Strategies to play the longer term trends in the markets
Doc is with us today with comments on the moves we are seeing to kick off 2017. We were expecting a reversal across the board in a large number of markets and now that we are seeing it the question is what comes next?
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I’m thinking it needs to move into a daily cycle low, and possibly intermediate and yearly cycle lows from here.
http://stockcharts.com/h-sc/ui?s=%24WTIC&p=D&yr=2&mn=6&dy=0&id=p56474436107&a=497576455
Just a guess, of course.
In any case, I think precious metals miners have the advantage over oil and gas producers and explorers for a while:
http://stockcharts.com/h-sc/ui?s=GDXJ%3AXOP&p=W&yr=8&mn=0&dy=0&id=p43630951564&a=497583377
Latest Tech News:
LAS VEGAS (AP)
10:15 a.m.
Smartphones can do almost anything, but how about molecular physics?
An Israeli startup has embedded a molecular sensor called Scio in a new smartphone that can analyze any material — whether that’s the nutritional content of an apple or a person’s body fat.
Consumer Physics’ scanners use infrared light to analyze molecular structure. The startup has been developing them for a few years, but this is the first time it’s embedded in a mobile device — one from Chinese phone manufacturer Changhong.
Is that a little too much science to carry around in your pocket?
If it can dissolve “body fat”……then you will have a winner……….
Ha….yes. Good one.
🙂
Trump is sending a lot of swamp rats to Canada, I see their license plates everywhere, Florida, California, New York. It’s too cold for swimming here unless you are a beaver, and most of the people I see look like lawyers. DT
Lol
Doc…… are you going to the FUN auction in FL…..?
Jerry, what’s that—I ALWAYS love fun.
Florida United Numismatists………..FUN………at Ft. Lauderdale , Fl. ……coin and currency auction….I thought you might be going since you like St. G’s…..Jan. 9=10
4th -6th also
all the good graded stuff……is going up………
Great to hear Doc’s re-assuring voice again. His thoughts on the $, the conventional markets and gold make sense to me and I’m invested accordingly.
On top of that the sun is shining after 5-6 days of storm (16″ of snow and cold weather) so things are definitely looking up. Best to all for a good January.
Doc, do you think the VIX is due to bounce higher, being so low?
Pardu, I believe we’re getting very close.
Indeed.
platinum versus Palladium behavior is interesting.
Is that signalling a pause in Copper mining shares boom?
A different Hamilton with something worth reading:
https://econimica.blogspot.com/2017/01/americas-supposed-enemies-are-literally.html
thanks…….new perspective and thoughts on the big bad three. RCI
I agree that there’s more “work” to be done to get the technical picture in order but I do not consider this move in the miners to be just a “bounce.” GDXJ is up 35% in three weeks and is exhibiting plenty of strength. Of course it can pull back several dollars, and probably will very soon since it is now at a zone of resistance, but I believe that the next intermediate term advance has started.
http://stockcharts.com/h-sc/ui?s=GDXJ&p=W&yr=6&mn=11&dy=0&id=p94698378340&a=385422417
Great stuff Matthew. Thanks for these.
Not banking on another tank to 1050/970 in the spring… as proposed by many as the ‘final’ shake off ?
I’ve also been questioning (in my mind) whether this is likely …as the grind-down in November/December dragged on.
Tad, I don’t see 1050 or lower happening at all. If it does, my expectations will have been dead wrong.
Thanks Matthew.
The Dow has dropped 18% versus the senior gold miners in less than 3 weeks.
DIA priced in GDX:
http://stockcharts.com/h-sc/ui?s=DIA%3AGDX&p=W&yr=5&mn=5&dy=0&id=p40902783390&a=493540636
The divergence between Dow and NASDAQ behavior is telling.
Yes, the same goes for the divergence in RSI readings between the Dow and S&P lately.
Nice charts,Matthew,much appreciated as always.
And thanks for your comment yesterday.
Thanks and you’re welcome, Pete.
