Is The Pullback in Metals Stocks Over?

February 7, 2018

Chris Vermeulen, Founder of The Technical Traders joins me today to focus on the precious metals stocks recent sell off. Nearing the lower part of the range they have traded in for all of 2017 he sees a potential opportunity in the short term. We also discuss the big picture with interest rates on the rise, stocks rolling over and volatility finally back in the markets.

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    Feb 07, 2018 07:36 PM

    We seem due for at least a bounce now, with GDX sitting on significant pitchfork support and the 600 day simple moving average:

      Feb 07, 2018 07:24 PM

      Based on the steepness of the fall, I would wager that whenever we do get a bounce, we will likely make a lower low within 2-4 weeks. This will almost certainly bottom with some sort of divergence of the momentum indicators. Given the pain inflicted, lots of people are going to bail on any sort of bounce.

      Silver looks like it is going to be headed into the 15s eventually. Heck, it could happen tomorrow at the rate we are going.

    Feb 07, 2018 07:41 PM

    I like this analyst. Basically thinks we will grind sideways to lower into the middle of the year with a breakout possibly late in the year. Not really what I wanted to hear, but it makes sense. He has been pretty accurate and he is definitely very pragmatic. He’s also 100% bullish. Skip to about the 19 min mark to get his view on gold for this year:

      Feb 07, 2018 07:19 PM

      He doesn’t give much of a reason for his sideways grind “wear ’em out” scenario and I think the “scare ’em out” scenario we’ve just had could accelerate the move to a breakout significantly.

        Feb 07, 2018 07:32 PM

        The manner in which we broke beneath the Ichimoku clouds for the miners and silver is portending a low below the December low. The next month or two is going to be a volatile mess, at best IMO. A bounce could be significant, but I don’t think we will get anywhere near the border of the latest green cloud on the daily chart.

        Every bullish set up that has been devised over the last 19 months in the miners has been dashed every time. If we do bottom soon, we are not going to rocket to new highs like 2016, IMO. It’s going to be a choppy mess. Again, I think we pop up into March and then grind lower into summer.

          Feb 07, 2018 07:36 PM

          A move below the December low would not be nearly as surprising to me as the long sideways grinding action that he expects. Of course, markets are very good at surprising us all regularly.

        Feb 07, 2018 07:37 PM

        I think he bases that mostly on the triangle forming from the long term trend lines. One might expect more consolidation until we get closer to the apex of the triangle.

    Feb 07, 2018 07:46 PM

    Vancouver January 2018, At the Bar #VIDEO

    Mickey Fulp & Brent Cook discuss resource investing ideas…. at the bar.

    Feb 07, 2018 07:12 PM

    GDX weekly Ichimoku cloud indicates that it will have a shot in early March to break above the cloud. At that point, I would expect a sideways grind into the summer before going higher into fall.

    If GDX fails to get penetrate the lower border of the cloud, hopefully we don’t get too far below the 233 week MA and it can grind sideways under the cloud until it can muster some strength to punch through. I would prefer the move higher in March and then sideways grind into the fall though. Recall I said the silver miners should start to rally after march. Between now and then though, price can do lots of crazy things.

    Feb 07, 2018 07:17 PM

    GCC weekly. I would prefer not to see this drop below the upper border of the cloud.

      Feb 08, 2018 08:33 AM

      Goehring & Rozencwajg Associates

      Natural Resource Market Commentary – 2nd Quarter 2017

      “We are at the bottom in global commodity prices. As you can see from Chart 1 (which plots the price of commodities as measured against the US stock market going back 100 years), commodities are as cheap today as they have ever been. Only in the depths of the Great Depression and at the end of the dying Bretton Woods Gold Exchange Standard did commodities reach this level of undervaluation relative to equities. For those investors willing to ignore the noise and extreme negative commentary (regarding surging shale production, OPEC disunity, electric cars, and China’s impending collapse), there is a proverbial fortune to be made if they invest today When commodities are this cheap relative to stocks, the returns accruing to commodity investors have been spectacular. ”

      “As the dollar continues to weaken, we believe western investors will aggressively return to the physical #gold markets. We recommend investors maintain present positions in the gold and silver stocks.” “..we continue to believe precious metals equities remain excellent investments.”

    Feb 07, 2018 07:47 PM

    Like Miky Ds…IM.LOVIN IT!
    Said over and over gold = gamble and any big move may be bs.
    Only stock rallys that just burn out. The “Gold” season has beem pathetic.
    But over on the greatest bull market in history. Ya know the one BM called for years a Bogus ralley, recovery ect. Attempting to scare people away LOL.
    Now.we have the correction I called for and Im betting BIG….Once its over it will contunue!
    A few weeks a month….not sure yet.
    There limited places to put your money on earth but bubble or I stated before the US markets ARE the largest most liquid regulated in the world!!!!! Plus its still king dollar not USED TOILET PAPER….Omg sum are. Dumb!
    Be safe….seriously listening to gold bugs is a health hazard.

    Feb 07, 2018 07:10 PM
      Feb 07, 2018 07:37 PM

      Sure, nothing goes down in a straight line. The question is what happens after the first bounce peters out? Unless we get a massive reversal on Thursday or Friday, there is almost guaranteed to be follow through selling next week or the week after.

        Feb 07, 2018 07:09 PM

        True, but JNUG and JDST are trading vehicles only.
        P.S. Does anyone know if the Kirkland Lake / Novo Resources warrants are trading?

    Feb 07, 2018 07:41 PM

    Terrible sock performance on the Canadian side. Not sure if all the attributes show?

    Feb 08, 2018 08:05 AM

    This sound player is definitely better.