A bit of an opinionated Market Close – Tue 14 Feb, 2017

This Market Close was fun to put together as it is chock full of opinions. (Along with closing figures!)

Click download link to listen on this device: Download Show

Chris TempleAl Korelin

  1. On February 14, 2017 at 2:13 pm,
    confused says:

    Ouch! Alittle cold water on the so called return of the PM bull. Have you read this Matt, EX, Rick, Doc or any other gold bulls here?

    • On February 14, 2017 at 3:52 pm,
      Excelsior says:

      I’ve read comments from that contributor Plunger before, and overall, he has a well thought out and reasoned outlook for another leg lower with the A B C leg. (with A being the down leg from 2011 to Dec 2015, and then the upleg B being the move off those lows to the 2016 summer highs, and then now being the leg C further down).

      I would not completely rule out his scenario, as it is well reasoned, but I don’t agree with the thesis or those projections for a few reasons:


      For a sector to mark a bottom requires terrible sentiment, in late 2015 you could tell it a number of ways. Frank Homes (Mr. Commodities) started an airline ETF waiting on the sector to recover, there were less resource sponsors and traffic on most of the main mining websites (including here at the KER), and mining conference attendances were down in the toilets. Very few except a few of the rogue contrarians here on the KER were even discussing buying mining stocks back in December 2015 tax loss selling season. If you remember, we were joking on this blog about “holding our noses and buying more Silver miners.” It was fairly grim.

      Technically speaking, for it to be a bottoming pattern then the rally off of those lows needs to take out the recent prior peaks, and Gold and the miners absolutely delivered last year. Gold took out 3 higher peaks as well as the 2013 spike low, on massive volumes, and it paired up precisely with the lows and then move to record highs on the Gold Miners Bullish Percentage Index. (more on that in the next post)


      First let’s review the double bottom move down to $1445.40 that gold put in during mid to late December 2015. I had remained more reserved, because I had said since the rally in the first quarter of 2015 that I wanted to see the prior peak at $1346.80 (~$1347) taken out definitively on a closing basis. If you recall, the rally in early 2015 had fizzled out at $1307.80 and not made it past $1347. It was a bummer back in early 2015, and as a result, moving forward $1308 became first resistance, that had to be taken out to eclipse the rally from 2015. $1308 was referred to as “The Matterhorn”, (he mentioned $1309 in the article – same basic level). However, $1208-$1309 was significant, but to me it was only the first of several challenges Gold must overcome.

      It was Dragonite that reminded us all of the major spike down trough to $1321.50 from the spring of 2013, which had started the several years of sideways to down consolidation. Upon going back and looking at that again, it became very clear that this $1321.50 was a severe downturn in 2013 and defining moment in the Gold Bear. There was even a show here on the KER where the speakers had postulated that $1321 was “The Bottom” way back then. The point was that for the Bull market to be back on then Gold absolutely needed to put in a close above $1321.50.
      Well, look at the chart below of the past and what has happened this year and you’ll note that Gold took out $1307.80 (the Jan 2015 peak), $1321.50 (the 2013 spike down low trough, that did serious chart & sentiment damage), and Gold also took out $1346.80 (the next higher peak from the summer of 2014). When those levels ($1308/$1321/$1347) were taken out, then I was finally comfortable with the fact that it was not just a counter-trend rally, but in fact the beginning of the new bull in gold.

      Lastly, when Gold spiked up to $1377.50 this summer, it also took out a lessor peak of $1361.80 (from the autumn of 2013). Typically the summer is more bearish for the metals, so for Gold to have taken out so many prior peaks was uncharacteristically bullish. We mentioned in discussions on here a few times (and Glenfidish nailed it) that Gold had borrowed from the normal Fall rally by going so high into the summer, and that we’d have a dip down into November. (great call Glenfidish).

      That’s exactly what we’ve seen play out thus far, and so far coming out of late Dec 2016 to early 2017 the metals have rallied a bit and technically made a “Higher Low”. Honestly, unless Gold goes all the way down and breaks below that $1045.40 Dec 2015 low, then in my opinion we are still in the new Gold bull market.