Energy is still looking medium term very bullish to me:
Silver/SLV has found a modified Schiff fork resistance today. I doubt it will hold for long.
http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=0&dy=8&id=p77120019018&a=451786106
NOW ON LIVE and worth listening to:
(on AI)
https://www.voiceamerica.com/show/2193/breaking-banks-fintech
CHS: Thanks, like McAlvany Weekly Commentary on Wednesdays, but a little longer
like
I went short a few days early and was almost stopped out!
The BBands on the daily GS chart tells me SPX is about to head south. VIXY looking GR8!
uranium and certain EMs on a tear.
Uranium stocks are on a tear, Gold & Silver stocks on a tear, Base Metals stocks on a tear…… 2017 has started off with a bang.
There was so much Green on the Screen today that I had to put on my PreciousMetals Depends in case I did a laundry drop with all the excitement.
Today’s Theme:
Everything is Awesome Lego Movie song
It may be a passing fancy, but many resource stocks are up substantially over the last 2 weeks. I ended up trimming a few back that bounced much further than I was expecting towards the end of the day, but am doing my best to let the winners run for a bit. It just makes me nervous that with FOMC next week that we may see sell down at the beginning of next week, throwing some cold water on the fire.
Scratch that last message, as I got my dates all messed up listening to a dated Audio interview and thought they were talking about next Tuesday & Wednesday.
The FOMC meeting isn’t until Tuesday Jan 31st – Wednesday Feb 1st; so there is still time for this rally to run a bit further. Best to make hay while the sun is shining….
the news may change, since there is a new sheriff in town……..new policy , new tone, new direction…………jmho
You can “depend” on it……… 🙂
Ha! I love it…. change is so “depend”able……
bought some western uranium, an interesting under the radar near term producer. Nice news release. Now they can move on with fresh capital. Very thinly traded on CSNX and therefor not so speculative.
http://www.western-uranium.com/news/WUC_News_Release_03Jan2017.pdf
Yes, I’ve been watching Western Uranium for some time as well, and don’t see them as speculative as some of the explorers, as they have some defined deposits they spun out of Energy Fuels and that the CEO had acquired privately.
George Glassier (their CEO) is the guy the really built up Energy Fuels into the great company that it is today. They did have the recent setback in the approval of their Ablation technique, but still they are a very interesting development company.
You may have already heard this as it is a few months old, but George was on Palisade Radio and did a good job over-viewing the company and opportunity:
________________________________________________________________________
George Glasier: How Low Will Uranium Go?
BY COLLIN KETTELL ON SEPTEMBER 11, 2016
Yes, listened to this interwiev and I liked it a lot. Its hard to find any new updated info about WUC. The Palisade team and Brien Lundin likes the company also👍. I hope their new ablation technology will be fully approved by 2017.If it is they have the second largest deposit of uranium in US and production right around the corner with a CEO who wants a rerun of his last success with EFR It seems like a good bet. And remember it can go to production with very low uranium prices and still have positiv cach flow unlike other Uranium companys. Higher uranium price = Really good chance they start production.
Are you in or out Mr Ex? And if not why? cause I know you are a value hunter🤓
Latest update 30 nov:
http://www.western-uranium.com/news/WUC_News_Release_30Nov2016.pdf
Nice Updates Blue. I’m not currently a shareholder of Western Uranium, but its on my short list of companies for sure. I track about 60+ Uranium Companies but currently own the top 8 on my short list that I’ll copy below (but do plan on making 2 substitutions in the near future):
NEXGEN ENERGY LTD
ENERGY FUELS INC
UR-ENERGY INC
DENISON MINES CORP
URANIUM ENERGY CORP
UEX CORPORATION
URANIUM RESOURCES INC
PALADIN ENERGY LTD
(those are my current holdings, and below are U3O8 companies waiting on deck)
___________________________
Centrus Energy Corp
Peninsula Energy LTD
Western Uranium
Anfield Resources
ALX Uranium Corp
Bannerman Resources
GoviEx Uranium
Toro Energy LTD
Berkley Energy LTD
Canalaska Uranium LTD
________________________________________________________________________
I plan on selling out of Uranium Resources (URRE) soon, because they appear to have an identity crisis. I’ve traded in and out of them since 2010, and respected the fact that they’ve been around for decades and were past producers, but they just recently sold off their New Mexico assets to Laramide Resources, and kept their Texas assets and 2 processing centers in TX. What got me more interested again was when they purchased Anatolia Energy in Turkey last year, which will be a lower cost insitu processing center. Of course, right after that Turkey did the coup and has been getting weirder and wonkier, and there is no history of Uranium mining in Turkey, so that is a concern to me, but I was willing to give it a shot.
