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Welcome!

A focus on oil and the larger inflation picture

Sean Brodrick joins us for a focus on the oil market. Oil has been on a strong and relentless run higher since the crash into negative prices over 1 year ago. We discuss where he is seeing opportunity in the oil stocks. We also carry the moves in oil over to the ongoing inflation narrative and debate as to whether it will be transitory or here to stay.

Click here to visit Sean’s site – Wealth Wave

Discussion
93 Comments
    Jul 07, 2021 07:38 AM

    Bought HMY, GGO.v and KTN.v today. If HMY must retest its low, I will buy more.
    https://stockcharts.com/h-sc/ui?s=HMY&p=D&yr=1&mn=1&dy=0&id=p24659617360&a=985516989

      Jul 07, 2021 07:47 AM
        Jul 07, 2021 07:27 PM

        Speaking of buying and Anglogold Ashanti…. I’m hoping they buy out Corvus in the next 2 months. If so, I may hang onto the AU shares if KOR gets nabbed.

          Jul 07, 2021 07:38 PM

          It would be at 50 right now if it had Newmont’s PE. Of course there are lots of reasons for such discrepancies and some might even be legit but I’ll take AU at this time, hands down.

            Jul 07, 2021 07:53 PM

            Yes, AngloGold Ashanti is one of the best valued Seniors for sure. Kinross has sold off a lot as well and looks undervalued relative to it’s peer group as well. I don’t usually go into that large of companies in my portfolio, but if Corvus does get acquired by AU then I may just hang onto the position for next big leg of the bull market until it plays more catch up with other seniors like Newmont, Barrick, and Agnico Eagle.

          Jul 07, 2021 07:38 PM

          How do you think KOR owners will fare if such a buyout occurs? It seems like most buyouts now favor the buyer and not the owners of the company being bought.

            Jul 07, 2021 07:50 PM

            Hi Mike. Well, like any trade, there isn’t a once-size-fits-all answer, because it depends on where traders got positioned as to how happy they’ll be at a buyout scenario.

            Personally I got positioned in KOR at $1.92 4 months ago, and KOR closed today at $2.71, so the trade is already well in the money for me at this point. If a buyout was announced tomorrow at let’s say a 40% premium from here to $3.79 then I’d be thrilled. I’d have the option of pulling profits for a nice gain, pulling partial profits and letting the rest convert over, or letting the whole amount convert over. I’d likely opt for pulling partial profits in some of that gain, and letting the rest convert to AU shares, in this hypothetical example.

            Most buyouts are in the 30-50% premium zone, so if that happened from present levels would be a nice upside in a short time frame for any investor that got in lower than current prices. That is a much better return than most generalist investors will make all year in their mutual funds, and I personally anticipate we may see something as soon as the next 60 days from Anglogold Ashanti making their move on Corvus. That’s just my personal opinion and definitely not investment advice.

            Really it would depend on someone’s goals with why they positioned in a stock and if they feel the acquisition robbed the company of much more upside, that won’t be the same in the combined entity. I still think there could be some nice upside after the takeover if shares converted over to AU, for the reasons previously mentioned to Matthew up above, and to his point on the rerating potential in Anglogold Ashanti to get more in line with valuations of other senior companies.

            There are however times, where investors feel the companies future gains are robbed during takeovers, as the larger company picked off the smaller company before it really has a chance to spread it’s wings and fly higher, or like in the example of the recent acquisition of my Roxgold position by Fortuna, I just didn’t see many synergies with the business combination, and would have liked to have seen a larger West Africa focused gold producer do the acquisition instead. If Semafo or Teranga would have acquired Roxgold, before they themselves got swallowed up into Endeavour Mining, then I could have gotten excited about those business combinations.

            For me personally with Corvus, I entered the stock 4 months ago based on their great drill results, and that they were happening in tandem with both Coeur Mining and Anglogold Ashanti both drilling like crazy right next to Corvus in Nevada on their respective properties. I figured KOR could run higher based on just drilling success, and also postulated that either CDE or AU would make their move on Corvus in a year or so. When Anglogold Ashanti just took that larger strategic stake in Corvus and put in a 90 day hold on Corvus doing any other major transactions with any other company, that showed their hand in my opinion.

            At this point with a 41% gain in place, and if another 30%-50% gain was stacked on top of that, then I’d be very happy with those returns on an investment in a 6 month period of time. If a different investor did something like buy into last summers peak over $3 hoping to get a multibagger, and then got taken out for a 30%-50% premium, then they may not be as excited. It’s all relative.

      Jul 07, 2021 07:17 PM

      I’ve bought GGO, BBB, and IPT over this week although all three could have one more dip down. The chart for HMY looks perfect, I don’t buy US listings but I may make this my first.

      https://stockcharts.com/h-sc/ui?s=IPT.V

      As always, thanks for the charts Matthew!;-)

        Jul 07, 2021 07:27 PM

        I like that HMY has a PE of 10 and moves like a junior. Even $8B AU moves very well and has a PE of 8.

        Good luck, Dan!

        Jul 07, 2021 07:31 PM

        The P&F PO for HMY is 9.75

        Jul 07, 2021 07:01 PM

        Dan – Thanks for sharing what you’ve been buying. Over the last 7 trading sessions I’ve added to my positions in Americas Gold & Silver, Tarachi Gold, Western Copper & Gold, Integra Resources, Denison Mining, Ur-Energy, Energy Fuels, Equinox, Eloro, Nova Royalty, FPX Nickel, Guanajuato Silver, Calibre, Firefox, and Brixton. In the prior 7 sessions before that I only added to Alamos, Excellon, Cartier, Fosterville South, and Defiance. This has churned through most of my dry powder remaining, but I may add to a few more based on how things progress.

