Here’s What We See In Silver, Copper, and Gold Stocks
Today Doc and I field some of your questions on the charts for silver, copper, GDX and GDXJ. We mostly focus on the weekly and monthly charts. The overall takeaway is that the precious metals and base metals are in a good spot but we are not expecting a major move until next year.
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Doc, if you have a chance could you give me your thoughts on TECK please?
Bob, technically, I would say TECK has a good chance to work its’ way down to 16-17 range over the next few weeks.
Thanks Doc – I had a 14ish buy target the last time and missed that bounce when it got to just below 15 and went up 40 odd percent again.
That’s not one I have an interest in but I’d be surprised if it goes below 18.50 unsurprised if 19.50 holds.
Doc,
What is your take on FCX? What are technicals telling you. You have spot on with Silver!
Thanks.
Repost on Palladium…………..As I said before, might be reason Palladium higher than Platinum.
https://www.apmex.com/category/46001/1-oz-palladium-american-eagles
Backlash from advertisers on NFL……….
http://www.zerohedge.com/news/2017-09-28/first-sponsor-pulls-ad-dollars-nfl
Here is some junk news on bitcoin…………they have the fraud mixed up….it is Jamie who is the fraud.
http://www.zerohedge.com/news/2017-09-28/wolf-wall-street-says-jamie-dimon-right-about-bitcoin
GDX still has not touched the 233 or 200 day MAs…
http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=1&dy=0&id=p82209982409&a=547215272
That is encouraging, but GDX is the larger companies, and doesn’t correlate at all with many of the Jr miners as discussed below. I don’t know many investors that personally have all their mining positioned tied up in GDX or GDXJ and as a basket they average out the moves of individual stocks that many investors hold.
Personally, I’d rather look directly at the individual holdings in my portfolio and chart each company on its own.
It’s the same with using a commodity index. We all posted a bit on that earlier in the week and last week, but still those baskets skew what is actually happening in individual commodities due to the huge weighting in certain ones like Oil & Gas.
It is more fruitful to look at each commodity separate rather than the basket, so I’d rather follow Oil, or Copper, or Silver, or Zinc, or Lithium, or Cobalt, or Platinum, on their own merits.
To be clear though, it is a good sign, in general, that the large cap companies traveling as a herd average, have been pretty resilient and trending upward into the seasonally strong fall rally from mid August into September as expected.
Ex, GDX is not going to have a big run without the juniors doing even better so it’s well worth looking at.
It is worth looking at for the larger picture in the PM space, but in 2017 the micro cap and nano cap juniors have not moved in relation to the larger Majors & Mid-tiers and there has been disconnect. The smaller Juniors got punished much harder to the downside during the consolidation over the last year and due to the negative sentiment in the retail sector for the Jrs coming out of the GDXJ rebalance. The larger funds have stuck by the larger names, but have not come in to support the smaller companies at this point in the cycle.
Gary S. feels confident that gold is going to have a failed daily cycle here, and head into an intermediate cycle low. He’s calling for it not to bottom until mid-Oct to beginning of Nov.
Be that as it may, there’s lots of support on the daily GDXJ chart:
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=2&mn=4&dy=0&id=p65621226186&a=539093952
That sounds like Jordan Roy Byrne and many others.
Gary Savage:
https://youtu.be/ERrjbVTaOvI
Jeff Kern’s SKI analysis looks like USERX is about to clinch a significant buy signal.
I’m with Kern on that. The coming action could surprise a lot of people, including many bulls.
GH
Thanks for the link. I try to follow SKI, as it is almost always correct
Maybe I was wrong on this, as to meet Kern’s criteria USERX needs to be above 7.89. I thought it would close above that yesterday, but it only rose a measly 1 cent.
Let’s see how it closes out the week.
Looking for opinions on playing the gold/silver ratio. Exchanging some gold ounce bars for silver rounds at this time. Does this make sense to anyone?
Yes, that makes good sense, especially longer term. However, the ratio could spike to 100 or so if there’s a stock market crash (which I do not think is going to happen this year even if the market tops soon).
If past patterns hold, as seems very likely, and you’ve got a several year time horizon, it should be a winner.
Platinum is also extremely appealing right now relative to gold.
I would have to agree………very appealing…..
Those who sold the miners in the first third of May to avoid the “summer doldrums” have made a mistake.
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=7&dy=22&id=p23105749823&a=545692043
Especially if they sold NSRPF@.50 in May…
I’d hate to be THAT guy!
Novo’s drilling results will overwhelm technical analysis for a long time.
Bonzo Barzini – thank goodness I didn’t sell NSRPF in May at that price, but I still sold it in July on the surge, but watched it keep going up, up, and away on the gold nugget youtube videos news. I don’t think anyone saw a move like that coming, and I was just happy to make some nice gains off the move, but it was bittersweet when you see how far it continued to climb. Still no shame in taking profits when you have them.
Matthew – I disagree that it was a mistake for some traders to sell in May, and it really depends on which miners one has in their portfolio. GDXJ doesn’t track well with most the miners I personally hold, and has shifted over to much larger companies now.