However, recently they’ve started buying Lithium assets (out of left field) and I’m not a fan of companies jumping on the Lithium bandwagon at this point in the cycle. I do hold 5 Lithium companies at present, but they are the established Producers or advanced Developers that are laser-focused on just Lithium and will be the winners from current LI frenzy. URRE lost some of my respect when they switched gears in Lithium right after buying the company in Turkey, but I have to admit, that move did put some life back into their share price, as a result. 🙂
Paladin Energy is a bit of a train wreck, and they may be the biggest casualty of this very long Uranium rout since 2011 because they didn’t have the long-term off-take agreements that the other producers like Cameco, Areva, Energy Fuels, and Ur-Energy had, and have just been pummeled. It’s a tragedy as they were next largest producers after Cameco, Rio Tinto, Areva, and Uranium One, but they’ve mostly imploded at this point. Whether they survive or not is a big question mark at this point.
Due the high risk, I only swing-trade Paladin, but their low share price allows wild swings of 10-20% every few days, and it is fun trading. However, I’m thinking about just getting out of the madness and rotating into something more stable.
My plan is to rotate the funds out of Uranium Resources and Paladin and put them into Centrus Energy (a Uranium Processor & Enricher), and into Peninsula Energy – a new insitu Uranium processor that I’ve been following for some time and feel comfortable bringing into the fold.
Next up for me after that would be Western Uranium & Anfield Resources, if I swap out any of the other companies higher up in the batting order.
In each sector I like holding the Jr Producers, Advanced development projects and some explorers, to diversify into the various sub-sectors.
(UUUU/EFR) – Energy Fuels & (URG/URE) Ur-Energy & (PALAF/PDN) are my 3 Producers at present. As mentioned, I’m going to swap Paladin for Centrus Energy.
(DNN/DML) – Denison is unique in that they own part of one of the 3 mills in the Athabasca along with Areva, and that is the Mill processing Cameco’s ore, so they get tolling revenues from that, and will be able to put their feed through it eventually. They have advanced deposits in the Athabasca like many companies, but also a partial stake in their African assets they JV’d with GoviEx on on. In addition they have a remediation division (like what Alexco has in the Silver space), and this brings in additional income. I’m not sure how to classify Denison as result, but consider them a Developer (?) with their fingers in a lot of pies.
(UEC) Uranium Energy Corp & (URRE) Uranium Resources have been my 2 other Developers, [but a swap of Uranium Resources for Western Uranium or Anfield Resources is my plan]
Toro Energy and Bannerman Resources are 2 Aussie Developers that I’m keen on as well.
(NXGEF/NXE) Nexgen is the premier Uranium Explorer by a long shot due to their world class asset and may be the best generational Canadian discovery of any commodity in the last few years. (UEXCF/UEX) UEX Corp is another Explorer I traded off and on since 2010 and feel have one of the most prospective land packages in the Athabasca outside of Nexgen, Denison, and Fission. (ALXEF/AL) ALX Uranium and (CVVUF/CVV) Canalaska are 2 other Explorers I’ve traded in 2016, and are worth keeping an eye on.
Other investors seem animated by Berkley Energy and Skyharbour resources , so I’m watching them as well.
That’s my 2 cents on Uranium Miners for now……
I mentioned above that Nexgen (NXE) was hands down the premier exploration company and a generational discovery for all Canadian commodity companies.
This post from the savvy investor @PamplonaTrader over at CEO really sums up just how valuable the rock is that Nexgen is finding. (It’s mind-boggling)
_______________________________________________________________________
@PamplonaTrader – “I see alot of people get excited over 2gpt gold deposits. At 2gpt Au, the ore is worth $75/t. Iron ore miners are getting bid with iron ore prices at $80/t. Lithium miners are in a raging bull market with Galaxy Resources recently selling hard rock spodumene at $900/t.
