US Markets Extend The All Time Highs – But Are We seeing Something Similar To The Internet Bubble
Ed Moya joins me today for a focus on the moves higher in US markets today. With the S&P breaking above 3,400 the charge is continuing to be lead by just a handful of stocks, mostly tech. It has more investors asking if the current environment is similar to the internet bubble.
Click here to follow along with Ed’s daily note over at the OANDA website.
9. Its magic, performed by the magical ones.
10. Its this songs , fault.https://www.youtube.com/watch?v=19sAewJH22I
It’s funny how the media is able to excite the masses about a particular problem and then turn on a dime and insist that this new problem which they have conjured up is now the new problem. Most Americans have a chain store mind, give them washing machines and cars and they don’t care about what the culture of mass production and A.I. machines have done to their minds. DT
This Philosopher AI has its own existential questions to answer
by: Thomas Macaulay
“A new Philosopher AI could help you find meaning in a meaningless world — as long as you don’t ask it any controversial questions.”
“The system provides musings on subjects that have plagued humanity since its inception. You can ask it about a topic that’s filling you with existential angst. It then uses OpenAI‘s GPT-3 text generator to analyze your text and spit back a life-affirming/soul-destroying response.”
Does this sound familiar, in 1926 a classic Science Fiction film was created, Fritz Lang’s Metropolis. It is meant to be the year 2000 A.D. Metropolis is a gigantic city divided into two distinct divisions. A luxurious upper class who enjoy exotic pleasures above ground, and a working class living beneath the city in slums slaving away at the great machines that power and control Metropolis. Many times the future is foretold by SF films. DT
Yes DT – good analogy and I have the film on DVD and have watched it a few times, as a big sci-fi fan. Yes many times the future was foretold by SF films indeed.
Metropolis (1927) Trailer #1
Is it similar to Escape From New York with the “Snake”?.
Another great film, but no it’s not really like that.
Funny DT……..
I don’t usually post anything regarding Covid but felt compelled to do so.
My wife found out today that 2 years ago her LTC facility had an influenza outbreak that led to 18 deaths…..Covid this year ,where every single resident got it ,was 21 .
https://www.wnd.com/2020/08/7-dire-consequences-collateral-damages-lockdowns/
Sent from my iPhone
Sounds like they got lucky. In my county we had twice times as many deaths in nursing homes than in a bad flu season. Some nursing homes did not have a single case of COVID-19 while several others had about 25% of the residents die in just 3 months.
The nursing homes that did the best were ones that reacted quickly and had the enough of the proper PPE such as gloves and respirators. The wearing of PPE is why very few doctors and nurses that cared for COVID-19 infected patients contracted it.
JMiller, after browsing through some past comments on this site, I see that you got involved in some “discussions” about face masks with some others. I want to let you know that you are correct. Face mask can help reduce the transmission of the COVID-19. The question is by how much. N95 respirators are of course the best especially for the wearer when it comes to protection. Face masks should be worn especially around those most likely to having serious symptoms and a higher probability of death if they contract the virus. Those other commenters, like OOTB Jerry, were speaking out of ignorance.
You are correct Wayne. OOTB Jerry usually speaks out of ignorance.
I think more info would be helpful about this LTC facility like how many were patients 2 years ago and how many were patients this year?
Not sent from my iPhone
The fact of life is that people die every day. The important knowledge comes from knowing how to minimize risk AND the size of the risk one is taking.
What annoys me INTENSELY is that there is knowledge out there that reduces the threat of the seriousness of covid-19.
Get your blood serum level of vitamin D above 45 ng/mL……suntan or supplement.
Make sure your diet includes Zinc and vitamin C.
Then if you actually get covid-19 there are further therapeutic measures on can take.
For the most part politicians have axes to grind and are either stupid or don’t care about the public….they love wielding power though.
Gold update!
Long term portfolio remains untouched.
Short term/intermediate portfolio Is currently on a bit program. We went from regretting not having sold anything to buying in tranches on these pull back. Remember I spoke about us heading lower last week I’m the miners. And that has happened. Some miners have been up and down in a range however others have moved down like impact and Scorpio and many others for better entry points.
Tomorrow Or next day or two I hope to use my remainder of my second lot of purchases. Today i used a portion. This would leave me with two tranches left. 50% of my saving for short term/intermediate portfolio. Which tells you guys that I’m keeping 50% of my cash on hold of gold does indeed decide to move lower.. if this does come to fruition I would think being ready and not panicking is what’s suitable. I will be ready for either or which is prudent in these markets and at inflection points.
“If” we head lower than I would expect a cycle low in 3/4 week of October…which means that 50% cash will be ready to deploy. If not and we head up. I’ve added on good pullbacks and we will more than likely sell on the next moves up and see at that time.
Play it safe and do your homework.
Cheers to all
And DT thanks for nice words the other day..in regards to david joining the clan..
Glenfidish – are you part of a collective investor group? You used “we” in there a lot, so it read like you are plural number of people.
