Is next week setting up for a pullback in the US markets?

November 18, 2016

We wrap up the moves this week in the market. Covering US equities, the VIX, a broad comment on commodities as well as oil and the US Dollar we are very close to some significant levels. Although next week is a shorten trading week it will be important to note if certain levels on the S&P, VIX and PMs will be broken.

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    Nov 18, 2016 18:39 PM

    Gold’s Bull Market Still In Tact – Gwen Preston
    ResourceMaven at the Metals Investment Forum (MIF) – Nov 16, 2016

      Nov 18, 2016 18:47 PM

      Gwen covers Inflation, Bonds, potential Trump administration effects on Gold and commodities, and how many bear markets last about 5 months with times out well with the beginning of 2017.

      The most interesting section to was towards the end when she gets into the different subsectors of miners Majors, Mid-tiers, Small producers, Developments stage, and Exploration companies. She also discusses entry points in the cycle of a stock and about considering adding pre/post news releases, the effects of free trading shares after financings, the risk management and active management of Jr Mining stocks, and portfolio allocation and position size. (she had a slide with Silver, Zinc, Copper, and Uranium as sectors she liked)

    Nov 18, 2016 18:40 PM

    Why This Gold Bull Market Will Likely Continue – Jay Taylor
    Metals Investment Forum (MIF) – Nov 16, 2016

      Nov 18, 2016 18:12 PM

      Jay Taylor is a good guy. Interest rates, GDP, Bond/Stock selloff potential, Gold and Commodities cycles, and more…..

    Nov 18, 2016 18:41 PM

    Growth – Margin versus Volume – Joe Mazumdar
    Metals Investment Forum (MIF) – Nov 16, 2016

      Nov 18, 2016 18:32 PM

      It’s always interesting to listen to Joe, and has a very grounded perspective. The information on the Majors needing their core gold AISC at $1020 or below is their survival strategy; and thus, the divesting of other non-core assets & liability and farming out the exploration & development to smaller companies. The real message that emerged with the Majors is that they are depleting their reserves under the new focus of margins over growth…. but the industry is contracting.

        Nov 18, 2016 18:52 PM

        Interesting review of the motivations behind the motivations of Majors for brownfields over greenfields, and safe jurisdictions in acquisitions versus those willing to take on more diversification and more risky jurisdictions that have “fiscal discipline.”

        There are also many companies opting for Joint Ventures. (personally I like the Joint Venture model between David [Jrs] and Golliath [Majors & Large Mid-Tier] for synergy in cost and sharing the workload). Eventually those partnerships lead to mergers between Jr Explorers & Developers and the Larger Producers. The takeover target potential usually plays a key factor in my acquisitions of Jrs, as does the potential for exploration discovery upside.

        Brokerage firms and financing have been back to look for quality projects.

        Quality management teams and projects are going to get invited to the dance….

    Nov 18, 2016 18:42 PM

    The Greatest Buying Opportunity of All Time…Again? – Jordan Roy-Byrne
    Metals Investment Forum (MIF) – Nov 16, 2016

    Nov 18, 2016 18:42 PM

    How to Invest in These ‘Out of Whack’ Markets – Eric Coffin
    Metals Investment Forum (MIF) – Nov 16, 2016

      Nov 19, 2016 19:07 AM

      Eric cracks me up with his frank “tell it like he sees it” approach and his candor. Always an entertaining and informative speaker, and he has the pulse on the resource markets, and finds good exploration plays earlier than most.

      Eric shares his thoughts quite often on CEO as well and offers both keen insights mixed with humor. Good to check in once in a while….

    Nov 18, 2016 18:43 PM

    The Resource Sector in a Trump World – John Kaiser
    Metals Investment Forum (MIF) – Nov 16, 2016

      Nov 19, 2016 19:00 AM

      John is much more liberal and his comments may rub some people the wrong way, but if you want to skip the political/economic rant, start the video at the 12 minute mark and the rest is on the mining sector and quite informative.

        Nov 19, 2016 19:09 AM

        All the Kaiser political ranting aside….. he still made some interesting macro points about Zinc, Copper, Nickel, Uranium, Cobalt, and Specialty Metals.

    Nov 18, 2016 18:44 PM

    Making the Case for Zinc – Vendetta Mining Corp. $VTT $VDTAF
    Published on Nov 18, 2016 – Metals Investment Forum (MIF)

    “Analysts are calling for the lead and zinc bull market to begin and if investors are looking to get into the sector, Vendetta Mining Corp. may present an opportunity. President and chief executive Michael Williams shares insights on the firm’s operations in the top tier mining jurisdiction of Queensland, Australia.”

      Nov 18, 2016 18:46 PM

      $CNX $CLLXF Callinex Mines, Inc. – Corporate Presentation
      Published on Nov 18, 2016 – Metals Investor Forum (MIF)
      #BeneathTheSurface #ZINC #GOLD #COPPER #SILVER #LEAD

        Nov 18, 2016 18:47 PM

        Prospecting for Nickel with Balmoral Resources $BAR $BALMF
        Published on Nov 18, 2016 – Metals Investor Forum [MIF]

        “John Foulkes, VP of corporate development for Balmoral Resources, updates investors on the company’s #nickel and #gold discoveries at the Metals Investor Forum. Speaking to the crowd, he says Balmoral’s focus right now is on its Martiniere gold project.”

