General Market Commentary – Mon 20 Aug, 2018

Doc Copper down 20%, sending a macro message?

Copper is a sector we have been talking a lot about over the past 2 months as the price has dramatically pulled back. More importantly is what it could be telling us about the future of the US and global economy. Our friend Chris Kimble, from Kimble Charting Solutions outlines a key chart level to watch over the next couple weeks.

CLICK ON CHART TO ENLARGE

Doc Copper has had a rough go of it over the past 7-years and especially of late.

Since the highs back in 2011, Doc Copper has created a series of lower highs and lower lows.

Since the lows in 2015, it has experienced a strong rally, creating a series of higher lows, as interest rates and several commodities did the same.

In June Doc Copper may have created a double top at (1), as it was testing last years highs. Since hitting 2017 highs at (1), Doc Copper has declined nearly 20% in the past 10-weeks.

The decline now has it testing potential dual support at (2).

What Doc Copper does at (2) could send an important macro message to commodities, bonds and stocks around the world! Keep a close eye on what Doc Copper does the next few weeks at (2), as it could be very important!

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Comments:
  1. On August 20, 2018 at 8:15 pm,
    Excelsior says:

    August 20, 2018 – (SBB) (SGSVF)

    SABINA GOLD & SILVER DRILLS NEW HIGH-GRADE DISCOVERY AT BACK RIVER GOLD PROJECT AND INCREASES SUMMER DRILL PROGRAM TO 12,000M

    >> Drill hole 18GSE545 returns 11.58 g/t over 39.50 meters confirming significant new discovery at the Nuvuyak Target

    > Drill Intercept located approximately 1 kilometer to the west of the Goose Main Deposit

    http://www.sabinagoldsilver.com/news/sabina-gold-and-silver-drills-new-high-grade-discovery-at-back-river-gold-project-and-increases-summer-drill-program-to-12-000m

    • On August 20, 2018 at 8:41 pm,
      Excelsior says:

      TD’s Earle Bullish on $SBB’s Nuvuyak Discovery with $3 12-month price target:

      “The company trades at 0.39x NAV5%, which is a discount to its peers. We view the completion of financing as a key catalyst for the company to begin re-rating to an eventual producer multiple. A post-financing development comparable would be Lundin Gold, which trades at 0.67x NAV5%. However, if the company demonstrates the Nuvuyak discovery has significant size (and production) potential, it could re-ignite takeover speculation.​”

  2. On August 20, 2018 at 8:18 pm,
    Excelsior says:

    Orefinders Closes McGarry Mine & Larder-Lake Project Acquisition

    August 20, 2018 – (ORX) (ORFDF)

    “We were able to acquire the McGarry Mine & Larder-Lake projects that were previously tied up in litigation and environmental issues and we have since come to an agreement with the Province which effectively eliminates the issues impeding development of the region. With this acquisition, Orefinders has acquired a very high-grade resource which has substantial exploration upside. We’ve also acquired the data from over 100,000 metres of drilling along with substantial geophysics. In the near term, we will be releasing our new interpretations, geological model and exploration plan for this asset and others. This is the type of acquisition that falls directly inline with our philosophy of finding new deposits on old mines,” said Stephen Stewart, Orefinders’ Chief Executive Officer.

    http://www.orefinders.ca/august-20-2018/

  3. On August 20, 2018 at 8:27 pm,
    Excelsior says:

    Is The Metals Rout Signal or Noise? The Zinc Perspective

    Andy Home – August 16, 2018 – Reuters

    “The bloodbath is part and parcel of the turmoil playing out across the financial market spectrum.”

    “But industrial metals find themselves at the epicenter of investors’ fears about global, particularly Chinese, growth and escalating trade tensions. A rising dollar and a falling yuan simply reinforce the macro negativity.”

    “If Doctor Copper and his metallic friends are to be believed, global manufacturing is heading for a cliff-edge.”

    “But should we believe them?”

    “Those analysts that track the complex are not convinced.”

    “There were no metals-specific data or news that could explain the price slump,” according to Commerzbank’s daily commentary.

    “We regard the price slide as exaggerated, absurd and unjustified.”

    “Is the price rout signal, or noise?”

    “Although copper inevitably grabs the headlines at times such as these, a more interesting perspective on the question is offered by zinc.”

    https://uk.reuters.com/article/us-metals-zinc-ahome/commentary-is-the-metals-rout-signal-or-noise-the-zinc-perspective-idUKKBN1L11ID

    • On August 21, 2018 at 5:55 am,
      Charles says:

      Ex – What do you think of USAS here? Does it double bottom here at the November 2016 low, or do we get a bounce and then test the early 2016 low? What is interesting is the stock is at the 2013 low and the 2009 low. Slo Stochs is way oversold on the Weekly. Weekly RSI is not as oversold as in 2009 low or the 2016 low. Positive divergence perhaps? Might add a bit more here given the expected fundamental improvement in cash flow expected in the second half. Thoughts?

      • On August 21, 2018 at 6:31 pm,
        Excelsior says:

        As is normal for this stock the last 3-4 years, people are underestimating their turn turnaround strategy, and reacted harsh when they didn’t generate free cash flow in the 2nd quarter, but they aren’t considering how the 3rd & 4th quarter will show that changing.

        They just got San Rafael into production at the end of 2017 and were ramping up to steady-state full commercial production, and their costs have been dropping as expected. The issue arises when analysts just look at the current balance sheet and assume that will just continue and thus they extrapolate it forward (which is a colossal mistake).

        The other issue is that Silver, Lead, Zinc all pulled back in the 2nd quarter and the first part of the 3rd quarter, which has punished the entire sector, so it isn’t like USAS pulled back in isolation. Most of the Silver and Zinc producers, developers, and explorers pulled back over the last few months (with a few notable exceptions) .

        I’m very bullish on USAS over the next 12-18 months, and have been adding into this weakness. It is not nearly as risky as it’s price action would suggest, and they’ll be plugging away for years to come, when many miners go the way of the dodo bird.

        • On August 21, 2018 at 8:05 pm,
          Matthew says:

          It looks like an important low is in the works right now and I wouldn’t be surprised if last week’s 2.08 low holds.
          http://schrts.co/cb3AiU

          • On August 21, 2018 at 10:09 pm,
            Excelsior says:

            Matthew – Thanks for the chart and support figures off that trend-line.

            Ever Upward!

          • On August 21, 2018 at 10:11 pm,
            Excelsior says:

            Those trend-ending volume spikes are also interesting.

          • On August 22, 2018 at 5:33 am,
            Charles says:

            Thanks guys. Seems like a good place to add a bit more. Matthew, could you also give me your updated chart analysis on TRCH and NSU? Thanks as always.

          • On August 22, 2018 at 7:02 am,
            Matthew says:

            TRCH looks like it will be going lower but possibly just 5% or so.
            http://schrts.co/bQb4Sk

          • On August 22, 2018 at 7:05 am,
            Matthew says:
          • On August 22, 2018 at 7:11 am,
            Matthew says:

            NSU can go higher but the odds that it will go much higher don’t seem favorable. I would be in sell mode if I owned it.
            http://schrts.co/9zfMCc

          • On August 22, 2018 at 7:12 am,
            Matthew says:
          • On August 22, 2018 at 7:44 am,
            Charles says:

            Thanks Matthew. I was sort of thinking TRCH wanted to undercut its recent low given that it made a lower high when it spiked up recently. I still plan on holding through. On NSU, I think I will sell and raise some more cash and see if there is a better opportunity later to get back in.

  4. On August 21, 2018 at 12:21 am,
    Matthew says: