A look at GDX and the equal weight commodity index
Jordan Roy-Byrne joins me for a close look at the GDX and GCC (equal weight commodity index) charts. It all ties into the potential of inflation picking up in 2020 which could be a major driver not just for the precious metals. Jordan also shares some levels for gold and silver where he sees strong support.
Click here to visit Jordan’s site and follow along with his metals commentary.
I will trade this sector when large moves occur, I’m very cautious with so much prevailing bullishness among the retail investors with miners. I could be wrong but don’t think sector is ready just yet.
I’ve noticed mostly fear and extreme uncertainty on other sites/forums.
Bought Brixton at .18 today (and .185 yesterday).
https://stockcharts.com/h-sc/ui?s=BBB.V&p=W&yr=8&mn=3&dy=0&id=p53192729975&a=670511416
I also picked up a little today. Still think it could fall a little lower, but didn’t want to miss the opportunity and will buy some more if it falls further. Thanks for the heads up yesterday.
I just bought more (his time at .19).
That’s conviction! Just watched a little today. Probably missed a buying opportunity, but got to busy with other things.
I just bought some more this morning.
It looks like you got a good price!
I just got lucky and picked up more at .18. I wonder if this tariff noise is making some nervous about gold.
I still think it could go lower. I am thinking around 12 cents on the BBBXF ticker. I will probably buy more if it goes there.
I can definitely see why you think it might go lower. What keeps me buying is that I think it would have a hard time going lower if silver starts to move.
I just finished the day with more at .185!
Ha! Keep buying and the stock will never get there!
Me against the world! That should end well! 😳
Matthew, where do you see BBB in a intermediate/long term?
Do you have a big exposure in the Company?
Cheers!
Miklo, I see the potential for huge gains (10-20 fold and more) but it’s impossible to guess where it will top in the long term. There are just too many variables.
I have a few hundred thousand shares.
Thanks Matthew!
Would you like to give me an opinion on my portfolio:
WM
KL
Kinross
FVI
Agi
Cde
Usa
FR
KTN
SVE
WDO
Tudor
Barrick
SIL
I would really appreciate your opinion, your knowledge and your charts are the main reasons I come to this website.
Cheers
Wow, I’ll give some technical impressions at a glance.
WM: Short, medium and long term overbought with significant short term negative divergence that would cause me to sell a good portion and either wait for a pullback or buy something else. Even the quarterly chart is overbought but looks like it can go much higher. The question is, will it pull back first and considering the numerous opportunities out there at this time, I’d look to take profits and buy something else.
KL: I’d sell all of it since it for some of the reasons cited above. The quarterly RSI(14) hit a whopping 90+ recently so I’d bet that Sprott was right to sell his (I don’t know if he still owns any). It seems like a quality company that should go higher over time but I would be very surprised if it keeps up with the sector in general from here, especially the juniors.
Kinross: I don’t usually like the senior miners but this one can move and is getting set up to do just that pretty soon. It has not tested the 200 day MA since May so that’s a level I’d watch if it weakens from here (currently 5.40).
FVI: The weekly chart is the best thing about Fortuna and it will have a new weekly MACD buy signal if it doesn’t fall apart tomorrow. I’ve owned it but it has been a long time. It seems to carry more political risk than many others operating in Mexico.
It will probably do very well just like it did in 2016 regardless of my negative bias toward it.
AGI looks similar to Kinross but weaker and threatens a little more downside. However, my reading of the sector as a whole goes against this and it looked just as “threatening” in May just before it took off.
CDE: This one looks like it needs a break but that’s also how it looked in March 2016, just before it went up almost 200% more. Still, I’d be inclined to diversify here if you haven’t already. Keeping is fine too since it looks like it has plenty of room to run higher based on the monthly and quarterly charts. The weekly chart is not so overbought that the stock would have a hard time responding to a higher silver price. I think it could do surprisingly well even without pausing/pulling back first if silver is moving.
USA: All good in my book. Enough said. (Though I still have not reestablished a position.)
FR: Also all good.
End of part one.