          Nov 18, 2016 18:48 PM

          Precipitate Gold Corp. (PRG) – Jeff Wilson
          Nov 16, 2016 – Metals Investor Forum [MIF]

            Nov 18, 2016 18:50 PM

            4,900 Words with Don Moore, CEO of Playfair Mining $PLY.V

            By Peter @Newton Bell, 17 November 2016

            “I had the pleasure to meet Mr. Don Moore, Chairman & CEO of Playfair Mining Ltd., at the Metals Investor Forum last weekend and just had to follow up with him. He was a great conversationalist at the conference and I got the sense he was well respected in the community….”


            Nov 18, 2016 18:52 PM

            GMV Minerals (GMV) – Ronald L. Handford
            Nov 16, 2016 – Metals Investor Forum [MIF]


            Nov 18, 2016 18:53 PM

            Black Sea Copper & Gold Corp. (BLS) – Vince Sorace
            Published on Nov 18, 2016

            President and CEO Vince Sorace shares some of the company’s latest developments in the region to investors at the Metals Investor Forum in Vancouver, BC.


            Nov 18, 2016 18:55 PM

            Atlantic Gold Corp. (AGB) – Steven Dean
            Published on Nov 18, 2016

            “By this time next year, you could be hearing about gold production in Eastern Canada. At least that’s what Atlantic Gold Corporation CEO Steven Dean told the crowd at the Metals Investor Forum in Vancouver. Focused in Nova Scotia, the company has managed to find opportunity by understanding the geology of the region in a new way, looking for disseminated gold instead of high grade.”


            Nov 18, 2016 18:57 PM

            Almadex Minerals Limited (AMZ) – Morgan Poliquin
            Nov 18, 2016

            “Almadex Minerals Limited may present investors with opportunities in mining, especially because of the company’s long history in the sector. Its strong portfolio of assets is a results of over 35 years of prospecting, discovery and deal-making by Almadex’s predecessor company, Almaden Minerals. Speaking at the Metals Investor Forum in Vancouver, chief executive Morgan Poliquin said Almadex is well positioned to make its next discovery.”


            Nov 18, 2016 18:02 PM

            San Marco Resources Inc. (SMN) – Robert Willis
            Nov 18, 2016 #MIF

            “Known analyst and gold sector investor Eric Coffin says he recommends investors look at San Marco Resources given the company’s high grade Chunibas project as well as its joint venture with Globe Trotters Resources Group that will help generate discoveries in the region. Tune in to San Marco’s CEO Robert Willis’ presentation at the Metals Investor Forum as he shares some of the company’s latest developments.”


            Nov 18, 2016 18:04 PM

            Klondike Gold Corp. (KG) – Peter Tallman
            Nov 16, 2016 – Metals Investor Forum [MIF]


            Nov 18, 2016 18:14 PM

            Thank u Excelsior all info !

            Nov 18, 2016 18:46 PM

            Always glad to share info with the KER crew.

            Hope all is well James / Franky / Xing Xang. Buy the Strange Dips!!

            Nov 18, 2016 18:17 PM

            Very generous of you, Excelsior! Thank you for your time and great info!!

            Nov 18, 2016 18:48 PM

            Thanks DC. Good speakers and companies to review from the MIF for sure. Cheers!

    Nov 18, 2016 18:05 PM

    OK – I’ll stop there as that is plenty to digest from the Metals Investor Forum.

    Don’t want anyone getting MIF’ed…. 🙂


      Nov 18, 2016 18:45 PM

      Lol.. appreciate all you do!!

        Nov 18, 2016 18:48 PM

        Thanks Ann. There’s some good info on those presentations above. Have a great weekend.

    Nov 18, 2016 18:15 PM

    Why Gold Won’t Protect You from Inflation

    I was in St. Kitts last month for the Liberty Forum conference, where I was a speaker. I also moderated a debate pitting Peter Schiff against Harry Dent on the inflation-deflation question.

    Things got really hot. There was some yelling, and at one point, Harry stood up and tossed his mic in frustration. I thought they might go at it.

    I want to tell you about this debate…

    Peter Schiff is the chief strategist at the brokerage firm Euro Pacific. He has a radio show and has written some books. He’s probably most known as calling for a collapse in the dollar and being generally bearish on the U.S. economy.

    Harry Dent is also a well-known financial commentator. He writes a newsletter and is author of several books. He’s probably most famous for his predictions based on demographics. He’s also a vocal deflationist.

    Inflation here means generally rising prices. Deflation means prices are generally falling. There are other consequences associated with each. For example, Peter believes interest rates will rise. Harry thinks they will fall. Peter thinks the dollar will lose value, Harry thinks not.