      Here is the Chart that goes with all those Gold peaks & troughs. It’s easier just to see it:


      • On February 14, 2017 at 3:53 pm,
        Excelsior says:

        Based on the Gold chart it sure looks to me like the Dec 2015 low of $1045.40 and the Dec 2016 low of $1124.30 form a “W-shaped Double bottom”. Also that $1045.40 formed a mini-double-bottom back in Dec 2015 to kick off that $1045.40 level as the lower low.

        In addition, note how Gold blasted up through the 144 week EMA, 233 week EMA, and the 377 week EMA. In particular, Gold had sunk down through that 144 week EMA in 2013 and hadn’t broken back up through it until last year’s rally. That is pretty significant in my view.

        • On February 14, 2017 at 3:54 pm,
          Excelsior says:

          Another point weighing in favor of the bottom being in is that the mIners really outperformed the metals and often led the metals higher. This is a very bullish sign.

          *One of the better indicators I keep in the arsenal of technical data weapons is the breadth indicator (BPGDM) – The Gold Miners Bullish Percentage Index.

          You’ll notice on the chart below that the (BPGDM) made trough lows to oversold conditions in Nov-Dec 2014, right before the early 2015 rally, and then made lows in Jan of 2016, right before that epic rally last year, and then it hit 100 in July/Aug which is as overbought as possible. So that was a clue to take some chips off the table. Then you’ll see that in Nov & Dec of 2016 that things had gone down and double-bottomed as too oversold, so that was a good time to buy….. etc…..


          • On February 14, 2017 at 4:02 pm,
            Excelsior says:

            It look like the miners could top out again soon (which makes sense because usually the miners rally from early January to early March, on all the news releases that come out prior to the PDAC, and the after the PDAC they have a habit of selling off in mid-late March ….. The “PDAC Curse”. Last year was the first exception in a long time (another point about the strength of last year’s rally).

            I’ve said all along that I like buying from after Thanksgiving to late December during tax loss selling season, and then selling those positions right after PDAC as a seasonality trade. It looks like it’s going to link up well based on the BPGDM chart above.

            I’m planning for another week or two to squeeze a few more gains out of the miners, and we should also see a flurry of press releases hit over the next 2 weeks so companies can cover the news with investors at PDAC. This should add fuel to fire and put a little life back into the sector (right before the market pulls the rug back out — ha!)

          • On February 14, 2017 at 4:39 pm,
            Steele says:

            Excellent points and compelling bullish argument. Also, an intermediate miner top coinciding with PDAC in early March looks about right. But we may not reach August 2016 highs by then.

          • On February 14, 2017 at 5:33 pm,
            Excelsior says:

            Yes, it is more likely we break the Aug 2016 highs later in 2017.

          • On February 14, 2017 at 5:37 pm,
            JohnK says:

            I’ve come to believe the “PDAC” curse is just a coincidence of the action of the companies listed on the TSX.V
            Stockcharts has a seasonality button on their website and I have been tracking the TSX.V companies on the Yahoo Volume leaders with a 70-100% percentile on stockcharts seasonality. This has provided an interesting over view of the monthly action of the TSX.V Twice as many companies have advanced 70-100% during February than March.

          • On February 14, 2017 at 5:40 pm,
            JohnK says:

            That is 70-100% of the time during the last five years,during that month. Not a 70-100% gain during that month.

          • On February 14, 2017 at 5:58 pm,
            Excelsior says:

            Good points Johnk. I’m not sure what all the drivers, but yes Jan & Feb tend to be much more bullish than March with resource stocks for some reason as a seasonality play.

            As mentioned, many companies rush to get their news out before the PDAC, and then this often leads to an intermediate term high, and creates an ideal exit point for many investors. Then following the biggest mining event on the planet, there is a bit of news lull, as many companies blew their wad on the front side. This may be a contributing factor.

            Regardless I’ll be watching the news flow and the action in the miners over the next 2 weeks very carefully. (Well, not really that carefully as I’ll be laying on the beach starting this weekend…. so I’ll only be peaking in on the miners from my smart phone during some well deserved R&R and in between adult beverages 🙂 ).

          • On February 14, 2017 at 6:00 pm,
            Excelsior says:

            Peeking in, not peaking in….. (gosh, it would be nice if the miners were peaking then).

          • On February 14, 2017 at 6:09 pm,
            JohnK says:

            Interesting Shad.
            I haven’t looked at the reasons why,I just know the companies as per the data.
            This may deserve some more analysis.
            I’m thinking with the volatility associated with President Trump,this year could be different.

