The Relationship Between US Equities and Precious Metals
The equity markets are continuing to fall today in the face of decent job numbers and this is also pulling down a number of other markets. Doc and I first look at how the VIX was warning everyone by consistently rising from early January. We also look at the precious metals which are falling today. Timing is important at this stage as typically the metals rise through February and fall after PDAC. Is history going to repeat itself this year?
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Lets stay focused on Metal……….no more repeats…….. 🙂
Sorry the above MEMO got cut off.
Here’s another:
https://www.youtube.com/watch?v=I-YtGMAzPFo
Posted Feb 2, 2018 by Martin Armstrong
Nunes Memo
Here is the Nunes memo the FBI and the Democrats did not want to be released. This confirmed that the FBI and Department of Justice abused their surveillance authority to target Trump’s 2016 presidential campaign. This describes a criminal act on the part of the FBI – FRAUD UPON THE COURT.
White House made no redactions to the memo and declassified the document “in full.” The release puts Trump at odds with the FBI Director Christopher Wray and Deputy Attorney General Rod Rosenstein, both who have urged Trump not to release it for fear that it really just makes them look very bad.
The memo lays out that the very top law enforcement officials knowingly used the unverified information to convince a court to give them a warrant to spy on the Trump campaign. This is no different from Watergate that took Nixon down. Here the FBI and DOJ used a court by means of FRAUD to accomplish the very same thing as what took place in Watergate and it explains a lot as to why Comey never took notes on the interview with Hillary.
The FBI expressed “grave concerns” about the memo’s release, suggesting it is inaccurate. That is to be expected. They either told the source of their information to the court or they did not. All they need to do is come forward and prove that that did inform the court the source of the info came from the Hillary campaign.
The FBI has stonewalled Congress’ demands for information for nearly a year. They have had ample time to explain but have failed to do so. They are correct insofar as the release calls into question the integrity of the FBI and DOJ, but that becomes very obvious for months.
It’s no surprise to see the FBI and DOJ issue objections to allowing the American people to see information related to surveillance abuses at these agencies. The corruption in the FBI and DOJ has infected the agencies right to the top and it is highly questionable that simply removing the head of agencies will change anything. The disease has run very deep.
What should happen is very clear. Those who argued before the court should stand for criminal charges. Then they will sing and you will get to the full scope of how bad this infection really has become.
https://www.armstrongeconomics.com/world-news/corruption/nunes-memo-is-out/
CFS…………..you got any new infor on the State Dept releasing some more Hilly emails
AOL, had a story on this today……I posted it earlier.
OOTB, No more info…..sorry.
CFS….Thanks for the follow up…….
this is what I posted, …..read today
https://www.aol.com/article/news/2018/02/02/state-department-releases-batch-of-hillary-clinton-emails/23351348/
Metals going lower…….
kitco..
..silver 16.59….
..Platinum down $17….
Silver just an absolute whipping boy today. Oh well.
ditto on that one………
Wages grow at fastest pace in more than 8 years
https://www.marketwatch.com/story/us-adds-200000-jobs-worker-pay-rises-at-fastest-pace-since-2009-2018-02-02
This is not bad for silver and it is positive that SIL and SILJ are down no more than SLV today.
“This is not bad for silver and it is positive that SIL and SILJ are down no more than SLV today.”
The day’s not over yet. SIL is absolutely poised over the abyss on the weekly chart.
Some support/resistance levels for SLV:
http://stockcharts.com/h-sc/ui?s=SLV&p=W&yr=2&mn=0&dy=0&id=p04364056101&a=575293585
61.8% retrace is 15.46 for SLV. I expect that to get hit soon. Hell, it could happen today.
Very very disappointing day today. Let’s face it, if I am long something and even remotely hopeful, look out below.
From my perspective, today’s action is a relief. The miners could have easily provided 3 to 5 times leverage to silver (that means minus 10% to minus 17%) if the outlook were really as bearish is it might seem.
Big gains always require work and in markets, especially this sector, the work includes not allowing the market to scare you out (think price action) or wear you out (think time).
I suppose. But the mining charts, at least the silver mining charts, look pretty terrible on every single timeframe to me. The weekly charts are a mess.
Silver though, is the worst of all. It could easily breakdown to new bear market lows.
Like I said, it will be years before the 2016 highs are taken out, at least for the silver miners. I expect March to mark some sort of low. God only knows where we will be at that point.
Latest Q anon
some interesting info” A.shifty”… 🙂
No wonder the guy looks nervous all the time…..
kitco list is pretty red lookin.
The metals seem to be chucked when the stocks get sold, same as always.
The metals always get some selling help on jobs report day. You’ll know that I might be wrong about that being the case this time if the sector doesn’t turn up very soon.