          Jul 07, 2021 07:19 PM

          Wow, that’s a lot! It is mostly a guess lately, IPT has a positive P/E and Brixton has been going down for almost the whole last year.

          I’m speculating with IHC, Imperial Helium, and GHG, Global Hemp Group too.

          https://stockcharts.com/h-sc/ui?s=IHC.V

            Jul 07, 2021 07:28 PM

            I am also not holding any uranium stocks at this time.

            Jul 07, 2021 07:42 PM

            Thanks for the heads up on IHC and GHG Dan, and yes, both Impact and Brixton look attractive at current levels. I”m still pretty stocked up on Impact but have been considering adding more if it dips to silly levels. With Brixton I’ve had a very small position, compared to the position I sold last summer, and I just bumped it up a little bit feeling it was getting oversold, and anticipating Thorn drill results in the next few weeks.

          Jul 07, 2021 07:56 PM

          Ex:
          Good selection of buys. My plan this AM was to pick-up Aurcana again. However I took those fund and slid it to my checking account for my house cleanup fix up campaign to at least lock up those funds.

            Jul 07, 2021 07:15 PM

            David – You likely made a wise decision there investing your house cleanup/fix campaign, as those are tangible results and good value to your daily life and real estate assets. As for Aurcana, I’ve got a nice position in it, feel fine holding it for their move into production, and exploration campaigns, but expect they’ll have the same kinds of start up challenges any new mine does when getting commissioned and up to commercial nameplate production. As a result, I expect that if they have any of these normal startup operational hiccups, that it may sell down further, and I’d been keen on adding more at lower levels.

            Jul 07, 2021 07:16 PM

            Speaking of Aurcana…

            Aurcana Provides Initial Assay Results and a Restart Progress Update for Its Revenue Virginius Mine

            by @nasdaq on 7 Jul 2021

            https://ceo.ca/@nasdaq/aurcana-provides-initial-assay-results-and-a-restart

          Jul 07, 2021 07:16 PM

          For what it’s worth, I would think twice about holding most uranium plays at this time. For example, Energy Fuels looks very risky. Its P&F PO of 3.50 is reasonable and possibly conservative.
          https://stockcharts.com/h-sc/ui?s=UUUU&p=W&yr=3&mn=11&dy=0&id=p43737683007&a=987769428

            Jul 07, 2021 07:15 PM

            Thanks Matthew, and you are not alone in the voicing of caution as it relates to the current Uranium stocks at their present valuations. They really moved hard a few months back, up about 300%-1000% percent in the several dozen most popular names, so a correction here would not be out of the question.

            Personally, I had trimmed back profits in the Uranium miners once in January, and again in March, to free up some dry powder to rotate into other sectors, but I was starting to feel more underweight in the sector again, and just added some back to a few key holdings since the pricing has already pulled back about 15-20% from where I sold partial positions. I’m not going to be aggressively adding to most of my Uranium positions (unless a company has individual catalysts that warrant so), but I did want to have enough weighting that I’d benefit if the sector keeps surprising folks to the upside. Basically I wanted to make sure my dogs in the fight were up to fighting weight, but definitely don’t want to overfeed them here.

            Jul 07, 2021 07:42 PM

            FWIW, the only Uranium stock I own right now is Denison.

            Jul 07, 2021 07:43 PM

            Also noteworthy about UUUU is that it traded more than one-third of its outstanding shares during the week that marked its top in March. That is one BIG handoff by the strong/smart money to the weak/dumb money. A few weeks later, it gave a weekly MACD sell signal which remains in place today. For comparison, IPT traded about 7% of its float during the week that it topped last summer. For BBB it was under 5% and for the TWO weeks that marked Pan American Silver’s high, it was roughly 20% (10% for each of its top two weeks).

            After going 10 bagger off the covid crash low, no one should be surprised if Energy Fuels takes a long break while it refuels.

            Jul 07, 2021 07:47 PM

            FWIW the only Uranium stocks I own right now are Energy Fuels, Ur-Energy, Uranium Energy Corp, Denison Mines Corp, Nexgen Energy, Azarga Uranium, and Standard Uranium.

            I only added last week to UUUU, URG, and DNN. Overall I’ve reduced my position size in UEC, NXE, AZZ, STND from where they were in mid January & March.

            Jul 07, 2021 07:51 PM

            As for UUUU I trimmed it back in January and March (I guess in sympathy with some of the smart money handover to dumb money), but then I just bought some back, so I may be less smart now, but less dumb than people that were buying it from me the last 2 times I sold. Overall, I’m just going to hold what I have, and would be happy to add more to my uranium portfolio if we did get a nice washout in the sector to clear the sentiment. If that timed well with the PMs running hard to the upside, where I could trim off some of those profits, then even better. We’ll see how it goes…

          Jul 07, 2021 07:45 PM

          Ex, are you viewing any of these these purchases as short term holds or are you thinking these will be part of your portfolio that you hold for a while. I know you’ve been shedding some in chunks over time… just didn’t know if you’re viewing these the same way or you envision having sticky fingers with more of an interest to hold them. I figured since you mentioned you were almost fully in the market.