“We went from regretting not having sold anything…” (who is we?)
“we will more than likely sell on the next moves up…” (who is this we?)
> Did you already start your Secret Newsletter without telling us and this is what your subscribers are doing? 🙂 [only yanking your chain man]
Personally I’m very happy my portfolio did not remain “unchanged” the last few weeks, and was very active taking some well-earned profits off the table from late July through the first 2 weeks of August, and discussed many of the stocks I was trimming back at that time.
That was a “change” to the portfolio definitely worth making, especially after the huge run from the sector lows in Mid-March to early August.
I had mentioned on here repeatedly in mid-March and early April that I was deploying all my available funds buying with both hands (even taking some out of my deep savings to deploy and also ramping up into margin buying in a number of companies) from mid-March through mid-April. I was stunned that many investors were discussing still selling into that fishing line sell-off and then moving to cash or sitting on the sidelines at exactly the wrong time and that was the wrong action. Wise investors were buying those extreme oversold conditions in March & April, and then rode those miners up through their highs a few weeks ago. By early August my trading account was up 330% from where got down to in mid-March, but that’s because most mining stocks went up 2-5 times, and I was actively swing-trading them the whole way up.
However, by the middle of July it was very clear that a pullback was looming and quite overdue, so trimming back the out-sized gainers in the face of that was “playing it safe” and was the right call, versus leaving things untouched, which would have left larger gains on the table only to see them disappear. Sure the bull market will bring those miners back up to those levels again eventually, but why not sell into the strength and froth, and buy back when the weakness inevitably would show up… like it did.
The miners topped relative to metals about a month back now, (not just a week ago), and many stocks topped out in late July through early August, as did the mining ETFs. THAT was the time to really being trimming them back, not just waiting until last week, after they’d already been correcting for some time.
Now that things have pulled back and cooled off on the chart indicators for the last month, I’ve been starting to more aggressively add back to positions (at much lower prices) since the middle of last week. This may have still been a bit premature place to start adding, but scalping the higher profits from late July – early August, and then buying back into those same positions at lower prices, was a much a much better strategy than having done nothing over the last month (leaving things untouched) and watching those gains evaporate.
Most of the Jr miners should be trades, not longer term holds, and the sector and most individual companies have plenty of volatility, making them ideal for swing trading or directional trading.
For those that did actively manage the risk/reward ratios in their portfolios they were adding like crazy in March and April, and then trimming those positions back in late July and early August. The vast majority of Gold & Silver miners and the ETFs are currently at far better prices than they were a few weeks ago at their highs. Those were the same highs were so many people were crooning the tired mantra “be right and sit tight” or beating their chests about not selling anything. We hear and read statements just like that at every short-term, medium-term, or longer term top, so it’s not a surprise. For those that like to buy low and sell high, it makes far more sense to sell into strength and overbought conditions, and then buy into weakness in neutral to oversold conditions with the funds raised from successful trading.
It definitely is smart to have some cash or trading funds on hand to take advantage of future corrective moves, and if things in the PMs devolve further those allow one to seize those opportunities. If Gold does head down into 3/4 of October, as you mentioned, then things may get more ugly in the sector, but I’m a bit more optimistic that we are nearing the end of this August corrective move, and may have a more positive Sept.
After buying back in strong since the middle of last week, I’m strongly allocated into the sector and don’t have anywhere near 50% cash on hand, but admit I’ve got more risk exposure due to that. My thesis is that after this correction finishes playing through (maybe after Jackson Hole), that there is still more upside to capture, before a larger and longer correction comes, and I want to be in position to capitalize on that move before trimming back in a more meaningful way. It’s a calculated risk, and it may bite me if things plunge from here, but I still have some funds to deploy if we see more weakness in the PMs.
The economic reality is that nothing fundamentally has changed:
– there are massive amounts of debts being piled on by countries all over the planet
– the US wants to pass another massive stimulus bill
– the Fed is about to discuss letting inflation run a bit hotter and propose printing Trillions more Dollars
– the Dollar may have a counter-trend bounce for a short while, but the trend is still clearly down in the greenback
– interest rates are still low with negative real rates, and that is unlikely to change
As a result, I’d expect Gold to hang up pretty well, as nothing has improved, only further eroded.
My interest is much more in the miners themselves than the price of the metals, and really at $1800 or $1900 or $20000 Gold and at $22 or $24 or $26 Silver, then the miners should actually be doing far better than they have up until now, and still have more catching up to do with the moves the metals have made. Even if prices pull back a bit in Gold or Silver from their current levels, I expect to see the miners hold up better and possibly run higher despite any metals pullbacks. Once people run the math for producers or developers valuations at these current prices, and look at where the valuations in the mining stocks were back in 2011 when prices were last here, there is a big catch up rally that needs to play out.
While the world has been imploding the last 5-6 months, conversely the PM miners have still had a fantastic year so far. I don’t believe that run is over in the short, medium, or longer term.
Wishing everyone prosperity whatever their investing strategy. Ever Upward!
