Uranium commentary – Can the stocks continue to drastically outperform the spot market Uranium price?
Justin Huhn, Founder of The Uranium Insider joins me for a Uranium market update. We discuss the short term weakness in the stocks that did not last very long at all before the uptrend resumed. I have Justin share his thoughts on why the spot Uranium price continued to fade lower while the stocks are clearly in a strong bull market. It’s all about how the spot market functions.
All the more reason to own a uranium royalty as far as I’m concerned. 😉
Haha! I saw what you did there. 🙂
One of these days I may pull the trigger on the Uranium Royalty Corp, but it looks a bit overinflated to me at current levels, and I’m happy with my basket of 7 Uranium stocks. Having said that, as the bull develops I’ll likely move that up to a dirty dozen Uranium stocks, and will consider URC as one of them.
Ever Upward!
(YCA.L) ((YLLXF) Yellow Cake plans to raise at least $110 million in equity
Reuters Staff – Feb 25, 2021
“Uranium fund Yellow Cake said on Thursday that it intends to raise at least $110 million to partly fund the purchase of physical uranium under an agreement with NAK Kazatomprom, the world’s biggest uranium miner.”
https://www.reuters.com/article/yellow-cake-equity-idUSL4N2KV4UJ
There has been a lot of chatter of are we headed to inflation or deflation. I feel like a lot of these below can go to either or.
For camp inflation, we have our typical hedges against inflation: Precious Metals, Agriculture, Commodities, and Energy but: (all if which I have taken positions in)
Have you thought about these alternative ideas that would be great hedges as well.
1. Good health (a whole topic on its own)
2. Good character (always wins)
3. Ability to learn: self education (library ecard are pretty popular)
4. Culture (food and redneck activities for me… who throws corn hole?)
5. Children as investments (legacy)
6. The best sports are the least expensive. (blown up too much in U.S.)
7. Homestead: primary source of food, water, shelter, good for independence, a small self-sustaining homestead is perhaps one of the best hedges against inflation, and it is a splendid training ground for kids.
8. Be a specialist: doing something better than other people in the community.
9. Trade / Hobby – defense warfare (personally bee keeping, welding, knife making, hunting, investing, I do not sleep)
10. Costless Hobbies – the best hobbies are the ones not being advertised.
a. Could bring financial value
b. Could bring entertainment
c. Could be a skill
d. Gardening
11. Enjoys one’s Family: invest in it (can you ever invest too much and does it seem we invest what is left not what we have first)
12. TRUE FRIENDS (keep them close)
+1 GrowingTrees. That may be the best post of the week.
Thanks Ex, I wish they were my ideas but they are from an old book recommended from Grant Williams. It was at the end of the book after the typical recommendations you would see. Thought it was too good not to share.
Oh, well thanks for sharing it regardless. Yes, Grant is a sharp guy.
Great List…………JMO
I think , a few around here already do most of what is on the list…..JMO
I am going to be nice , the rest of the week, over at the political section…. 🙂
Which is good to hear!
🙂
I’ll take the other side.
Costless hobbies are boring and not very challenging.
Set the bar high, challenge yourself to perform at your highest level.
Don’t settle for mediocre. Be the best. Once you’ve attained success, share your success with others so they can join you.
Retirees……here at the Ker, have been doing that already, you just did not notice….
Coin and paper currencies for PROFIT…. LOL….
You are going down the wrong path. Being an investor COULD be a costless lobby, reading from the library, be a alternative style bee keeper, learning to freaking tie knots, the idea is not to settle but to be creative / invest innovatively. Golfing is not a costless hobby.
G Trees:
Why would you go to the library when you can buy books on Amazon for pennies on the dollar and start your own library. Your friends will be impressed.
I love honey and don’t mind paying up for the “good stuff”
My point:
Once you have obtained the “Gift” of of understanding the markets, the world will become your oyster. The only thing holding you back will be yourself.
I feel like this is going to be a merry go around. I agree. I do have a lot of books. Some of my books are expensive, the library is free. I do not have a lot of space (thus Audio/Ebooks). Audio books are mostly what I do (I have 5 kids). I hope to get the gift one day I guess and I do not hold myself back. Here’s to hope.
