Richard Postma - The Doctor Is In – Mon 12 Feb, 2018

US Markets, GDX Trading Range, and The Importance Of Longer Term Charts

Doc is with me today to recap some of the moves in the markets and metals. We discuss how the longer term charts are most important for long-term investors to watch because the noise in short term charts can have little impact over the trends.

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Featuring:
Richard PostmaCory Fleck
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Comments:
  1. On February 12, 2018 at 2:02 pm,
    Matthew says:

    The dollar broke below its September low a month ago and has now bounced enough to backtest that level.
    The bounce has been wimpy so far but that doesn’t mean we can be sure it’s over.

    http://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=0&mn=11&dy=13&id=p53239290704&a=570974456

  2. On February 12, 2018 at 2:16 pm,
    Matthew says:
  3. On February 12, 2018 at 2:16 pm,
    Excelsior says:

    Silver was up over 2% today, yet most of the Silver miners were up 2-5 times that much offering fantastic leverage to the rising metals prices.

    A great start to week!

    • On February 12, 2018 at 2:32 pm,
      Excelsior says:

      There is no doubt the largest explosive gains can occur in the thinly traded micro cap Explorers in any commodity, and those are fun speculative positions to take a punt on, with the proper smaller position sizing.

      It should be noted though, that when the trend changes from bearish to bullish in the miners it is often the small to mid-tier Producers that catch the bid first, as larger investors or funds are more comfortable with mining companies that are actually operating mines instead of just a marketing campaign. (a novel concept)

      Today’s action reminds me so much of what the 1st half of 2016 was like….. the Silver Producers really can move when they put on their dancing shoes!! (Anti-Utter Trash)

      Symbol โ€“ Silver Producers โ€“ % Chg

      ASM Avino Silver & Gold Mines Ltd. +12.10%
      EXN.TO Excellon Resources Inc. +11.39%
      USAS Americas Silver Corporation +10.83%
      GGD.TO GoGold Resources Inc. +10.45%
      AG First Majestic Silver Corp. +8.95%
      SVM Silvercorp Metals Inc. +8.44%
      TAHO Tahoe Resources Inc. +7.81%
      HL Hecla Mining Company +7.45%
      FSM Fortuna Silver Mines Inc. +7.24%
      CDE Coeur Mining, Inc. +6.82%
      SSRM SSR Mining Inc. +6.49%
      IPT.V IMPACT Silver Corp. +6.06%
      EXK Endeavour Silver Corp. +5.69%
      GPL Great Panther Silver Limited +4.39%
      PAAS Pan American Silver Corp. +4.15%
      BHS.V Bayhorse Silver Inc. +2.50%
      HOC.L Hochschild Mining PLC +2.23%
      FRES.L Fresnillo PLC +2.22%

      • On February 12, 2018 at 3:04 pm,
        Excelsior says:

        The reason I’m a fan of building a personalized ETF over just investing in pre-packaged ETFs is that most of these funds have weightings & allocations that make no sense with the market they are supposed to capture.

        We’ve beat GDXJ nonsensical lack of “Junior” lineup to death, and have comments on how URA the Uranium ETF is waaaay to heavily weighted in the dying dinosaur Cameco, and cult like following of Nexgen, at the exclusion of many other solid Uranium companies.

        In looking at the performance of the Silver “Juniors” ETF (SILJ) today at over 4% it is easy to see why it didn’t perform as well as most of Juniors….. It hardly has any meaningful allocation to them.

        Here are the Top 10 Holdings in SILJ:

        Coeur Mining Inc 12.87% (not a Jr)

        Pan American Silver Corp 12.43% (not a Jr)

        Hecla Mining Co 11.70% (not a Jr)

        Hochschild Mining PLC 11.31% (not a Jr)

        Yamana Gold Inc 5.49% (what the hell is a Gold Major doing in here?)

        Hudbay Minerals Inc 4.76% (what the hell is a Zinc Copper Major doing in here)

        MAG Silver Corp 3.92% (the only Jr and it is a developer)

        Silvercorp Metals Inc 3.64% (mid tier Silver, but it should have a much higher weighting)

        First Majestic Silver Corp 3.60% (not a Jr)

        Tahoe Resources Inc 3.56% (not a Jr)

        ______________________________________________________________________

        What a complete disaster of an ETF if investors really want exposure to Silver Jr Miners. I get that they want a few more stable companies as an anchor, so they should put a much higher weighting in Silvercorp & Americas Silver (who was not even in the top 10 btw) as they are both THE LOWEST COST PRODUCERS in the sector.