Gold Market Update – upside breakout and advance to new highs looking imminent…
Clive Maund – Sunday, August 23, 2020
“For those who expect gold to keep going up nonstop the past few weeks have been disappointing, but for more experienced investors and traders who like to “keep one foot on the ground” the pullback of the past few weeks across the sector is a blessing – let me proceed to show you why.”
“On the latest 6-month chart for gold we can see that it broke out to new all-time dollar highs and then above the “magic” $2000 level early this month, a development that brought forth a plethora of bullish articles and prognostications as you would expect, sucking in the less experienced at a top as usual. Gold’s action in doing that was actually very bullish, but as it did it at the end of a steep unbroken rally that resulted in it becoming extremely overbought, it needed to stop for a rest, and it has taken a rest over the past few weeks.”
“Gold’s corrective action since its early August peak is actually as bullish as its breakout to new highs and above $2000, for we can see that the reaction has taken the form of a fine bull Pennant that has gone a long way towards working off the earlier overbought condition. No technical damage whatsoever has been caused by the 2 declines within this Pennant – on the contrary, it has been accompanied by a very bullish volume pattern, which is why the Accumulation line, shown at the top of this chart, has risen to new highs as the Pennant has formed, which is a most auspicious indication. With the price now not far above its rising 50-day moving average, the MACD histogram (blue bars) well into a negative reading and the Pennant closing up, the time looks right to gold to break out upside into another upleg and here it is worth noting that many PM stocks are on the point of upside breakouts, which is why we have been piling into them in recent days.”
https://www.clivemaund.com/gmu.php?art_id=68&date=2020-08-23
Ex,
It is always my pleasure to talk to one of the founders if not historical posters in this forum :).. Formerly known as shad.. :)..
I wish and hope you have made billions if not gazillions with all your perfect calls 😃 “no sarcasm”..
People and my friends at the ker know that I’ve been if not one of the best callers in gold recently at least been pretty darn consistent with “ live before the fact calls “ on price direction. Trust me you can’t find that In any news letter.
I’m a good guy ex and i know you are as well. I don’t compete but I make calls on real terms. Are they perfect? Not always but this year I’ve killed a few and my good friends I’m here know that. I cheer for you and Matt and everyone else. My joy is we al make a buck.
The three of us have different approaches and philosophies from what I’ve seen. I’m the young buck i think lol.. different angle and learn from the greats. Been watching you and Matt go at it for years and guess what? I’ve developed my own method that i believe can go toe to toe with many.
So i guess what I’m saying is “we” the term used in general because that is what is truly happening lol.. goes lower in gold, we will all see what happens.
I’m a one man show who has learned from many including Matt and yourself! But I’m perfecting my own craft and this year have been really impressed with my own numbers and calls.
Gold will print a red candle! No one has the balls to call that yet i do 🙂
I have made many calls many wont do for there reputation But glen does it. I will be off from time to time but my overall consensus is on target. Others will always play it safe to back track what they say so they always seem kike they are perfect lol..
Forgive my rant ex.. my point is we are not finished the down and soon we will go up.
Best to you and everyone..
Forever up!
Glen
Sounds good Glenfidish, and I definitely value your input and calls and your unique style and method man.
However, I still didn’t follow the “we” thing in your post because it wasn’t the “royal we.” Your explanation was: “i guess what I’m saying is “we” the term used in general because that is what is truly happening.”
But it wasn’t what was really happening. You had said “We went from regretting not having sold anything…” but that makes it seem like everyone had that regret instead of it just being you having that regret.
That was the point of my response – I was selling in late July – August and discussed it clearly if you go back and read the blog for those few weeks, and was not the only one starting to pull profits then (I remember Doc, David, and Marty mentioning they were trimming some positions as well). I have no regrets, and I doubt anyone else does that trimmed a few weeks back, so there was no “we” regretting not selling. You were the one that came on almost day saying your portfolio was “untouched” but you should have been touching it to trim some of those winners back, so I didn’t understand why you’ve kept repeating that even into a 4 week correction, like it was a badge of honor.
For clarity – Glenfidish, I never claimed to make perfect calls, and don’t make perfect calls, but I was very clear on here about buying in March – April (in real time) , and I didn’t remember seeing you as active here on the KER blog at that time discussing buying then.
I don’t know if you were buying big in March and April as well or not (because you didn’t say you were), but my comments are posted and the other contributors that were trimming comments were as “live” as anything you’ve “called.” My words and there words are there for you to go read and I eventually posted a summary of which stocks I bought from March 13 – April 24 with the precise dates for about 20 or so stocks during that time period. I didn’t have any fancy targets or prognostications, I just knew the valuations were ridiculously oversold and were going to go much higher, and never doubted that the bull market was still underway so I was buying everything I could.
