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A recap of the ECB comments and the swings in gold and the USD

Cory
October 20, 2016

This morning the ECB concluded its meeting and Draghi disappointing with his press conference. The lack of direction ended the press conference 15 minutes early due to lack of questions but the gold market and currency markets reacted but have since start to return to prior levels.

With Chris Temple we chat about what the ECB announcement means in the general central banking environment as well as investors perceptions. The fact is central banks around the world are going to continue down the road they have been on until something major changes.

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Discussion
49 Comments
    Oct 20, 2016 20:12 AM

    Check out TLTFF press release today. Stock should jump but it appears asleep.

    Oct 20, 2016 20:25 AM

    Bob Moriarty – certain posters are giving you a rough time over at CEO just as a heads up. I put in a good word for you sir and appreciate all your wisdom over the years.

    https://www.ceo.ca/index

    Oct 20, 2016 20:35 AM

    GDX looks like it can go to about 25.70 before running into significant resistance.

    For those who can view a 60 minute chart:

    http://stockcharts.com/h-sc/ui?s=GDX&p=60&yr=0&mn=1&dy=22&id=p06948312699&a=482143044

      Oct 20, 2016 20:39 AM

      Matthew – I posted a number of Silver Mining comparison charts on the Market Wrap from Wednesday. You’ll like how a number of the stocks we hold stack up Year-To-Date.

      The charts are about half way down the blog:

      http://www.kereport.com/2016/10/19/a-couple-quick-comments-on-the-sp-and-the-usd/

        Oct 20, 2016 20:19 AM

        Thanks Ex. I decided to take the top five from your bar chart and see how they have performed since their respective 2016 lows rather than YTD. From best to worst as of right now:

        BBB 750%
        EXN 732%
        IPT 600%
        BCM 418%
        AXR 592%

        At 2016 peak:

        BBB 1,908%
        IPT 1,064%
        EXN 887%
        AXR 846%
        BCM 661%

          Oct 20, 2016 20:20 AM

          +5 Nice work.

            Oct 20, 2016 20:24 AM

            What is interesting is that we are still at the very front end of the bull market that will last years. There has been a nice correction for investors to add to positions (or if they missed the run so far to get positioned). It is interesting how few seem to have mentioned buying the miners while they’ve been on sale the last few weeks.

            I guess that it why it is called contrarian investing…. 😉

            Oct 20, 2016 20:27 AM

            Yeup, I believe many will ultimately go 20x or more from where they are right now.

          Oct 20, 2016 20:24 AM

          USA, btw, is up 490% right now, by that approach, and peaked at 777% in August.

            Oct 20, 2016 20:25 AM

            777 – cosmic

      Oct 20, 2016 20:40 AM

      Matthew – Check out JAG

      ****It is easy to see the out-performance of the Smaller Gold Producers over GDX and GDXJ (proxies for they household Sr Gold Majors, Mid-tiers, and Streamers):

      {many of the companies I would have put on this list were also already acquired this year Claude, Lakeshore Gold, Newmarket}

      Argonaut Gold, Jaguar Gold, Richmont Mines, Marlin Gold, Gold Resource, Caledonia Mining, Klondex, and McEwen Mining.

      http://stockcharts.com/freecharts/perf.php?GDX,GDXJ,AR.TO,JAG.TO,RIC.TO,MLN.V,GORO,CAL.TO,KDX.TO,MUX.TO&n=200&O=011000

      Oct 20, 2016 20:42 AM

      *****It is easy to see the out-performance of the Jr Gold Development-Stage companies over GDX and GDXJ :

      Mexus Gold, Luna Gold, Monarques, W. African Resources, Victoria Gold, Belo Sun Mining, Pure Gold, Golden Reign

      http://stockcharts.com/freecharts/perf.php?GDX,GDXJ,MXSG,LGC.TO,MQR.V,WAF.V,VIT.V,BSX.TO,PGM.V,GRR.V&n=200&O=011000

      Oct 20, 2016 20:38 PM

      Do you think we head back down after hitting resistance to complete the h&s on the weekly chart?