G Trees:
I have read way to many investing books .In the end a third grader could do a better job of investing than most people due to the excessive amount of useless information to you must go through until you find your way.
If I could nail it down to one author who put me on the right track it would be Thomas J Dorsey and his analysis of relative strength. The other thing was to be cognizant of your downside risk before you started thinking about profits.
In the end it was pretty simple.
I just did the penny challenge where I turned 2500.00 into 37,500.00 in 31 trading days.
In the end it is really that easy.
I will admit that following the K.E Report for over thirteen years didn’t hurt either.
Congrats. I have not read Dorsey. I am currently reading Capital Returns: Investing Through the Capital Cycle and the Most Important Thing (Howard Marks) And Yes, the people here have been great! Best of Luck!
Strange Rates, Dollar, and Gold activity.
DXY: https://ibb.co/ZL4PL1G
Now 100% cash.
Gold is weaker today because the United States 10-Year Bond Yield is shooting up to 1.47%
https://www.investing.com/rates-bonds/u.s.-10-year-bond-yield
That’s what made me take out JDST position in the pre-market session, as mentioned on the blog from yesterday. With rates popping, and gold dropping, I’d expect the miners to be under pressure today.
Current Gold price at $1768.65, which is only $1 above the November lows.
I pulled profits in Anaconda, Golden Minerals, and Endeavour Silver, just to raise some more funds, in case we see the downside momentum escalate.
I just added more to my JDST. We are on the Highway to the Danger Zone at these November lows levels.
Palladium One surfaces from its nap. Added a little to Great Bear and Denison as I took a small amount of Discovery profits.
Good adds today David. I considered adding to Great Bear as well, but am holding out in case we see a bit more weakness. Today was a very busy day for me in the markets, and I outlined the trades down at the bottom of this thread in a response to Doc. Cheers!
I took some Great Bear profits to help my son buy a pontoon boat to go along with his lakehouse. I thought that was a better use of the profits than watch the recent decline. As a result I want to add back my position as it drops.
Doc may be spot on!
If GDX breaks lower here, its 2/22 High will be MaxSat “X” — Unqualified !!
Actually the consensus view from most technicians over the last 2-4 weeks has been that Gold may break the November lows and head down in the low $1700s or high $1600s, so I just took some quick portfolio action, just in case that is what plays out.
Funds are raised, and short miners hedge is in place. If this level holds again as a double bottom, then I’ve got plenty of positions to participate in any upside moves, but we are an inflection point, and as Jordan and Cory were discussing on yesterday’s interview, we are going to be putting in not just a weekly candle tomorrow, but also a monthly, and at these levels, it is likely to be ugly. It would have been better if rates had rolled over and headed lower, allowing gold to rise up into the mid $1800s for tomorrow’s close, but that looks unlikely at this point.
Rising (Raising?) Rates in a Bubbling Market. I’ll watch for now.
Yep. Rising rates could be the pin the pops the bubble market, which is what would prompt the Fed to introduce yield curve controls. They’ll want to see a market temper tantrum first, and then will stop the advance of the rates by coming in and buying up treasuries in a big way.
I mentioned yesterday I took out a position in VXX for exposure to volatility. I may raise that bet slightly today, just in case the waters get choppy…
Added more to VXX for more volatility exposure, and got repositioned in RWM for Short Russell2000 exposure.
Well, I’m sure glad I got the hedges in place, as throughout the day JDST, VXX, and RWM have all moved higher, while many stocks moved lower. The choppiness has arrived.
I had edged into a 58% long position, finishing yesterday, but seeing the action this morning spurred me out of risking anything at all, meager though my account may be.
Gold “Crowline” support at risk: https://ibb.co/s9cxmRK
“Crowline”: https://ibb.co/JrJXp4Y
Base1: Dec 2016 – Base2: June 2020
GDX Busted !!
If GDXJ and Newmont hold, this all could be Head Fake Divergence.
In any case, I’m watching for now. (STATS report much later today.)
Even when priced in gold, copper is in blow-off mode…
https://stockcharts.com/h-sc/ui?s=%24COPPER%3A%24GOLD&p=D&yr=1&mn=9&dy=0&id=p84799139830&a=808832542
Nice chart for a space launch.
Yep, it looks like Copper is topping out here and starting to roll over. It moved down from $4.35 in the premarkets to $4.25.
I took profits earlier in the morning selling my Atico Mining for a nice scalp gain, after having sold Filo Mining yesterday, in addition to trimming back positions in Kodiak Copper and Western Copper and Gold. For now those are the main tweaks I’m making to the copper stocks in my portfolio.
Those who think rising nominal rates are bad for inflation should ask themselves why commodities are going straight up exactly as bonds have gone straight down.
Speaking of which, TLT is now more oversold than it was at its major low of 4 years ago and has several nearby support zones. It will rise with gold but a big decoupling of the two is coming…
https://stockcharts.com/h-sc/ui?s=TLT&p=W&yr=5&mn=5&dy=0&id=p97216193895&a=909278581
I haven’t seen anyone stating that nominal rates are bad for inflation, but they have been bad for Gold, and are decimating the bond markets. In addition, if they rise too much more they’ll begin to really pressure the general markets, which we’ve seen today. The US Dollar weakening is pushing the commodities up, and that is what is inflationary.
Correlation versus Causation
Have they been bad for gold? Or is it simply that gold and bonds move together as safe haven assets. I say it’s the latter.
Also, it is important to understand that rising rates are the result of falling bonds and not the cause. They don’t decimated the bond market; inflation does by causing real yields to go negative.
As for the negative effect on stocks, that’s coming but not here yet. In fact, stocks have been in a steady and clear uptrend since interest rates took off in early August and will likely turn and begin a correction just as interest rates do the same. As long as the bond market still attracts safe haven flows, falling stocks are actually “good” for falling interest rates. Again, the relationship is more correlation than causation.
The weakening USD will cause interest rates to spiral higher in the years ahead by causing investors to shun overpriced bonds and their now negative real yields. So, higher interest rates and inflation go hand-in-hand despite the majority opinion that rising rates are bad for inflation (and therefore gold). Most don’t know the difference between nominal and real rates, or, for that matter, nominal and real anything.
Yes, I’d agree that Bonds and Gold often move together as “safe havens” and used to post charts discussing the “safety dance” to that effect a few years back, so I get that. However, Bonds and Gold will begin decoupling, as the bond game is up, and bonds couldn’t keep climbing higher, and conversely, rates couldn’t get much lower than 0.318%, that they hit last summer. That jig is up.
Yes inflation-adjusted negative real rates, (interest rates – inflation, where inflation is greater) has been the environment that Gold thrives on, and we’ve had negative real rates for years now, and discussed that concept many times on the KER for years now as the prime mover with gold. Negative real rates are the fuel for higher gold prices, much more so than any correlation to the US Dollar or General equities.
Conversely, inflation-adjusted real rates getting less negative since last summer, has been why Gold has corrected since last summer, as inflation was flat, while 10 year treasury yields rose.
Inflation, as measured by the government CPI numbers,(flawed as they are at capturing all the inflation that everyday citizens are experiencing), has been mostly flat, and yet bonds have been sold and rates have been rising since last summer. So we haven’t seen inflation spiking in the data, and inflation was not the cause pushing rates higher for the last 7 months. Rather, it was a lack of interest in bonds as they had topped out, so that money was off in the general markets chasing higher yields. After the bond bubble popped last summer, then selling has begot more selling, and 10 year treasury yields have thus been rising, which had led to more selling decimating trillions of dollars in the bond market.
The US Dollar has been weak for the last 2 years, and that is ultimately what is causing inflation of commodities and services as the purchasing power decreases, and things cost more. Lack of confidence in the US economic situation, massive amounts of debt and fiscal stimulus, has caused a falling Dollar, has been inflating the value of commodities. This is why we’ve seen prices in Copper, Nickel, Zinc, PGMs, Oil, Lithium, Soft Commodities & Grains, etc… all going up, which leads to cost-push inflation when combined with rising wages, and ultimately results in products and services costing more.
During much of that time when the dollar was weakening over the last few years, rates were actually going down, and not up, so the weak dollar isn’t the sole causation of rising rates either, or treasury yields would have been rising the whole time and not falling.
