What would it take to get Doc fully allocated in the gold sector?
Doc joins us today for a quick update on gold and silver. We start with the 2 day rebound in gold and if anything has changed in the charts he is looking at. We also discuss what it would take for him to become fully allocated in his portfolio.
It’s good to get Doc’s perspectives on the longer range chart set ups, and what he’s looking at for the bottoming process, and on getting more aggressive with the buying in a few months. I got pretty aggressive with the buying in late Feb through early March, but did trim some of my miners back into the late March strength and even into today’s strength to raise some funds for if we see the slow grind down that Doc/Glen/Jordan and it seems most are expecting over the next few months.
Still, I’m about 95% fully invested at this point, and only have about 5% of funds available for my trading account, unless I move over more savings from deep storage, or sell other asset classes in my trading account to raise capital (both of which I’m still considering as further options depending on what we see play out).
If however the action since mid March has been a sideways channel forming and bouncing along a bottom, then most of the held positions should do fine and offer nice upside leverage for whenever things start trending higher again in the PMs. I’m prepared for more downside in Silver than in Gold, but I’m not expecting anything too terrible, and will be ready to go bottom fishing if we see another 15%-30% drawdown in the stocks.
Will be interesting, if DOC is right with $1600 until mid of the year
Difficult times to predict anything
The senior gold miners bottomed a month ago and the recent drop did nothing to threaten that fact.
https://stockcharts.com/h-sc/ui?s=%24HUI&p=D&yr=1&mn=11&dy=0&id=p06809940553&a=674485004
Like this chart.
Thanks Matthew. That was a nice bounce off the 600 day EMA for the HUI and encouraging.
GDM took back the monthly KAMA this week as well as the 200 month MA (both were broken in February).
Also looks good.
The daily MACD for GDX was selling on Tuesday but that has already been reversed.
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=9&dy=0&id=p67263056533&a=924093106
Also going up
Gold, but especially GLD, was also about to give a daily MACD sell signal but the last two days kept it on its buy signal of 2 weeks ago:
https://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=1&mn=5&dy=0&id=p94767652949&a=753284548
After dipping close to its 50 week MAs, silver printed a huge bullish hammer candle on the important weekly chart:
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=6&mn=7&dy=0&id=p04834332997&a=426943004
How does one ignore this double bottom in the making?
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=3&dy=0&id=p55154788353&a=931628026
Great stuff…looking forward to next week
Great charts and analysis Matthew.
Thanks again Matthew…..
You’re welcome Jerry.
The miners bottomed at a very important 8-year resistance-turned-support so it’s odd that so many are so sure that lower prices are ahead…
https://stockcharts.com/h-sc/ui?s=%24GDM&p=W&yr=10&mn=11&dy=0&id=p04904826281&a=715025543
The low tested no fewer than 3 forks as well as the 2016 top:
https://stockcharts.com/h-sc/ui?s=%24GDM&p=W&yr=5&mn=11&dy=0&id=p13815766330&a=783806384
I am just plugging along, being long…… 🙂
I am thinking you are on to something…
The miners look a bit different when priced in sound money and more exciting in my book. They have been in a very bullish/constructive consolidation (rather than a correction) since last July and are likely to rise massively when that consolidation ends, which I think will be soon.
It’s great to rise versus the dollar but much better to rise versus gold.
https://stockcharts.com/h-sc/ui?s=%24XAU%3A%24GOLD&p=W&yr=13&mn=11&dy=0&id=p44487352060&a=471646105
Matthew, just giving you a shout out for the awesome charting. When you add in the Cole’s Notes comments/insight, you have taken your work to the next level.
Much appreciated.
Canucksi, the chart above at 4:40 pm (April 1) was created and annotated before the summer top so I should have added a note to point out that the big blue fork also provided us with the August high in the miners (GDM) after it perfectly marked the covid crash low. That fact adds significantly to the probability that the recent low (at another part of that fork) is an important one.
Priced in real money, GDM now has its first weekly MACD buy signal in a year:
https://stockcharts.com/h-sc/ui?s=%24GDM%3A%24GOLD&p=W&yr=6&mn=5&dy=0&id=p90857566708&a=673536254
Fun fact: The November high for GDM:Gold was the same as the November 2000 low. The Gold miners need to quadruple versus gold to reach their highs of 15 and 17 years ago.