Conventional stocks, on the other hand, should continue down for several reasons including rising interest rates and price inflation.
My tiny TYP gained 20% today on good volume. This is not 2008.
good for you. Meanwhile, bellweathers like HL and AG are smashed to bits. More pain coming this month. I believe we will get a major low in March, but that’s a lot of time for major price damage. Recall I said there was no way IPT was going to penetrate the monthly Ichimoku cloud but would instead stay underneath it until March, which is when the lower boarder starts to rise. Lots of pain coming between now and March lows.
Unlike your bellwethers, IPT did just fine today and finished flat (after being up for awhile).
On piddling volume. It’s already below the cloud border. So its anyone’s guess what it does between now and March. My guess would be lower though it could go sideways in theory.
You’re funny. The volume was actually ok and was the highest since Monday. But you miss the obvious here as usual. The big boys and silver got pounded and the “risky” junior did not yet somehow that’s meaningless?
Sure, it could plunge next week but why didn’t it today when it had every reason to?
SLV’s MAs are bearishly aligned. No one is expecting a crash in silver to new bear market lows, but anything is possible here. Frankly there is very little that is even remotely supportive on the SLV charts. There is nothing but air below and the monthly bollinger band is presently bending downwards.
The weekly and monthly indicators tell me that a crash from here is very unlikely.
Cory:
I respectively disagree with your comments about good news being ignored. It’s more visceral than that IMO. I think on a day like today you have people who have ridden the bull in conventionals for months and sometimes years and both greed and fear kick in sometimes. Greed that they want to keep everything they had yesterday and fear that the downside could get away from them quickly. This causes selling when normally, many would simply turn their head and wait for the rebound. It’s always in the back of their brain though, what if there isn’t a rebound? Just sayin’. Good discussion. Thanks.
Great comment SD. You very well might be right about the mentality changing. Maybe people are waking up to the fact that this run has been too easy for too long. I still think that there is too much passive investing but today should have people reconsidering.
Email me me anytime!
The drop in the Dow is starting to get real.
Yep………down —631, should get some attention when Jo 6 pck. gets home and read the news…..Monday will be another down day…..imo….sell, sell , sell
what is that 2.4%….really not that big of a deal….
https://www.youtube.com/watch?v=y-BCDYwZJbs
Stone on Memo
The good news is already more than priced into the market and the selling so far probably has very little to do with fear since dumb money is euphoric and is almost certainly buying the dip.
In short, the selling is completely rational for many reasons.
The Dow has broken its hockey stick support and the weekly RSI(14) has plunged from over 90 to below 70. This is a great development for the gold/silver miners since it will cause even the dumber money (but not the dumbest) to discover where the real opportunities are.
http://stockcharts.com/h-sc/ui?s=%24INDU&p=W&yr=9&mn=0&dy=0&id=p58499428981&a=421704680
Matt,
what a Chart!!!! So now the “back-test” back to 2013::)
Matthew, you are dreaming. My silver stocks got absolutely smashed today and this week. This reeks of 2013 to me.
You’re the dreamer, spanky. This is absolutely nothing like 2013. That’s a fact, btw.
The weekly AXU chart is basically identical.
Wrong, spanky. You can easily compare the MACD and MAs then versus now yet you somehow failed to. On the monthly chart, the differences are even greater. The MACD, STOs, and ADX(14) were all negative; now they’re not. There’s also very obvious difference with respect to the Bollinger bands and the MAs.
The differences are huge and we haven’t even talked about cycles, fundamentals, and the effects of other sectors and where they are at with their own charts, cycles, fundamentals, etc.
Your claim is simply ridiculous.
Weekly:
http://stockcharts.com/h-sc/ui?s=AXU&p=W&yr=5&mn=5&dy=9&id=p29001833095
Doc, how far down do you think gold and silver will go beyond the drop today?
The PM stocks actually look pretty good in the face of a 680 point drop in the DOW. I like that the hit happened today just before the weekend. One would assume the Fed will step in soon if things go south fast. If not, then maybe a real correction will take hold and wash out the over-levered insanity that has become the norm in all U.S markets.
My silver miners are down around 12% in aggregate this week. So glad I’m not in the Dow!!! Couldn’t stand a 2% loss!
funny.
Jr Mining is gambling, as far as I can tell the error of the “bugs” is thinking that it is not.
Course timing is everything. inform yourself and reduce the odds against ya.
I kinda think all the markets are gambling tho, the Russian market is lookin pretty darn good.
With these ridiculous sanctions the U.S. is putting on rich Russians, they are going to remove their cash from the west and put it?,,,,,,maybe the Russian market?