        If they want one more larger silver then I could see leaving First Majestic due to their purity level in Silver (compared to Hecla, or Pan American or SSR or Tahoe).

        Why don’t they have a much bigger weighting in ACTUAL Silver Jrs like Avino, Excellon, Impact, Santacruz, Bayhorse, Great Panther, Alexco, Aurcana, etc… ?

        *** I realize this may be due to the snafu that GDXJ got into by getting close to owning more than 20% of the smaller companies, but then they have no right to call this a Jr fund. (and there is no excuse for Yamana and Hudbay being in a Silver Jr fund). Whoever does the allocation in these should be fired.

        If investors really want a Jr Silver ETF then they’ll have to build their own…. As it should be.

        • On February 12, 2018 at 5:31 pm,
          Cory says:

          That’s a great point Ex! If you truly want to have a diversified portfolio in a certain metals sector you have to do it yourself.

          I bet if you put that list of companies in front of anyone they would not even come close to guessing it is supposed to be a silver junior fund.

          • On February 12, 2018 at 9:06 pm,
            Excelsior says:

            Thanks Cory. Yes most of the savvy investors I know have built their own list of companies in the weighting and allocations they feel animated by in their commodity of choice. It takes more work and DD, but it can truly be rewarding. Cheers!

        • On February 12, 2018 at 7:25 pm,
          Matthew says:

          Be a contrarian, Ex. I for one don’t want the ETFs and other funds to be heavily allocated to the micro and nano caps until MUCH later in the bull market (when all the good ones are no longer micro or nano caps ๐Ÿ˜‰ ) This is one of the many things I like about Impact Silver, it is not over-owned by a long shot. The herd owns the likes of Great Panther and Excellon, not to mention First Majestic.
          As ETFs go, I think SILJ is still a great one aside from its relative lack of liquidity. Considering its large holdings and diversification, it performs extremely well. It’s also “marginable” so we can make it act even more like a good junior.

          • On February 12, 2018 at 8:07 pm,
            bonzo barzini says:

            I’ve never owned an etf. I have my own personal mining fund, the Porcumpansen Bushy
            Bubble Trust.

          • On February 12, 2018 at 8:40 pm,
            Matthew says:

            I don’t own them most of the time either but they are nice to trade actively. They’re liquid and essentially immune to “company-specific” bad news.

            Btw, I don’t like the sound of that mining fund of yours. ๐Ÿ˜ฎ

          • On February 12, 2018 at 8:45 pm,
            Matthew says:

            IPT looks very good versus SILJ right now and IPT:SILJ closed the day at a new ytd high:

            http://stockcharts.com/h-sc/ui?s=IPT.V%3ASILJ&p=D&yr=1&mn=2&dy=9&id=p52897251325&a=571802060

          • On February 12, 2018 at 9:12 pm,
            Excelsior says:

            Matthew good point about not wanting the more widely followed funds to be overly invested in the micro caps until later in the cycle when they’ve appreciated more. ๐Ÿ™‚

            It just seems odd for SILJ to claim to be a “Junior” Silver mining fund when it has mostly large Majors & Mid-tiers, and a large allocation to a Gold Major and Zinc/Copper Major.

            They could at least pick some of the smaller mid-tiers and pretend they are trying to follow the Jr miners. Normally Jr Silver companies will outperform the Gold miners, but lately many days SILJ has matched GDXJ and now I see why – it isn’t going to get that leverage with those large juggernauts in the mix.

            Yes, for now we can quietly acquire the smaller companies that will have upside torque to rising prices when the sector really gets hot over the next year or two.

            Ever Upward.

          • On February 12, 2018 at 9:15 pm,
            Excelsior says:

            “I have my own personal mining fund, the Porcumpansen Bushy Bubble Trust.”
            — Bonzo Barzini

            How can I get in on some shares in your Bubble Trust early, before we get too late in this cycle when it goes Bubble Bust? ๐Ÿ™‚

          • On February 12, 2018 at 9:37 pm,
            Matthew says:

            Yes, it is funny that such an ETF hardly holds what its name implies but that is probably due to the fact that most real juniors become too risky (at least at face value) by the time the end of a long bear arrives. Most, including IPT, just don’t resemble a good investment until a bull market gets going and projects become much more profitable.