+4
Silver bottomed right on schedule and has already recaptured its 200 day MA…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=3&dy=0&id=p48827535491&a=849938118
Price is near a two month low but the accumulation/distribution line just broke out to a clear two month high and that is bullish.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=11&dy=0&id=p80843117899&a=719135773
The XAU is again above its 50 week MA:
https://stockcharts.com/h-sc/ui?s=%24XAU&p=W&yr=12&mn=0&dy=0&id=p60008141588&a=779531140
A move above 150 (about 8% from here) will be a big deal. Btw, notice that the big blue fork on the following chart is based on 2008 to 2010 action and provided us with the bear market low of January, 2016 and nearly the covid crash low last year. It then marked resistance last May-June.
https://stockcharts.com/h-sc/ui?s=%24XAU&p=W&yr=15&mn=0&dy=0&id=p21830332268&a=618520531
Overall very impressive array. Thanks
But wait, there’s more! The miners are also looking good versus the stock market…
GDX:SPY
https://stockcharts.com/h-sc/ui?s=GDX%3ASPY&p=D&yr=1&mn=0&dy=0&id=p34679639725&a=626014880
If you doubt how that’s going to turn out, here’s bellwether NEM vs SPY…
https://stockcharts.com/h-sc/ui?s=NEM%3ASPY&p=W&yr=5&mn=8&dy=0&id=p63339824777&a=931778995
Here’s a cup and handle chart I made years ago for Novo and it worked out as it should have, and then some:
I hope the whole thing is visible to you (back to 2014).
https://stockcharts.com/h-sc/ui?s=NVO.TO&p=W&yr=7&mn=3&dy=0&id=p75780308735&a=518438075
I love those cup and handle formations….. 🙂
Doc,
You sound like my father giving sound advice..Everything you said today leads me to believe you and me are the only ones in the planet running the same pattern and that is 100% scary for the bulls lol.
There is no doubt without question that gold is headed lower sonare the seniors and juniors and start up etc.. Folks believe what you want but then to cry when you get your ass handed and then claim certain people are gods and get thanked every day.
My point is this we are talking about your hard earned money at least fir your sake don’t believe a story if the story had Been falling for 8:9* months..
This is and will be the longest correction in history.
You don’t blow by every Fibonacci retracement and not get to the ultimate 78%z
Think what you want but glen has a great record!
I’m not married to any trade.. suckers rally which will turn.. docs two months is similar to my pattern close enough…
Glen
Glen, you can claim you aren’t married to any trade but your words and bravado say otherwise. After the last two days, an objective analyst or pro trader would not make the claim that “There is no doubt without question that gold is headed lower sonare the seniors and juniors and start up etc.”
You are clearly married to one setup which is why you are ignoring all other possibilities.
If you don’t see the potential here, something is wrong…
https://stockcharts.com/h-sc/ui?s=GDX%3AGLD&p=W&yr=5&mn=7&dy=0&id=p56814772135
“Always expect the unexpected”……….. words of wisdom….from unknown author… 🙂
Doc with all this debt being created and fed being boxed in on rates will we see hyperinflation which could cause a severe recession or even depression.
Any thoughts??
Matt,
You are right!!!
btw Ramby is finally retreating some of his DUST+JDST positions and is aware and respecting the potential of a note-worthy double bottom here. He is also of the mind that Doc’s scenario could play out or even worse. He speaks humbly and takes NOTHING for granted and plays other markets when the PM’s suck. I respect chartists like that.
We have to be Mentally Prepared for our chart-scenarios to get punished by the markets. I hope you are correct here, but a healthy hedge or having some dry powder on the sidelines is often a prudent call. I am just 55% in the PM’s right now, but ready to go all in if your scenario kick’s in. Surprises work in both directions.
You are very wise confused +1
Dont forget this chartist here! we have got some game..
correction to my post which said the latter. I believe its the former we will turn down swiftly and shortly but other scenario could happen.
Hey Matt hope you are well.
Remember a year ago on MUX you said it would take off and soon…I wasn’t so sure. Here we are Its been the worst performer.
Markets who knows eh. Covid warped everything.
I’m cutting 500 2x4s n my saw mill a day at $12 ea…That’s bat shit eh?
Cheers
Bill, I do not remember that since I didn’t own MUX a year ago but I did start accumulating it way too soon, which is not uncommon for me. In 2015, I shared the fact that I was going to buy all significant weakness in IPT (while Birdman squawked against it) and by the end of the year, my position had grown 6.7x. Then, 6-7 months later, the price was 11+ times higher. I like companies without debt and MUX sucks in that regard.
I also wrongly thought the sector might have one more push left after the August top last year but I recognized when that was probably no longer possible and stated so.
