Richard Postma - The Doctor Is In – Fri 17 Mar, 2017

Gold and gold stocks vs US equities

Gold stocks continue to under perform the underlying metal. It is still encouraging that gold managed to get a buy on the back of the Fed rate hike but it will take time for the much larger run up. We also discuss the US markets and VIX. Our timeline for a pop in the VIX and volatility in general is in 2-3 weeks.

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Featuring:
Richard PostmaCory FleckAl Korelin
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Comments:
  1. On March 17, 2017 at 10:45 am,
    CFS says:

    Trump getting a lesson in Tariffs and trade right now:

    https://www.youtube.com/watch?v=MbO-LS2ClD0&feature=youtu.be

  2. On March 17, 2017 at 10:58 am,
    OOTB Jerry says:

    the trend is your friend (joke)… this stinks………

    • On March 17, 2017 at 11:26 am,
      OOTB Jerry says:

      Dow is going to 50,000……hang in there……….

  3. On March 17, 2017 at 10:58 am,
    CFS says:

    The only reservation I have about the Doc’s commentary is that this is a triple (or quad) witching day, so I rule out today’s action as being indicative of anything other than typical witching action.

  4. On March 17, 2017 at 11:05 am,
    pardu says:

    Doc, you said you may short the VIX, isn’t the VIX due for a pop up in the near term?

    • On March 17, 2017 at 12:05 pm,
      RICHARD/DOC says:

      Pardu, I said that rather poorly—I would mean I would short the conventional market by going long volatility or the VIX—especially if the VIX gets appreciatively under 10.

      • On March 17, 2017 at 1:31 pm,
        Excelsior says:

        I put a couple of logs on the (UVXY) fire earlier this week, expecting more volatility after the fed and anticipated a bigger media circus around the dept ceiling that expired at the end of the day on March 15th (the Ides of March).

        So far, there has barely been a peep about the debt ceiling issue, and instead, people are just rehashing the Trump “skinny budget” without asking themselves if any of it will get funded or not. Now, I’ve been busy this week, but was anything ever decided on the Debt Ceiling, because after looking a few times, there has been no mention on whether it got raised or not on most of the sites I frequent.

        Really weird that this was not of more importance this week in the financial news.

        Anyway, this is the 3rd time in a row I’ve squandered good profits from mining trading in a volatility trade that sunk like a stone. A little frustrating to say the least, but also fascinating that the VIX can be so calm, traders so complacent, and that the general stock indexes never stop for even a 10% correction for any reason. I’ve never seen anything like it, but will admit, in going long volatility….. I chose poorly.

        • On March 17, 2017 at 2:22 pm,
          Tad says:

          I’ve done exactly the same thing on the VIX; keep getting hammered.
          The LA times mentions that the bedtime ceiling won’t HAVE to be dealt with until sometime in the fall ??!! Not sure why. Here’s the article.
          http://touch.latimes.com/#section/-1/article/p2p-92813234/

          • On March 17, 2017 at 2:23 pm,
            Tad says:

            Bedtime??!! iPad finger. Sorry. “DEBT” it should have spelt.

          • On March 17, 2017 at 3:28 pm,
            Excelsior says:

            Funny Tad. Maybe it should “Bedtime” for the Debt Ceiling…..

            This was an interesting passage from that article you posted:

            “The debt limit needs to be raised to pay for spending already authorized by Congress, not for future spending.”

            Trump sided with hard-liners in 2013, publicly opposing an increase. “I cannot believe the Republicans are extending the debt ceiling — I am a Republican & I am embarrassed!” he tweeted then.

            But Trump’s views appeared to have changed now that he’s president and would have to deal with the ramifications of a default. Treasury Secretary Steven Mnuchin “will work with Congress on a path forward,” White House Press Secretary Sean Spicer said this week.”

          • On March 17, 2017 at 4:14 pm,
            Excelsior says:

            This passage also stuck out:

            “On Thursday, the limit was reinstated at about $19.9 trillion, the current level of outstanding public debt. To avoid going over the limit, Treasury has begun what it calls “extraordinary measures.”