The point of lightening up during the Summer Doldrums isn’t that there is a huge sell off (doldrums are boring sideways trading – not a terrible selldown); but merely to rotate into other sectors present better opportunities during those sluggish months, and then coming back and repositioning in late July – early August for the Fall rally is a very opportune.
Here is a different chart of IPT and investors would have fared MUCH better selling in May:
http://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=0&mn=7&dy=22&id=p55661169685
In fact, investors that lightened up their Silver shares in May and repositioned in mid August as discussed would have fared much better as well:
http://stockcharts.com/h-sc/ui?s=SIL&p=D&yr=0&mn=7&dy=22&id=p36163910029
Same thing with SILJ. Selling in May and then buying in Mid August would have provided protection from the downward consolidation, and provided a more opportune entry point – as mentioned would be the case earlier in the year:
http://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=0&mn=7&dy=22&id=p68318921304
With SCZ I trimmed in May, and bought back in July – August and picked up a slightly lower coast basis and put that money to work in other areas that was more productive. (I’m not losing any sleep over that decision). 🙂
http://stockcharts.com/h-sc/ui?s=SCZ.V&p=D&yr=0&mn=7&dy=22&id=p52331712738
Ex, if you sold SILJ at the beginning of May, as so many do, then you did not get a better deal in August.
If you sold SIL at $13.25 and bought it back at $11.75 I’d call that a better deal.
Ex look at your SILJ chart and then be realistic. Do you really think that one who sold in the first week of May would be quick to step up and for roughly the same price in July or August? You’re kidding yourself if you think the answer is yes. What happens in the real world for the vast majority of investors is the market turns before they expect or desire so they miss it.
In addition, most investors do in fact hold the larger miners that make up those etfs. The dollar volume proves it as does most small investor’s risk tolerance/confidence for the tiny stuff.
Therefore, my first comment was correct and yes, I was speaking generally. Had you simply said there are exceptions, I would have (obviously) agreed.
The facts remain: May was not a good time to sell and your portfolio won’t enter a bull move without the ETFs doing the same — which is why the ETFs are useful.
Btw, I don’t know if you recall, but I held no Jag at all when it plunged because I sold it in the .70s and .80s. As for IPT, I held only 50,000 shares when it began to break down (most was sold above $1.00) and now have well over ten times that number of shares.
Buying in the summer often makes sense but selling in May usually does not.
Calling it is a mistake to sell in May and bringing it up just to poke fun at seasonality trends, is what I took issue with.
I was simply pointing out that yes, seasonal investors (of which there are many) who do sell in May, would be on board with buying back in late July early August for a better price (and if they are doing any substantial volume then a 10-20% is well worth it and was a better place to position.
Clearly it was not for those that wanted to buy back after the Summer Doldrums if you look at the charts Matthew. If you are challenging that idea then you aren’t looking at the prices in May versus July/Aug. They were lower for many companies at the end of the Summer Doldrums.
Personally, I traded that seasonality pattern, and I’m sure I was not alone, nor am I a Lemming as you mentioned. There were better entries in most of the stocks I follow, and there absolutely was in SIL / SILJ for investors or funds that are in the ETFS. Nothing controversial about it, there were just lower prices at the end of Summer like there typically are.
I said May is not usually the time to sell. I did not poke fun at seasonal trends. I poked fun at the way people play them. If you sell right, then you usually would sell before May and then delay buying (or at least buying much) until after May.
If one has not done any selling when they should have, then it becomes much riskier to do so based only on the fact that it is May. Such a player is not the kind that is likely to make such a spec worthwhile.
Investors that trimmed back their JAG in May would have been WAY better off. They were a special case where I decided to reposition in that waterfall decline when the fund liquidated their position, and that has worked out very nicely so far:
http://stockcharts.com/h-sc/ui?s=JAG.TO&p=D&yr=0&mn=7&dy=22&id=p29370637371
Even with many of the ProspectGenerators it was better to have trimmed/sold in May and get repositioned after the Summer Doldrums:
SMD chart:
http://stockcharts.com/h-sc/ui?s=SMD.V&p=D&yr=0&mn=7&dy=22&id=p27434249572
GMX same deal – investors could have trimmed back in May and bought back in July/August and skipped the doldrums.
http://stockcharts.com/h-sc/ui?s=GMX.TO&p=D&yr=0&mn=7&dy=22&id=p71385377614
It’s useless to pick out individual stocks for the purpose of looking at seasonality since you can ALWAYS make a case for selling dozens of stocks at any given time. You have to look at the group as a whole for anything meaningful to come of the analysis.
All I buy and sell are individual stocks, so I look at them one at a time.
The point was that I disagreed with the global statement you made that it was a mistake to sell in May and reposition in July/August. That is exactly what I did, and moved money into other sectors, and came back in after the GDXJ rebalancing nonsense, and then added more in the early August dip and got WAY BETTER ENTRIES as a result. I wouldn’t say that was a Lemming approach, and in fact was using a seasonality mixed with Technical approach to lower my cost basis in a number of stocks I follow.