Look at CUT and WOOD, timber is at multi year highs.
Bill, as an interesting note… about a decade ago, the forestry industry was claiming to be hurting and we were supporting key players in the industry with approximately $1B over the course of a couple of years. The companies were crying they needed the money, but most weren’t interested in opening their books. Now, with the high price of lumber, they must be making money hand over fist.
Keep cutting. 🙂
Glen
Ya Im out still to many ?????????????????????????????????????????
Need a base we are just bouncing.
Thanks for input.
Dang…………WHERE IS OWL………………….
Reading all the threads!
I believe gold has bottomed, I’m not a chart guy but the huge amount of money printing and these proverbial low rates can’t be anything but positive for precious metals. Our government has declared a third lockdown from covid that will start tomorrow. The economy here was reeling and now it is flat on it’s back. Real estate keeps going higher with all the bidding wars, we are definitely in the final melt up before the crash. I have seen craziness before but nothing compares to what is happening now. DT
Fair enough guys..
First and foremost thanks Ex for your contributions and investment advice on your letter..+many
Matt fair enough im not going to go back and forth on the topic as im clearly in Docs camp at this moment. Ive said it once and i will say it again thank you for your insights and charts and knowledge there is no disputing.
Im just a bit shocked for lack of words at the amount of bulls still thinking a two day bounce in gold is the bottom when many red flags on my side continue to pop up.
Some of you would love for me to post charts and show my work but im reserved in that nature matt does plenty there as they are in line but we differ in how we look at them in this precise moment. Someone here is going to be way off, either 80% of you or me, doc, bill and holy and charts i guess lol..
Again dont get upset at me im just voiving my opinion and im not here to disgruntle anyone i have much respect. If i give opinion maybe it is sound advice and some just fight it.
Is there a possible chance we have bottomed? Jerry, dt and matt there is im open minded but i dont see it and with that said please allow me to give and voice my goldupdate! Its food for thought and not a challenge anymore just my thoughts i share.
To the audience there is a mute button and ignore if i ruff your feathers. I think i have earned the platform at least in my head lol
Wishing evey single one of you prosperity during this high volatility time.
here goes..
10 year rates will continue to climb for the time being. at least short term from what my charts tell. Combine this with a temporary move higher in us dollars and we have a formula to continue to put pressure on gold for now.
The corona virus semi shutdown and not full lockdown is smoke in the mirrors which has caused the few days rally..i would assume if not very short term then possibly
in a few weeks time we would resume the decline. I believe its the latter.
from a long term perspective we are 7 months into this corrections and would not be one bit surprised if it went another month or more looking at the charts again..
The inflection point of the monster rally we had from the 2015 low to the alltime highs is enormous..Its is unprecented run with definite corrections and retest but non the less an enormous bullish run. The bulls have had there cake for a long time. Given we are still in a bull market and given the projections we need to go to, it is by far normal in my eyes to have a deeper then normal and sizeable corrections after hitting new record highs. To get to the promise land “everyone” needs to be on the same page and that includes the bears who are short/insiders/bankers/manipulators/regulators lol, i use the last word to lightly as they clearly dont do there job.
From the perspective of gold itself, jerry and many others have made it clear that trying to get the real stuff at these current prices is insane good luck. Its not the metal thats out of favor or bullion market thos have high premiums. Its the corrupted paper market and the algos need to take it lower to stea/was and repeat the game that never ends. Investors can choose to ignore my advice but the shares continue to get slowly squashed and its not done. They/bankers are slowly manipulating it down hence cat walk to psycollogically break each and every investors that will eventually through in the towel. Once the appetite has been taken care of then and only then will these bankers turn bullish and off we go.
From a sentiment point of view still to many bullish investors that does not sit well with me. the bullish percentage indicator is way to high needs to come down at the very least a 14 reading in my books..
You are about to see enormous volatility that will blow you away and it will move fast in each direction. Im positioned for up or down regardless but since i highly feel its going lower i wont pass up the chance of buying lower as such events happen only so often and this will be no different. So my voice is why buy here if you can get lower prices..We are at a point that i much rather hold out for full fibonacci retracements then blow powder in no mans land.
wishing you all a safe and happy easter
glen
Thanks Glen.
Yes Glen, you certainly pour your heart into analyzing the gold market, hard work usually pays off, thanks for your efforts. DT
Thanks for sharing your perspective Glenster. Always appreciated.
Metals(active): https://tinyurl.com/h3sa9xb7
(Gold nearly qualified for saturation topping.)
Thanks Doc, “In Doc we trust”