Technicals vs Fundamentals – One is working much better for market predictions right now
Chris Vermeulen wraps up today’s editorials by sharing why he likes to focus on technical over fundamentals when making short terms trades. Currently there is a big discrepancy between the technical outlook and fundamental outlook with the economy. These are short term investment ideas but techincals have won out recently.
We focus on the US markets, gold, gold stocks, and defensive sectors.
I agree completely that the gold/silver sector will not be trashed when the stock market falls again. The big picture is so crystal clearly bullish that smart generalists must be piling in already.
SLV made it to an important resistance before pausing and pulling back to fill this week’s gap:
https://stockcharts.com/h-sc/ui?s=SLV&p=W&yr=6&mn=0&dy=0&id=p08934503797&a=727972963
Agreed. While there may be some across the board weakness if there is another “Sell Everything” liquidation event like there was in late February – mid March, I don’t expect it to trash the Gold or Silver sector this time around.
Also, yes there are more and more generalist Billionaires that started to position, mostly in Gold and the Major Producers starting last year, that this will continue to bring new money into this small Precious Metals sector and prolong the bullish trend for some time to come.
I’ve got little doubt that Gold will eclipse it’s 2011 all time high of $1921, and that Silver will eclipse it’s 2016 surge high of $21.23 in the next year. This will be like throwing gasoline on the fire for the PM mining stocks and should push them through whatever weakness hits the general markets as a result of the economic fallout for the 3 months of insane lockdowns in the US and many other nations around the globe.
Ever Upward!
I think silver is going significantly higher before it has a multi-week correction/consolidation.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=6&dy=0&id=p02034432971&a=501194637
Matthew – do you think it is probable that Silver breaks above the 2019 peak at $19.75 on this leg, or might that be first resistance?
I am on pins and needles waiting to see how it plays out from here. Simce 2001, and this is only my account, every time my account gets to this value, they pull out the play book, and bust the technical charts. That’s why I am so opposed to corrections being “normal” and considered healthy. I can only point to the 11 year march upward in the general markets, while the PMs march to the orders of a different drummer. I wait with apprehension what occurs in the months ahead.
I’m kinda partial to the Ramones cover of Needles and Pins…
Although, with all the riot footage from the last week and all the social division, this may be a better Ramones song to feature:
I Wanna Be Sedated (1978)
See if I ever say “ needles and pins” again. I am going to stick to four letter words. 🙂
I think silver breaks above the 2019 peak and corrects from somewhere above it.
It’s a risky call considering the looks of the overbought daily chart along with today’s candlestick but I think there’s a good chance tomorrow will be an up day even if it starts lower.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=0&dy=0&id=p75066488190
Thanks Matthew. We’ll see if Silver can break on through to the other side….
Your charts appear to show silver still going up if I read them right. I feel like we haven’t started yet. No time to be correcting.
Ghostbusters – Where do these stairs go? (They go up!)
Finally a source of wisdom with credibility. 🙂
Haha!
Chris Temple: Roaring Uranium Market and Silver Acceleration Imminent
Palisade Radio – Jun 2, 2020 #AudioInterview
“Tom welcomes investor and publisher Chris Temple of The National Investor back to the program. Chris expects a big uranium rally as many things are happening with uranium behind the scenes. Past policies have hindered the US standing in the uranium industry, and Trump is now attempting to correct those policies. The coming supply changes could be opportunities for prudent investors.”
“Uranium demand is global and mostly unaffected by what happens in the United States. Nuclear is the only green energy that can provide 100% of a countries needs, carbon-free. There are developing countries that will entirely skip building petroleum supply chains and instead build out solar, wind, and then electric vehicles.”
“Chris is more cautioned when it comes to silver, as the silver market has yet to respond to the market. Large investors and companies consider silver to be an industrial metal. These investors are needed to move the price of silver. Gold and then silver will take off when the traditional inflation scenario returns.”
Brandon Munro – Why are some Uranium investors blaming Kazakhstan?
CruxInvestor – May 17, 2020 #VIDEO
“Kazakhstan is easing emergency restrictions in some towns but what does that mean for the resumption of production of uranium at KazAtomProm. Munro explains. Also, we discuss what pressure Kazatomprom may be under and from where? Plus, how is Russia coping?”
“The US Govt is trying to get their seat back at the uranium table, after years of neglect. Will SMR technology be their saviour, and if so how long will it take. This week saw a big announcement with regard to their ongoing Advanced Reactor Demonstration Programme. Big numbers being thrown around. Bigger the US Dept of Energy has indicated.”
I posted this on the weekend show, but felt David Cates did a really great job laying out some of the underlying Uranium drivers under the surface of Cameco’s shut downs (hint: it was NOT just due to the Covid-19 issues, as it is being widely panned in financial circles that follow this part of the Energy sector, but really longer term contracting cycles that need to kick off, as we’ve mentioned on here for some time.).
In addition he points out that Kazakhstan just did something really smart in boxing out the traders, that were buying up Uranium and doing their agreements with Utility companies, which interrupted the natural cycle of companies negotiating prices with Utility companies that actually incentivize production. This is a major point that I don’t believe many have grasped yet.