            The first accounting maneuver began Wednesday when the Treasury suspended the sale of state and local government series securities, which count against the debt limit. On Thursday, the department suspended issuing new debt for some federal employee retirement and disability funds, Mnuchin said.”

            http://www.latimes.com/business/la-fi-debt-limit-trump-20170316-story.html

        • On March 17, 2017 at 2:53 pm,
          Chartster says:

          The VIX is all about the timing. It’s been sideways for over three months. When it moves, it’s gonna be a good one. VIXY looks like it will get a nice move soon. It should be worth it, for those that catch it, right.

          • On March 17, 2017 at 3:30 pm,
            Excelsior says:

            Well, I had a few good VIX pops in 2015 and 2016, but the last few attempts my timing was terrible.

            Again, I figured this Wednesday & Thursday would be the days volatility would return and on Monday/Tuesday I was timing out UVXY brilliantly in my own mind….

            Epic fail on my part…..

    • On March 17, 2017 at 5:11 pm,
      Steele says:

      These are the approximate odds of making money by going long volatility.

      https://www.youtube.com/watch?v=uYX-NSZMqt0

      • On March 17, 2017 at 5:13 pm,
        Matthew says:

        +1
        I don’t know why so many are so interested in trying.

  5. On March 17, 2017 at 11:30 am,
    confused says:

    Looks like gold will have to break through 1260$ for anyone to become bullish again. Gold is biding its time lulling all participants into a long long slumber…..zzzzz….zzzz…zz

    • On March 17, 2017 at 1:24 pm,
      Excelsior says:

      It was a pretty boring day.

  6. On March 17, 2017 at 11:35 am,
    CFS says:

    Listening to the Merkel-Trump press conference, it is clear that the Press are as dumb as rocks.
    There is a reason,actually two, why Germany is a powerhouse economically.
    1. They generally have a good work ethic.
    2. Germany is a big fish in a big pond; and it is the size of that pond (the Euro currency) which has hidden the fact that the German currency has been held artificially weak.
    This allows Germany to export much more than she could as an isolated country, which would have a much stronger currency on its own.

    • On March 17, 2017 at 12:18 pm,
      Marty says:

      +1

    • On March 17, 2017 at 1:14 pm,
      Bob UK says:

      Merkel has screwed Germany. It is going to cost the Germans, and of course Euro, tens of billions extra per year to house, feed and ‘manage’ an immigrant community that will probably only be a drain economically.

      • On March 17, 2017 at 2:26 pm,
        Tad says:

        Yes. “Manage” is a good word Bob. “Monitor” is another…

  7. On March 17, 2017 at 1:24 pm,
    Excelsior says:

    Sprott Money News Ask The Expert March 2017 – Jim Rogers
    Mar 17, 2017

    Legendary investor Jim Rogers joins us this month to discuss Fed policy, the dollar and gold.

    https://www.youtube.com/watch?v=3TNmEY8mfJM

  8. On March 17, 2017 at 1:34 pm,
    Paul L says:

    Don’t know why investors went crazy the other day with gdxj up so much with the smart money taking profits. Gold will be lucky to get into the low 1300’s this September and 1400 next year unless gold does not hold 1100.

    • On March 17, 2017 at 1:45 pm,
      Excelsior says:

      I’d be thrilled for the margins of many companies in my portfolio with Gold in the $1300’s and ecstatic if gold made it up to $1400 next year. Most of the distressed producers and unloved or forgotten development stage companies would be thrilled as well and it would cause their shares to move up substantially.

      Same thing for Silver rising back up above the $20’s by next year – huge leverage would show up in the Jr Silver Producers and developers if that plays out.

      The market is anticipating a move like that on days were there appears to be a turn-around in pricing direction (and the rest was likely short-covering from investors assuming incorrectly that rate hikes = lower metals prices).

  9. On March 17, 2017 at 1:40 pm,
    Excelsior says:

    H.R.1407 — 115th Congress (2017-2018)

    “To establish a strategic materials investment fund, and for other purposes.”

