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Will there be any major moves in US stocks or PMs to year end?

Cory
October 25, 2016

Doc is with us today to discuss the general trend in US markets and gold. We continue to see a general rollover in US markets but are we setting up for a nice pop in November? The monthly chart is not showing us this to be the case.

As for gold we are slowly grinding up since the big washout earlier this month. There is a comment below regarding sentiment for gold (especially in terms of stocks) that we take a look at.

Click download link to listen on this device: Download Show

Here is the comment we discuss focusing on sentiment in the junior gold ETF… [CORRECTION: The interview quoted below was recorded on September 30th. I read a morning email from MarketWatch that had this interview quoted but it made no reference to when the interview was recorded. I assumed it was more recent. My apologies.]

The gold tug-of-war has extended into October. The metal is down 3.6% this month, however, it’s still up 20% year to date.

But for some, it’s not time to buy the current dip yet. Jesse Felder, founder and president of Felder Investment Research, told Real Vision TV in an interview that he’s still waiting on a sizeable bust up in gold prices. “I’ve got a big position in two gold miners, and to go back to an oversize position, I’d love to see a great shake-out,” he says.

“I was looking yesterday on StockTwits, and the junior gold miner ETF had a 97% bulls and 3% bears. That’s a pretty crowded trade,” he says. “I’m keeping my core position because we’re in a bull market, but I’d really love to see a washout of sentiment.”

Felder says such a gold meltdown could be triggered by more problems cropping up for European banking, which would trigger a dollar pile-in, and help “wash off this excess bullishness” in gold currently.

Long term, he’s a bull, says Felder: “We’ve got massive money printing around the world, negative interest rates. I can’t imagine a more bullish scenario for gold over the long term,” he says.

Discussion
63 Comments
    CFS
    Oct 25, 2016 25:06 AM

    unusual for an ETF to outperform gold mining majors……GDJJ up 7% today.

      CFS
      Oct 25, 2016 25:14 AM

      I forgot GDJJ was 2X levered.

    Oct 25, 2016 25:07 AM

    Here is a Year-To-Date comparative Line Chart showing how the Jr Silver Producers and Jr Silver Development stage companies continue to outperform the Silver ETFs (SIL) and (SILJ)

    $ISVLF , $SVBRF, $EXLLF, $USAPF, $BBB, $SCZ , $AXU , $BCEKF

    http://stockcharts.com/freecharts/perf.php?SIL,SILJ,ISVLF,SVBRF,EXLLF,USAPF,BBB.V,SCZ.V,AXU,BCEKF&n=200&O=011000

    Oct 25, 2016 25:07 AM

    I agree with Stewart Thomson:

    “The US T-bond has swooned since the Brexit vote occurred, and that’s been a headwind for gold. In 2017, I expect the T-bond to swoon more, but against a background of falling real interest rates and rising nominal rates. That’s good news for gold.”

    http://www.321gold.com/editorials/thomson_s/thomson_s_102516.html

      Oct 25, 2016 25:19 PM

      A+++. Stewart Thomson has called it right almost every step of the way the last few years. He was one of the few people who said a rate hike was bullish for gold. His letter is top notch and well worth reading.

        Oct 25, 2016 25:17 PM

        Yes, and I might have addressed it even before Stewart did. Here’s what happened when I tried to explain it to Birdman more than three years ago…

        https://youtu.be/VZWZo-_VMUU?t=70

          Oct 25, 2016 25:10 PM

          Matthew –
          You are one damn sharp cookie…..

    b
    Oct 25, 2016 25:12 AM

    Gold News Digest
    Tuesday 25 October 2016
    Worst day for gold ETFs since April 2013

    Investors pulled nearly 17 tonnes from GLD on Friday as gold price bulls lose confidence

    Oct 25, 2016 25:24 AM

    Corey,
    wow! It looks like CLZ (Canasil) got the Brent Cook “BUMP” recently! Ouch!!! Do you think this baby will touch the .23 cent level if gold drops here or will it stabilize and poke its head above its 200 MA?? Looks precarious here. I might wait to buy it at .23 CND cents. Thoughts?

    CFS
    Oct 25, 2016 25:28 AM

    I never bought Teck, but got shares in a merger situation.
    It just chugs along. I’m not a chart TA person, but I don”t see sideways on this.
    http://stockcharts.com/h-sc/ui?s=TCK

    Oct 25, 2016 25:31 AM

    My long awaited children’s book is finally here!

    Mt first book “Flounder TeaKettle” has been published in eBook format on the Apple iBooks platform.

    It is compatible with all Apple devices.

    The book contains three stories, includes vocabulary section and is suitable for children ages 5 and up. Adults will enjoy the stories as well.

    I cannot guarantee what gold or silver will do, or a stock or horse, but I can guarantee your children or grandchildren (as well as yourselves) will love these stories.

    The illustrations are beautiful as well.