Here we have Arrow, where the operators will be mining the high grade material for the first 10 years. The ore in the high grade subzone at 13.26% and spot prices ($21.62/lbs) is worth $6,300/t. At term prices ($33/lbs) the ore is worth $9,650/t.
Even using the global grades, the ore at Arrow is more valuable than even the richest gold deposits. At spot prices, Arrow’s ore at an avg grade of 2.63% is worth $1,250/t whereas the ore at Pretium’s Valley of Kings is worth $775/t. “
All I can say is – Wow!
In a later post he goes on:
@PamplonaTrader – “Re chasing things up. Do you believe Uranium prices, at $21.62/lbs, are closer to a bottom or closer to a top? Read what I posted above and then imagine how profitable Arrow could be at $40/lbs, $60/lbs, $80/lbs.
Also, people are forgetting that NexGen is not a one trick pony. If you read through the last MD&A, you’ll note that NexGen created multiple subsidiaries, one of which was a royalty subsidiary. When Arrow is eventually sold, the shareholders will see multiple spinouts and will retain an option on Arrow via the royalty subsidiary.
@HighROI likes to offer the Eleonore anecdote – Virginia Mines sold the 2% NSR (up to 3.5%) to Osisko for more than it sold the deposit to Goldcorp. Both deals were worth roughly $400M.
Still many multiples to be made here for long-term investors.”
I appreciate your comments, EX, they are very important because you throw your own experience and DD into your answer. Its very informativ and easy to use for my own trading and investing, thanks.
I think NXE is a no brainer and will be taken over. Im gonna buy it this month and have as a core uranium pick. My problem is there is a lot of good companys out there in the resource sector and Im forced to select only a few good miners because I dont like to be in too many stock So a few uranium picks is enough. Wuc , and UEX are my favourites and I even liked CanAlaska before but Its too speculative and I dont like the diamondexploration part of CVV. it drags down the shareprice when it doesnt go well like recently when they came out with bad new.
I think we have all this year to find a couple of good uranium names before it gets going for real. Rick rule thinks the bottomingprocess ends this summer.
Good luck out there Ex!
Thanks Blue. Always fun to share ideas in the Energy sector. Good luck to you as well.
Yes, the Canalaska diamond tangent did hurt their perception with many investors, but it was definitely worth exploring with DeBeers as a potential spinout company. It doesn’t look like it worked out though, so hopefully they’ll back on focus.
That’s my issue with Uranium Resources starting to purse Lithium now. Maybe they build up those resources and spin out that company or sell it for more value, but as a shareholder, that isn’t why I invested in them initially, so I’m easing out of it on upward moves.
Yes, Nexgen is a just a juggernaut, and despite it’s popularity, it still has quite a ways to run.
Thanks for the Rick Rule review…. He’s an interesting and informative guy. I agree that this is the time to get positioned, (although, I am mostly positioned at this point, just reshuffling the deck).
Chart: How Every Commodity Performed in 2016
JEFF DESJARDINS on January 5, 2017 – Visual Capitalist
Thanks, Ex. You and I seem to inhabit difference universes, but have very similar opinions!
It’s a big multi-verse out there. Cheers CFS!
Let’s keep the good ideas percolating and circulating……
different not difference
Just when I think I have my Ipad under control!
Gold could get to near 1224 and then it fails again. Gdx near 24 to 25 possibly and then a sell.
Those are good levels to watch Paul! Personally I have slightly higher targets but only to the tune of $1,235 to 1,240 for gold. First thing first it needs to break $1,200…
Gary has probably laid another egg and hatched a new baby bull. The prior one died.
As mentioned a couple of weeks ago, the bond market is recovering and will continue to for at least a couple of weeks. That probably means the conventional market is ready to fall here as mentioned today. Watch TLT to challenge the 130 area. Doc.
RGC. Redstargold,
My favourite junior minor, waiting for drill news, very nice chart from BobbyC
Blue, nice indeed.
Blue:
Redstar has drill results coming out near the end of the month and I expect them to be barn burning.
Will oil be able to penetrate resistance at $61.80?
My guess is not on first few tries.