            Jul 07, 2021 07:11 PM

            That’s a great question Canuckski, and the answer is that it is a mixed bag, but I’ll unpack that bag…

            The short answer is that I have a large number of stocks in my portfolio and they’re all a potential short-term trade to me. Having said that, there are companies I’ve owned a core position in for years, and I just trade around 25-50% of the position leaving 75%-50% of the position invested in any market.

            So with the longer term holds, I still buy the dips and sell the rips around the partial positions in these core stocks (mostly the royalty, mid-tier producers, small producers, some developers). In the other developers, smaller producers, and in particular the explorers, I’m much more likely to sell the whole position on a short term trade based on if they hit big, or to limit losses on a failed thesis.

            My current strategy was that I had been trimming back some winners &/or sold out completely from some losers in the Cannabis, Psychedelics, Battery, Clean Energy, and Precious Metals sectors in May through early June. When those sales were combined with the money I trimmed earlier in the year selling prior rips in the PGMs, Uranium, Lithium, and Copper stocks, then that was the overall pool of money available.

            My thoughts on allocating this pool in such a concentrated way recently in the PM stocks, was that they just look like the best value to me at present. Most of the other mining stock sectors in the base metals and energy metals already had big runs, so a further digestion/correction seems warranted. I still like those sectors, but see the PMs as offering the best risk/reward setups at present, compared to areas like the base metals or battery metals.

            Some of these recent purchases were to bolster some positions that I feel may do well either fundamentally and technically, but also tethered to what I expect in the underlying metals markets. If some of the more established names pop on a move higher in the metals later in the year, or if some of the explorers pop on good or great results, then I’ll likely harvest those gains, and move them back over to the sectors I trimmed more aggressively over the last few months. I’m big on sector rotations within my portfolio, and so now I’ve gone in big again in the PMs, but will rotate to the BMs and EMs if some of the PM stocks make a nice move higher in the next few months.

            Jul 08, 2021 08:25 PM

            Thanks for the unpacking Ex. Much appreciated.
            I get the impression many are wondering which way the metals market is going to go. For the ones thinking we’re only going up, then the interest is in which stocks should hold more favour going forward. Thanks.

    Jul 07, 2021 07:18 PM

    Fed “altered” minutes supposed to be out today. Haven’t heard but must have been miner positive since they took them down. What can they say…going to raise interest rates during the life spans of the next generation. That should kill the miners today.

      Jul 07, 2021 07:41 PM

      Looks like the last 30 minutes is a shorters paradise. How come we never get the memo.

    Jul 07, 2021 07:46 PM

    Low of day and they aren’t stopping.

      Jul 07, 2021 07:40 PM

      Well I guess I was put in my place today…where ever that is. The good news is one of those computer run markets hit an all time high like the S&P or Nasdaq or Hog Futures…not sure.

    Jul 07, 2021 07:41 PM

    Seems like this is the 7th- 8 th time in the last 23 years since I’ve been an active trader, that there just aren’t any substantial buyers in the resource markets at this moment in time.

      Jul 07, 2021 07:46 PM

      No wonder I was down 7% today. The only paper Metals up today were Gold, Silver, Copper, Platinum and Palladium. Good none of my miners are in to that junk.

      Jul 07, 2021 07:25 PM

      Marty do you mean substantial buyers like institutions and hedge funds, or do just mean high net worth individuals?

      There is always Eric Sprott, personally backstopping many Jr Gold & Silver companies.

      It is a really interesting market dynamic right now with sentiment so low amongst retail investors, but clearly not that way with institutional, family offices, and high net worth individuals, that are all participating in the deluge of company financings we’ve seen over the last year +. Almost every capital raise from a company gets filled, gets oversubscribed and upsized, and the mining companies are the most cashed up they’ve been in many years. Just the size of the capital raises is also much higher than it’s been in years, and there is definitely an appetite for substantial buyers of the company in those regards (mostly in below the market deals and often with warrants attached).

    Jul 07, 2021 07:43 PM

    Still 8.5 % in cash, practicing patience

      Jul 07, 2021 07:49 PM

      I spent the day sharpening my pitchfork and picking up a new rope. My form of patience.

      Jul 07, 2021 07:37 PM

      After the dearth of buying I’ve done the last 2 weeks, I’m at 1.5% funds available, 98.5% fully deployed. It is always my goal when raising funds to hold more to the side for rainy days, but then I can’t help but deploy them when the sentiment and pricing gets smashed down. Often this serves me well and has me buying at most major corrective moves, but sometimes it’s a bit early. Like this year I started buying heavily in late February through early April, still doing much of buying in March, near many intermediate lows, but it would have been better in hindsight to have waited to start adding until mid March and not having started a few weeks early as prices were still declining.

      The exact same thing happened the prior year of 2020 during the pandemic crash — when things sold off hard in late February, it had me keen to start adding to positions in early March through April. Again, I was at least buying near the big turns, but by getting a bit trigger-happy earlier in the correction (even though it was only 2 weeks early), I ended up buying some stocks at a good deal, but not a great deal. Of course, it would have been a much better deal by waiting until maximum pessimism, but when I see a 20-40% decline in a company that I already feel has much further to run to the upside, then it’s hard not to add more. The problem is that some ended up going down 30-60% and had a better clearance sale after I added another tranche. I was lucky and did nail some companies in their mid-March lows, but there were a few where it would have been meaningful to have held off a bit more before buying.

