Is Everyone Too Bearish On The PMs
Doc kicks off today with a call we recorded late in the day yesterday. We discuss the overall pessimism for the precious metals sector. When we hear so many people shunning any sector it deserves more attention. We also look at the continued weak dollar and how that could support metals in 2018.
Click download link to listen on this device: Download Show
Wow…..is this essay from your blog site???😁😉
Sorry, I got a bit carried away…. (haha!)
When there is only visibility to see 4 lines at a time in the chat window, it is hard to gauge how it will look after hitting submit.
😂👍🤔
Great post, EX
I am with you … still have about 10% to spend late-December or early-January.
Not sure if we have bottomed for the tax-loss selling; the long-term charts are the ones to look at right now. However, selecting the time to re-enter or add to your favorite companies will differ. For example, I think the zinc (with silver) stocks have the lows behind us ( FWZ & CEM), due to low inventories.
Not so sure the gold stocks have bottomed yet; I am not looking forward to another knife fight at $US1200-1220.
Silver stocks probably, just due to the very SGR relative to historic highs (i.e, around 80-ish). And the psychological $16 silver spot seems to be holding.
A couple mainstream values, right now, are MUX and KLDX
Hey Brian,
Good to hear from ya man. Yes, it is possible there could be more pain in the metals or miners in the short term, but we are near and intermediate bottom. I layer in most years between Thanksgiving and Christmas as a general target and find it is a good time to reshuffle the deck.
As a result, there was a nice pop in a many miners coming out of the gate on the Fed Hike announcement. I trimmed some on Friday morning to move a bit back to cash for any further wonkiness.
Yes, I believe Silver stocks will rebound sooner and to a greater percentage move so the portfolio is weighted accordingly.
As for MUX and KLDX I still like them both and had KLDX earlier in the year, but sold it and currently have MUX. I got miffed that they bought the Black Fox Mine for pennies on the dollar from Primero, and decided I like how Rob M. runs the company, and I’ve noticed they have nice leverage on rising or falling prices. I also believe MUX will surprise investors to the upside on their production results next year.
The move that I had expected to begin much earlier this fall is finally here. It might not really get moving for another two weeks or so but it is here and won’t be just a bounce. The technical picture following a long bear market doesn’t get fixed overnight and this one is shaping up very well…
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=3&mn=6&dy=9&id=p47217209745&a=563285689
For anyone who finds the above chart to be scary…
Matthew – NIce use of Mr T !! (classic)
Matthew… what about a yearly close above $1307.00 and the low is in or a yearly close below with the low in Q1 of 2018?
I don’t agree with that but would like to know who said it. Was it Armstrong?
Matthew – I do like the series of higher lows for the longer term picture.
As always, thanks for the charts to keep things in perspective.
You must have had a fairly large cash position after the last rally, it’s extremely hard to hit the lows and sell at the high and hold cash until the market comes back down. I prefer to trade in and out of stocks as I see opportunity and get bored with sitting on the sidelines. I remember Jim Rogers saying something to the effect that 90% of the time it is best to just sit it out and wait, that again is very hard to do because of the patience it requires. DT
It wasn’t a huge cash stake, as I got about 85% positioned in July & Aug, and just added about 15% to my portfolio right before Thanksgiving and through the beginning of this week. I’ve already trimmed a few names back earlier this morning to lower my cost basis far below current prices in many that I hold, and to move it back over to cash for next week. If there are any reversal days in the miners on the balance of December, then I’ll be reloading. I plan to enter 2018 fully deployed, but want to see how the year kicks off in 2018. If it looks like a rally is brewing then I’ll ride it up, or I may divest some partial positions in 2018 if the move is muted.
Personally, I still believe we are in the bull market that started when the metals bottomed in Dec 2015 and the miners in Jan of 2106. I’ve seen no new lows in the metals to make me doubt this thesis, so in 2018 we should make higher highs. Granted it may take until the 2nd half of the year, but there will be tradable rallies, and in a bull market surprises are to the Upside …… 😉
Also, I’ve been busier than a one-legged man in a butt-kicking contest because Uranium miners have been so peppy. In addition, there are a few base metals and battery metals stories that have continued to climb higher. Fun times!