KTN: I’m quite bullishly biased about this one and see limited downside as long as the sector holds up. If the sector stalls here for an extended time, it could find its way to at least 16 cents.
SVE: Looks good.
WDO: I’d be trimming this one for sure. Yes, it probably has more upside but at this early stage such a win looks like a big gift to be used on shares that haven’t moved much yet.
It reminds me of Claude Resources a few years ago. In late ’15/early ’16 I said that it would probably triple again in ’16 but that I was selling it for better opportunities. Well it did triple again (quickly) and I was still right to sell it since I used the proceeds to buy silver juniors that went 10x.
Tudor: Looks good and at .49, it is just .002 below the important 200 day MA. A move above that MA on higher volume would be a good sign.
Barrick: Picture-perfect action from this market leader lately. It looks great and is telling us that the whole sector is likely going up from here.
SIL: Looks great. (I prefer SILJ but don’t own either one.)
Miklo, it looks like you have a good and well diversified portfolio even if you take none of the actions that I would. You should do very well with it.
Matthew, although I owned only two of the stocks listed by Miklo (I’m below water on CDE, and keeping fingers crossed on USA), I appreciate that you took the time to share your perspective on each of them. Thanks.
You’re welcome Canucksi. It’s nice to see that both of those are doing well today.
Noticed that gold moved up and GDX moved up over 2% after the FOMC meeting. On a related subject, and remembering a Sherock Holm’s mystery where the clue was a dog that DIDN’T bark, we have a similar clue here: The Trump who DIDN’T tweet when the Fed didn’t cut rates and indicated it wouldn’t cut for all of 2020. Curious, isn’t it?
I wonder if Trump made a pact with Fed Chairman not to criticize him as long Fed keeps greasing REPO market which is inflating the SM.
Commodities are SIMPLY maintaining value as the dollars sinks.
That’s what they do.
It is not rocket science.
No, it’s rock science and industrial commodities can easily fall with the dollar even while rising somewhat nominally. If the economy is not good, commodities are likely to fall in real terms. Gold went 25x in the 1970s while copper went 3x.
After gold fell from $1920 to $1050 it was ready to go up at least 3 fold, and possibly 5 or 8 fold. I saw gold go from 120 to 850 between 1975 and 1980, and from 250 to 1920 between 2000 and 2011. So a rise to 8k should not surprise anyone except leftists rats who hate gold. And 8K gold could easily take silver to $200 or higher.
BB, of course you’re correct. It only takes patience. I continue to add and buy stocks that are bottoming and slowly building a big position. Some of my stocks have had beautiful runs and they’re still nothing where they will be in the future. If you look at a gold/monetary base chart that is long term, we’re just starting a massive climb toward a high of 4.8 some day. I love this market right now and if folks are patient and add on dips, they’re going to see returns some day that will dwarf any bull market of the past.
The leftists in charge hate gold because it exposes their criminal mismanagement of the currency and there’s nothing they can do about it.
I agree with you Matthew, it does depend on sentiment as well as the economy for extreme deviations about the mean, but the fact is commodities over longer time periods also tend to keep their value. They tend to act inversely to the dollar on average.
Individual commodities then also vary with supply and demand ( i.e. the economy), with sentiment AND with manipulation.
Sentiment is often deliberately altered by conferences and promotion. (This often is a major contributor to seasonality.)
Manipulation of shares is both by brokerage houses using warrants, and
Manipulation for monetary metals is done by by and the U.S. Treasury.
I don’t agree with much of that. The CRB is up 87% since its 1971 low which puts it at mid-1973 level. Copper is up 458%. Gold is up 4,150% since 1971.
Manipulation has done nothing to stop gold from protecting one’s purchasing power.
A million dollars in 1930 is now worth $71.6 million dollars if it was parked in gold (at a constitutional $20.67/oz, that’s 48,379+ ounces x $1480 today).
Sentiment and seasonality has nothing to do with anything except in the short term.
Matthew, gold has done well since 1930, but if you had put just $1000 into Phillip Morris in 1925 and held all the spinoffs and reinvested the dividends since then, it would be worth about $250 million. I wish my grandfather had bought some PM-MO in 1925 but he put everything into Texaco. And he turned in his gold in 1933 when the evil FDR called it in.