          • On February 14, 2017 at 6:46 pm,
            Excelsior says:

            Well, as noted, last year the rally was so strong that it shrugged off the seasonality trend that has been comically dubbed the “PDAC curse”.

            In that live blogging event on ceo.ca last week on the 9th, the PDAC curse being dodged last year came up during the discussion about whether the gold market had bottomed from both John Kaiser and Tommy. Brent also noted that this year under the new administration may be a bit different.


            @tommy – “And how will we know we’re in a bull market?”

            @HRA-Coffin (Eric Coffin) – ” I think it’s a bull market – but nothing like some of the past ones we’ve seen. Will take a while for that to develop. ”

            @JMNorthShore (Joe Mazumdar) – “We are seeing some financings of junior explorers being upsized considerably. Given that the gold price is still around US$1235 so definitely a lot of investor interest in the upside potential. The fact that we have not had some of the large financings from producers or streamers/royalty companies suggests that the institutions are also ready to put some money in earlier stage plays.”

            @Brent_Cook – “Agree, precious metals look good for the year. It is going to get really weird down here in the US” about 2 hours ago

            @JKaiser – “PDAC curse only occasionally gets violated as in last year. Will be an interesting test this year. ” about 2 hours ago

            @tommy – “No PDAC curse last year. A pleasant surprise around here! I am still a child of the bear market and can’t have enough cash…. ” – Feb 9th, 2016

          • On February 14, 2017 at 7:06 pm,
            Excelsior says:

            Here’s a good article from Eric from 5 years ago when things were just starting to break down further in 2012, and he waxes on the PDAC curse.


            The PDAC curse
            Eric Coffin of HRA Advisories | Mar. 22, 2012

            From The March 2012 HRA Journal

            “It’s that time of year again. Thirty five thousand people descended on Toronto to take part in the largest mining industry confab in the world. The PDAC has become famous for the broad range of attendees, the numerous parties and the gouging by local hotel operators. ”

            “For resource stock investors, the PDAC famous for something more sinister; the “PDAC Curse”. So far this month is looking like this annual scourge is alive and well and making life miserable for resource stock traders yet again.”

          • On February 14, 2017 at 7:08 pm,
            Excelsior says:

            Here’s another article showing the 2011 PDAC curse:

            “If you haven’t heard of the PDAC curse, you’re in for a tale of woe and despair.”

            “PDAC, for those of you unaware, stands for the Prospectors and Developers Association of Canada. The annual PDAC Convention was attended by nearly 30,000 mining people earlier this week. Because corporate executives don’t like going to jail, most juniors with any sniff of positive news will release their results just before or during the convention. That frees them up to promote unfettered. BNN broadcasts live from the floor and conducts interviews with quotable executives and analysts. Its a pretty big deal…”


          • On February 14, 2017 at 7:11 pm,
            Excelsior says:

            Here was the Kitco coverage of the question last year, and we know in retrospect, the curse was lifted last year, but you can sense the hesitation going into this period last year…..


            Can The Market Survive the PDAC Curse?
            Tuesday March 08, 2016 (Kitco News) –

            “Although gold prices are up almost 20% since the start of the year, the market might not be able to escape the PDAC curse, a common correction seen after the Prospectors and Developers Association of Canada conference, as analysts and market participants are expecting to see a pullback after the recent 13-month high.

            “I think we have seen things move pretty hard in one direction so it makes sense to see a pullback,” said Brent Cook, author of the newsletter Exploration insights.


          • On February 14, 2017 at 7:18 pm,
            JohnK says:

            Good stuff Shad.
            All my positions are still bullish.
            Technically things still look awfully good.

          • On February 14, 2017 at 7:26 pm,
            Excelsior says:

            JohnK – Yes I agree things look very constructive in many of the miners I follow, so we still have some room to move to the upside. I’m not too worried about it, but if we get some big rips over the next few weeks, I may trim near PDAC (just in case)…..