Yes, what is causing rates to rise, is a lack of interest in bonds, because the bonds had topped out when and couldn’t go much higher, as rates couldn’t go much lower. The market has been thriving on returns, and folks have left the safety of bonds to pursue risk off assets in the general markets and speculative fervor we’ve been seeing in almost every market as of late. This just highlights the complacency in these markets, lack of fear, and desire for market participants to take on more and more risk, to chase higher returns, and it will end badly.
If 10 year yields keep moving up higher, it will throw a wrench in the gears in the general markets, and we’ve already been seeing that recently. Today as rates rocketed higher the general markets were under pressure. If the 10 year yields get up to 1.8%-2% then there will be a market tantrum, and the FED will have to intervene, and start buying bonds to bring the rates back down, effectively controlling the yield. This will keep treasury rates confined to a narrow range of 0.3% – 2%, and that will cause money to leave the bond market and look for a new home for a safety play, and ultimately some of that massive institutional and pension capital flow will find it’s way into Gold over the next few years.
I had posted this article from Lyn Alden Schwartzer last week and she nailed it here.
__________________________________
The Treasury Yield Stress Point
Feb. 22, 2021 – Lyn Alden Schwartzer
“If Treasury yields continue to rise that may pose a problem for growth stock valuations.”
“However, the Federal Reserve always has the option to intervene and suppress yields, for which the release valve is the currency.”
“Since the third quarter of 2020, most of the global economy has been in a reflationary cycle, meaning that we’re getting rising economic activity, rising inflation, and rising long-term Treasury yields from very low levels.”
“Most asset classes have benefited from it, but going forward if this trend continues, rising Treasury yields would put pressure on overstretched growth stock valuations and financial assets across the board more generally.”
Here’s another interview that popped up along the same lines as this discussion on rising yields being dangerous for the stock market, and the likelihood that if the market has a fit, that the Fed will need to intervene and control the yields.
_______________________________________
Danielle DiMartino Booth – Will yield surge get out of control? This is Fed’s next move
Kitco News – Feb 25, 2021
“The U.S. 10-year Treasury yield briefly surged above 1.6% on Thursday. Until the Federal Reserve declares an intervention to bring down the long-end of the curve, equities markets could see continued “nervousness” said Danielle DiMartino Booth, CEO of Quill Intelligence.
0:00 – Federal Reserve and inflation
4:37- Bond yield rise
6:15 – Fed reaction to yield rise
8:46 – Stock market reaction
Re: “Conversely, inflation-adjusted real rates getting less negative since last summer, has been why Gold has corrected since last summer, as inflation was flat, while 10 year treasury yields rose.”
Ex, here we go again. Bonds and gold (i.e. safe havens) topped at the same time last August and fell at the same time. Both were overbought and cyclically done. That’s the correlation. Rates had nothing to do with gold falling from a straight up blow-off and a 90+ RSI.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=2&mn=1&dy=0&id=p29171226309&a=444055643
I don’t know the point of your first two paragraphs. Or the 4th and 5th. I’d venture to say that the price-makers in the market don’t care much for silly CPI numbers or other thoroughly corrupted data. TIPS (Treasury Inflation Protected Securities) apparently told a different story than the CPI did. So did the best indicator of all: gold. It’s long been considered the canary in the coal mine for good reason. It did not almost double in the last 2.5 years because the dollar was strong.
6th paragraph: In a system in which central planners are doing their best to hold interest rates down, inflation and the fear of it are main reasons interest rates rise.
7th paragraph: “Yes, what is causing rates to rise, is a lack of interest in bonds, because the bonds had topped out when and couldn’t go much higher, as rates couldn’t go much lower.”
And what caused the lack of interest? Inflation. It sure wasn’t the low yields. They’ve been ridiculously low for the last decade+ while there were fantastic gains to be had in the stock market yet the bond bubble kept growing. Don’t forget that the bond market is about ten times the size of the stock market and has a lot players that aren’t interested in stocks at all. Gentlemen prefer bonds.
Final paragraph + your two links, etc.: Massive, suffocating debt and otherwise poor economic conditions cannot handle rising inflation for many reasons which I will not cover here. The stock market suffers because real returns get hit from every angle and become harder and riskier to achieve. The powers that be and their media love to promote rising rates as the big problem rather than side effect because they and their meddlesome policies are the real culprits.
The fact is, gold and bonds are safe havens that are highly correlated in stable times and decouple when bonds lose their (perceived) safe haven status due to overvaluation and inflation. It’s that simple. There is zero truth to the claim that gold fell since August because of rising interest rates and the fact that it took 75 days to merely retrace a 13 day parabola is a testament to its strength. And a testament to the market’s opinion about inflation can be seen in the numerous parabolas all over the commodities complex. So the market doesn’t buy your 4th paragraph.
Inflation protected securities kept climbing along with rising rates and peaked months after gold.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=1&dy=0&id=p82701813723&a=444055643
I’d agree that the market sniffed out more inflation that the bogus government CPI numbers, and already agreed that bonds and gold tend to travel in tandem as safe have trades and decouple when the perceived value of bonds are ditched due to inflation.
Having said that, the market does buy the CPI numbers and that is how inflation is monitored, and it has been flat, while yields were rising since last summer, making inflation-adjusted real rates less negative since last summer to present, and is the primary reason Gold has been falling in value.
There are 2 scenarios where gold will go back and both depend on real rates getting more negative overall:
1) CPI inflation rises against the 10 year yields, making real rates more negative
2) CPI inflation stays flat (much less likely), while yields come back down, making real rates more negative, and akin to what we saw from 2019 heading into mid 2020.
Inflation is created by not just more money supply, but also the velocity of money supply, which we didn’t seen after the QE post 2008-2009 Great Financial Crisis, but we are seeing an increase in the velocity of money recently as all the stimulus is putting helicopter money directly into the hands of businesses and individuals, unlike prior QE. This has been pressuring the US Dollar, which then spikes commodity pricing (and we see it everywhere in commodities – Copper, Nickel, Zinc, Oil, Lithium, Soft Commodities & grains, etc…), which combined with rising wages, leads to cost-push inflation.
We are in agreement that we’ll see inflation, but the reason for it is the increasing money supply paired with an increase in the velocity of money from the insane central banker meddling and printing, and the out-of-this-world stimulus measures, racking up colossal debt, and tanking the dollar. Rising rates are an after affect moreso than the cause of inflation, and they are a bet on the reflation theme of the economy picking back up post-pandemic.
I do agree with your statement: “The powers that be and their media love to promote rising rates as the big problem rather than side effect because they and their meddlesome policies are the real culprits.”
Yes, rising rates are a side effect, and merely a symptom of their fiscal mismanagement. Regardless, as Lyn Alden mentioned: “going forward if this trend continues, rising Treasury yields would put pressure on overstretched growth stock valuations and financial assets across the board more generally.”
At that point, it will throw a wrench into the gears of the general markets, there will be a market tantrum, and the FED will be forced to intervene and buy bonds to bring rates down and start yield curve controls. That will ultimately ensure negative real rates, and a positive environment for gold, as inflation is going to keep rising. The market has sniffed out inflation is rising more than the FED or the CPI rates are letting on, and the rising rates are but a symptom of this, as bonds loose their luster.
It’s absurd to suggest that gold topped because of interest rates when they hadn’t even budged at the time of the top. Gold was simply spent and parabolas always get retraced. The downside fuel is built into them.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=11&dy=0&id=p34387267822&a=444055643
Interest rates bottomed on July 26th, and then started rising against a flat CPI inflation reading from that point and have only kept rising up until present, which moved real rates less negative.
What will move gold higher again is real rates getting more negative, by inflation out pacing them, or 10 year yields falling relative to the CPI numbers.
I don’t see any evidence to suggest that the market buys the CPI and inflation IS an increase in the money supply. We have had a huge reduction in the purchasing power of the currency over the last decade while velocity has kept falling. Because of the way velocity is measured, it probably won’t turn up before we see massive new price inflation.
Craig Hemke was asked about inflation adjusted real rates effects on Gold, and he covers this topic quite well. The question is posed at the 9:40 mark in this interview.
Maybe his answer will be more suitable.