      So, once again, I’ve likely bought too heavily over the last 2 weeks during this corrective move, and should be like Doc with only 43% deployed, but the more things correct, the easier it becomes to buy, and maybe I blew my wad too early here. I’m at a point where I’m going to hold and “love the ones I’m with.” 🙂

      Jul 07, 2021 07:54 PM

      Just to share with the Ker family…. It’s been a while since I received a call from my metals guy, but he called me today in light of him coming into a decent stack of ounces of gold (coins and bars). So, I went over to empty him out of what he had. We spent 10 minutes or so talking about the latest news and I asked him what he’s been seeing this past while. There’s been no change for months. He shared that most metal dealers are low on stock. Basically, whatever he gets in is generally in low quantities and is pretty well gone by end of day.

        Jul 07, 2021 07:55 PM

        Canuckski – Thanks for sharing that with the KER family. There is definitely still some solid investor demand for the physical metals, and the supply of coinage and smaller bars is still more limited as a result.

        Ever Upward!

    Jul 07, 2021 07:08 PM

    API Reports Seventh Straight Inventory Draw

    By Julianne Geiger – Jul 07, 2021

    “The American Petroleum Institute (API) on Wednesday reported a draw in crude oil inventories of 7.983-million barrels for the week ending July 2.”

    “Analysts had expected a fall of 6.2 million barrels, based on a survey by S&P Global Platts.”

    “In the previous week, the API reported a draw in oil inventories of 8.153 million barrels after analysts had predicted a draw of 4.686 million barrels.”

    “Oil prices are up 40% so far this year, and soared earlier this week on the OPEC+ deadlock between Saudi Arabia and the United Arab Emirates (UAE), but volatility set in shortly afterwards. Oil prices were down over 2% early Wednesday, but were regained by the time of the API release.”

    “Oil further fell Wednesday after a Wall Street Journal report highlighted, in no uncertain terms, the UAE’s clear desire to boost production and market share.”

    https://oilprice.com/Latest-Energy-News/World-News/API-Reports-Seventh-Straight-Inventory-Draw.html

    Jul 07, 2021 07:41 PM
      Jul 07, 2021 07:54 PM

      Goldman Sachs bets against their clients. The banks lost their credibility with the end of Glass Steagall and deregulation. They act in their own interest and the Federal Government has elected not to regulate many things. It is going to take time for the people to understand the value of the Constitution versus rhetoric.

      Jul 07, 2021 07:07 PM

      Before reading that, I can say GS is right regarding the inflation hedge part UNLESS the inflation comes with a poor economy. In the 1970s, gold went up 25 times and copper didn’t even triple but both went up the same amount in 2001-2011, about 670%. The CRB went 250% in the ’70s and 160% in the ’00s. Silver was hard to beat in both environments at 3,760% and 1,143% and will be even harder to beat in the current one that is unfolding.

      Risk-adjusted and very long term, gold is a superb inflation hedge. When it peaked last year, it reached above 100x its pre-Fed price of 20.67. It took the Marxist bankers 106 years to drain 99% of the dollar’s value. It would have happened much sooner if not for US hegemony.

        Jul 07, 2021 07:25 PM

        Gold has not done well compared to FANG in last 10 years but gold has a long history. Gold equities on the other hand, have been very disappointing. I think they are best treated as trading vehicles than long term investments.

          Jul 07, 2021 07:27 PM

          That’s true about the FAANGs and many other companies in the past for periods of time. The unique thing about the FANGs is that they are all de facto arms of the same shadow government that brought us the Fed. AMZN, for example, has benefited massively from covid because of government actions that were designed to help it and hurt its competitors. I won’t discuss the more “interesting” things about these entities but much of their success is based on a very unlevel playing field, not a free market. The same goes for countless multinational companies to a degree that has increased significantly in the last several decades.

          Remember that a true hedge is supposed to mitigate risk and gold does that for most portfolios like no other asset. All stocks are inherently much riskier and Bitcoin is obviously extremely risky. We don’t know how the FAANGs will do in a stagflation or worse, an inflationary depression.

          The miners are definitely trading vehicles. They’re like options that don’t expire.

        Jul 07, 2021 07:19 PM

        I am not saying the article does not have merit…Goldman, CITi, JPM, WF, etc has list credibility because they violate the law. How can you accept a truth when your agenda is to steal from your clients. I have an open mind, but a corporation that has been proven to reject fiduciary duty in favor of corporate profits deserves only rejection. If the analyst us correct, resign and work somewhere that values truth.

    Jul 07, 2021 07:32 PM

    While most people here have been concerned about the precious metal market, I have been killing it with my investment in Neo Battery Technology. I have at this moment a seven bagger in this stock and it is just getting started. Alumina Partners did the Due Diligence and provided the secure funding. This stock could be the holy grail, a hundred bagger, if it doesn’t get taken out. Ex said a few weeks ago that he had missed this stock when it was selling for 33 cents CDN. He didn’t even look at it because he has been to busy. Alumina Partners just secured financing with Focus Graphite (FMS) for $12 million. They are positioning themselves in the hot EV Battery Technology Revolution. Focus has two big graphite properties in Quebec. With cheap Quebec Hydro Electric power they will be winners, but the real winners will be the finance companies like Alumina. DT

      Jul 07, 2021 07:08 PM

      Good comments DT, and your great 7 bagger returns. That is a fantastic win, so job well done.

      Yes Neo Battery Materials has had a great run, and yes, I missed the rocket ride in it, as previously stated, but as previously mentioned just didn’t know about it in time and found out about it after someone else pointed it out to me over at ceo.ca, when Bob M had been covering it sending the stock, which pushed it even higher.