            Here’s one more bonus video on the PDAC Curse from Fabi…. for your entertainment:

            Is there a PDAC Curse? 💰
            The Next Big Rush


    • On February 14, 2017 at 4:22 pm,
      Excelsior says:

      Gold Off To A Rough Week, Can It Recover?
      Feb 14, 2017
      Guest(s): Todd ‘Bubba’ Horwitz – Chief Market Strategist, BubbaTrading


    • On February 14, 2017 at 6:20 pm,
      Matthew says:

      I’m not going to belabor this since Ex already did. 😉

      There are so many reasons not to be worried that I wouldn’t know where to begin. One technical example is that the monthly MACD (12,26) has avoided crossing below the signal line (9).

      Here’s a monthly chart if you’re a subscriber:


      • On February 14, 2017 at 6:49 pm,
        Excelsior says:

        Ha. Sorry, I did belabor the point a bit……

        At one point, It felt like I was in labor to a large KER gold post……

        • On February 14, 2017 at 7:42 pm,
          Excelsior says:

          …. it popped out as a blog baby gold bull …….

          • On February 15, 2017 at 4:19 am,
            OOTB Jerry says:

            Nothing wrong with belaboring a point when new facts and new guru opinions arise…………….JTLONG…… 🙂

  2. On February 14, 2017 at 2:31 pm,
    confused says:

    It’s Plunger’s post on Gold Tent….

    • On February 14, 2017 at 4:24 pm,
      Excelsior says:

      He’s expecting a “plunge”. No surprises there.

    • On February 14, 2017 at 6:11 pm,
      Chartster says:

      Thanks for the Plunger post. One of his charts fits perfectly with a cycle theory I have that seems to be true. It has gold heading south until late summer. Will it go lower than 1050? I don’t know, but I think it will. The posablity still does exist for a lower low. And I agree with him, it will be a washout or compitulation phase.

      The question is: if central bankers knew the bottom of silver was “in”, wouldn’t silver be blasting off, already..?? Huh, yeah) it would!

      • On February 14, 2017 at 6:25 pm,
        Chartster says:

        Bottom line. When everyone goes JTL and throws in the towel on metals. THat’s when it’s time to buy!

        • On February 14, 2017 at 7:00 pm,
          Excelsior says:

          I sincerely hope that Everyone doesn’t go JTL. That might get a bit hectic.

          • On February 14, 2017 at 7:13 pm,
            Chartster says:

            Haha, I meant most gold bugs at large. Not everyone, and not JTL , literally.

          • On February 14, 2017 at 7:34 pm,
            Excelsior says:

            Whoo… OK we all dodged a bullet there….. 🙂

            I got it, a sentiment wash out. That was my point up above, back in 2015 sentiment was pretty washed out at the shows, on line, commodities guys were starting airlines ETFs, and we were holding our nose to buy stocks.

            If gold did go down one more time though and took out the $1045.40 low, then I agree that would flush the whole sector’s sentiment right down the drain.

            That is not what I’m expecting, but I’ve also learned the hard way the the market is a cruel teacher.

          • On February 14, 2017 at 10:02 pm,
            GH says:

            Gotta hand it to JTL, he timed his exit perfectly to coincide with the resumption of the bull!

  3. On February 14, 2017 at 2:33 pm,
    Paul L says:
  4. On February 14, 2017 at 2:44 pm,
    DC says:

    Big Al, Chris, Rick — Good commentaries! Enjoyed them all, thanks.

  5. On February 14, 2017 at 2:48 pm,
    OOTB Jerry says:

    Absolutely need a debt Jubilee….clean the banker’s clock……

    • On February 14, 2017 at 3:55 pm,
      Excelsior says:

      It would be quite the Jubilee. Let them eat cake!

  6. On February 14, 2017 at 2:52 pm,
    Ozibatla says:

    The US $ recent action suggests it is not ready to break crucial support as yet, which is not overly positive for pms. The fact that the dollar has surged back through the 100 mark with follow through buying is a sign of some intermediate term strength. Coupled with the fact that Yellens latest yap affair talked about more interest rate hikes, the dollar seems to want to go higher in the near term

  7. On February 14, 2017 at 2:52 pm,
    OOTB Jerry says:

    Chris is spot on again……………..

  8. On February 14, 2017 at 3:21 pm,
    CFS says:

    Ira Epstein Metals TA:


    • On February 14, 2017 at 3:55 pm,
      Excelsior says:

      Thanks CFS.

  9. On February 14, 2017 at 3:41 pm,
    CFS says:

    But all major countries are in debt, thus there CANNOT be much relative movement in currencies.
    They will all print and devalue together.
    Thus the only possibility is inflation.