            For many reasons, I believe that IPT and many others will eventually make themselves hard for the big money to ignore. You’ll want to be an owner before that big money buys.

          • On February 13, 2018 at 5:05 am,
            Excelsior says:

            In fairness SILJ does have exposure to some other Silver Mid-tiers like Endeavour Silver and Fortuna and Great Panther, along with a few Jrs like Excellon, Silvercrest, etc… but only in 1% alllocations. Pretty lame for a Jr fund, but when they have beefier allocations in those it will be later in the cycle.

            Point taken.

  4. On February 12, 2018 at 3:10 pm,
    Excelsior says:

    Resilience. Initiative. Enterprise. โ€“ $ASM Avino Silver & Gold Mines.

    Cambridge House โ€“ Feb 8, 2018 #VIDEO

    https://www.youtube.com/watch?v=1NL3YCo81ig

  5. On February 12, 2018 at 4:56 pm,
    GH says:

    All my precious metals chart look great right now, which is a nice relief. I took it in the shorts over the past couple of weeks, b/c I was too bullish. It looked to me like we started a new intermediate cycle in December, so I didn’t expect such an intense pullback, and held through it. But the charts look unusually uniformly bullish now, so maybe I was right…

    Gold miners look like they’ve put in a significant double bottom vs the S&P500_

    http://schrts.co/jHkYdk

  6. On February 12, 2018 at 5:00 pm,
    RICHARD/DOC says:

    GH, as mentioned in the interview, I would like to see a short term rally for GDX and GDXJ in view of how early we’re in this intermediate rally. If that happens, I’ll breathe a lot of relief going into the spring/summer months.

    • On February 12, 2018 at 10:01 pm,
      GH says:

      Likewise!

  7. On February 12, 2018 at 5:01 pm,
    RICHARD/DOC says:

    rally= cycle.

  8. On February 13, 2018 at 4:38 am,
    Wolfster says:
    • On February 13, 2018 at 4:59 am,
      Excelsior says:

      I don’t have a huge interest in Tin, but I hold Tinka Resources which has a nice Tin resource that lays underneath their Zinc resource in a big flat sheet.

      _________________________________________________________________________

      “The Tin Zone Inferred Mineral Resources are estimated to total 10.5 million tonnes grading 0.70% Tin equivalent (SnEq). The Tin Zone resources occur in separate lenses from the Zinc Zone Mineral Resources, and do not overlap. The Tin Zone Mineral Resources are hosted as disseminated cassiterite and chalcopyrite in massive to semi-massive pyrrhotite lenses at the contact between the Pucarรก Group and underlying phyllite of the Devonian Excelsior Group. Parts of the Tin Zone mineralization can occur as quartz sulphide stockwork veinlets hosted by the phyllite.”

      https://www.tinkaresources.com/projects/ayawilca

      • On February 13, 2018 at 5:01 am,
        Excelsior says:

        The only other company I’ve held that was serious about Tin was Metals X:

        > Australia’s Largest Tin Producer

        “Metals X is a globally significant tin producer through its 50% ownership of the Bluestone Mines Tasmania Joint Venture. The key assets of the Joint Venture are the world class Renison Tin Mine, a 700,000 tonne per annum tin concentrator plant and the Renison Expansion Project (Rentails).”

        https://www.metalsx.com.au/tin/

        • On February 13, 2018 at 5:02 am,
          Excelsior says:

          If there is another Tin resource though that bares imminent attention, please don’t keep it a secret ๐Ÿ™‚

          • On February 13, 2018 at 5:14 am,
            Wolfster says:

            You got the only one I know covered with Tinka ..๐Ÿ‘

  9. On February 13, 2018 at 6:08 am,
    Excelsior says:

    (VTT) (VDTAF) Vendetta Reports Additional High Grade Drilling Results from the Recent Bridge Zone Discovery at the Pegmont Lead-Zinc Project

    @newsfile on February 13, 2018

    https://ceo.ca/@newsfile/vendetta-reports-additional-high-grade-drilling-results