Power button for floating nuclear plant will be pushed in Murmansk next autumn
Rosenergoatom brings a new era for electricity production to the Russian Arctic.
By Thomas Nilsen – December 15, 2017
Japan Nuclear Update
Japan’s Ohi 3, 4 Clear to Restart
Nov. 30, 2017
“The governor of Fukui prefecture in southwest Japan on Nov. 27 approved the restart of Kansai Electric Power Co.’s Ohi 3 and 4 reactors. The decision clears the final regulatory hurdle for the restart of both reactors early next year. Both Ohi reactors are 1,127 megawatt pressurized water reactors that began commercial operation in 1991 and 1993.”
“Ohi 3 and 4 were the first reactors to resume operation following the Fukushima Daiichi accident, but were both taken offline in September 2013 for scheduled refueling and maintenance. However, their restart was delayed in May 2014 by the Fukui district court following a lawsuit by an antinuclear group. Kansai Electric’s appeal of the decision was overturned by a higher court in March 2017, paving the way for their restart.”
“All Japan’s 48 reactors were shut between 2011 and 2012 after the March 2011 Fukushima Daiichi accident. Five reactors have since resumed commercial operation after meeting revised regulatory standards—Takahama 3 and 4, Ikata 3, and Sendai 1 and 2. Twelve other reactors at six sites now have been approved for restart, the Japan Atomic Industrial Forum said. The next reactors to resume operations likely are to be Tokyo Electric Power Co.’s Kashiwazaki-Kariwa 6 and 7 and Japan Atomic Power Co.’s Tokai 2, followed by Tohoku Electric Power Co.’s Onagawa 2 and Chugoku Electric Power Co.’s Shimane 2, the director general of Japan’s Nuclear Regulation Authority said Nov. 22.”
HeyDT. I have your syndrome too…..I just rotate to biotech and small caps when miners don’t look good. Been I them the past month and now rotating those winners into some gold and base plays …….and of course I’ve been playing pots and blockchain too
Wolfster, Gotcha, we are pretty much on the same page. DT
Here’s a bigger view and it is very bullish…
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=7&mn=2&dy=0&id=p89355857009&a=549806801
Very nice….. broke out of the wedge and came back to test support, now bouncing there.
The longer term chart looks quite constructive for where things will be heading as the baby bull turns into a Toddler Bull.
* (I’m pretty sure we just got done with the Terrible 2’s – lol)
The coming year will be huge for the silver miners as the gold-silver/silver-gold ratio finally reverts to the long term mean.
SLV:GLD daily:
http://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=1&mn=8&dy=0&id=p09737734524&a=562891616
That’s good news Matthew. A huge run in the Silver miners will NOT hurt my feelings 🙂
Ex/Matthew:
I would be interested in your comments about Metallic Minerals up in Keno Hill. I suspect they are just below the radar and I don’t think I’ve read comments before.
Bob M. I’m a fan of Metallic Minerals, and I followed them due to their proximity to Alexco, and actually owned them in the mad rush last year when they used to be called “Monster Minerals”. (what a great but corny name that was)
I’ve commented on them a few times here on the KER, but personally would rather own Alexco (AXU) because they’ll be moving into production in 2018 and have been hitting bonanza grades at their Bermingham and Flame & Moth deposits.
At one point much further down the road, Alexco could acquire them, to consolidate Keno Hill, but they need to start generating revenues and get back into production first.
I do like the CEO Greg Johnnson for where Metallic is in the exploration cycle, because he has a geo background. He’s the right guy for the job at this point, but will need to be replaced when they move into the next phase of development. Greg used to be over (WG) Wellgreen Platinum before they brought Diane Garrett in (after she sold Romarco to OceanaGold) to right the ship over there. He was just drilling to infinity and beyond, but really Wellgreen needed to get a handle on their metallurgy and needed a new approach.
Like you mentioned recently, most Geos just think mining is about spending money drilling, drilling, drilling, without ever needing to worry about a profit. However, while they are drilling, Greg is the guy. Also, Keno Hill is incredibly prospective as Alexco has proved. I like the story over at Metallic and have them on my close watchlist, but I’ve got 16 Silver stocks and am all stocked up at this point. 🙂
Sorry it was Monster Mining not Monster Minerals. All I know is I had a monster return when it surged up last year. 🙂
MONSTER MINING CHANGES NAME TO METALLIC MINERALS CORP.