        Oct 20, 2016 20:07 PM

        Yes, the question is, how far?

    Oct 20, 2016 20:05 PM

    I am BAG HOLDING on TLTFF. And their stock usually pops about 3 days after news.

    Oct 20, 2016 20:06 PM

    Hey Excel. The G-man over at Smart $ says he thinks the seasonal bottom is in on gold. I hope not, I don’t want to bag hold on DUST.

      Oct 20, 2016 20:12 PM

      Yes sir. I watched the G.S. video and posted it on CEO yesterday (since we aren’t supposed to post them here). He makes a good case for the intermediate low to have been hit and things are reversing. We’ll see how it goes.

      Also G.S. views line up with bottoming in the Bullish Gold Miners percentage, that Paul W was pointing out yesterday. I don’t know where I’ve been on that one……

      Here is the revised chart I posted yesterday with a longer time frame. It gets kind of sparse 3-4 years back and was almost non-existent 5 years back, but this does give an indication of the trough we’ve been in with miners and the likelihood of a reversal:

      http://stockcharts.com/h-sc/ui?s=%24BPGDM&p=D&yr=4&mn=0&dy=0&id=p94313912289

    Oct 20, 2016 20:30 PM

    10 Reasons Gold Will Outperform Stocks in the Next Decade
    Gold has been beating stocks for 10 years, and it may continue to do so for another 10.
    By Wayne Duggan – October 20, 2016

    http://www.kiplinger.com/article/investing/T026-C000-S015-10-reasons-gold-will-outperform-stocks.html?rid=SYN-yahoo&rpageid=15586&yptr=yahoo

    Oct 20, 2016 20:50 PM

    Did Energy fuels bottom?

    On September 23, 2016 at 12:55 pm,
    Pete says:
    Thank you,Matthew i am nibbling all the way down from here.

    On September 23, 2016 at 12:59 pm,
    Matthew says:
    That’s what I would do.

    On September 23, 2016 at 4:36 pm,
    Excelsior says:
    I am as well Pete. To me it is one of the last places left to find insane undervaluation.

      Oct 20, 2016 20:52 PM

      Pete – I’m not sure if the final bottom is in, but I’ve been a buyer a few times lately.

      We’ve had quite a good conversation going on Energy Fuels in the $EFR room at CEO:

      https://www.ceo.ca/efr

        Oct 20, 2016 20:55 PM

        If you scan back up through the older comments there a number of good posts.

          Oct 20, 2016 20:06 PM

          Great conversation,Thanks Excelsior

            Oct 20, 2016 20:23 PM

            FYI….. just put up 3 videos and their October Corporate Presentation in that room also.

          Oct 20, 2016 20:24 PM

          Thanks,for the videos,Excelsior

          Oct 20, 2016 20:11 PM

          Thanks Blue – that is interesting on those trendlines down on the RSI on that second chart. Looks like it’s ready for a bounce.

          Do you think it will go for the area where it gapped down due to the financing news?

            Oct 20, 2016 20:22 PM

            I think so but I bought it under 2 cad for the long run and wanted an undervalued uranium play. I put it in the coffee can. I dont want to miss the baby bull in uranium😉

            Oct 20, 2016 20:57 PM

            Ha! Yep, it’s a good one to have in the coffee can for the Uranium Baby Bull. I’m not sure where the little bull is, but when he shows up there is a lot of damage to repair to the sector. The initial run will be quite interesting though.

            Oct 20, 2016 20:00 PM

            Here’s an encouraging sight for Uranium bulls…..