What I do remember is when you started getting more active here on the KER blog you saying you bought it big in early June (like on the 5th or something arbitrary), but much of the move had happened by then, so I’m not sure if that is when you first bought or if you had already bought big in March/April/May and were just topping up in June. I just don’t remember you discussing buying big in March or April or May, but you certainly weren’t discussing it in real time, and by the time June came along we’d been positioned for months, so I wasn’t sure why you buying that date was a such a big deal to you.
As for the trimming of positions in late July through early August, I posted on most economic editorials either mid-day or the end of the day what I was buying and selling “in real time” (mostly in conversations with David, Wolfster, Bonzo, Doc, or Charles). I discussed trimming back positions (like in Impact Silver or Brixton) and then buying them back at lower prices. I didn’t mentioned every single stock or post every single day, but there was plenty of “real time” trading discussions that we had on the blog. Maybe you didn’t read them all, but those posts are there over the last few weeks and they were all done “real time”.
I also agreed with you that Impact Silver may pull back, and had trimmed it back the first and second week of August. I sincerely hope you also trimmed back your IPT position at higher levels since you realized it was going to pull back, so you could buy it back lower, but I don’t remember you mentioning in real time that you sold some at higher levels. (I may have missed it if you did, and if so would stand corrected).
As for your statement about “Gold will print a red candle! No one has the balls to call that yet i do.”
Glen – If you remember I agreed with that point immediately the first time you made it because there have already been 5 monthly candles in the green so it would be very unusual to see another bullish month candle without a pullback first. I agreed red in August, and then green in September. You then later changed your call to red in Aug & Sept.
Matthew pointed out to you just the other day that 6 green monthly candles in a row hasn’t happened since 2002. Doc also made that same point about the monthly needing a corrective month several times on editorials with Cory, as did Jordan Roy-Byrne, Craig Hemke, and Chris Vermeulen. I also posted videos of Ira Epstein and Gary Wagner that both expected a bearish monthly candle. For some reason you have made a call about a red monthly candle after 5 prior green ones some big point, but most technicians agreed that it was likely August will be a corrective down month, so we are all in agreement there. That really isn’t a balsy call after thje relentless parabolic move higher in Gold off the March lows for the prior 5 months.
As for your last paragraph: “I have made many calls many wont do for there reputation But glen does it. I will be off from time to time but my overall consensus is on target. Others will always play it safe to back track what they say so they always seem kike they are perfect lol..”
I sure hope you’re not directing that at me. I make mistakes all the time, but my comments are on the blog. I was very vocal about buying as much as I could from mid March – mid April, and in trimming back positions in late July – August, and mentioned most stocks I was buying or selling the day I did it. There was no “playing it safe” or “backtracking” and I didn’t hit every trade as well as I would have liked, and some days after I mentioned buying a stock it still went down more, or after trimming a stock it may have risen a day or two later. Overall though, my trading accuracy has been very solid and I’ve profited nicely this year and anyone following along can see that.
I agree with the general statement you made at the end, “my point is we are not finished the down and soon we will go up.”
I also wish the best to you and to everyone, and hopefully that rant response clarified a few areas and did it in real time… 🙂
Ever Upward!
For transparency, I posted my trades from today on the Doc blog from Sunday. That blog from yesterday was simply filled with tons of great information from a number of different KER posters, so these may have gotten lost in the shuffle. However, since it seems like the comments about doing things after the fact was directed in part at me, I wanted you to see the “real time” buys from today as a example of the kind of updates I’ve regularly posted like this for many years now.
____________________________________________
> On August 24, 2020 at 11:07 am,
Excelsior says:
“In addition to topping up Brixton, I also added some more to positions in Lion One, Metalla, and Anaconda today as the miners sold off. I also started a new position in Nomad Royalty today. I’ve got stink bids sitting in a half dozen other names in case the sell-off gets more pronounced.”
> On August 24, 2020 at 12:23 pm,
Excelsior says:
“I had my stink bids hit in QMX Gold and Silver Tiger while I wasn’t looking.”
“For now I’m removing the other stink bids, just in case things get ugly from here, as I feel I’ve done enough buying for today.”
> On August 24, 2020 at 5:15 pm,
Excelsior says:
Added: Anaconda, QMX, Brixton, Silver Tiger, Metalla, Lion One
New: Nomad Royalty
Here’s a trading summary post from Friday on the Vic S. editorial blog to David, as another example.
> On August 21, 2020 at 3:28 pm,
Excelsior says:
“Thanks David. I ended up adding a bit today to top up positions in Maverix, Brixton, Silvercrest, Endeavour Silver, Galiano Gold, QMX Gold, and Metallic Minerals. I was able to get lower prices on all of those than where I trimmed them back, so the positions are a bit beefier now, but I’m ready to buy more if we see the PM miners keep correcting down further.”
Hopefully those still qualify as “real time” enough as they were same day trades.
Ex,
Please don’t think to much lol.. “we” meant the price of things went from here to here. We as in from point A to point b is what I’m referring to. Could also mean we as me and my inner self…
OK. Understood. I do tend to overthink things at times. Cheers!