Yields bottomed when gold (and bonds, duh) topped. What’s a Hemke anyway? Are you seriously suggesting that I don’t know all about rates as they relate to gold? Did you develop dementia since you started coming here? I doubt that anyone here has covered the subject more than I have.
https://stockcharts.com/h-sc/ui?s=%24UST10Y&p=D&yr=1&mn=1&dy=0&id=p45672566522
Matthew – I didn’t suggest anything of the kind, and didn’t accuse you of anything, and am well aware you’ve discussed rates on here for years, as have I. I’m not even sure if you listened to Craig’s answer about how the rising rates made real rates less negative, or the 2 ways real rates will get more negative.
If you’re to the point of getting hostile and defensive, and accusing me of having dementia, then its probably best to be mostly in agreement, and agree to disagree on the balance. Good night.
This is uncanny:
“They do not like to think that their perspective may be flawed and when confronted with the truth this normally strong and confident sign often sticks its head in the sand. Members of this sign justify basing their actions on their emotions because they feel very certain that they are fair people, and therefore their perspective must also be fair…
They are often the strong-willed co-stars to more dominant personalities, relying on their likeability, kindness, and natural magnetism to draw others to them. Porcupines are polarizing individuals who make both friends and enemies easily.”
https://www.primalastrology.com/porcupine.html
🤦♂️😄
Agreed. It sounds just like you.
Copper and other commodities have done well lately. Ammunition has done better than anything else in the last couple years. (as far as collectibles)
The Dow is currently doing a tweezer top, and gold is about to break a key support level.
Look out..
Gold already broke support a week ago and the weak bears were completely unable to capitalize on it. Now we have an inverted TLT blow-off/hockey stick that is looking terminal.
Gold likely has little downside from here.
https://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=1&mn=6&dy=0&id=p00357662797&a=834997522
Gold did break support in overseas trading, but didn’t break the November lows on a closing basis, closing $1 above the the old trough. So for the purposes of last week the old low held as and it was more a double-bottom. As you pointed out, the bears couldn’t keep it below the November low on a closing basis, so it was a failed attempt to really capitalize on the push lower.
Now whether that November low falls today or tomorrow or anytime soon still remains to be seen, as we have been hovering dangerously close to it and even popped below it briefly today. The closing price will be key.
I don’t think a lower daily close will be a big deal. Weekly closes are more important and last week’s was well below any since mid June. The market is simply wrung out which is why gold went up 2% on Monday instead of plunging.
To be clear, I am not saying that all this precludes further downside in gold. It could still reach the targets I had mentioned (mentioned, not predicted) from 1737 to as low as 1690. Both are a far cry from the bears’ predictions and could be over quickly in one more sharp plunge (sharper the better to end this thing once and for all).
Today’s intraday low took out the November low during regular U.S. hours yet the market’s response was a big yawn. Not a good sign for the bears. Maybe they’ll get what they need tomorrow.
Good thoughts Matthew, and yes, I saw the November low pierced intraday, but then it bounced right back up above it and still closed above it on the day.
As you mentioned, the weekly charts are more important, and last week was a new lower low, but so far Gold has held up better than expected, and the miners haven’t fallen out of bed, so the selling is pretty “wrung out” as you mentioned. It may help that Gold has been in the corrective move for 7 months already, so much of the selling pressure has already been exhausted, but those lower targets of $1737 or even $1690 wouldn’t be the end of the world or anything.
It would still be most bullish if on the daily charts there isn’t a close below $1767, and we saw a W-shaped double-bottom, as that is one of the strongest bottoming patterns. If not, and we break to new lows to consolidate, then so be it, and I’ll just use up my remaining dry powder to buy that dip.
Well, Gold price is back down in overseas trading to $1761, after having dipped to $1755, so it looks like Friday’s close (both a weekly and monthly close) is going to be fugly.
At this point it looks like having a double-bottom off the November lows is being negated, and we’ll see the consensus view of lower prices in the yellow metal in the near term. I’m glad I sold some miners for profits this week, and started the JDST position, as mentioned on the other blog. Dry powder has been raised, and prepared to fire off at any deals in the miners that show up on the clearance rack.
The Ides of March is now staring us in the face—the first week of March will tell the story and it will in all probability be a move lower.