He didn’t get into much in this interview, but another key change in the last year or so is how many secondary sources have decreased (Russian underfeeding, US Dept Of Energy dumps from Obama administration era, Japanese overhang, etc…)
Lastly, I felt David nailed it when took a shot across the bow at commentators that keep parroting the line “There have been several false starts for the Uranium miners the last few years”. Boom!
> I’ve been saying the same thing each time a casual armchair commentator makes that same incorrect statement. Look, Uranium double-bottomed around the $17-$18 zone in late 2016 and then again in late 2017. That was the bottom. The price is now $34, and has almost doubled, and most Uranium miners are up substantially from where they were trading in late 2016 or late 2017, so how is that a false start? (Here’s a clue: It isn’t and the stealth bull market has already been underway for some time)
It is the exact same pattern we saw play out with Gold, where it clearly bottomed in 2015, and the miners in Jan 2016, and it has been in a bull market clawing it’s way higher ever since, yet many denied that Gold was in a bull market until it has already added $500-$700 and the miners had surged much higher off their initial 2016 lows. For some reason, people are not objective when looking at real price action, and need it to get past some mental or emotional line in the sand before they’ll finally concede a sector is in a new bull cycle. Maybe it is because they can’t admit that they missed the whole first part of the move, and so they must draw a line in the sand and say, “OK, now a bull market is starting – 1st inning of the game… BS”. The reality is we are already in the 3rd or 4th inning, but as they say… “most are late to the game.”
________________________________________________________
David Cates: Mine Closures Create Perfect Storm for Uranium Prices
Palisade Radio – May 15, 2020 #AudioInterview
“Tom welcomes returning guest, CEO and President of Denison Mines, David Cates, to discuss everything uranium related. David says, “Supply has really dried up.”
Typical …he is a……lost ball in high weeds…. 🙂
… “OK, now a bull market is starting – 1st inning of the game… BS”. The reality is we are already in the 3rd or 4th inning, but as they say… “most are late to the game.”
Agreed. Although for clarity, as may have worded that poorly, David Cates was actually calling out most commentators on the Uranium sector as being lost balls in high weeds, because they are the ones saying we may be getting ready for the 1st inning a new bull market.
Mr Cates was actually correct that Uranium bottomed several years ago, as did the stocks and it has already gone up 100% in price since the double bottom at $17 in 2016 & again in 2017. Uranium is now trading at $34 and has been gradually moving up for years, so people saying the game is just getting ready to start missed the epic surge from the end of 2016 into Q1 of 2017, missed the rally from late 2017 into Q1 2018, missed the US miners rally in 2019 on Section 232, and likely have missed the recent gradual rise in Uranium stocks in 2020 on the Nuclear Fuel Group decision, the Cameco shut down, and the cuts from BHP’s Rossing mine, and cutbacks in output from the Kazakh’s.
While the majority of the move in the Uranium stocks still lies in front of investors at this point, there have been solid gains to make in the sector for the last few years trading the rallies; and pricing bottomed years ago and has only been heading higher since then.
Again, it is very much the same thing we saw in Gold bottoming and heading up for years before investors finally got the memo that we had been in a bull market since that time.
Great summary………the crowd will be the last to show up…..
Agreed. When the crowds show up and get excited and pile into the sector, I’ll be glad to sell some of my shares to them at much higher prices. 😉
I’ve decided to initiate an initial tranche into DNN Denison this morning and it is in the process of still getting filled, but I’ve been meaning to get a position going with them again, and this latest rant encouraged me to put more money where my mouth is.
I’ll likely be adding more to to my UUUU, URG, UEC, NXE positions as well.
Talk about inexperienced traders, I saw two separate sells at one share apiece. Unemployment and government funds combined with cell phones everywhere makes this a day trading market for cyber junkies. LOL! DT
Agreed DT. I can’t imagine the point of selling or buying just 1 share, but in my experience those are bots running on algos testing the support resistance levels, but usually bots buy in batches of 100 or 1000. Regardless, I’m willing to day trade or swing trade idiotic moves or investor freakouts in the markets. (haha!)
Danielle diMartino Booth:
The pinkie on Minuteman Statue redemes Trump. Authentic Back Street Boyz got the rest—-
Don’t hear much from Jihad John lately….
For the first time since 2003, silver’s 55 week MA has crossed above the 233 week MA and for the first time since 2011, both are pointing up. Just by looking at those MAs you can see that the 2016 setup was vastly inferior and was nothing but a big mean-reversion ignited by gold bottoming at 1045.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=10&mn=7&dy=0&id=p37322778921&a=763751367
Notice that the 55/233 “golden cross” was happening just as the crash began. The whole ordeal set us back a little but the coming moves will be healthier for it.
