Comments on the USD breakdown, PM pops, and individual stocks

January 24, 2018

David Erfle, Founder of The Junior Miner Junky joins me today to share his thoughts on the significance of the USD below 90 on the USD index. This is providing a nice pop to metals across the board. We also look at some of the items he looks at when deciding whether to invest in certain stocks.

Click here to visit David’s site and at the least sign up for his free email list.

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    Jan 24, 2018 24:51 AM

    The Dollar drop today was entirely due Mnuchin’s big mouth at Davos.

    Long term it is due to the demise of the Petrodollar, combined with lack of foreign buying of treasuries.

    Jan 24, 2018 24:00 PM

    Glad , Ex and I, had a great discussion on the Dollar this morning early……
    and some agree with our thoughts……… 🙂

      Jan 25, 2018 25:45 AM

      +1 OOTB

        Jan 25, 2018 25:46 AM

        For clarity, I was mostly discussing the moves off FED rate hikes and the seasonality of the Q1 Run that follows the December lows the last few years.

        Recently, the dollar weakness has just been another log thrown onto the fire.

          Jan 25, 2018 25:36 AM

          The dollar was fizzling long before Mnuchin opened his yapper, and had already tested the 92-91 level once a few months back, then the rally fizzled at 94, and was already heading back down to complete the right shoulder of a Head & Shoulders topping pattern.

          The Dollar was going to head down into the high 80’s regardless of any political theater.

          The media is just grasping for a reason to attach to a technical price move is a falling Dollar that was happening with or without Munchy, and the pattern set up LONG before Davos.

            Jan 25, 2018 25:42 AM

            It was mentioned a few times that asset classes don’t stay in their “Range” forever, and eventually they either need to break out or break down. The consensus here on the KER blog and many other investing sites that utilize technical analysis was that the Dollar would bread DOWN out of it’s range.

            Some of the regular guests that come on the KER all felt the dollar would stay in its range and business would continue as normal. This is because they didn’t see any fundamental reason for the dollar to drop lower, and they thought it would bounce at 92. That isn’t what happened, because the price action technically was more powerful than fundamental news.

            The fact that Mnuchin finally came out, along with Ross BTW, and the Chinese decreasing their buying treasuries, and the debt ceiling debate last, week and about a dozen other things all contributed, but there doesn’t need to be a “Silver Bullet” fundamental reason for price action. The price action, chart set up, and the trading momentum are all the reason one needs to forecast the pricing.

            That is why many of the technicians on here already saw the H&S pattern set up in the dollar and nailed the move into the high 80’s months ago (before any of these fundamental “reasons” were ever cooked up or happened).

    Jan 24, 2018 24:05 PM

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    Jan 24, 2018 24:17 PM

    Doc, do you still see the PM’s pulling back in the near term and presenting another buying opportunity or are they on the way up with very little in the way of a pull back? And, what do you think about Evrim Resources, Advantage Lithium, or Tinka Resources?

      Jan 24, 2018 24:26 PM

      Hey Pardu, sorry but Doc is away and will not be back until mid next week. I will try to get some comments from him when he returns.

    Jan 24, 2018 24:55 PM
    Jan 24, 2018 24:59 PM

    Is the dollar (UUP) going to bounce at nearby support? Probably, but it won’t mark an important low.

    Jan 24, 2018 24:00 PM

    This is an important breakout and, despite the gap this morning and the subsequent selling in the afternoon, GDXJ managed to close the day above the upper Bollinger band:

      Jan 24, 2018 24:36 PM

      I lightened up last Friday, and had to hold my nose and jump back in today. Stepped out yesterday just in time for it to take off without me.

        Jan 24, 2018 24:39 PM

        I hate chasing like this…hoping I did the right thing…

        But likewise, it looks like an important breakout to me.

          Jan 24, 2018 24:13 PM

          I’ve been trimming a few names here and there on outsized moves, and trimmed back a few larger positions to peel off some profits, but am proud of myself for mostly staying 80-100% deployed since the move up in mid Dec. Now I’m around 85% deployed, but agree that this breakout has had teeth so far, and I’m curious if Gold is going to take out the old 2017, or preferably the 2016 highs on this rally.

          The Q1 Runs can be quite strong so if this spills over into February then it could make a new high. That would get new money to come into the space and this would be a boon to Gold, Silver and the miners.

            Jan 24, 2018 24:53 PM

            The renewed strength came even sooner than I thought! 😮

            On January 18, 2018 at 5:30 pm,
            Excelsior says:
            Do you think a short term JDST position could be in order for a tradeable short?

            Reply to this comment
            On January 18, 2018 at 6:25 pm,
            Matthew says:
            Yes, but I’d be ready to get out soon. It also makes sense as a hedge if you are very long the sector and nervous.

            I won’t be betting against the space here but I did eliminate all but a tiny bit of my margin debt yesterday. Otherwise I’m still all-in.