    If you go to iBooks and search for “Flounder Teakettle” you will see the book and will be able to preview a sample.

    Anyone who has children or grandchildren will really appreciate these stories.

    I am hoping you will go look at the sample and decide for yourselves.

    I sincerely believe you will love these stories.

    Thanks!

    Oct 25, 2016 25:39 AM

    Off Topic: Still concerned about who is handling the trading for TLTFF. Never a response to any news or facts or progression. 2 cents up…2 Cents down on and on.

      CFS
      Oct 25, 2016 25:47 AM

      There you go, David.

      Theralase Anti-Cancer Technology to be Presented at International Conference
      Filing Services Canada XHTML via CMTX – Tue Oct 25, 6:01AM CDT

      Toronto, Ontario (FSCwire) – Theralase Technologies Inc. (“ Theralase® ” or the “ Company ”) ( TLT:TSXV ) ( TLTFF:OTC ), a leading biotech company focused on the commercialization of medical devices to eliminate pain and the development of Photo Dynamic Compounds (“ PDCs ”) to destroy cancer, announced today that Dr. Lothar Lilge, Professor and Grad Student Coordinator, Medical Biophysics, University of Toronto, will be presenting Theralase’s anti-cancer technology at the Photodynamic Therapy and Photodiagnosis (“ PDT-PDD ”) Conference taking place from October 24 to 28, 2016, in Nancy, France.

        Oct 25, 2016 25:51 PM

        There you go CFS. Let’s see which way it moves .. . 2cents up or 2cents down.

      Oct 25, 2016 25:55 AM

      Gary has been bolder with his calls lately but the continued strength makes plenty of sense to me.

      From the weekend:

      On October 22, 2016 at 11:33 am,
      Matthew says:
      The bulls have the edge on the very short term charts (15min, 30min, 60min, etc.) so I think the daily chart will improve further:
      http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=11&dy=0&id=p38752831903

        CFS
        Oct 25, 2016 25:04 AM

        I think the SGE has given a floor, which is difficult to penetrate for very long.

          Oct 25, 2016 25:22 AM

          I think you’re right about that.

        CFS
        Oct 25, 2016 25:09 AM

        The volume is a problem for me.

        http://stockcharts.com/h-sc/ui?s=BTG

    Oct 25, 2016 25:32 AM

    I agree with Doc. Today’s rally in gold feels like a trap. I’m positioned short-term bearish.

    Oct 25, 2016 25:37 AM

    If we have a head-and-shoulders top forming, then the miners could be in for an eventual retest of their January lows:

    http://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=9&dy=0&id=p43137623992&a=480292154

      Oct 25, 2016 25:03 PM

      Matthew,
      Do you think that the HS top is too obvious?

        Oct 25, 2016 25:27 PM

        I’ve seen a lot of obvious ones work out, but that’s not what I think is going to happen in this case. Instead, I believe we’re probably looking at part of a bigger bullish pattern:

        http://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=3&dy=0&id=p34972802117&a=385013020

          Oct 25, 2016 25:03 PM

          Mattthew – That chart is more pleasing, but we’ll still have to see if it is the more “obvious” Head & Shoulders pattern you guys were discussing. If we get a bit more follow through to the upside, I may trim back some positions just in case it is the right shoulder and the miners take a plunge. I’m up to a 70% allocation, but may take it back to 50% into the strength (if that is what we see).

          Oct 25, 2016 25:52 PM

          Thanks Matthew, much appreciated
          Agreed on,a lot of obvious H-S patterns work out

        Oct 25, 2016 25:31 PM

        Of course, there are a lot of smart people who think that there will be one more plunge of 10% or more before we get a low. I don’t rule that out but I sure like the way my nano caps have been acting in the face of all this new bearishness. I’m ready for either outcome.

          Oct 25, 2016 25:13 PM

          Maybe. I think anyone that doesn’t have a core position should average in, otherwise they might find out they have been stepping over dollars to pick up pennies.

            Oct 25, 2016 25:23 PM

            Whenever the low happens, most will be caught off guard — including the smart money. Significant lows can’t happen any other way.

            I am very comfortable being very heavily invested right now.

    Oct 25, 2016 25:40 AM

    Took MY profits on DUST and DSLV yesterday. Playing SLV (for son), USLV, NUGT, and ASM for this run. My only longs at the moment are ASM and TLTFF. Still holding a small bag on DSLV.

    SPXS and SQQQ are looking REAL tasty!!

      Oct 25, 2016 25:25 PM

      Uh-Oh – sounds like you’re thinking of shorting the markets Jason. I’ll agree it looks tasty; however, I’m simply amazed how the general markets have kept levitating higher and higher despite bad earnings, global turmoil, minimal GDP growth, and without more than tiny pullbacks. With the exception of last August, these markets haven’t even had a solid correction in years. It’s a risky move, but I’ll confess to putting a UVXY volatility position in place for just the same reasons. 🙂

      Good luck ETF ninja.