      When I did start positioning in battery companies quite recently I elected to go with Eguana and Electrovaya for Lithium batteries, and Pyrogenesis and HPQ Silicon for the new Silicon based battery technology. I’m still constructive that those companies have pulled back down to good valuations over the last 2 months, for what will be a much larger longer term trend to the upside for years.

        Jul 07, 2021 07:13 PM

        Sorry for that jumbled wording above. I tried writing that post on my smart phone earlier, then got sidetracked and came back to it later to finish the post and submit, but can’t view more than 4 lines on this phone. I didn’t realize until posting how disjointed it was. Once again, I can’t wait until we get the edit feature fir posting soon.

          Jul 07, 2021 07:14 PM

          Fir = for 🤦‍♂️

          Again, bring on the edit feature…

    Jul 07, 2021 07:52 PM

    With regards to this daily editorial with Sean Brodrick above, I personally thought it was a great discussion on Oil and Inflation, and he was spot on for most the points he made.

    It’s really great to have guest like Sean B. coming on to share their insights with the KER crew.

    Do other folks like these editorials, topics, guests, or have any other topics that they would like addressed when we talk with some of the generalists we bring on?

      Jul 07, 2021 07:06 PM

      Are there other sectors beyond commodities & energy, general markets, bonds, currencies, cryptocurrencies, etc… that folks would like us to ask generalists about?

      Are there are any specific smaller sectors like Tech, Banking, Healthcare, Utilities, Transports, Smallcaps, Dividend stocks, etc… that people have any specific questions they’d like addressed, or that they see as unique opportunities or trends for rotation into?

      Just checking to see what folks are most interested in, or what investors feel may be overlooked at present.

        Jul 08, 2021 08:51 AM

        No! You only be proficient in a few things…….don’t spread your operation.
        They sure are taking the PM stocks down with the rest of the market today!

          Jul 08, 2021 08:21 AM

          Good comments Chris. We are still fairly focused, and like to cover with the generalist pundits we bring on an overview of the general markets, bonds, currencies, and commodities and energy, but don’t want to just get pigeon holed only discussing Gold everyday, and it is a cyclical market that will have ups and downs. I agree with not spreading one’s focus too wide, but just checking to see what folks are interested in, or if there are areas folks wanted addressed when we speak with the generalists.

          Jul 08, 2021 08:23 PM

          You just noticed they have been taking the miners down? This has been going on for sometime and you have me grief for it..just saying 😉

        Jul 08, 2021 08:59 AM

        NO……… stick to your knitting……as the saying goes…..
        Peter G……at kitco today……. has a good summary…

    Jul 08, 2021 08:03 AM

    Last week was my best week ever. Wiped out in 2 days this week. Gold up both days.

    Jul 08, 2021 08:17 AM

    Is this the final capitulation or signs of something seriously wrong in gdx?

      Jul 08, 2021 08:24 AM

      If not seriously wrong with the GDX, then most likely there is something seriously wrong with Wall Street.

        Jul 08, 2021 08:32 AM

        I bought some gdx puts this morning before gdx started puking down. Matthew put out a chart indicating a close below 33 would be bearish during the weekend. This sector is only good for trading. Stick to gold, silver and stay away from the miners.

          Jul 08, 2021 08:29 PM

          Not sure if you read my post but over a month ago I was clear that GTX left two monthly gaps behind and there was no way we were going to go higher without filling those gaps. I placed monthly gaps as very important in fact it’s right up there for me. In case you don’t know and for all the other viewers GTX has a monthly gap at 32.50 I expect that gap to fill. The bigger question will be, If we break below that gap we may be in serious trouble.

          I nice full of that gap and big reversal would also be a dream come true. My dreams rarely come to fruition lol but I’m hoping this one does

          Glen

            Jul 08, 2021 08:31 PM

            Gtx=gdx

            Jul 08, 2021 08:37 PM

            Hope, dream and a prayer……. lol…….

            Jul 08, 2021 08:52 PM

            Jerry lol good one buddy!

            Jul 08, 2021 08:54 PM

            Glen……. hope your day is going well….my friend… 🙂

    Jul 08, 2021 08:26 AM

    As Dr. S. Bahkdi of Mainz said, “if you take the vaccine you will go to your doom.”

    Jul 08, 2021 08:39 AM

    Ex:
    I have no suggestions on what to cover as it appears all options for investment are time bombs. There has been some great news for many of the miners over the last couple of weeks, but meaningless when they (whoever they may be) are on a path of destruction. I am under the belief that the powers that be have got to clear short/naked short positions to take the positive side of the trade. Or protect hedge funds or managed money who have found an easy living in the unregulated precious metals market by taking counter-intuitive positions. So, in a way, I am thinking positive about the future, in that “they” are at the end of their “free range grazing rights”, and they pushed corruption to the limits.

      Jul 08, 2021 08:28 AM

      Yes, we’re in that slow summer doldrums period, where even good news is get muted results or being sold into as a liquidity event, and ok news or lesser has been sold aggressively. I’m not sure that it is so much naked shorting of these tiny microcap juniors, or if it is just apathy to the sector at present as people are not as focused on the markets and out traveling, seeing family, getting outside, etc… now that many restrictions have been lifted and life is returning a bit more to normal. Also the underlying metals haven’t done much to inspire new generalist investors to enter the sector (especially with the stock markets treading to higher and higher levels over the last few months).

