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Joel Elconin – Selloffs Continue With Little Hope In Sight, Is There Any Beacon Of Hope?

Cory
May 10, 2022

Joel Elconin, Co-Host of the Benzinga PreMarket Prep Show and Editor of the PreMarket Prep website joins us to recap the continued breakdown in financial markets as well as commodities. With all the broad averages down close to and over 20% this year most of the metals are down close to 20% from recent highs of just a couple months ago. To add a little hope for investors Joel shares one beacon of hope to watch for this week.

 

 

 

Click here to visit Joel’s PreMarket Prep website.

Discussion
27 Comments
    May 10, 2022 10:11 PM

    Another ugly reversal day—-moving down into the close which may signal a lousy start to tomorrow. Went to the candy store and actually did some purchasing today—there were those that thought the store was open a few weeks ago but they were taken advantage of—as mentioned at the end of April, May and June should be an excellent time to take advantage of some tremendous bargains. The DOW should continue to move south toward 28,000 and this in itself won’t help the PMs either. Copper is just starting to break down and oil is starting to look a little “toppy”. We could use a catharsis for the PMs here and the bulls have a chance for their v recovery although it will probably be a small v and not a large humongous V—-that needs to happen after some wallowing around at a low trading range for awhile. It’s good to be in cash but it’s getting time to allocate more over the next 4 weeks.

    Reply
    May 10, 2022 10:21 PM

    Stewart Thomson say’s the $1835 To $1775 is in his re-buy zone for gold equities, maybe there will be a little relief rally tomorrow as we are almost there. It might be time to unload some “DOGS”. (unless you are already out of this market like I am). DT

    http://www.321gold.com/editorials/thomson_s/thomson_s_050322.html

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      May 10, 2022 10:30 PM

      DT, I Believe you’re correct—we need about 2 more weeks of this carnage and I’m starting to sniff out that relief rally.

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        May 10, 2022 10:47 PM

        Doc, when I buy back into the market, I will only buy Gold or Base Metal Juniors that I absolutely believe have a big enough deposit to become a mine and have drilled out a large enough deposit. I think I now know which ones to go after. That eliminates about 99% of them. Now even sometimes that doesn’t work out, remember Poor (Pure) Gold, PGM. LOL! DT

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          May 10, 2022 10:54 PM

          DT, good plan. Thanks for reminding me about PGM—-I Might do a little speculation since it has nice gap to fill.

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    May 10, 2022 10:53 PM

    Yesterday I said that GDX had support at 31.30 and today’s low was 31.31 but based on the action, it wouldn’t surprise me if goes lower tomorrow. It is still almost 10 percent above the late January low and almost 8 percent above the 200 week simple MA.
    https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=6&dy=0&id=p09667326922&a=1121059647

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    May 10, 2022 10:13 PM

    There was a positive divergence between silver and the silver stocks beginning around midday and strengthening into the close. Silver dipped about 1.25% in the last half hour but the silver miners didn’t care and didn’t follow suit at all. SILJ finished the day about 3.4 percent off its low versus SLV while HL did a bit better.
    Silver finally tested its 2016 high after being stopped by the 2008 high twice, last September and December. It doesn’t show on the following chart because it happened after the CME close…
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=6&mn=3&dy=22&id=p79031069941&a=426943004

    Maybe now it will drop to the 2019 high of 19.75 as it retraces the rest of its vertical 2020 move. If it’s going to, I hope it does it at once and not after a rally.

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    May 10, 2022 10:23 PM

    AG is in the process of breaking down and looks at risk for a number of weeks.

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      May 10, 2022 10:40 PM

      Silver.

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      May 10, 2022 10:22 PM

      the 200 day bbs are so tight, I wouldnt trust the initial thrust as it could get reversed once the bands have started to bend outwards.

      When has anything in this sector ever been a smooth ramp up? I would say almost never. Lows and levels of support are almost always undercut before reversing. My cynical guess is we get a strong move lower that is reversed within a month or two in the opposite direction.

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        May 10, 2022 10:32 PM

        My question pertains to the monthly silver:copper chart you see above. Monthly means big picture, not the next few days or weeks. So, based on the chart, which would you choose? There’s only one correct answer.

        Reply
    May 10, 2022 10:44 PM

    Silver tested its 48 quarter/12 year MA today. Notice that relative to that MA, silver is much cheaper now than it was at the 2008 low.
    The enormity of the pending break above this giant fork should be obvious. It’s easy to see why it has been so well defended by the bears for the last 8 quarters.
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=Q&yr=50&mn=11&dy=0&id=p55924572136&a=1139425735&r=1652221747842&cmd=print

    Reply
      May 10, 2022 10:30 PM

      Weren’t you predicting an imminent breakout to the upside a month ago?

      My cynical but hopeful take is that we go well below that MA this month and into next month and then reverse by the end of June to form a large tail or wick. Maybe it will close June right on that moving average. July will likely tell the story.

      Or we could just crash lower.

      Reply
        May 10, 2022 10:36 PM

        “Imminent” when talking about a quarterly chart and a 40 year pattern means no less than during the present quarter and I’m pretty sure I addresses that at the time. I would never post a quarterly chart with two months left in the quarter (at the time of my post) as evidence that something was about to happen next week or next month.
        Even if this somehow turns into a crash that sends silver shockingly lower, you are way too bearish longer term. The secular bull market in stocks that began 40 years ago is over. Therefore, the outperformance that gold and silver displayed during the 2008 crash would most likely be even more pronounced following any crash now. Yes, gold performed far better in that ’08 crash than most realize. Not only did it bottom 4 or 5 months ahead the stock market, at its worst, it fell about 34% while SPY fell about 56%. In addition, it fell from a fresh all-time high and extreme overbought readings (monthly RSI(14) @ 85) that year. For those who don’t know, that definitely helped gold’s fall.
        It then took gold one year to surpass its pre-crash high while it took SPY more than 3 years to do so. Gold’s outperformance this time would probably be much more dramatic since both stocks and bonds are now in secular bear markets which was not the case in 2008, not even close (unless you measured them in gold).

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    May 10, 2022 10:46 PM

    The CDNX is cutting out an interesting chart…

    https://schrts.co/nidsetQM

    Reply
    May 10, 2022 10:26 PM

    Does the gold silver ratio over 85 factor into your market considerations?

    Reply

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