Good stuff Ex. I am sitting about 10% down August 17. That was my peak for this run. I have more individual stocks (new), more adds, more subtracts but basically more shares and variety but less value overall. That could be positive but only if they get off the orchestration down and let us go back to the rally. They either recognize the back economy or step up the lies. I am always concerned that they chose to lie until there is nothing left to lie about.
back economy = bad economy
Proof reading = bad
Thanks David. Yes, I’m in a similar boat with more new positions, quite a bit of exploration stories that I’m waiting for drill results on, a few new developers, and even a new producer. I just checked and my high water mark in the portfolio was on Aug 18th, but it was conglomeration of profits pulled in PMs, some gains in Uranium and Lithium miners, a few pops in the Copper stocks, and everything firing on all pistons. I’m now down about 11% off that level, but was expecting a corrective move and have been adding to positions on the way down the last 2 weeks.
Today I sold my Denison position for a nice gain, trimmed back my Endeavour Silver, and added to Impact Silver and Silver Tiger, but overall have just been holding in most positions. I’m thinking we may have one more washout day tomorrow, in the day leading up to Jackson Hole Fed babble, where I’ll deploy just a bit more funds looking for a pop after they open their mouths about their new views of inflation and warming up the printing presses for another round of magical money creation. At that point, I expect the PMs to pop – later in the day Thursday and into Friday.
Glen, I don’t see the big deal about finally getting a monthly red candle but after a rare five straight months higher for gold, it is welcome. I’m more curious to see if it closes August back inside the monthly Bollinger Bands or not. If it does, it might be a clue that we will get a little more corrective action in September and maybe even head toward your target of 1750-1800 (but I still would doubt that 1750 would be reached).
Bit=buy
buy = bit… coin ? (haha!)
I actually started stashing some spare funds in the Grayscale Bitcoin Trust just in case the crypto kiddies and Raoul Pal are right about 50K – 100K prices one day.
Powell set to deliver ‘profoundly consequential’ speech, changing how the Fed views inflation
Monday August 24 2020
– Fed Chairman Jerome Powell will speak Thursday during a virtual version of the Fed’s annual Jackson Hole, Wyoming, conference.
– He is expected to outline what could be the central bank’s most active efforts ever to spur inflation back to a healthy level.
– “Average inflation” targeting means the Fed will allow inflation to run higher than normal for a period of time.
– The effort will be the reverse of former Fed Chairman Paul Volcker’s rate hikes instituted to quash inflation in the 1980s.
The Fed is not enthusiastic about forcing the Government to pay a fancy rate for money for it’s own use. I’m sure they will get inflation first followed by deflation, when the disaster they have initiated and prolonged is brought upon us all. DT
It just all makes one feel warm and fuzzy inside doesn’t it? 😉
Is that before or after they remove the knife from our back. I’d say if the Fed gets too warm and fuzzy about inflation, gold should be off to the races…
Once the Fed discusses their warm & fuzzy inflation targets, and more magical money creation, I believe we will see a pop in the PMs once investors marinate on that for a a little while — maybe as soon as Friday, and moving into next week.
For those who rest assured that the Fed has their back, Avi is predicting another market crash that would surely pull down the PM stocks–
Who is Avi?
Avi Gilburt. Come on Glenfidish, his epic fights with Gary Savage was a big part of the reason the Savage left the KER (on top of Birdman’s heckling) and him losing a steak dinner bet with Doc. 🙂
Avi is a solid Elliot Wave technician and pinball wizard.
Ex, I especially enjoy watching Rick’s Restorations, American Pickers, (The Pickies) and Pawn Stars when they feature Pinball Machines from the past. Some of my youth was spent in the backrooms of variety stores where you could play tilt or win. LOL! DT
The Who – Pinball Wizard
Ex,
Yes I know who he is. Not my cup of tea with all due respect.
Ditto Glen……
Understood. He’s an acquired taste… More like coffee than tea 🙂
More like an expresso….. 🙂 no typo…. s deleted by intent…
Well played OOTB. 🙂
Might take Glen, a couple of minutes to figure out the expression part…. lol…
just kidding Glen….you t(e)a man…..
Jerry,
Jaja good one. No harm taken. When you and ex get together I’m sure to have some good laughs 😃
🙂
Otavio (Tavi) Costa @TaviCosta · 1hour ago on Twitter:
“Still wondering…..”
“If the housing market is booming, why is the Fed still buying record amounts of mortgage backed securities?”
“Their MBS holdings just hit record levels again.”
Where is AIG when you need them?
I was not a fan of the Savage. I found that doing the opposite of what he predicted was a successful approach. I think he has lost more than a steak dinner.
IPT just broke .81 so I am now watching .77-.78, a support based on some closing highs of the last year…
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=5&dy=0&id=p65689520611&a=804945905
My second tranche filled for .81 very happy customer!
Remember I have my third and fourth tranches waiting. A portion of my third will be used at my previously discussed target. .74 if it comes.. after that look out I won’t deploy till much lower. If it even happens.