SEPTEMBER 12, 2016
https://www.metallic-minerals.com/news/2016/monster-mining-changes-name-to-metallic-minerals-corp/
Ah-ha – I see you are already well informed on them. All the best, and I’m in big with Alexco so I’m rooting for the whole Keno Hill district.
_____________________________________________________________________
Metallic Minerals Catches the Silver Ring
Bob Moriarty – Dec 15, 2017
http://www.321gold.com/editorials/moriarty/moriarty121517.html
If one believes, as I do, that silver is in for some significant relief during the months and years ahead, then Metallic Minerals is very appealing. Everything is in order from a fundamental standpoint (property, share structure, management, political jurisdiction, etc) and, as importantly, the weekly chart looks great. So the stock does not face a technical headwind should the rest of the sector take off.
http://stockcharts.com/h-sc/ui?s=MMG.V&p=W&yr=2&mn=2&dy=0&id=p16492393270&a=563414067
Robert
Not that you asked my opinion, but I am enthusiastic about MMG; I believe that owning AXR and MMG is the most solid silver-pairing in the world, right now. If you look at MMGs land WRT geology, historical mines, etc … there may actually be more exploration potential than AXU. The presentation on MMG’s site is one of the best in the entire exploration arena – very easy to understand the potential without being a geologist.
I don’t ever see Alexco buying Metallic … but I was wondering what you thought MMG’s end-game might be?
Am I mistaken, or does the SLV:GLD chart say:
“Tax-loss selling is complete for silver miners”?
Brian: Technically, no, but it will seem like it.
Brian:
I think the end game for MMG will be the same as for Alexco, production. My opinion is similar to yours, the silver gold ratio really favors silver for the next few years. There is a lot of silver in the ground still around but we need higher prices to pull it out. Greg got burned badly with Novagold and I think he will want to bite the bullet and go for production.
Metallic Minerals Corp interview with CEO Greg Johnson
Cambridge House – Feb 15, 2017
CEO interview Metallic Minerals Corp. – Creating Value through Discovery
AXINO GmbH – The Resource Community – Mar 12, 2017
Metallic Minerals Corp. (TSX-V: MMG) (OTC: MMNGF)
Stock News Now – Oct 11, 2017 #VIDEO Interview
$AXU $AXR Alexco Resources: Exploring Upside At Bermingham Deposit – Production Decision 2018
> Interview With Chairman & CEO Clynton Nauman
ResourceCapitalAG – Nov 26, 2017 #VIDEO #Silver #Zinc #Lead
>> $AXU $AXR Alexco Resources with CFO Mike Clark
Cambridge House – Nov 27, 2017 – Corporate Presentation #Video #Silver #Developer
That is the singular chart, Matthew
Hi Brian – Watch the March 12th Video Metallic Minerals linked above “Creating Value through Discovery” w/ Axino.
In it Greg mentions their great working relationship with Clynton at Alexco, the synergies between the teams many of whom worked together back at NovaGold and some of Greg’s team used to work for Clynton. He states that the initial plan would be toll-milling their ore at Alexco’s mill. He goes on to say that with so much infrastructure in place, that if they really hit it big then they would consider a stand alone mine.
This would still be several years from now, and if Alexco is the one toll milling their ore down the road, while they are knocking it out of the park when they go in to production in late 2018 and into 2019, then at that point, I would NOT rule out a friendly merger.
Having said that, it wouldn’t surprise me to see a larger Major or Mid Tier take a controlling interest in Metallic or take them over to build a stand alone operation either, if they can prove out their thesis. (and I’m pretty sure they will. Keno Hill rocks)
Cheers!
Bob M & Brian – Here is a cool Map of Keno Hill showing both Metallic and Alexco land:
https://www.juniorminingnetwork.com/images/news/September_2017/Metallic_Minerals_9-18-2017_1.jpg
Here’s another good looking Map of Metallic Minerals drill targets at Keno Summit:
I wish Greg Hunter would mention TAX EVASION.
Most of the power structure, including Hillary, Obama, Bush 1&2, etc create Tax-avoiding foundations and use those vehicles to provide tax-free travel and living expenses and in Hillary’s case, other benefits……all tax-evaded.