Doc:
You talking PM markets or Equities or everything?
So interest rates can’t go up……how long have we heard that spin? I’ve got a couple sizable CDs coming due……hope that 1.5 on the 10 yr. holds or goes higher.
Silver, I’m talking gold.
Watching equities today………I think March will likely be telling for them also. JMO
A correction looks imminent to me…
https://stockcharts.com/h-sc/ui?s=QQQ&p=W&yr=3&mn=3&dy=11&id=p79358385711&a=909362220
Matt, EX, Doc,
Ramb bought initial positions in Ivanhoe, ipt, silvercret,alexco and a couple of other PM stocks…the first time coming back to the PMs since the end of Jan when he got out completely. For months, He has been saying that a potential top has not yet been negated..he still sees a potential “top” in the “daily line combo charts” from CNDX,HUI, GDX,GDXJ,GDM,GLD,SIL,SLV, HGU and the XGD charts. Matt can you elaborate what he might be referring to? I think KER folks might want to know the potential risks of that. To be clear he is not saying we have topped…just that it has not been negated and thus is still in play.
Hi Confused, – Thanks for the update on Rambus’s outlook, and he is likely wise to start accumulating as the PMs correct a bit further, as they are far more attractive now than they were in early January.
I have good low cost-basis positions in Impact, Alexco, and Silvercrest that you mentioned, but not Ivanhoe. Until we figure out if this corrective move has any further to plunge, then I’m just holding most of those kinds of quality positions, but if they drop in a meaningful way, then I’ve got funds to add to them.
As for the comments about a potential top in the PM ETFs, I’m not sure I followed that. Are you saying he isn’t ruling out that last Summer’s move was The Top? I personally don’t believe that is true, and I still expect to Gold take out the $2089 top from last year, and still expect Silver, and the miners to go up multiple-fold from present levels.
Agreed Silverdollar. I took out a (VXX) position for volatility exposure in the premarkets and added more as the session got going, and mentioned above also taking out a short Russell 2000 position via (RWM). I had also taken out a (JDST) position in the premarkets, and added more earlier in the morning, and it has continued moving up on the day.
Picked up some TWM,SOXS, and QID yesterday…….Owned small positions previous.
Today, all in the money………and the way the markets closed today…..I expect a continuation down in the morning. The dip buyers weren’t acting with any conviction the last half hour. Of course, I’m wrong half the time so…………….
Nicely done SilverDollar! Ah, I see you went with the 2x inverse on the short Russell and short Nasdaq, as well as shorting the semicoductors with a 3x inverse fund. (interesting idea). Very well played sir!
With rates rising and the Fed sitting on the sidelines, it feels like they’re willing to see this frothy conventional markets get hit. Speculation is everywhere right now and my bones tell me that there will be some pain coming for every investment. The Fed probably would like to see some of the froth dissipated.
Doc – the Fed will sit on the sidelines and watch until the rising rates pop some of the bubbles, and then when there is a market tantrum, then they’ll start buying up treasuries and control the yields, (likely capping them below 2%). Right now rates are 1.53%, so there isn’t enough pain yet to the general equities. At about 1.8%-2% though, there will be a larger reaction in the market, and it will force the central bankster hands….
I agree completely. I’m holding the copper positions and just about every other position and will cost average lower since I’m only 44% invested.
That makes sense Doc. I did some trimming in the Coppers (Sold Atico/ trimmed Western Copper and Kodiak), but did add a little to my IBC Advanced Alloys as they are downstream in the Copper, Beryllium, and Scandium markets producing alloys for industry. I had mentioned selling Filo Mining yesterday, so now I’m down from 10 to only 8 Copper stocks, and smaller position in 2 of those remaining. I also trimmed down Grid Metals a little, and while they are Palladium/Nickel play, they also have some Copper exposure.
I trimmed back a few profitable Golds & Silvers (Anaconda, Golden Minerals, Hecla, Endeavour Silver, Inca One, Mexus Gold), but then conversely added to others that I had trimmed recently since they had continued to pull back today. (Jaguar, Gold Standard Ventures, Sailfish Royalties) I almost bought some more SAND today, but decided to wait to see if we get lower prices. As mentioned yesterday, I’m already pretty stocked up on Sandstorm, but if we see more weakness I may add a little more to the pile.