The sector ended up getting what appears will be just a textbook abc (possibly abcde, but I doubt it) correction rather than the more bullish one that I thought we had a good chance at. And that’s ok, the picture is still textbook bullish.
With the usual pressure brought by the damn Fed speaking this week, there might not be a dramatic move up until after Labor Day but I do think we can see the low today or tomorrow in the miners.
SILJ will probably at least partially fill its 7/20 gap while testing its 50 day MA:
https://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=1&mn=0&dy=0&id=p26024776495
Matt,
I’m with you 100%. I do not think for a moment either that we are heading much further down. I was really looking for this .81 if we head down to .74 that’s great if not I feel like you just said we should have a turn around soon. The top is not in as you said.
A Big Moment For Junior Gold Miners Looms
by @Goldfinger on 25 Aug 2020
“For the last three weeks gold/silver and precious metals mining shares have been mired in a corrective phase. After reaching a frothy overbullish sentiment extreme on August 7th, gold has consolidated between $1920 and $2000 with the most of the recent price action focusing on an even tighter range between $1930 and $1960 (as I type these words gold is testing the lower end of this range):”
“Gold did bounce back to over $2,000 (on August 18th), and now it seems that a retest of the $1870s could be imminent. A retest of the August 12th low near $1874 now lines up with a rising 50-day moving average and offers a logical spot for a ‘double-bottom’ to be put in place. ”
“Another drop below $1900 in gold would also likely bring the junior gold miners to the brink of completing a head & shoulders top that has been brewing for a couple weeks:”
“Given the fact that gold, gold miners, and the GDXJ (junior gold miners ETF) are all in strong long term uptrends we should give the benefit of the doubt to the bulls until proven otherwise. In uptrends, buying at support tends to be a profitable proposition more often than not.”
https://ceo.ca/@goldfinger/a-big-moment-for-junior-gold-miners-looms
I don’t believe for a second that we have even the possibility of a head and shoulders top in the juniors even if the pattern completes. Instead, I think GDXJ shows what Elliott Wavers would call an expanded flat correction that morphed into a standard zig-zag. This development is what ended my very bullish near term outlook and left me with “just” a bullish outlook.
You can see that IPT’s A-B-C (zig-zag) correction consists of two smaller abc corrections (one in A and one in C)…
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=0&mn=7&dy=0&id=p31383089631
Those selling here must be those who bought around 1.20 a month ago. Bless their hearts. 😉
Btw, today will make 8 days down for IPT. That’s the most since 9 down four years ago following the 2016 high.
Seems like a good time for a reversal of trend.
I also think it is more unlikely that the miners (and GDXJ as a proxy) referenced on Goldfinger’s article are putting in a large head & shoulders top, but I’m always willing to look at someone’s thesis and look at things from a few different angles.
I think his statement about “gold, gold miners, and GDXJ all in strong long term uptrends we should give the benefit of the doubt to the bulls until proven otherwise” made the most sense. A head and shoulders top would mean a much larger and longer correction is about to get underway, and while anything is possible, I just don’t see that playing out with so many macro factors underpinning the PM sector.
An A-B-C corrective move (or the zig-zag with 2 smaller a-b-c corrective legs) does seem more reasonable, and the IPT chart is a good example.
Just curious if you think that 89 day EMA around $.75 that you included on that IPT chart may offer support?
Yes, I’m not sure who would be selling IPT down at these levels when they are totally cashed up, are making massive profits in the 3rd Quarter at these metals prices, and have 3 different exploration programs underway, but maybe it is the bag holders who bought that top a month ago. I was selling them my shares around that time, and will happily buy them back from them now. (haha!)
Yes, based on past action, I do think the 89 day EMA will provide support, whether precisely or not, who knows, but it clearly meant something before the big moves began. In addition, it has the 50% retracement of the entire March to July move just below it at .74 so is definitely significant due to that backup. And with Powell not speaking until Thursday, we could easily see more pressure tomorrow and/or Thursday. You know how it is!
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=0&mn=9&dy=0&id=p30320045409&a=805032999
I really like the looks of SILJ vs GLD (but of course we may need a quick break of the 50 day MA this time):
https://stockcharts.com/h-sc/ui?s=SILJ%3AGLD&p=D&yr=1&mn=0&dy=0&id=p91829671118&a=798302474
Well, just to be safe I added a bit today at $.79, and it if drops back to $.75-$.74 tomorrow or Thursday morning then I’ll add more. It just moved to my 2nd largest position.
Can’t go wrong with .79 even if it does go lower, in my opinion. I sure don’t see it falling apart.
Thanks. Yes, this has been a nice place to regroup and add for the longer term bull, and when investors get wise to how well they are doing operationally at these Silver prices, and then pick up on their expedited 3 prong exploration program for Silver near existing mines, gold targets in their “Valley of the Gold”, and their Copper/Zinc/Lead/Silver base metals targets in the Volcanic Massive Sulfide deposit that they have been waiting to get back and explore, then I’m almost more excited about their exploration news for balance of this year, and that should present many upcoming catalysts for value creation. It’s a stock I’m very comfortable holding onto.