      Again, we just wanted to see if there were any questions from folks, other topics they’d like to hear addressed, and it was more so around what we ask the generalists, as we have a good handle on the PM markets and what to ask specialists in the resource sector.

        Jul 08, 2021 08:35 PM

        I have lost about 20% of my account in 2 days. That does not sound like passive, disinterested traders. That seems to be an all out orchestrated attack triggered by the Fed Minutes nothing burger.

          Jul 08, 2021 08:44 PM

          Yeah, I’m about 19% down from my all time portfolio highs on June 1st, but it has been a move down over the last 5 weeks, and has accelerated more the last 2 weeks, but I’ve been through draw downs like this over and over over again, and it was normally through periods of disinterest from investors in the sector, and it’s not just the PMs but many commodities and other sectors also selling off the last month or two (Uranium, Lithium, PGMs, Copper, Zinc/Lead, Nickel, battery companies, pot companies, psychedelic therapies companies, meme stocks, cryptos and defi, and many other sectors in the general markets). I find it hard to believe all of those are getting naked shorted or manipulated by the Fed, and it is really more a corrective move in many markets, and more sellers than buyers. This too shall pass…

            Jul 08, 2021 08:29 PM

            I have been through a bunch of these also and they are rarely triggered by a “valid” reason. My theory is not that one entity foes it all, but one entity like the New York Fed trading desk can trigger movement in the preprogrammed algos of managed money. I haven’t looked back again today, but it appeared that there were about 7-8-9 straight candles on the paper gold price earlier today. We know JP Morgan can exceed position limits in the silver market because the CFTC has said so. So I am fairly sure they let all the commercial dealers do it. It would seem that such repetitive sales would not be beneficial to a client unloading a large position. Unless that client is the Federal Government. It seems reasonable that when large “sales” occur which often are as large as some degree of annual production, that they would have to be naked or “phony”. When the managed money algos sense the abnormal movement in the “paper” market they, in turn, join in the onslaught triggering greater downside movement. I wouldn’t be surprised if those running algo programs have access to knowing where the “stops” are concentrated….but they don’t really need to know when sales are piled on by a false trigger dump by the paper commercials. Once you get managed money and stops triggered, you in effect scare the crap out of retail, who join the party. Then the pundits all look at each other and blame the dollar or the yield on the 10 year or some other guess because in reality it was fabricated for a reason that is most likely criminal generated by a government entity or a quasi-government entity like The Fed. And the Game goes on…

            Jul 08, 2021 08:27 PM

            Yes, the game does go on…. and it is reasonable that certain days larger institutions or maybe the Fed utilizing other banks could dump a large number of contracts onto the market to trigger sell stops with other traders, which then triggers the algo high frequency trading bots, which then cascades over into retail investors selling. That part makes sense in the gold futures contracts, or maybe paper derivatives like the GLD or SLV. As for the miners, I could see them doing a similar dump in the ETFs like GDX, GDXJ, SIL, SILJ, but find it would be less likely in the individual miners, (especially the juniors).

    Jul 08, 2021 08:17 AM

    EX
    simply no interest in gold and miners in particular. Hasn’t been there for quite a while except for devoted followers.
    Market downturn won’t help but initially cause even greater pain.

      Jul 08, 2021 08:30 AM

      Agreed jonsyl on the lack of interest in gold and the miners in general lately. This too shall pass, but until then, this sideways to down churn and negative sentiment has had me encouraged to add to positions in the companies I like, that are selling off despite doing quality work to advance their projects. It’s been a good time for contrarian accumulation as things drift lower.

        Jul 08, 2021 08:10 AM

        Ex,
        I am simply going to give up on the miners. It is not worth the headache. I have been buying the miners etfs and they have gone nowhere for years. Better to find simpler investment strategies that don’t wear you down. In my opinion, the miners will start performing better only when the broader stock market doesn’t perform well and no one knows when that would happen.

          Jul 08, 2021 08:24 PM

          Hi Pyrite. Yeah, I can understand the frustration in the miners, but when people hit maximum pessimism in any asset class, is usually the best time to be accumulating it.

          Personally I’ve done incredibly well for years trading the miners, but they’ve not been very good buy and hold investments (depending of course on where an investor got positioned). I realize not everyone likes being more active traders, but even if people did swing-trades buying during intermediate corrective moves, and shaving off some profits on the succeeding rallies, they’d have been able to pull down some nice investment returns over several month periods.

          So when people say the miners have gone nowhere for years, that really isn’t completely accurate. There have been plenty of rewarding trades in the mining stocks almost every year for those that bought during corrective moves and low sentiment, and then trimmed them back into the excitement.

          Most notably were the moves higher the first 8 months of 2016, the Q1 runs in 2017 and 2018, the move higher out of the fall of 2018 into the Q1 run of 2019, the move into the summer run in 2019 through the fall of that year, the monster move higher out of the pandemic crash in March 2020 through August of that year, and the recent bump up from the March double bottom in Gold through April & May.

          I’d anticipate that we are now getting into one of those similar troughs for pricing and sentiment, where things have been selling off and people are abandoning ship at the wrong times. Personally, those are the kind of market setups I wait for with the dry powder, and why I like to fire off the dry powder when most people are throwing in the towel or moving back over to cash.