CFS:
Bush 2 was even more cute than that. When he sold his piece in the Baseball club he listed it as a long term capital gain. Alas owning sports clubs has their own tax deals and it was legally ordinary income. But who is counting?
A lot of these stocks have been washed out (AGAIN) and the next 2-3 weeks should go quiet with a downward bias. IMO, it’s a great time to add to PM positions.
Agreed Doc. I trimmed back partial positions in some of the winners this morning to move funds back over to cash for exactly that reason. Looking forward to going on the hunt for bargains the balance of the month.
One of the stocks I got in good with in late Nov and early Dec was Silvercrest because they’ve been hitting some stellar drill results lately. I trimmed this one back today since they’ve moved up the last few weeks and really leaped up the few days, but wondered where you think it may pull back to if it corrects?
Would you expect it to go back and fill these gaps?
Silvercrest Mines (SIL.V)
http://stockcharts.com/h-sc/ui?s=SIL.V&p=D&yr=0&mn=6&dy=0&id=p33629785354
Here’s another chart of one that I trimmed back a partial position in – Mexus (MXSG).
I still have a nice position but it was such a pop so quick, that I decided to take a few chips of the table. Sometimes these smaller Jrs can just keep surging though.
Do you have a good price target for MXSG for adding back a tranche?
http://stockcharts.com/h-sc/ui?s=MXSG&p=D&yr=0&mn=6&dy=0&id=p62791953153
Or do you think it could just keep running now that it broke out above its 200 day EMA?
The move up was on huge volume (because they are finally producing gold now that the 2nd Merrill Crowe processing plant is on site), and look at the MACD on (MXSG)
http://stockcharts.com/h-sc/ui?s=MXSG&p=D&yr=0&mn=6&dy=0&id=p62791953153
It appears it could run a little further and I do feel it will pull back again. I was ready to pull the trigger on this one a week ago and like an i…. I waited. I won’t wait when it pulls back in the near future.
YUP
Meanwhile news from the swamp:
CFS – Do you still follow Mandalay Resources?
They had one of their 3 mines flood earlier this year and took quite a beating, but mostly because they don’t do much promotion or have much visibility.
I still see them as way undervalued and like that they pay a dividend. I’d been off on other adventures earlier this year but I’ve been starting to add to a growing position down here at these low share price levels. They’re getting ready to bring on their 4th mine and they are solid operators.
I just didn’t know if you had any insights or thoughts or if you still follow them.
Mandalay Resources (MND) (MNDJF) Corporate Presentation – Nov 2017:
I consider Management fairly incompetent, so I stopped following.
When I stopped hitting my head into the wall it was quite a relief.
I still like their properties, but….
I see a major hedge Fund with $9 billion in assets has been buying Mandalay recently.
Also Gran Tierra Energy, and Teck Resources. Interesting.
Yes, I believe they were thrown out with the bathwater, but a new group of larger investors is getting ready to get predatory. I’ve started buying recently as well, and feel that they got oversold on the mine flood story. They were able to rule it as force majeure and recoup the funds, but the market during dull times is quite unforgiving.
As you mentioned, I like their mines and other properties and they’ve been somewhat respectable operators, but I never hear anyone talking about them.
It is like Sierra Metals – They were unknown and dormant for a long time, and then out of nowhere last year, BAM! suddenly investors realized what assets they were sitting on.
I’m wondering if some company like Teck just won’t scoop them up on the cheap?
I think Teck is way undervalued.
Even after Teck’s run up over the last 2 years, it still only has a P/E of about 7.
They are not raising dividend though, so maybe they holding cash for a reason.
I also believe that Teck has Canada Zinc Metals (CZX) (CZXMF) in their sites:
Here is a Map showing the properties that $CZX Canada Zinc Metals $TECK Teck and #KoreaZinc have adjacent to each other, and explains their interest in partnering together: (it looks like a takeover waiting to happen to me).
http://cdn.ceo.ca/1ce1i9i-Kechika%20Regional%20Project%20Map.pdf
Quick update of how the East values the PMs versus the West:
(BBB) (BXTMF) has been perky lately. Must be anticipation of the drilling on their Silver/Cobalt property coming up (and it was way oversold).