Wow. That was a long run on sentence and should have been 3-4 smaller sentences, but I got excited just thinking about it all. Ha!
It’s OK. I was able to take a breath right before Volcanic Massive Sulfide and it was all down hill.
Haha! Good one David. Next time I’ll just write VMS deposit. I’m pretty excited to see what they hit on their Gold target though as well. Fred also mentioned that on their Silver deposits that they’ve also noticed down underneath the Silver it transitions to Lead/Zinc, but then under that level they have gold down below, so they may be increasing their exposure to Gold. I have mixed feelings about that, as I liked them as the purest play exposure to Silver, but at these Gold prices, having some exposure to both the precious metals will still be just fine.
Bottom line – I’m just glad they are ramping up exploration in a more meaningful way, and I’ve been waiting for them to turn the corner with higher metals prices to get more aggressive on their massive land package.
There is far more risk than reward in today’s stock markets.
S&P short interest is the lowest in recorded history, while the divergence between market breadth and prices is far beyond the previous record. In our view that means there’s seldom if ever been a better time to sell stocks and hedge portfolios or be net short the market.
As I said 2 weeks ago..
Do not chase gold & silver or related stocks higher. The prudent re-entry point should prove to be lower.
If you do not have short or hedge positions in place, or long exposure to the US dollar, it’s time to do so.
Could the S&P be nothing more than the markets being conformed to Trump’s wishes to have an ongoing up general markets until the election. Even if that explains the charts…it is still reality and fits your comments.
I am hedge-free regarding gold and the miners but did buy some USD with CAD today and will probably soon buy more (for short term reasons).
The CDW version of CAD:
https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=4&mn=5&dy=0&id=p55130676798&a=521484960
PM stocks have been crushed from their spiky highs.
It’s been a normal/fine crushing so far. Today is/was a very good buying opportunity.
Picked up some ISVLF on the weakness this morning.
Balanced some silver positions by selling a few Southern Silver and Santacruz and put that into an add on Impact. Actually Impact bigger in shares and value than the other two. Not too good a balance. I guess it was a shift.
Also added to Blackrock Gold when it went below US one dollar. I think I used some Metallic which remains a bigger position. I think that is it today.
Interesting choices David. I sold out of Southern Silver a few weeks back, but still intend to buy back in at one point, but just figured Discovery Metals is the premier lower grade massive Silver/Zinc/Lead optionality play and is getting the most attention so that I’d stick with that, and I’ve been building a new position in Silver Tiger instead, as I believe they may have the high-grade goods, similar to a Silvercrest based on what they’ve targeted and found thus far.
As for Santacruz Silver, I haven’t touched my position for a while as I believe they are going to get rerated up much higher once they put out their 3rd quarter results in a few months, and they have to be making some money finally with higher Silver prices and 3 mines running at full steam again. They are the lowest valued Silver producer and I believe they have a lot of catching up to do to the rest of the pack. Also they remind me quite a great deal of Impact Silver as higher cost underdog Jr producer that is about to hit their stride. I have a larger position in Impact than Silvercrest, but I really like both companies, and have watched both teams execute well in the tough Silver markets, and now it is time for them get rewarded in the improving price environment.
Blackrock Gold looks very interesting, and I saw it get pumped hard on ceo.ca, but it looked like it got way ahead of itself to me, and I just wrote it off as I missed the rocket ship on that one and may catch it when gravity brings it back to Earth.
It is still early with Blackrock but there last drill results were good. If they keep hitting, I will ride it but if there is less than good results, I will probably move it to freegold or Metallic, Vizsla or whatever still has a chance to extend. My best profits pending are in Great Bear and Discovery and I am trying to keep the share count up on those as I have already pretty well depleted Silvercrest. Right now I am waiting for our next rally as I don’t think my high flyers are going to put out many drill results while this correction is going on. They have learned the algos don’t care.
David, you bring up an interesting topic regarding the explorers and how to actively manage the drill plays, what to do when they become high-flyers, and ultimately chasing the quality companies that have already made a true discovery and proved they are onto a worldclass deposit.
With many of the hot exploration drillplays (like Blackrock, Vizsla, Metallic, Amex, GT Gold, etc…) they still have a lot of work to do to prove they have enough continuity and scope in the asset to make it into an economic deposit which could actually be a mine one day.
Most of the hot narratives are really at valuations lately that put them a bit ahead of themselves for what they have so far, but there is a rabid cult following of stocks like that that maintain the shareprice valuations at nosebleed levels from the frenzy and furvor. Even Great Bear is a bit ahead of itself because they don’t even have an official resource estimate yet, but had a market cap over $900 Million a few weeks back and have now pulled back to a mere $689 Million market cap – that is crazy when one considers how many actual producers with much larger resources bases don’t have anywhere near that.