          In a few months folks will look back and wish they had accumulated into the weakness, but most will not take advantage of the clearance sale. This is why I’ve been buying aggressively the last 2 weeks (as noted higher up in this blog thread), and I added to a half dozen more positions today. I’m prepared for the fact that gold, silver, and the miners may still plunge lower, and if that happens, I may pull out some funds from deep savings to deploy, but for now I’m willing to weather a storm or two, and another 15-20% correction from here, as I still believe we will continue to be in the larger bull market that kicked off when Gold bottomed in December of 2015 at $1045.40.

          $1700-$1800 gold and $24-$26 Silver is also still plenty high enough for producers to keep cash-flowing and growing, and for development stage projects to have attractive economics. We are also close to earnings season where the producers will be reporting on their operations and earnings, and despite the bottom-dwelling sentiment in the sector, the producers are doing just fine.

          Most companies have had no issues raising money, and have biggie-sized their capital raises, and raised larger amounts than in past years to fuel meaningful work on their projects. There are hundreds and hundreds of companies with drills turning and we are going to see a flurry of drill results over the next few months. I’ll be looking forward to tracking which companies make some meaningful discoveries this drill season.

          One last area that has been muted are the M&A deals, but with travel picking up and folks now going out to projects, it is likely we’ll see a few more deals get announced soon, and that typically energizes the space and frees up capital that can be rotated into new projects.

          We’ll see how it goes…

            Jul 08, 2021 08:45 PM

            Ex,
            I mostly buy the major miner etfs: GDX and SILJ. It is nothing but chop for months and explode for few months since 2016. I guess it is a different story with juniors.
            I added some Jan 22 gdx calls and it is brutal. Not sure if I should sell them on the next rally or hope that they break even. Hope it is not a good strategy though. I understand I took the risk with calls and have to deal with my trading decisions but you would think with all the profits and fundamentals, these stocks should be doing amazingly well.
            If anyone can suggest ideas on what to do with my gdx calls, I would appreciate your thoughts and suggestions.

            Jul 08, 2021 08:45 PM

            Yeah, that is a good point Pyrite, as I’m in the individual names versus the ETFs, so many of them will move with more torque for periods of time that can be exploited (to the upside and downside). However, even the chop of the ETFs have provided some good intermediate trades over the years.

            As for options, I don’t trade them, as the stocks are risky enough for me. 🙂

    Jul 08, 2021 08:17 AM

    Gold and silver update!

    Remember awhile back we spoke about what glen was seeing in the charts. It’s now reality. They were double tops or Also know as m patterns and they co timid to sell off.

    This is one nasty sell of of naked shorting and criminality behind it. Some call it a bear market now almost 1 month shy of a year. Glen spoke about Intermediate trends or bears lasting 12 months or more. This seems to be in line with it.

    Impact silver call was .46-.48 won’t be an issue tagging that. The bigger issues will be of impact is going down to my purchase order of .29-.31.

    The monthly candles are red king and nasty and I’m perplexed with lack of words at how these a hole bankers and thief’s are filling up there appetite with borrowed shares. 100% pure criminality. How much longer can they take from the poor or retail investor? Really not much juice left from a bottom.

    Hang tight folks but a turn may not come till a bottom in September as discussed. The miners are acting like they want and will break the double bottom. For the sake of all I “Do not wish that one bit” as it would suck to have to wait till September. This fall is my number 1 reason I “never “ use margins or borrowed money.

    Good luck to all and I wish for a turnaround soon and if not we will be buyers at the bottom with the 4.6% left..

    Glen

      Jul 08, 2021 08:36 AM

      Thanks for sharing your thoughts and analysis on the PMs and miners Glenfidish.

      Do you see Gold going down and taking out the double-bottom from March at $1673-$1675 and breaking down to even lower levels?

      If so and if gold was to make a “lower low” then that would be more of a bear market signal.

      However, if Gold was to put in a higher low here (than the March double bottom levels), then couldn’t this still just be considered a corrective move down in the larger bull market?

      Curious to get your thoughts on what a bottom would look like if it happened later in the year. Would it need to go lower than the March levels, and what level of support are you looking for to hold?

      Any more color around what you are looking for in the bottoming process would be appreciated. Thanks!

        Jul 08, 2021 08:19 PM

        Hey Ex,

        Thanks for the dialogue. Basically what I’m seeing is the monthly chart continues to bleed red and keeps getting longer across the board on miners. The double tops and m patterns project down to the start of there lows something “ I never wished for” but is clearly happening and I never ruled this scenario out even after we broke right shoulder.

        The double bottom from has stood it’s time and many believed that it was indeed the final bottom. I’ve always said I don’t trust double bottoms and I didn’t like the monthly candle left behind from gold in that monthly. This does not mean it’s not a bottom or will not hold. Matthew, yourself and many other contributors made a good case for it and the more I looked at the scenario the more we began to except it. For example gdx making that run up in short order. But the taste in my mouth has been and continues to be the under performing miners across the board on a monthly. Docs scenario of moving down for another month etc. And the icing on the cake is gold finger, rambus, Gary and many others jumping off the gravy train and going bear something me and doc had mentioned before.