            ______________________________________________________________

            First new US Nuclear reactor in 20 years Goes Live
            By Max Blau, CNN
            Updated 6:01 AM ET, Thu October 20, 2016

            http://www.cnn.com/2016/10/20/us/tennessee-nuclear-power-plant/index.html

            Oct 21, 2016 21:23 AM

            Nuclear Power and the Clean Energy Future
            Prepared for Nuclear Matters by the Horinko Group

            “Nuclear power is a critical part of America’s clean energy future. It is unmatched in its ability to generate around-the-clock, large-scale, clean power. It avoids hundreds of millions of tons of CO2 emissions per year, and it provides the largest portion of the nation’s clean electric power. As states consider their clean energy policy initiatives for the future, they should adopt approaches that preserve nuclear energy so as to continue to reap the benefits of this clean power source for decades to come.”

            “Future rates are difficult to estimate because they hinge on a hypothetical electricity fuel mix, which in turn is highly sensitive to the price of natural gas. Moreover, eliminating nuclear power would alter the demand for, and cost of, replacement sources. Further, changes in electricity demand overall will also impact investors’ construction decisions, market-clearing prices, and the availability of sources already in operation to replace nuclear power.”

            “If all nuclear power plants were suddenly shut down, of course, we would predict significantly higher emissions (and market-clearing prices) in the near term as many non-baseload sources capable of running continuously would be required to step in and fill the place of nuclear power. Thus, one possible approach is to use non-baseload emission rates reported by the Environmental Protection Agency (EPA). This approach, however, would likely overestimate resulting emissions in the longer term because, among other reasons, it represents only an initial snapshot. We would expect newer, more efficient sources of power to be constructed in the medium-term such that emission levels would decrease somewhat from current non-baseload rates.”

            http://www.nuclearmatters.com/resources/reports-studies/document/Nuclear_Power_and_the_Clean_Energy_Future.PDF

      Oct 20, 2016 20:01 PM

      UUUU Energy Fuels closed up over 9% and double the average volume. That’s encouraging.

        Oct 20, 2016 20:08 PM

        Yes,lets see how it plays out

      Oct 20, 2016 20:16 PM

      I think the odds are pretty good that it has bottomed.

      http://stockcharts.com/h-sc/ui?s=EFR.TO&p=D&yr=1&mn=0&dy=13&id=p87070411465

    Oct 20, 2016 20:59 PM

    Mr T…you state that Central Banks will continue to call the shots for currencies and, by extension, the markets. On the surface that makes some sense as they do have control of all the levers; but this line of reasoning leaves out any discussion of China, Russia, India et al where what? 4 billion or so folks work and play and who do not necessarily know that the so called west is omnipotent and all powerful. Therefore, could it also be reasonable to expect that, at least in part, the U.S. buck and the SWIFT System might be bypassed for a significant amount of world trade? If it is reasonable then I would have to think the U.S. buck will also fall in value.
    Jes’ sayin’…jes askin’…

    Oct 21, 2016 21:14 AM

    That will evolve, albeit very slowly, over time, yes. I have always said I expect that those emerging economic/financial blocs will eventually have more clout. But so far, the Asian Development Bank, the joint efforts of the BRICs and the rest are only responsible for a tiny fraction of the overall action.

    GH
    Oct 21, 2016 21:20 AM
    GH
    Oct 21, 2016 21:34 AM

    Interesting juncture in GDXJ:

    http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=5&mn=6&dy=0&id=p66075597285&a=482827127

    Will it hold support at 41, or will the falling 50 day moving avg and upper rail of the downward channel knock it back down?

    If this year is a big bull flag formation, then it will break up out of this channel, and soon I would think.

    If it does fall back down, rather than launching from here, there’s a good chance it will present an optimal buying opportunity. Which I would time on the hourly chart. Will the previous low hold? It’s got the 200 day moving avg right below it and rising…

      GH
      Oct 21, 2016 21:37 AM

      I wouldn’t write of the possibility of $35, or testing 32.60 support.

      Oct 21, 2016 21:25 AM

      GH – Thanks for that GDXJ chart. Agreed about any fall back down being the optimal buying opportunity, before baby bull turns into toddler bull.