Again, I don’t usually trade the larger indexes or baskets of stocks like GDX or GDXJ and don’t know many investors that have their money tied up in those. Most of the investors I talk with have their own portfolio of Jrs and for them selling those in May, rotating to base metals and energy, and then positioning backafter the Summer Doldrums would have been far more advantageous.
I agree that the indexes are worth noting, for the general trend in the big boys, but I know that you, like me, focus on the micro caps and nano caps and by default they’ll have much smaller volume levels.
Ex, you left out the fact that both IPT and JAG were crushed by fund selling. So we can’t know how they would have held up.
My etf chart made it obvious that I am referring to the miners in general and, based on that, it is clear that selling was the wrong move.
Yes, they got hit extra hard with the fund liquidating, but they would have followed the trend with other Jrs downwards into the Summer Doldrums. (not on the same trajectory as the big boys in GDX and GDXJ).
The point I was trying to make above was that there were PLENTY of Junior stocks and in particular Silver stocks that sold down from May to July/Aug, so it was NOT wrong to trim in May and buy back in late July/early August. I did it personally and was very lucrative.
I’m not trying to just cherry pick here, and offered about a dozen examples to show the disconnect between the micro caps and GDX/GDXJ .
For the record, I do agree with you that the larger cap stocks held up better than expected, but most of the rise was from late August through September, and that is when the Summer Doldrums end the seasonally stronger time.
I’ve posted about a dozen times on the KER earlier this year that this was exactly what would play out, and it did. People can scoff as Seasonality if they want to but worked for the Q1 run, the sell down before/after PDAC, and it worked to sell before the Summer Doldrums and buy at the tail end…… again.
I don’t know why investors push back so hard on this concept, when they could just go with it and trade the trends and make some cake. It was only shared in the spirit of more KER readers making more money and to help others. I could easily just trade by myself and not say anything and make the wins, but I like the people on this blog and was hoping more would surf the trends.
Here’s a chart of Teranga Gold that I sold and May and actually just picked up again last week. I was getting out of the way of the GDXJ rebalance, and glad that I did.
http://stockcharts.com/h-sc/ui?s=TGZ.TO&p=D&yr=0&mn=7&dy=22&id=p28168599550
Investors that sold KDX in May and repositioned in August would have been better off, and could have put their money to work in other areas during that time.
http://stockcharts.com/h-sc/ui?s=KDX.TO&p=D&yr=0&mn=7&dy=22&id=p32464074201
Investors that trimmed back their Scorpio Gold (SGN) in May would have been spared the fallout, but this one is moving to a different pattern as it hasn’t picked back up in late August and September like many of its peers.
http://stockcharts.com/h-sc/ui?s=SGN.V&p=D&yr=0&mn=7&dy=22&id=p95424221183
Bottom line: For most companies I follow trimming or selling in May and repositioning in late July – mid August provided a chance to rotate into other areas that were more interesting like Copper, Zinc, Lithium miners, and then come back to the space at a better entry point for the rally that seasonally starts in late August through October.
Most of action in the Silver & Gold Jr Miners has been in September as expected.
With very few exceptions in the exploration side, there was very little money to be made holding from May to late July/early August, and in most cases investors could have bought back in lower than they sold for.
There were a few exceptions of course that just kept charging higher.
For example, one of the stocks I didn’t sell in May and added to throughout the Summer was Marlin Gold (MLN) which I’ve posted on here at the KER very regularly.
http://stockcharts.com/h-sc/ui?s=MLN.V&p=D&yr=0&mn=7&dy=22&id=p61484624710
The bottom line for me is that May was hardly the best time to sell just about any miner. For example, January was the last good time for selling Scorpio and and the sector in general.
The early May weakness that we saw was likely due to the lemming approach that most investors use. They hold hands and sell together.
The juniors that you’re picking out don’t have the trading volume to take much selling except when things are looking good. It would have been very foolish for me to wait for May to dump millions of shares. Yet, collectively, that’s exactly what most people do. I prefer to sell when most want to BUY.
I already answered this above, but for me, selling in May and buying back at lower price points in dozens of the micro cap and nano cap Jr miners in late July/ early August was very lucrative and far better than holding through the whole summer with “dead money”. So I wouldn’t agree with the “May was hardly the best time to sell just about any miner” comment. I listed specifics and posted charts to show the rationale for my decision, and they speak for themselves.
As you know, I have zero problem buying/selling any stocks, but not all investors can pull the trigger that easily due to the mental/emotional game…. as a result, I really do agree with your overall thesis that for most investors (that dither and waffle) that they would have been better served just holding through the Summer Doldrums and waiting for the Fall rally. My comments were more geared around the shorter term swing traders, and some of them may not have as substantial of positions as you do in any given company so they still could have liquidated 10K-50K positions in companies without doing to much chart damage.
The US$ dollar has poked its head up above the 50 day moving avg for the first time since early april. I wonder what the significance of this will be in the short to mid-term?
worth repeating………imho
http://news.goldseek.com/GoldSeek/1506005578.php