Zoomed-in for MA detail:
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=11&dy=0&id=p72003371589&a=763751367
Following the last such golden cross nearly 17 years ago, silver shot up more than 50% in within 19 weeks. Such a move this time would put silver at 25-26 by the end of September. Considering the much more favorable conditions this time (technical/fundamental/cyclical), a move beyond that in both price and time doesn’t seem unreasonable.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&st=2000-09-11&en=2005-10-18&id=p72003371589&a=763751367
Thanks Matthew for the historical data. Knowing what is “different” this time will help in understanding the day to day in the near future. We know past economic mistakes have not been addressed so by logic markets should act accordingly. With diminishing returns, Fed intervention, at some point, becomes ineffective. As Chris Vermuelen mentioned, fundamentals are not of much use right now. But your technicals are. Thanks.
Below the Feb 21 break-even level…again
The Matthew recovery may be starting. Price turn fighting to grab hold.
HI David – I noticed the same thing, and placed a half dozen stink bids with limit orders, and thought they may get hit, but now all of them have reversed up higher and while still down on the day, they are not down as much as they were earlier.
A real shakeout is underway but I remain very confident that it will not be an intermediate term shakeout and will be over soon.
The day started with the ETFs down in normal bearish fashion with GDX down the least followed by GDXJ, SIL, and then SILJ. That ordering has now been bullishly shuffled with SILJ down the least going from last place to first while GDX is now down the most going from first place to last. This is probably a big deal in my opinion but not the reason I believe we are probably going higher very soon.
Good Silver charts Matthew. I see those as incredibly encouraging medium term and longer term, despite today’s hard selloff in silver. This dip we see forming is one that should be bought, for the inevitable next leg higher.
OFF TOPIC:
What the hell are Biden’s staff doing in paying bail for Minneapolis rioters and looters?
If, Biden can keep up the rioting, …..maybe he can divert attention away from his dirty little son, and the UKRAINE looting……..Biden is knee deep in corruption, but, that is really not news, everyone should know that by now….
If you think ” black lives matter” one iota to these scum who loot, you are really stupid.
77-year-old David Dorn was found at approximately 2:30 a.m. Tuesday on the 4100 block of Martin Luther King Dr.
“He was murdered by looters at a pawnshop. He was the type of brother that would’ve given his life to save them if he had to. Violence is not the answer, whether it’s a citizen or officer,” wrote the St. Louis Ethical Society of Police of Dorn, whose wife is a sergeant with the St. Louis Metropolitan Police Department.
St. Louis Police Chief John Hayden said Dorn was murdered during a looting while “exercising law enforcement training.”
“David Dorn was a fine captain, many of us young officers looked up to him,” Chief Hayden said.
Chief Hayden said officers will wear their mourning badges in response to Dorn’s death. -KMOV4
Black on black crime, like MURDER, exceeds white on black crime.
That is not going to change anytime soon……jmo
This BLM movement is going to be proven a SCAM………
It already has been proven a scam at many prior protests where they were the clear aggressors and insinuated a great portion of the violence. Remember the “peaceful” protests a few years back where the BLM members were shooting at cops? Disgraceful.
Thanks for the reply………….agree………disgraceful………
Chartster just posted a good clip on the …..KNEE guy…….and the CIA connection…O
A black is TEN TIMES more likely to be killed by a fellow black than a white, so don’t try to tell me there is something meaningful to many blacks in the sanctity of life.
ALL LIVES MATTER.
Smashing good time……..London Fixers…….should be changed to London looters… 🙂
Buy, buy, buy……….
Gold down……dollar down……..really….. 🙂
Kangaroo court starting……Rosenstein misfit , and unfit for any office in the govt.
Reposting BS VIRUS……….
https://off-guardian.org/2020/05/31/its-all-bullsht-3-leaks-that-sink-the-covid-narrative/
During the Corona crisis the State has proved itself as one of the biggest producers of Fake News.
I think the reaction to the cop corona virus was wrong. We should have protected the vulnerable, not killed the economy, but the reaction of the state was out of ignorance and panic, not deliberate, in my opinion.
PLEASE NOTE: I am not saying there is not a group of one-world order wanna-be rulers out there trying to influence individual governments.
I believe the Democrat governors and Mayors deliberately chose to create damage, to blame Trump, as a route to re-election. That this aligned with one-world-order nuts, in my opinion, was more coincidence than design.
However, damage is now being done to the very fabric of society.
https://m.youtube.com/watch?v=Pxb94nQxlqo
Can anyone explain to me the utter moronic logic of low IQ Democrats?
One the one hand, you cannot work and must social distance or be in absolute lockdown for the good of your fellow citizens….
But on the other hand, you should demonstrate and consequently spread the virus…..for the sake of your fellow citizens.
Do Democrats think there is no logic conflict in these two behavior patterns, or do Democrats just not think?j
Miners get the morning hedge fund hit no matter whether physical is red or green. Time for a cup of coffee and then check back for the “Matthew Reversal”.
For what it is worth: Bought Teuton earlier in the week and it is doing well. TUO.V or TEUTF, Teuton Resources…do your own DD.
Chris,
thanks for the solid T.A analysis….lots to think about. So this next leg down in the stock market will NOT trash the PM sector too? Wow, if that really happen, then that will “ring the bell” for the generalists to pile in to PM stock….we might hit those 2016 highs quickly.