in charge. That may not allow China to get by without having to reckon with the laws of mathematics forever; but it’s gotten them farther than many thought possible, without an implosion.
$VIX daily seems to have a moving average crossover which appears a layup. XIV appears to be rolling over. Inverse VIX funds vulnerable to unexpected volatility:
I picked up more IPT today. It has now retraced about 50% of the move off of the January low and has found support (so far) at the June 2014 high.
It’s counterintuitive but such large, fast pullbacks are characteristic of a bull market. They serve to reset sentiment and sucker dumb money to sell before the next grinding move higher begins. In bear markets, we see the opposite – quick moves up followed by grinding moves lower. The grinding moves keep most players from participating in the right side of the bull or bear market.
Hi Mathew:
Back around July 1st you posted that you were buying.That was at .78. I made up my mind to buy monday at the close but IPT gapped and ran away from me..72 is looking really interesting.
Thanks for posting.
Yeah that was quite a move. It gapped up 9% and then ran away.
I said on Saturday, July 2, when IPT was .78, I said “I believe IPT is about to tackle MA resistance in the .90s and get through it…”
On the next trading day, Monday, July 4, it jumped 30% to 1.02
That was a great call, and IPT has been on an absolute tear all year long. The question I had was did it get a bit ahead of itself (even with the high concentration of Silver compared to most silver miners, and with the exploration upside). This was just the first inning of the game after all.
Regardless, it’s pulled back nicely and is looking like a good value at present.
Let’s hope on the fast pullbacks. I’m $.01 off from a buy in @ .5335 & .49 on ISVLF
Marty the day low was .5376, so let me know where you are putting your bid tomorrow (is it a partial at .5335 and then at .49). I believe Bonzo was putting his bid at .5336, so I ‘m going with .5337 🙂 and .491 😉
I’ll try to leave a few shares for you guys….. (lol).
In all serious I have started buying Impact this morning. Just had some fills at .5175, and I’ll probably be adding more throughout the day. Cheers!
Me too. I got two orders filled and have more in place. I am very glad that it has come back this far rather than consolidating for a long time at a much higher level.
I’ve also been buying more Avino and Americas Silver this morning…..
Matthew – I am also thrilled with correction in many mining stocks. Impact has been a runaway freight train, and this is exactly the kind of consolidation that investors (who have been on the sidelines) should at least be nibbling at in a number of stocks.
Yes, there could still be further downside in these small silver producers, but this is an attractive place to add or enter a first tranche. (I’m definitely not advocating anyone go all-in here though, but a little dab will do ya….)
As we’ve mentioned all year, the bigger risk is not to have any positions in place if things turn around head back up.
http://www.marketwatch.com/story/these-3-charts-explain-the-terrifying-math-behind-pension-funds-shortfall-2016-08-31 I’ve wondered for years when this monster underfunding is going to be truly recognized. What happens when it is………….gov’t bailout?
I believe this SPY:GDX breakout will fail but it’s bullish (for SPY) until it isn’t:
I bought a lot more USA today but my best fill was .305 because I failed to put lower orders in place before the dip to .295:
I considered doing the same today with Americas Silver, but held off. I may just add to Impact Silver tomorrow or Friday, now that it finally corrected.
I missed out on much of the PM stock bull this year, so keep selling men and I’ll be buying what you are giving up. 🙂
Here’s some wisdom that readers of this page ought to enjoy. https://www.thefelderreport.com/2016/01/07/the-greatest-money-manager-alive-attributes-the-majority-his-success-to-just-this-one-thing/
Good article on following liquidity and money flows based on the insane central bank policy.
+1
Thanks S
Closed the month up 305. Still down 555 for the year. Would be in the green but I got charged 1150 in fees by Scottrade first quarter. I switched over to Robinhood for most of my trades. ZERO fees! So in other words if I had been trading with Robinhood all year I would be UP $650 instead of down 555. 🙂
The market is hardly down -5.17 or .24%. Still well above the 50 and 200 day.
How are all of those copper warehouses in China that used to be packed to the roof with copper?
Copper drops to lowest in two months on ample supply And China woes.
Joe Deaux (Bloomberg) | 30 August 2016
Hedge funds bail on copper as Goldman sees ‘supply storm’ Money managers switch to net-short position, CFTC data show.
Luzi-Ann Javier (Bloomberg) | 29 August 2016
The PMI number came in much lower than expected this morning at 49.4, an definite contraction.
This was dismissed by some as indicative of manufacturing, which is no longer very important to GDP as compared to the “service sector.”
All eyes will be on the Non-Farm Payrolls report, probably to an excess, because the thinking is that a stronger number will give the hawks cover to arm twist a 25 bp rate increase at the FOMC in September.
A much lower than expected number will squash that expectation, and will probably cheer on financial asset prices and boost the stockmarket unless it is disastrous.
The expected number is 180,000, although there are suggestions of a possible 200,000.
After the initial reaction, wiser heads will be looking at the prior month’s revision from 255,000 if any. But more importantly, they should look at the growth in average hourly earnings.
The bankster and the Democratic establishment would like a number north of 200k., whichwould give the former a stronger dollar with which to effectively cheat foreign suppliers, and the latter a boost for their presidential candidate who hopes to ride in on MSM propaganda and Obama deceptions.
Any number produced will probably be corrected only after the General Election, if it is held.
Good call on oil by Chris and Cory.