It is the same thing with hot advanced explorers / developers like Tudor Gold, Skeena, Discovery, Wallbridge, Sabina, etc… They’ve had recent valuations at $400-$900 which is more than many producers with much higher resource bases, capital raised, mines & mills built, and actually in production. While some of them may be riding investor enthusiasm, good marketing of their projects, and higher metals prices to justify their valuations, it just speaks to how completely undervalued many of the producers still are. For instance, Americas Gold and Silver with 3 large Gold & Silver mining complexes only has a market cap of $380 M, or Argonaut Gold with 3 large mining complexes (4 mines) & resources + 3 more massive development projects, each as big as whole Jr Developer, only has a market cap of $752 M. So when I see that 4 mines & 3 Development projects at Argonaut versus Skeena which had a $750 market cap a few weeks back, it just doesn’t equate.
The thing with Silvercrest having over a $1 Billion market cap before production is that they have resource and insane economics to back it up and they are moving towards a construction decision. The same thing with Osisko Mining having a 1.3 Billion market cap pre-production. With Discovery and Great Bear they have a massive footprint and the potential for more exploration success to build a large world-class resource is the draw, but they still have work to do to prove out their thesis, and they are valued like they already have it in hand. What they have done though is consistently put out fantastic drill results, just like the others aforementioned and that is enough for most to believe they’ll get there. That investor confidence is a lot of the hurtle.
In my portfolio, there is now a substantial amount of exposure to exploration success for that upside torque, but I’ve been adding to more advanced deposits that will be mines (like Silvercrest, Alexco, Aurcana, Minera Alamos, Pure Gold, Wallbridge, Sabina, Treasury, Orezone, Bayhorse, Lion One, Monarch, etc…) because I want quality economic ounces in the ground to offset the speculative gamble from the drillplays (like QMX, Sokoman, Goldon, Newrange, Orefinders, Northern Shield, Percipitate, Defiance, Orex, Goliath, HighGold, Azimut etc…).
I’ve also got a number of advanced explorers and early developers that look like they have a good deposit but still need more resources to get noticed by the larger companies for a takeover or to be able to move things towards development on their own – (like O3 mining, Bonterra, Nighthawk, Auryn/Eastmain, Falco, Kootenay, Triumph, etc..)
Lastly, there are many smaller producers that can really have the needle moved by exploration success )like Anaconda, Impact, Santacruz, Excellon, Scorpio Gold, Superior Gold, Galane Gold, etc…), where I’m excited to see how their exploration programs may move the needle beyond just their production metrics.
Once companies get to be larger Jr producers and into the Mid-tiers, then the exploration still helps but won’t drastically alter the valuation of the company in most cases. Obviously if they hit the motherlode in a new discovery hole, that can still capture the market’s attention.
Overall it is nice to be diversified into the solid companies in different mining stages, but there are so many in “wait – n – see mode” awaiting drilling news to confirm an idea, establish the path forward as to which targets to hone in on in the future, or to decide how to develop a mining extraction plan. It puts a lot of pressure on these companies to deliver with the drill bit, and sometimes they do but it gets buried on a day where the metals are in a funk or other geo-political news overshadows it.
It has been pretty quiet for the last week or two with drill results, and it is likely the market is about to be overwhelmed with incoming data to sort through, which may get exciting, but can also lead to investor fatigue. It is why it is important for companies to write good headlines, market their story, and explain to investors why their results are relevant and advance the project forward down the path.
“We”: I remember Tiger starting to do that years ago and I thought that if he was getting help hitting that ball during a tournament that should be a penalty. Then Speith started doing and just the other day, Justin Thomas was using we. I don’t know…I guess they have physical trainers, swing coaches, spiritual trainers, wives, girl friends, caddies, reserved parking, free snacks, etc. but they better not be letting someone hit the ball out of the woods or something. Just suspect…the whole “we” thing. Some things you have to do by yourself.
It’s about personal accountability, and owning one’s actions and decisions, instead of trying to tie to it to others for consensus. There are times to conversationally use the royal “we” but not when discussing one’s own actions. Also, when people refer to themselves in the 3rd person it’s a bit bizarre, and something that narcissists like Trump or Muhammad Ali engage in.
We can all understand that!
We sure do!
We are funny guys!
US dollar doing a walk down. Maybe we will get some green (some) before close. Dollar must have read the Powell speech coming up Thurs.
Hold those thoughts. All those paper changes have been reconsidered.
US dollar down to 93.02 – maybe it is sniffing out what the Fed is cooking up…
How or why are markets doing what they’re doing?
Possible answers to consider:
l. We’re simply an exceptional people.
2. Jackson Hole”s beauty is capable of giving great wisdom to the Fed members.
3. God simply loves Americans and a powerful market.
4. Perhaps the Fed really knows what they’re doing.
5. Trading stocks has always been the easiest way to get rich.
6. With President Trump leading us, there is no limit to our greatness.
7. All risk has been eliminated with life in general…….
8. Just remember, what goes around, comes around.