Another good pickup and hedge on todays action was my pick-up of JDST in the pre-markets and then more was added earlier in the morning. I held onto the position for tomorrow, in case there is any follow through selling or PM weakness.
Other trades today were the adding the VXX volatility position in 2 tranches, and the RWM short Russell2000, both of which did well, but I held onto those for tomorrow as well. I also added more to Ucore Rare Metals, and Platinum Group Metals. I did trim a bit of my Ur-Energy back mid-day as well.
The goal for today was to raise more funds on the sidelines to be able to pounce on clearance sales, and protect some profits, as I didn’t want to see the gains evaporate in the event of a more serious market selloff.
On this pullback, I’ll be adding to JAG, SAND, EQX, and GSV. Also AXU, USAS, IAG, and HMY. I sold SSRM at the high and will take a new position again around 11-12.
P.S. – Doc, I ended up trimming back some of the WRN a bit today, along with a handful of other Copper stocks to book some gains, just following up on our discussion from yesterday. I do intend to add more back if we see more of a pullback in the red metal.
The fed has no choice but to sit on the sidelines. They control nothing.
Rising rates and gold dropping has been in the cards for months. Nothing has changed.
It’s going to be interesting when the Dow hits 19,200.
Chartster, you have an amazing ability to see things as you wish they were rather than as they are.
Matthew,
We had a conversation about bond yields, real rates and how gold will (and has dropped since our conversation months ago) drop as a result. You didn’t know it then, and you still don’t get it now.
As far as the fed goes, they have been taken over for more than six months now.
Amazing how price and action are how I’ve said they are. And gold will continue to drop. And the fed will continue to do nothing.
You do remember our conversation about five months ago regarding bond yields and gold price, right?
Why don’t you tell me specifically what you think I don’t get? I have not called a top in bonds and I’ve shown the perfect correlation of bonds and gold for years and years. I’ve also pointed out for years and years that the decoupling of gold and bonds (which comes with rising rates!) is PRECISELY what will drive gold to its final high. Nothing has changed and nothing has happened to call that assertion into question.
As for the Fed being taken over, that’s as true as your idiotic claim that Trump has restored the republic (and that he is brilliant; and that MMT/more counterfeiting is fine, etc., etc).
Buddy, you’re as dense and delusional as you are foolish. It’s incredible that you’re not embarrassed by all your crazy claims over the last couple years.
This has been your reality around here for almost a decade:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=5&mn=5&dy=0&id=p49696050341&a=642512939
Specifically, you said I was crazy months ago for saying that bond yields would go up, and gold will go down. Ok..!?
Bond yields have gone up, and gold has gone down since then.
Trump is brilliant, BTW.
In keeping with a crazy comment: I still think gold is going to 1,050. For technical and fundamental reasons (of course).
Ok, you’re either taking my words out of context or straight up lying. Rates have been rising due to an intermediate degree correction in the bond market and I would never say that such a correction occurring would be crazy. In addition, I’ve been a steadfast “inflationist” for the entire time I’ve been visiting this site and have always said that rising rates will come with rising gold, just like in the ’70s. Nothing has changed including your complete lack of understanding of economics, markets, money and the monetary system.
Boy, I’m sure glad Trump jailed all those bad guys and stopped those lefties from censoring us!
For my stuff…the 8 month pattern continues.
This was a really great editorial from Justin on the Uranium sector, and he was bang on regarding the historically huge volumes coming into the top dozen names being institutional smart money getting positioned. We’ve mentioned that same point on here many times since things heated up in December.
Also, he is correct that the downstream buying we’ve seen for enriched Uranium fuel, is more indicative or more buying, than just watching the spot price in isolation. What wasn’t mentioned in this discussion is the elephant in the room in the Uranium sector — longer term off-take contracts. That is what the sector is waiting to see, and longer term off-take contracts will need to be in the $50’s to incentivize new production. That is a far more important fundamental driver than what is happening in the spot market. Also, as Justin pointed out – the remaining producers will be mopping up most of what comes available in the spot market for the balance of the year.