>>> BRIXTON METALS CLOSES $1.5M FOR DRILLING ITS #SILVER – #COBALT PROJECT IN ONTARIO
December 7, 2017
$BBB $BXTMF Brixton Metals with Gary Thompson
Cambridge House – Nov 27, 2017 – #CorporatePresentation #Video
#Silver #Gold #Cobalt #Exploration
>>”Making that Major Discovery, That’s What Gets Me Up In The Morning” A Dialogue with Gary Thompson
Cambridge House Published on Dec 11, 2017 $BBB Brixton Metals #VIDEO
Did you say cobalt??? Upwards indeed. 😁
It’s interesting because those 2 mines had some stellar cobalt grades when it was in production, and they’ve done some scout exploration work that leads me to believe it is far better than most of the “cobalt” companies parading around these days:
> Historically the Langis Mine produced 0.36M pounds of cobalt and 10.4Moz silver
> Historically the Hudson Bay Mine produced 0.186M pounds of cobalt and 6.4Moz of silver
> Assays from 4 samples in 2017 returned 10 to 16 percent cobalt and 2 to 18 percent silver as disclosed in Brixton’s News Release dated August 17, 2017
– Past production was focused on high grade silver veins and the high-cobalt low-silver veins that were encountered underground and were not mined in many areas of the Langis mine
– The project has excellent local infrastructure; year round road access, close proximity to power, railway, gas‐pipeline, small scale mills, a refinery and assay lab
– Drilling will focus on testing both high grade cobalt and silver targets
Platinum is moving today
Maybe people are tired of precious metal manipulation for the last thirty two years. When were Americans allowed to buy gold? Only the day after gold futures traded on the COMEX, to allow front-running the gold price by the central banks.
For years after 2000 I have seen gold and silver pounded lower after 2011’s rise. Treated like the proverbial red-headed stepchild. Yet when I go to the local coin store, the price to BUY gold or silver was always an insulting 10-30% higher than the spot price. And if I wanted to SELL, gold or silver was always 5-25% lower than the spot price.
After being treated like the patsies at the poker game, or the marks at the dice game, for years, can you imagine the pent-up rage and frustration of the average investor, seeing what goes on in the bond market, stock market, real estate market, etc? And here comes a new investment opportunity. A new paradigm shift called crypto currencies. A chance, finally, for the average Joe to get in on the ground floor of a new future. Or maybe the first set of stairs before the prices rise out of sight like municipal bonds (sold by the city or county at $100,000.00 each).
Better yet, there’s no ever-tightening governmental regulation on these things called Bitcoin, Ethereum, Litecoin, etc! You don’t need to fill out 50 pages of proof of identity like at a bank or credit union, you don’t have to pay fee after fee for everything from letting your money sit in an account to cutting a check or even going overseas. You can do crypto currencies from your desktop computer or your smartphone. They do have a learning curve, true, but you’re not paying an investment broker $75/month to “manage” your money. And the returns! A bank gives you .001% and acts like they’re sending your daughter off to her dream wedding. Cryptos are giving 200%, 500%, 800% returns in three months. A chance for the average Joe to get in on the ground floor of a new future.
We have teenagers becoming Bitcoin millionaires. In USD, not play money. We have people retiring with Bitcoin wallets at age 55 like they’ve been working at Washington D.C. as caffeine-fed lobbyists for 20 years, not hairdressers or semi-truck drivers. We have the new rich of the Bitcoin Era already buying new houses, paying off debts, and accumulating wealth that they can pass off to their children in the form of secret Bitcoin accounts, once only the purview of families worth more than $20 million.
For the first time since 1913, Americans, as well as people around the world, can experience appreciating currency, instead of central bank-owned fractional reserve depreciating currency. Gresham’s Law, anyone? They can also travel with it without being afraid of being mugged by local, State, or Federal police. Or Customs agents at each and every border. Imagine, the ability to keep your own money!
Meanwhile, gold and silver – aren’t those still under the thumbs of the central banks? Of those who think they rule the world, and can tell the rest of us what to eat, what to wear, what to do for fun, what to work for all of our lives? While they live off of our work that is siphoned off to their coffers? Starve their coffers. Keep your money for yourself. Help build the next paradigm without central bank parasites.
jhpace1 – You raise some interesting points and questions about the direction of PMs and Cryptos and where to speculate versus store wealth. I enjoyed reading your post.
