The bond market is telling us some weakness could be entering the US markets

November 26, 2019

Chris Vermeulen joins me to look at the charts for US markets, bonds, gold, and natural gas. He points out that bonds have rebounded and are showing that some of the smart big money is taking a more defensive position. However gold is lagging the moves in bonds. Also considering where the VIX had dropped to we could finally see a US market correction that could bring some fear back into investors minds.

Click here to visit Chris’s site – The Technical Traders.

    Nov 26, 2019 26:34 AM

    This GDX chart is worth posting again. This low better hold:

    Nov 26, 2019 26:35 AM

    Hey Doc, Matthew, and Excelsior,
    Are you going to tender your Detour Gold to KL? I have owned both for years. Thanks.

      Nov 26, 2019 26:38 AM

      Bonzo, I, sadly, do not own Detour Gold or KL.

        Nov 26, 2019 26:53 AM

        Matthew, I got my KL shares when they took over Crocodile Gold, and now I’ll get a lot more KL. I think KL has much better management than Detour, so I guess I’ll tender to KL and see if they can do as well with Detour as they did with Crocodile. And KL also owns about 20% of Novo which could be quite a kicker if things pan out.

          Nov 26, 2019 26:54 AM

          KL sure has been a sector leader for quite awhile! Best of luck with it.

          Nov 26, 2019 26:39 PM

          Bonzo b. – I was in Crocodile Gold, that were taken over by NewMarket and then they merged into Kirkland Lake. That is when I sold, so I missed the recent rise of KL, but it had become a bit too large for my tastes by then. It has performed incredibly well though.

          I mentioned Detour was a solid takeover target, but I didn’t own it either, because I’m already invested in a number of other takeover targets, but this looks like a good merger for both Detour and Kirkland Lake, and is a nice success stroy for the industry at present.

          There was also acquistion by Evolution Mining of Newmont/Goldcorps Red Lake Mine.

          The M&A space is finally on the move once again. I hope this inspires a few more companies to go hunting for value and get the sector popping once again to kick off 2020.

      Nov 26, 2019 26:16 PM

      BB, I sold my KL when it was about 30. It’s getting hit here pretty well. It’s now on my watch list and I’ll purchase if this is a major move down.

    Nov 26, 2019 26:36 AM

    GDX vs DIA is hanging by a thread. This would be a great time for a bullish engulfing reversal:

    Nov 26, 2019 26:27 PM

    SILJ tested important speed line support in October and has just done so again. The situation looks a lot better now than it did yesterday.

    Nov 26, 2019 26:38 PM
    Nov 26, 2019 26:52 PM

    Looks like yesterday’s breakdown was all about filling the 11/13 gap:

    Nov 26, 2019 26:07 PM

    The XAU Gold and Silver Index has diverged bullishly from the pure gold index GDM (parent of GDX). This divergence, along with the HUI’s performance, makes it clear that the low for the sector as a whole happened almost 6 weeks ago. This is much more in line with my original expectation for a multi-week not multi-month correction. It was also as shallow as I had expected. Today’s action was important and new lows suddenly look much less likely.

      Nov 26, 2019 26:09 PM

      I agree Matthew. Seems like a lot of stocks I watch made a turn. Hopefully it lasts. I bought back the shares in AXU today I sold at the top. I still feel like it could go lower, but the follow through today was to much to resist.

        Nov 26, 2019 26:01 PM

        AXU should have a nice move with them going into production next year.

        Swiss Resource Capital AG

        “Interview with Chairman & CEO Clyntan Nauman on the Bermingham Silver Deposit, which can be in production in Q4 2020. Alexco Resources is exploring below the existing resource with promising results. The company is growing its Environmental business very fast.”

    Nov 26, 2019 26:46 PM

    Matthew – I’d be curious to get your take on (CD) Cantex Mining if you see this and have a moment to look at it. It’s a Zinc/Lead/Silver explorer that had some nice initial discovery results, and the potential for large size, so it shot up 700% earlier this year to over $6+, but got waaaaay ahead of itself, and recently did a round trip all the way back down to roughly where it started from. — Classic Jr Mining action!

    I’ve been nibbling at CD the last 2 weeks, but some postulate that it still may need to pull back further to fill the gap in the $.70 range. (currently at $1.06). I’m not sold on Gaps always needing to get filled, but with tax loss (and there are definitely investors with losses in that one) I wonder if it will pull all the way back down.

    I’d be curious to get your thoughts on it – even just a quick cursory glance. I do believe it is near bottom here, but if it still could fall 30% from current levels, I’m not ready to go all in yet. I’ve got about 40% of my position in place currently, but may wait until mid December to see if there is any further to fall.

    Nov 26, 2019 26:52 PM

    Ex, I think there’s a very good chance you’ve already seen the low but I don’t know a thing about the fundamentals of the company (especially debt/cash position). Assuming it’s financially ok for awhile and that it backs up today’s action tomorrow with more strength, I’d bet that you have a long term low in place.

      Nov 26, 2019 26:58 PM

      If you get a weekly close below .96, I’d be concerned about a move to below 50 cents. That huge 2018 gap looks like it was news-driven based on the volume increase so I would be surprised if it gets filled. The safest gaps to ignore are those caused by a game-changer.

        Nov 26, 2019 26:30 PM

        Thanks Matthew. I appreciate that feedback.

        Yes, that Gap in CD was when the company went from pre-discovery to the initial discovery, and I would be surprised to see it get back down below that Gap because there has been some good exploration work done this year, and the stock should be more valuable now that their thesis is starting to play out.

        Luckily, the company did the right thing and rose $12 Million in capital when the stock was up at $6, and that should be plenty in the war chest for the near-term for a very solid exploration program going into next year.

        Here is a recent news release from earlier in November where the hit on some solid Zinc and Silver grades.


        Cantex intersects 12 metres (4.2 metres true width) of 52.61% lead-zinc with 7.45 oz/ton silver at North Rackla

        by @newswire on 5 Nov 2019