    You cannot get much better off on average in a permanent currency printing world. You are always having the value of savings whittled away in terms of purchasing power.

  10. On February 14, 2017 at 3:51 pm,
    Silverdollar says:

    When things break, It’s going to be sudden and vicious. Kinda like the Oroville dam evacuation. jmo

  11. On February 14, 2017 at 4:03 pm,
    wolfster says:
  12. On February 14, 2017 at 4:13 pm,
    CFS says:

    More Flynn Discussion:

  13. On February 14, 2017 at 4:23 pm,
    CFS says:

    Adamera Minerals receives final Cooke airborne data

    2017-02-14 10:50 ET – News Release

    Mr. Mark Kolebaba reports


    Adamera Minerals Corp. has received final data from the helicopter-borne VTEM (versatile time-domain electromagnetic) and magnetic survey completed over its Cooke Mountain project in Washington State.

    Adamera is currently isolating eight to 10 Tier 1 targets in preparation for drilling in spring. Over the coming weeks, geophysical, geological and soil geochemical data will be compiled over the selected targets. Specific target descriptions within the project area will be released as they are developed.

  14. On February 14, 2017 at 4:52 pm,
    CFS says:

    Flynn may have been caught in a lie but so was the NSA.

    Seems to me, if the NSA had a TRANSCRIPT of Flynn’s phone call, NSA LIES as to what they are recording.
    And if this information is leaked, what protects anyone from UNCONSTITUTIONAL BEHAVIOR of the NSA?

    • On February 14, 2017 at 10:06 pm,
      GH says:

      CFS, as far as I know (and that is very little), they record absolutely everything forever. I do recall some statements about just using metadata en masse. But if attention is called to an individual, I believe that person’s electronic life is all there for them to review.

  15. On February 14, 2017 at 7:03 pm,
    CFS says:

    More Flynn Commentary:


  16. On February 14, 2017 at 7:17 pm,
    Paul L. says:

    Yellen always speaks with fear and seems to lack confidence. Maybe afraid of saying the wrong buzzwords.

    • On February 14, 2017 at 7:40 pm,
      Excelsior says:

      Paul L – I’ve noticed that as well. That is because these FED meetings have become a media circus. I miss the days when Greenspan or Bernanke just came out and raised the rate or lowered the rate without all the fed-babble and fanfare. Now Janet Felon is on pins and needles because every stinking word gets dissected and parsed for 3 days. Why people give the central banks so much air time is beyond me.

  17. On February 14, 2017 at 7:33 pm,
    CFS says:
  18. On February 14, 2017 at 7:35 pm,
    CFS says:

    Another source on Greece dropping Euro in favor of US dollar.


  19. On February 14, 2017 at 9:26 pm,
    Excelsior says:

    Insights on the Resource Market with Brent Cook and Joe Mazumdar
    by @Leni on February 14, 2017


  20. On February 14, 2017 at 10:51 pm,
    Excelsior says:

    Canaccord Genuity – Morning Coffee (Gold, Silver, Base Metals, Oil, Gas, Energy)
    Wednesday February 15, 2017

    IAMGOLD (IMG), Northern Dynasty Minerals (NDM), UEX Corp. (UEX), Pine Cliff Energy (PNE), Torc Oil & Gas (TOG), Whitecap Resources (WCP), Bonterra Energy (BNE), Baytex Energy (BTE), Athabasca Oil (ATH), Painted Pony Petroleum (PPY), Birchcliff Energy (BIR), Arizona Mining (AZ), and more……


  21. On February 15, 2017 at 12:20 am,
    CFS says:
  22. On February 15, 2017 at 12:30 am,
    CFS says:
  23. On February 15, 2017 at 12:34 am,
    CFS says:

    ULAANBAATAR, Mongolia (AP) — Mongolian lawmakers have told the government to revoke a private company’s purchase of a stake in a major copper mine, a move the president warned could scare away investors at a time when the economy is already struggling.

    The move highlights the political sensitivity of Mongolia’s copper, gold and other mineral wealth, the source of more than 90 percent of the North Asian country’s export revenues.

    Legislators approved a resolution Friday calling on Prime Minister Jargaltulgyn Erdenebat to revoke a Mongolian investor’s $400 million purchase of a Russian state company’s 49 percent stake in Erdenet Mining Corp. They want the government, which owns the rest of Erdenet, to take full control.

  24. On February 15, 2017 at 4:29 am,
    wolfster says:
  25. On February 15, 2017 at 4:46 am,
    Xriva says:
  26. On February 15, 2017 at 6:09 am,
    Matthew says:

    I annotated the following chart on Nov. 26 and the HUI has been following my arrow perfectly for the last six weeks:


  27. On February 15, 2017 at 7:22 am,
    Excelsior says:

    Pan American Silver Reverses To 4Q Profit, Hikes Dividend
    Wednesday February 15, 2017


    • On February 15, 2017 at 7:23 am,
      Excelsior says:

      Speaking of Silver and Gold miners with a Dividend………

      I’m glad to see (MND) (MNDJF) Mandalay Resources get a nice “outperform” upgrade from Raymond James. They are a great mid-tier #Gold & #Silver #Producer and they are one of the few miners that pays a #Dividend.

      If they were promoted differently, or if you put one of the “popular” names on top of their production and growth profile the stock would be up 2-4 times where it is today in share price. This one is still #FlyingUnderTheRadar

      Mandalay Resources – Corporate Presentation:


    • On February 15, 2017 at 7:54 am,
      Bonzo Barzini says:

      So why is PAAS down over 6% today?

      • On February 15, 2017 at 8:06 am,
        Excelsior says:

        Most Silver miners are down 2-8 % today across the sector. It’s not unique to PAAS.

      • On February 15, 2017 at 8:14 am,
        Matthew says:

        It was overbought and price had become quite extended above the major moving averages. It had also nearly matched its 2016 high even though silver is a long way from its 2016 high.

        It will probably need to consolidate for several weeks now. $18.70 looks like a done deal but even a move down to the 17.50 area wouldn’t be surprising.


  28. On February 15, 2017 at 7:41 am,
    Paul L says:

    Oil is looking like it has no hope of beating $55 and maybe not even 54. We could see go down to 51 or lower to 50. XOP has been dropping for over 2 months.

  29. On February 15, 2017 at 7:50 am,
    CFS says:

    Chesapeake Energy To Boost Drilling Budget, Rig Count
    Associated Press – 40 minutes ago
    OKLAHOMA CITY (AP) — Chesapeake Energy Corp. has announced plans to increase its drilling budget and rig count in 2017, saying that confidence is growing in the hard-hit energy market.

    The Oklahoma City-based company said Tuesday that it would increase its capital expenditures to $1.9 billion to $2.5 billion this year. That’s compared to 2016 numbers of $1.65 billion to $1.75 billion.

    • On February 15, 2017 at 8:09 am,
      Paul L says:

      A very high risk stock.

  30. On February 15, 2017 at 8:15 am,
    Paul L says:

    VIX is up 8.75%. Rally could be ending soon at sp&p 2350.

  31. On February 15, 2017 at 8:17 am,
    b says:

    The entire global financial system requires having a great deal of trust.

    If you have an online brokerage account, you may be surprised to know that you don’t actually own a single stock in your portfolio.

    When you log in to your account and buy, say, Apple shares, the brokerage will typically register those shares in its own name, not your name.

    Apple has no idea who you are. The shares are effectively owned by your broker. It’s their asset, not yours.

    Now that’s putting a LOT of trust in a complete stranger.

    It’s the same when you deposit your money in a bank. It’s no longer your money. It’s the bank’s.

    • On February 15, 2017 at 9:50 am,
      OOTB Jerry says:

      CEDE and Co…interesting how this just evolved over a few decades, who would have thought…, most do not even know. Bix has talked about this for several years.

      • On February 15, 2017 at 9:51 am,
        OOTB Jerry says:

        Dow 50,000 , on the horizon……lol

        • On February 15, 2017 at 9:52 am,
          OOTB Jerry says:

          Ephesians 6:12

      • On February 15, 2017 at 12:38 pm,
        GH says:

        Jim Sinclair too, during his GOTS campaign.

        ‘CEDE’ and Co. — they have quite a sense of humor, don’t they?

        • On February 15, 2017 at 1:32 pm,
          OOTB Jerry says:

          tragic for us in the end ……