There are definitely many advantages and disadvantages to both investment vehicles, and really one doesn’t have to pick one or the other, and there is no harm in owning both. As for recent speculation, the cryptos have greatly outperformed the PMs over the last few years, but that is no guarantee that will be like the next few.
At least with Gold/Silver there is a precedent of thousands of years of use, and it his held by central banks as money. Cryptos are still finding their footing, and are still priced in Dollar fiat terms. Yes, you can exchange one crypto for another, but as a “store of value” it is more dubious as there is no guarantee that Bitcoin, or Ethereum, or LiteCoin or Ripple will even be around in a few years. There may be some new country or industry run crypto that takes pole position over time, but there is no doubt the speculative frenzy has causes some amazing wealth to be created.
It really is fascinating how the tech-hungry Millennials seem most interested cryptos (and disinterested with the paradigm of old views on money and exchange), while most GenXers and BabyBoomers still gravitate to hard assets. What I’d expect to see play out over 2018 is more of the older audience taking a small portion of their money and putting it in cryptos, and possibly some of the younger millennials taking some profits from their Bitcoin or Ethereum and putting those into the PMs or into tech-oriented blockchain application companies.
I also believe that crypto mining will take on more prevalence moving into the next year or two. We live in interesting times….
To the moon with Crypto Wars — Issue No. 6 (cram-packed with different links)
Your dose of crypto news and analysis from @BTO and @Goldfinger
Crypto mining has always been at the cutting-edge of computing. By its’ very definition, mining algorithms have to be on that razor-thin edge, or else too many people would be making money too easily.
I have a major gaming machine from 2008 mining Litecoin. It might make .01 Litecoin in four months. My 2016 and 2017 desktops do a much better job mining Ethereum together for about .32 ETH in 44 days. Obviously, if I wasn’t already using these computers for something else, the electricity use would not justify keeping these machines running. But I’m also not going out and spending $5k on a cutting-edge AISC rig to mine BTC or ETH for two months before it, too, becomes obsolete due to the ever-more-difficult formula. I wonder about Russia and China saying that each are building multi-million-dollar computing warehouses to mine BTC. That’s not a good use of the taxpayers’ money, in my opinion.
Think of cryptos in the 2000-2006 “first wave” of precious metals, with the pioneers only in it, before Wave II stared in 2008, only to be slapped down by the US govt and interested parties. Gold went from $250/ounce to $1,900/ounce from 2000 to 2011. And that was in a manipulated market that had daily news stories naysaying the precious metals, before the gloves came off in 2011. What happens when unregulated Bitcoin et al attempts to break the fractional reserve paradigm?
A peculiar cryptocurrency named after the Russian president, PutinCoin, was among the best-performing digital assets on Friday.
PutinCoin was up 126 percent on the cryptocurrency exchange YoBit on Friday, trading at $0.04. The currency has a market cap of over $7 million.
“PutinCoin was created to pay tribute to the people and the president of one of the largest and greatest countries in the world: Russia! With PutinCoin a lot of possibilities will be provided for businesses, traders, private persons and social projects as the technology, services and apps are freely usable by everybody on this planet,” says the cryptocurrency’s website.
Good thoughts jhpace, great if its true, this new future.
Lynette Zang has some evidence tho that the banks are satoshi.
We could be being corralled.
The reserve currency is changing, and the banks want us digital.
But not being ruled by banks, aliens or all around bad guys is a great thought.
Hope it works out.
Good news—the commercials on the COT report are finally turning nicely.
Could the equation be this simple:
Tax-loss-selling + COT reversal + Cryptos topping = Buy PM stocks the next 2-3 weeks
Don’t forget topping stocks…
http://stockcharts.com/h-sc/ui?s=DIA&p=D&yr=1&mn=1&dy=22&id=p27900115616&a=540071516
Look at that weekly RSI 😮
http://stockcharts.com/h-sc/ui?s=DIA&p=W&yr=5&mn=6&dy=22&id=p76729503407&a=448653503
Holy Crap! I didn’t know it was that crazy! This TLS may be the best yet. PMs, uranium, cobalt, lithium, whatever… if you drop it on your foot and it hurts.