Add that to an ever improving economy, debtless and expanding….hmmmm
We are hearing agriculture is getting ready to move, people have started to want none gmo foods, the Russians intend to be the #1 suppliers of not poisoned foods.
Maybe that would still be gambling, maybe the U.S. gov would see anyone investing in a Russian market as a treasonous dog. Who knows?
You have a very loose definition of gambling. To you, leaving your house must also be gambling.
You’re doing something extremely wrong if you think buying good miners is like going to Vegas.
course its gambling, but we pros call it speculation.
Again, you have a loose definition of gambling. If it were anything like Vegas, I’d have no money left. So for me, it’s definitely not gambling. Risky yes.
u no….people that have a hard time admitting to themselves……..
first step is accepting ……
You must be a terrible investor or “speculator” if your market bets are as blind and stupid as any Vegas bet.
Only an idiot would compare buying a business with betting on where a roulette ball might land.
I agree Matthew – gambling on table games and speculating in an investment in a company where you can hold and utilize both fundamental and technical data to further reduce risk are not the same things at all.
Personally I enjoy gambling in Vegas and have played craps and roulette for decades, but those are games of statistics and yes, if you play long enough you’ll have no money left. They are also binary bets where you either win a set amount or lose the entire bet completely.
That is much different than averaging into a position in a stock and hold for minutes or hold it for years until you ready to sell, and the odds of a stock going to zero are very small in comparison to a bet on roulette or craps were the odds are over 50%.
An investor can always cut bait and run and still recover a portion of their initial position even if it is a losing trade, [try doing that at the roulette table 🙂 ] In addition, an investor can average down in a story they believe will be turning up over a certain time horizon, and then as the stock rises in share price recoup the initial portion of the trade that moved against them and come out with a profit.
The main difference is that an investor of a stock has bought a small sliver of a company which has intrinsic value, and gambling is statistics and chance. Big difference.
AXU dumped into the close. Down 10%. The weekly chart is ready for a crash next week. Looks exactly like 2013 at this point on the weekly chart. Next stop is the 200 WMA at 1.05.
Very very discouraging.
I actually added more AXU as it was pulling back today but that acceleration at the end was more than expected. It was down 10% on the day, but it is highly torqued to Silver action, and silver was down 3% today, so that makes sense 3:1 ratio.
Silver miners (especially the Silver Jrs) are incredibly leveraged so while it was a rough week in a number of names, this is to be expected if the metals sell off like they did on the dollar bounce and general stock markets & crypto markets pull backs. It was a sell everything week, and the Silver miners outperform to both the upside and the downside. Par for the course….
Except they don’t outperform to the upside. We had one 6 month moonshot in 2016 and the silver miners have been in a bear market ever since. They have been losing ground to silver for 18 months. That trend is set to continue and it could get extremely ugly if the metal lets go to new multiyear lows.
Next week or the week after is where it will all become clear. I think the silve miners will bounce hard in March, which is what I have been saying all along.
I think EXK goes back below $2 for a time and I think AXU gets down to .90-1.10 by March.
It was an 8 month moonshot in 2016; but there has also been then rally out of December 2016 into the Q1 Run last year into February, and then the rally out of August into September of 2017 where Silver miners did quite well. Just recently many silver miners were up 30-70% from this move out of mid Dec 2017 to last week. That ain’t too shabby.
If EXK gets back below $2, or if AXU gets down below $1 then I’d be a buyer of both.
I will say that Silver Jrs have performed on par with the Gold miners, and not had their normal performance, and Silver has lagged gold and not made new highs like Gold did, but it will get dragged along when Gold makes it’s move higher.
As the bull accelerates then Silver will outperform Gold, and confirm the momentum is picking up. That environment is were Silver miners will blow away most other sectors. Right now, when the metals and miners are selling off, then silver miners are outperforming to the downside
Yikes!!!!!!!!
+1 Today was a pretty brutal day. Earlier this week it wasn’t as bad as people were carrying on about, but today’s action was pretty bearish overall, in many sectors.
Why don’t you understand that it’s the relative weakness in the miners that was scary earlier this week, because we knew hold was going to correct soon.
Anyway, new multiyear lows for at least the silver miners coming very very soon.
IPT closed the week down a whopping 1.47% while silver dropped 4.2%.
My JAG finished the week unchanged while gold dropped 1.09%.
Way to cherry pick two tiny companies. I know IPT’s volume today makes today’s action meaningless. Plus, its down 90% from its peak already. Maybe the larger cap stocks will catch down now. I’ll tell you this though, that isn’t going to be good for IPT in the long run.
That’s BS spanky whether you understand or not. IPT is usually very good about falling and rising with leverage when it should. I’ve traded it for over ten years and disconnects like what we saw today is not the norm.
I “cherry picked” companies that I own just as you do when you bitch about how sorry they are. EXK anyone?