    Oct 25, 2016 25:09 PM

    Cory

    Please ask Doc tomorrow how is now different from beginning of the year? He says that this move is not strong. Correct me if I’m incorrect, but the first wave didn’t start off as very strong either.

    Oct 25, 2016 25:23 PM

    On the daily GDX chart, there is potential inverse head and shoulders formation forming if it can rally to about $28.50. A drop down to form the right shoulder on the daily chart could look like a right shoulder on the regular H&S formation on the weekly chart. Quite the dilemma. I favor Matthew’s scenario on the weekly chart, but I am a biased long.

      Oct 25, 2016 25:34 PM

      I think there’s good reason to be biased long, but then… I’m biased long so I would say that, wouldn’t I?

        Oct 25, 2016 25:26 PM

        I’m biased to the long side at present, so likewise, it would be stellar if you 2 gents are correct.

    Oct 25, 2016 25:32 PM

    The dollar hit fork resistance at 99.09 perfectly today and went on to close 40 basis points below that level — just the kind of action I wanted to see…

    On October 24, 2016 at 9:20 am,
    Matthew says:
    I want to see how the dollar deals with resistance at just above 99:
    http://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=5&mn=6&dy=22&id=p36011948050&a=451513644

    Oct 25, 2016 25:33 PM

    let me guess….sideways to down.

    have not listened to the audio….but that has been the message since December of 2015.

    Am I right? I will listen later.

      Oct 25, 2016 25:42 PM

      Yes, sideways to down, but don’t worry Dave, you’ll still have time to pick up these miners when they are 50-60% higher. This is a U shaped recovery remember….

        Oct 25, 2016 25:08 PM

        Just keep nibblin’…… Just keep nibblin’…… 😉

          Oct 25, 2016 25:03 PM

          That was mean of me. I take that back. I love the Dr. Keeps me entertained.

            Oct 25, 2016 25:53 PM

            Doc is a great man, and has a great sense of humor. He offers his thoughts to all of us for free and I always appreciate hearing his thoughts and analysis of the market. I was actually nibbling on some positions last week and the prior 2 weeks into the weakness.

    Oct 25, 2016 25:23 PM

    Silver has plenty of room to move higher tomorrow even if we haven’t seen the final low for this correction:

    http://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=1&dy=0&id=p82284983732&a=449326423

    Oct 25, 2016 25:25 PM

    For the first time in a month, GLD has closed above the 20 day MA:

    http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=1&mn=0&dy=0&id=p11156655396

    Oct 25, 2016 25:42 PM

    Took profits on NUGT. Bought DUST back. Added to SLV, USLV, and DSLV. I am like US government. I play both sides at once

    Oct 25, 2016 25:08 PM

    Cory, as far as I know, there is no Bullish Gold Miners percentage for the juniors. Please correct me if I am wrong. When was the Real Vision interview actually recorded? My guess (as you surmised) is the dates are completely out of whack, but even worse than you think. The BPGDM was 97% bulls in mid-August and there is no way the juniors would be so out of sync with the majors now. The washout in sentiment has already happened. IMO, Marketwatch has written an article that is a hap-hazard regurgitation of what is now out of date info.

    http://stockcharts.com/h-sc/ui?s=$BPGDM

    Oct 25, 2016 25:28 PM

    Matthew, I agree with you. I am almost all in now. I think the low was in the first week of October. Look at gold in almost any currency and there is a strong uptrend.

    http://stockcharts.com/h-sc/ui?s=%24GOLD:$xjy

    Only in USD does gold show flattish but even then it isn’t so bad. The action right now is similar to how it was in January and June. By the time the technical traders called the uptrend, most of my gold stocks had already gained 20 to 30%.

    I highly recommend everyone read Steward Thomson latest letter you posted above. He has it right.

    I have no doubt that gold and USD are going up together. The USD may go higher, but not without crashing emerging markets or killing US exports and corporate profits. It is only a matter of time. It doesn’t matter if it is Hilarity or Dump. They will spend, spend, spend and when the USD gets too high, the FED will play their games to bring it down and then gold will take off like a scalded cat.

    Oct 25, 2016 25:10 PM

    Hi Matthew,
    Interesting that Copper had a strong day…I thought!

    Thanks for your posts!
    Cheers

    Oct 26, 2016 26:55 AM

    Doc I agree…I’m out of PMs.
    Good bounce from intermediate decline but thats all.
    Gold bugs have been wrong. No DOW crash I said 1 and 2 years ago.
    USD is good cause there is no alternative yet… It NOT used toilet paper fools….yu know who you are. lol
    Gold is no big saviour…
    Enjoy
    moneytalks.us8.list-manage.com/track/click?u=84c535d167453f001a986f996&id=40030e3479&e=3a926e1db2