    Peter’s argument essentially was that the Fed is printing a lot of money and would continue to do so. Hence, inflation.

    Harry’s argument was that the debt deflation dynamics were the more powerful force. The economy has to delever, and as debts are repaid or written off, that process destroys money, more than offsetting the printing press.

    They touched on a lot of other things in the course of the debate — past hyperinflations, China’s role and more.

    The debate started out calmly enough, but after about 20 minutes, they really starting going at it.

    Harry won the debate, in my view. He had a good command of the facts and presented them well. I had also watched the presentations of both before the debate. Harry had marshaled an impressive array of evidence and made a good argument.

    My respect for Harry went up. For whatever reason, I had thought of him as a bit of a quack, but he has done a lot of good work on this stuff.

    Before 2008, I was solidly in the inflationist camp. But think about what’s happened since 2008. If I told you back then that the Fed’s balance sheet would balloon fivefold — creating lots of money — what would you have guessed the world would look like in 2013?

    Wouldn’t you be surprised to see the 10-year Treasury note pay just 2.8%? Wouldn’t you be surprised to find gold languishing at $1,235 an ounce? The inflationist view had interest rates and gold higher — not lower.

    So something is clearly not right with the “Fed’s printing money and we’re going to have inflation” argument. At some point, you have to re-evaluate the way you look at the world. Or you just sit content to be wrong. In financial markets, that can be costly.

    In this light, I appreciated Harry’s efforts, as his framework was the more challenging one to believe, but it has unquestionably been a better predictor of what’s happened post-2008.

    Even in the course of this debate, though, it struck me how many assumptions get passed off as givens.

    For example: Commodities will protect you in times of high inflation.

    Well, they don’t have a history of doing that.

    As James Montier of GMO points out in his most recent research note:

    “Commodities are often seen as an inflation hedge; however, this is almost entirely due to the experience of the 1970s and the creation of OPEC, and the domination of energy in the generally used commodity indexes. If you had held the ‘wrong’ commodities, their inflation hedging performance would have looked very different .”

    Here is the chart:

    Oil, Copper and Corn Prices 1970-1982

    So during the highly inflationary 1970s, oil was a great investment, but copper and corn were terrible. Commodities generally have lost value over the last century at the rate of almost 2% annually, according to GMO. Yet I see it repeated again and again by various advisers telling their clients/readers to own commodities to protect against inflation.

    The same is true of gold.

    Here is Montier again:

    “Gold is often held up as an inflation hedge. However, the data provide a challenge to this view. [The next chart] shows the decade-by-decade average inflation rate, and the real return to holding gold over the same decade. It doesn’t make pretty viewing for those who believe gold is an inflation hedge. That perception is down to one decade (the 1970s) when it held that inflation and gold were positively correlated. The rest of the time there isn’t a good relationship between gold and inflation.”

    And here is the chart:

    Gold’s Record During Inflation

    Yet people repeat — on faith, I guess — that gold will protect them during inflation. The record of gold on this front is spotty. It might. It might not.

    Montier’s paper, by the way, concludes that there aren’t any good inflation hedges in the short term. But over the long term, stocks and real estate are good inflation hedges. (He says the best is TIPS — Treasury inflation-protected securities.) In fact, Montier shows that even in countries that have suffered high inflation (or even hyperinflation) in the 20th century — such as Germany and Italy — stocks still delivered positive real returns. And real estate value correlates with replacement costs, which rise during inflationary times.

    After the debate, I sat on a panel with several other speakers. Asked if we’d have inflation or deflation, my first answer was an honest one: “I don’t know.” Forced to guess, I think we have deflation first, inflation later.

    In general, the long-term way to bet is that the U.S. dollar in your pocket will buy less tomorrow than today.

    Even Harry’s own presentation had a chart that makes it hard to argue any other way:

    The Value of the U.S. Dollar, 1900-2010

    It is true the dollar can do something different for years at a time. (I mean, look at the 1930s.) But as a long-term investor, I’d rather own businesses or real estate than cash. Then again, I’d rather own cash-spinning businesses and real estate than commodities or gold.

    Whatever you do, though, don’t let an old assumption pass uncontested. If you think there’s going to be inflation, you could at least be in the right things. And keep an open mind as to what may happen in 2014. The only certain thing about investing is that there are no certainties. That was my main takeaway from the fiery debate in St. Kitts.


    Chris Mayer
    for The Daily Reckoning

    P.S. “I buy on the assumption,” Warren Buffett once said, “that they could close the market the next day and not reopen for 5 years.”

    Nov 18, 2016 18:25 PM

    Took profits this week on JDST, DSLV, and NUGT. Small losses on UWTI and DWTI. Green for the month so far but not by much.

    Nov 18, 2016 18:04 PM

    Arthur Richards Rule IV Announces Change in Holdings of Shares of Sprott Inc.
    TORONTO, ONTARIO–(Marketwired – Nov. 18, 2016)

    Rick Rule…….. pulling some profits in Sprott. Well done sir.

    Nov 19, 2016 19:27 AM