Many companies have smoked gold but that doesn’t diminish its performance in any way since stocks come with much greater risks. As long the currency is debased, gold WILL rise nominally to reflect it. The same can be expected of the stock market in general but not individual stocks. For every PM-MO there are plenty of Eastman Kodaks.
Remember that gold is sound money, not an investment so that $71M that a constitutional $1 million is now worth is only due to the gross mis-management of the fraudulent money substitute non-dollar dollar (the dollar is defined as 371.25 fine grains of silver).
It’s funny that we the sheeple allow the most important unit of measure to go undefined these days. We would never tolerate it elsewhere. A foot would now be about a quarter of an inch if tracked the purchasing power of the fiat “dollar” over the last century. Imagine what our buildings would look like if that were allowed. 80 MPH would now be reduced to about 8,000 feet per hour. Without honest weights and measures, you have chaos just like we have today in this twisted economy. It is no accident that planning/saving for the future is now almost impossible and has been replaced with gambling/speculating for our future.
I dont think gold is anything more than preserving purchasing power.
Right now gold looks better than cash in a bank to me.
The problem with gold for wealth preservation is that we allow ourselves to be taxed (I think 28% in the U.S.) on gains that are mostly not real.
The fiat/debt/tax system is designed (yes designed) to keep everyone working and dependent on the government.
The masses have no clue just how much prosperity is taken from them. Those few who understand economics know that the trade-off is far from worth it.
That is true, I’ve been pondering how Im going to sell, if ever I do, without paying tax.
Inheritance maybe, if the law hasnt changed by then.
Maybe you can trade Sprott for shares in PHYS. At least in the states it’s taxed like a stock.
Kootenay Intercepts 721 gpt Silver Over 4 Meters within 415 gpt Silver Over 11.5 Meters on the E & J Veins at Columba Silver Project, Mexico
http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20191212:nCNWLH6CQa
That’s an interesting development. Thanks for posting.
Curious if you are buying her. I assume so given your other comments. I was waiting to purchase more for a large dip, but I don’t know if we are going to get it.
I’m not a buyer here but would be if I had not picked up so much of it when you put it back on my radar at under 15 cents Cdn over a year ago. Some of my purchases were +/- 11 cents.
I’m very bullish this one in the short term but the longer term looks really appealing due to the economics of its large but lower grade resources. As silver eventually leaves $20 behind, Kootenay should do significantly better than its higher grade peers.
I am very bullish the whole sector right now and if that proves to be the correct stance, I can’t see it falling much from here.
https://stockcharts.com/h-sc/ui?s=KTN.V&p=D&yr=1&mn=2&dy=0&id=p91795524456&a=684730971
The higher grade hits of the last several months could prove to be much more than just icing on the cake…
https://www.kootenaysilver.com/news/2019
Today’s reversal in the miners is probably a one-day wonder and should be bought, in my opinion.
You are absolutely right, Matthew!
I think, the miners will finish strongly at the close today.
This sudden reverseal will be good for the miners cause speculators will be left behind and start chasing
That’s right, the strongest moves start with the fewest participants and this one is shaping up better than most think.
HUI vs Gold just put in back-to-back higher closes than the previous best of the year which happened in August. This is a great though somewhat stealthy bullish sign…
https://stockcharts.com/h-sc/ui?s=%24HUI%3A%24GOLD&p=D&yr=0&mn=11&dy=0&id=p31641135386
SILJ is working on a huge and very bullish H&S bottom that is unlikely to be a dud. Watch for a weekly close above 11.80 on surging volume:
https://stockcharts.com/h-sc/ui?s=SILJ&p=W&yr=3&mn=11&dy=0&id=p45130571748&a=706220219
Thank you for your great input! It means a lot to me!
Keep your charts and analysis coming!
Cheers!
You’re welcome Miklo, best of luck to you!
I’ve been watching the 2 minute chart of GDX and it turned impulsively bullish on Monday afternoon. It is now approaching the end of a very nice 5 wave advance.
The sector is ready for the next big multi month move.