    “STRATEGIC AND CRITICAL MATERIALS.—The term “strategic and critical materials” means—”

    (A) the lanthanide elements, yttrium, and scandium;
    (B) titanium and titanium alloys;
    (C) magnesium;
    (D) antimony;
    (E) tungsten;
    (F) uranium;
    (G) tantalum;
    (H) fluorspar;
    (I) lithium;
    (J) strontium;
    (K) vanadium;
    (L) steel—
    (M) zirconium and zirconium base alloys;
    (N) metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent;
    (O) thorium; and
    (P) any other materials determined to be materials critical to national security by the Strategic Materials Protection Board established under section 187 of title 10, United States Code.

    https://www.congress.gov/bill/115th-congress/house-bill/1407/text

    • On March 17, 2017 at 2:05 pm,
      Excelsior says:

      It makes sense to me that the US and really many other countries should be trying to secure sources of these Specialty Metals and Critical Materials for technology, innovation, renewable power, defense, healthcare, etc…. outside of the stranglehold that China has had on them.

      There were some interesting comments on the Nuclear initiatives as well for both Uranium and for Thorium powered submarines. A very interesting bill indeed.

    • On March 17, 2017 at 2:41 pm,
      SilverbugDave says:

      Hmmmmmmmm…..!

      • On March 17, 2017 at 3:59 pm,
        Excelsior says:

        Well said.

  10. On March 17, 2017 at 1:43 pm,
    Paul L says:

    As soon as the s&p starts a rally it fails as investors rush for the exit. I sold out on the rally too near the end and the future fell soon after.

  11. On March 17, 2017 at 1:50 pm,
    SilverbugDave says:

    HUI:GOLD popped up a little Wednesday but just like Doc says, it’s giving it back and looks trendless. I for one am not head over heels in love with the yellow metal or anything else.

  12. On March 17, 2017 at 2:02 pm,
    Matthew says:

    GDXJ:GLD managed to close above a pitchfork support line and is still up 10% since the March 7th low…

    http://stockcharts.com/h-sc/ui?s=GDXJ%3AGLD&p=D&yr=1&mn=2&dy=0&id=p37183349750&a=513288825

  13. On March 17, 2017 at 2:06 pm,
    Matthew says:

    GDXJ:GDX is still up 8.3% since the low just two days ago and is bullishly above the Ichimoku cloud…

    http://stockcharts.com/h-sc/ui?s=GDXJ%3AGDX&p=D&yr=0&mn=9&dy=0&id=p83457600016

  14. On March 17, 2017 at 2:10 pm,
    Matthew says:

    UPDATE 1-Speculators raise long U.S. dollar bets to highest since late January -CFTC, Reuters

    http://www.reuters.com/article/cftc-forex-idUSL2N1GU1OP

  15. On March 17, 2017 at 2:28 pm,
    Matthew says:

    The 30 year T-Bond has probably bottomed and that is good for gold…

    http://stockcharts.com/h-sc/ui?s=%24USB&p=D&yr=1&mn=0&dy=13&id=p49797545724&a=483075717

  16. On March 17, 2017 at 2:44 pm,
    Matthew says:

    Gold closed above the 20 day MA for the first time in over two weeks and generally looks pretty good. Next significant resistance is the 200 day MA at about 1263…

    http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=3&dy=0&id=p43554598681&a=484925243

  17. On March 17, 2017 at 2:52 pm,
    Matthew says:
  18. On March 17, 2017 at 2:58 pm,
    RICHARD/DOC says:

    The commercials on the COT report for this week is finally starting to turn in a positive direction for the PMs—-they still have a long ways to go. The figures were acquired before the FED announcement so this coming week’s report might not show much of a continuation of this positive development.

  19. On March 17, 2017 at 4:21 pm,
    Markedtofuture says:
  20. On March 17, 2017 at 9:35 pm,
    b says:

    Demand For Physical Gold Is Collapsing

    “During the 2008 financial meltdown..There was a total disconnect between the paper price and physical demand. That’s now happening again, but in reverse. The paper price is rising, but physical demand is falling…This strikes me as total madness… There seems to be no fear in the market… no regard for sense or safety.”