Well … that is frightening. My biggest fear? The general stock market dives and takes all the miners with it … even if the PMs stand neutral or slightly positive.
It is going to be interesting couple months.
Hopefully I will not have to post the “That escalted
I might share that concern if the miners were currently held by more than a handful of weak hands. They’ve been correcting for well over a year and even concerns about the bear market persist. This is the opposite of the 2008 situation in which the miners were relatively widely held and gold had just made an all-time high (while the dollar made an all-time low). In addition, bonds and the dollar are at a different place cyclically and the rules of the banksters’ game have changed significantly.
No, I think the shock and awe will be to the upside under the current circumstances. And that would figure since it never pays to keep fighting the last war. For example, in August, 2009, I counted 4 dozen experts that were very bearish the stock market. No one who was short at that time ever got a chance to cover without a loss and stocks are now 3 to 4 times higher.
What’s coming will likely be much more like what we saw 15 years ago. The Dow fell roughly 40% while the HUI roughly quadrupled…
http://stockcharts.com/h-sc/ui?s=%24HUI&p=D&st=2000-06-30&en=2002-09-30&id=p04163656137&a=507999498
I’m ready for some shock and awe to the upside.
Me too!
Great discussions on this thread.
Thanks everyone.
There absolutely has been a great deal of pessimism over the last few months from most of the market chatter on almost any forum you check in on (including from most of our commentators – although Jordan recently pivoted to a bit more bullish) since the September highs.
I love it because this kind of extreme bearishness in oversold conditions creates the ideal sentiment washout necessary to mark and intermediate bottom. Let’s not forget some commentators were still calling for waterfall declines in names (that didn’t happen because most of them had already been sold down like crazy). The market ran out of sellers.
In addition, we mentioned a number of times all the money on the sidelines that was waiting to get back in during tax loss season, and that this would underpin miners at year when traders took on new positions. That is what we are seeing as well as short covering in the metals. To clear up much of the nonsense with attributing “everything” to short-sellers – this is BS, because 99% of traders have no way to short the the hundreds of individual Jr miners that are moving up. It’s called a technical oversold bounce, and new money entering the sector.
* I mentioned for 2 months about a dozen times about waiting for the mid-Dec lows during tax loss and around the FOMC meeting, and mentioned to a few different contributors here in Oct & Nov that I’d be positioning my last tranche before the fed-babble rate hike. (and I put my money where my mouth was and have profited nicely because of staking out an oversold market and buying when I don’t remember but a few even considering it). Almost everyone said they were “waiting”….. when 99% are waiting, I’ll take the other side of the trade any day and take action.
Normally after the FOMC meetings there are a few days for the PMs to get their composure, but the time-frame for the PM miners to rally after the hike is speeding up each time there’s been a hike. However, also interesting is that the size and length of the rally is diminishing each time as well.
> In Dec of 2015 the metals bottomed first after the initial rate hike, but it took the miners until Jan 19th, 2016 to get moving and that kicked off a monster rally for 8 months.
> After the next hike in Dec of 2016 the miners moved just a few days afterwards (maybe the 23rd onward) and continued to have a nice rally (again) into the first quarter of 2017 for about 3 months. The mid year hike had a small gold rally that happened quicker after the hike but was a smaller about a month an 1/2.
> Now we’ve got the exact same song and exact same song sheet at the exact same time of year. The markets, (being forward looking) anticipated the drill, and this time the miners rallied the day of the hike and some stocks are already up 20-40% in the last few days.
As mentioned, it ALREADY qualifies as a nice tradable rally for those that positioned into the carnage before the Fed meeting during tax loss selling. Some people are in the markets all year long to squeeze out 10-12 in their mutual fund. Anyone that took the trade could have made that return or 2-3 times that return on the quality mining stocks as they rebounded in just the last 3 days. [beats waiting all year long]
I see most of the miners in the Green (again) this morning, and since there have been 3 days in a row of excellent gains, I may trim a few back anticipating a see-saw next week, with more buying opportunities.
The Uranium stocks have also been rallying from November, just like they did last year, on some of the supply cut news, new reactors, and because it was also drastically oversold again.