        I’m not perfect and I’ve learned no one is so I just try and give my two cents. I waited personally to go shopping about a few weeks ago thinking we had a bottom possibly in March. Purchased brixton at 19.5-.20 few others purchase

        Then we break lower on the monthly and that’s when I said we better hold on. This is my reasonings for not buying at this point seems like a falling knife and it projects lower today .16 brixton second attempt at breaking it. If it breaks brixton is headed easily to .11-.13 next.. So considering I’m still bull my strategy just becomes very conservative at this point as to not purchase midline resistance or support levels “since”this intermediate trend lower or bear whatever you want to call it continues lower it tells me it wants to head to lower lines. I’m no genie in the bottle lol but I would much rather use my last three bullets in tranches further down then here. Me personally speaking I feel better that way. Seasonally and historically it’s either a bottom here and now or that bottom is coming much lower and in September. I’ve been watching that monthly slowly creep down in stealth position and it keeps grind down to my low cae scenario in most my miners. Something I did not want.

        Now do I think this double low will break yes and no. Sorry for the mixed answer. The most important thing to know is my 4.6% which is not pennies on the dollar will be reserved for “ best case scenario. Either we are slathered and I’m using it in September maybe august low or from a much higher pull back once we break that $1940 area.

        The good is this, if I can see the miners hit there lows very soon today/tomorrow maybe next week early and turn fast all the while gold holding here then maybe we don’t break lower. But we need to start seeing high volume with higher prices soon. Miners continue to show weakness while we had the run up and even now that we are bouncing. Price action is what I’m watching at this point of it turns positively quickly and we hold here I don’t see us breaking that low.

        Personally I want that to be the low and hopefully it is.

          Jul 08, 2021 08:36 PM

          Thanks for unpacking your outlook a bit further Glenfidish. Much appreciated.

          Yes, I’m interested to see if Gold will put in a new “higher low” above the March double-bottom levels, in this seasonally sluggish period of Summer and then rally into the fall, which is why I’ve added to a large number of PM stocks over the last 2 weeks, and even added to a half dozen today.

          If the March double-bottom in gold at $1673-$1675 does get broken to the downside, then it may get more ugly than I’d like to see, but I’d be willing to suck it up, pull funds out of deep savings, and buy in one more large tranche down in the low $1600s – high $1500s. What would be a deal breaker for me is if Gold plunged down and took out the Pandemic crash of $1450. At that point the bull market would be more broken in my opinion.

          For now, I’m happy to have picked up a number of positions at much lower prices than I trimmed them at earlier in the year, and I reduced down my exposure to a number of other sectors that have already run well, to put even more focus on the PMs at these seem like the more contrarian plays at this point. If we do find a bottom here in the next few weeks to a month, and start to rally in Aug/Sep/Oct then I’ll likely lighten up on some of the positions I’ve beefed up from late June into early July here.

          At this point it’s a waiting game to see where the selling will get exhausted, and when the next impulse leg to higher levels will begin. Hoping for the best, but prepared for the worst.

          If you see anything on the charts that makes you feel we’ve hit the bottom please keep us posted. Cheers!

      Jul 08, 2021 08:30 AM

      Glen
      you’re now firmly negative???
      I’d stick with the scenario that gold should go up but might have some further downside. LOL

        Jul 08, 2021 08:58 AM

        Jonsyl

        I’m firmly perplexed at the action it is orquestarles and naked shorting. I would recommend you take a firm look at the laws in Canada as we “Still” have loop holes for this and I’m 100% the hedge funds/bankers algos and mm are definitely doing this. I’m negative I’m regards to the length of time this will take as I see it now we “ may” be looking at a scenario I king said about September “could” mark a bottom if continued clear pressure in these miners does not stop.

        Overall I’m still 100% gold/silver bullish and will unload my 4.6% accordingly but I’m done buying a falling knife as I see it and imo.

        Hope that’s clear

        Glen

          Jul 08, 2021 08:00 PM

          Ex,

          Great summary and thank as well for your purchases and views as many investors look for direction with you and Matthew and many more. All together we are much stronger. I think your strategy personally is perfectly fine because even though your purchases some a few weeks ago like me or here your smart enough man to have cash for “ worse” case scenario which we never know.

          Now I’m going to go out in a limb and say these most recent bearish calls of $1400 or less which I’ve heard from dent for years, Jim Rogers I believe said $1000, and a few others I can’t remember I would place at a very low percentage but again what do I know lol.

          “If” we do break I think we are landing around that $1480-$1550 region and that’s the are that has been discussed even with Matthew and other technical guys etc. My personal was $1480-$1520 were one of my chart points to.

          But I think this bleeding sure feels like capitulation as Matthew explained and with very low volume.. If we make one last run down and turn and gold holds that double bottom as you said we make a lower high then ex I tell you, this will have been one of the biggest shake outs I have seen right up there 2008.. I asked Matthew if we can fill that last gdx gap and turn without breaking the double bottom? If so that could be a great pivot.

          Thanks

            Jul 08, 2021 08:44 PM

            It’s appropriate that you used the word “pivot” because 32.60 marks a very important one. So, yes, we definitely can hit that level without making a new low and we better or it could get much uglier.
            It’s interesting that there is no gap at all at that level on the weekly chart.
            https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=7&dy=0&id=p20993277185

            Jul 08, 2021 08:30 PM

            Thanks Glenfidish for those further targets and comments. We still may have some gut-wrenching days ahead of us, but if we can bottom in the low $1700s, that would be the most ideal, keeping the pattern of higher lows in place. If we break the March lows, then things get a bit more dicey.

    Jul 08, 2021 08:54 PM

    Matthew

    If you believe we can leave it behind and resume the bull then I’m for it. It’s so close that I would love to collect it and reverse hard. So I could sleep better at night 🙂

    No but seriously speaking you believe it can be left behind and we would be ok for the king term trend?

    Thx