As for what will or won’t be good for IPT in the long run, I know that you are unlikely to tell me anything noteworthy.
It looks like sub-$10 may be in play. In that case, the metals will be too expensive in terms of spread. SLV will be the way to play it.
SIL’s 200 DMA is about to negatively cross the 600 DMA in the next few weeks. Most of the goldmining indexes are in the same situation. It would take an absolute moonshot starting yesterday to prevent this cross.
Bullish!
Beautiful bearish alignment of MAs for slv:gld ratio. So much for the double bottom. Down she goes.
http://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&b=5&g=0&id=p99826981242&a=575336162&listNum=1
I don’t know if you’ve noticed but there will always be bearishly aligned MAs when a bottomed is reached.
Does today’s candle look like that ratio will be bottoming any time soon? Sure, if it manages to waterfall down and is miles from the 50 DMA, I would consider that a good contrarian signal to go long. But not now.
SIL:SLV much more pain agead, although I expect some sort of bounce/sideways action for a couple of days. Then its bombs away. Wonder if this one will rebound as well as SLV:GLD.
http://stockcharts.com/h-sc/ui?s=SIL%3ASLV&p=D&b=5&g=0&id=p26932703600&a=575337936&listNum=1
$CDNX–I warned just days ago that last month’s candle looked terrible (I was duly criticized for faulty TA) and this early action for February more than bears that out. The $CDNX chart is in big big trouble on every time frame. The MA’s are bullishly aligned on the weekly chart, so it may take some doing, but 700 should be hit soon. Hell it almost dropped a hundred points this week alone.
One of the freakiest 1 week candles I have ever seen (in context).
http://stockcharts.com/h-sc/ui?s=%24CDNX&p=W&yr=5&mn=0&dy=0&id=p92214799791&a=575348023&listNum=1
https://www.youtube.com/watch?v=K5u84ahecu0
Silver Doctors weekly wrap:
https://www.youtube.com/watch?v=K5u84ahecu0
Silver Doctors weekly wrap:
https://www.youtube.com/watch?v=K5u84ahecu0
Thanks Doc
I always like listening…
Full disclosure as I was loaded up with cheap energy stocks. I sold everthing before the disaster in them and gold stocks. When things look wobbly I get out of the way first and ask Qs later. Better to take a small loss let the dust settle and regroup.
Sure glad I SOLD my MJane stock OMG! HMMJ, WEED ect just smashed. Save myself mega bucks. A couple were asking a while ago would I re-buy. NOPE unless a major wash out and consolidation.
Here’s a quote from a great manager and oh boy I AGREE as when fools rush in!::
Marijuana and Bitcoins and Tweets! Oh my!
Certain themes and sectors of the market appear to us like they may be in a mania phase. It seems all a
company needed to in 2017 was announce they were exploring opportunities related to marijuana,
cryptocurrencies or blockchain and their share price would immediately spike higher.
And before anyone sends us hate mail, we are not dismissing the real opportunities and companies that
will emerge related to each of these themes. However, we are wary of the magnitude of the share price
gains and some company market capitalizations that may be years away from being supported by even
the most bullish estimates of industry and company revenues.
There have certainly been opportunities to make money associated with these themes, and we have
dabbled in a small way, utilizing risk-adjusted and hedged strategies. We’ve focused on companies that
have real products and revenues today, steering clear of pre-revenue companies that only have an idea
and a press release. We are not willing to commit any significant capital to these themes at this stage.
In the end, hindsight will maintain its perfect track record and we will eventually find out what’s behind the
Wizard’s curtain.
Any thoughts on this SPX:VIX chart Doc? http://cdn.ceo.ca/1d7b4ke-Screen%20shot%202018-02-03%20at%2011.43.52%20AM.png
I like that chart, Ty, thanks.
BIll, thanks for the interesting comments.
Doc.
Armstrong been bang on with vertical matket theme.
Its all about thr banks and the debt. BM called the usd years ago ” used toilet paper” it just so turns out that its the best toilet paper on the planet.
US markets are THE go to place in a global crisis. Oh and the Dow was going to crash every year. I heard this bs over and over.
Commodities are cheap now but a rally in the green back would going to curb any comodities bull…..
If the usd rises in a big way then poof.. Zillions of dollars in usd debt around the world will have to be repatriated and with interest rates rising then double trouble for the US!!???
I think few understand those relationship.
As I said before we need a sharp correction in the markets then higher till they blow up.
That my best guess. Cheers
https://www.youtube.com/watch?v=LKMIQnS5Pcs
Memo discussion……look back to my Tuesday comments and see how close I got.
It is clear that heads should now role.
I want to see investigations into what Obama and Clinton KNEW, authorized and when.