            Jan 24, 2018 24:10 PM

            Yes it did. I was expecting the $1340-$1350 area to swat Gold and the miners back down for a week or two.

            Thank goodness I never pulled the plug on JDST, but I did strongly consider it on Friday the 19th. I just hate taking a position in any leveraged vehicle over a weekend and opted out after thinking about a conversation with Brian here on the KER back in the spring of 2016 where I decided to hedge with JDST. He wrote back and said/asked … “JDST ?? When that trade moved against me hard it wiped out some of my gains during that run and I felt like a big dummy… So, once bitten, twice shy. I had 1 good JDST swing trade in 2017, but in retrospect I should have done more last year. If one is wrong-footed on those triple-leveraged inverse trades then it can move against an investor pretty quick. Unlike a miner it is more challenging to wait that out if the decay sets in during sideways channeling.

            I decided to just trim back the position size in a number of miners and move it over to cash and put it in a few blockchain companies too. On Monday & Tuesday I did add back to a few of the positions. In addition I am still sitting on some of the cash at present.

            Because of the cash and moving some funds over to the blockchain/crypto I’m now down to a 85% allocation to PMs but I’m more comfortable (less nervous) with what I have in place now.

            Of course, when there are surges like today in some of those companies then there were about 4 that I wish’d I let the whole thing just role, but I thought we’d have more of a breather before heading higher.

            For me it was about risk management and easing my mind, and I still have plenty of exposure to whole swath of mining stocks to keep participating in any extension to this rally. I also bought one stock back at a slightly higher price because I wanted a bit more weighting in it.

            I’m not sure what the net result of all this will be in a few weeks, but I feel pretty good about the positions that I have in place right now, and today was a nice green day for my portfolio.

            Thanks for being willing to bounce ideas around, as it is very easy to second guess one’s strategy, or a chart, or a sector. I value the feedback. Ever Upward!

            Jan 24, 2018 24:13 PM

            role = roll

          Jan 24, 2018 24:46 PM

          Stepping out when you did wasn’t technically wrong, it just feels like it when you’re forced to buy back at a higher price. I know for sure that many sold and have yet to buy back. Among them, most will wait for much more confirmation before buying and that is not wrong either. Our discipline should match our risk tolerance and those who take less risk should be happy to accept a smaller gain.

          I’m pretty sure you did the right thing.

          $1400+ here we come:

    Jan 24, 2018 24:15 PM

    Where Did All the Equity Go?

    Sandstorm Gold – Jan 24, 2018 #VIDEO

    “President and CEO Nolan Watson delivers a keynote presentation discussing how structural changes to the financial markets is affecting mine finance and what Sandstorm is doing to fill the void. Recorded live from the 2017 Mines and Money London conference.”

    Jan 24, 2018 24:19 PM

    (SCZ) (SZSMF) Santacruz Initiates Veta Grande Mill Expansion and Receives Drilling Permit

    @newswire on January 10, 2018

      Jan 24, 2018 24:24 PM

      (SCZ) (SZSMF) Santacruz Commences Drilling at Veta Grande Project

      January 24, 2018

      “The initial 6,000-meter campaign over 15 drill holes will be focussed on drilling the Veta Grande vein at depth below the current level being mined by the Company and is expected to also intersect the La Flor, San Jose and Armados veins that run parallel to the Veta Grande vein.”

      “Carlos Silva, COO of Santacruz, stated “This drill program will allow Santacruz to establish a maiden resource estimate on the Veta Grande vein in the first half of 2018,” Mr. Silva continued “Following this Phase 1 program the Company’s plan is to broaden the exploration program along the northern strike of the Veta Grande vein as we are eager to test the strike extent of this important historical vein system.”

    Jan 24, 2018 24:17 PM

    22 metres at 1.02% Ni and 475ppm Cu at Leo’s Dam Nickel Prospect
    Perth, Western Australia, 25 January 2018: Pioneer Resources Limited (“Pioneer” or the “Company”

    $PIO.AX (ASX: PIO)) is pleased to announce it has intersected significant nickel sulphide mineralisation in recently completed drilling at its 100%-owned Golden Ridge Project in the Eastern Goldfields of Western Australia.

    The Company advises that drilling at the Leo’s Dam Prospect within the Golden Ridge project area has returned a highly significant nickel sulphide intersection of 22m at 1.02% Ni and 475ppm Cu from 202m. Results of the Company’s cobalt-focused drilling at the Project were released to the ASX on 24 January 2018.

    The results of this phase of drilling validate and strengthen Pioneer’s geological model for the Golden Ridge Project, and it will now make plans for the next phase of field work at the Project as a priority.

    Jan 24, 2018 24:51 PM

    Got a nice double on AKG. AAU looks dirt cheap here.

    Jan 25, 2018 25:22 AM

    Panic in REPUB land hillary and obama are in charge in a secrect society . they are all worshiping at strange pizza parlors in WASH . Elvis is still alive and helping her . Its all a plot ., buy more vitamins from ALEX JONES before he hits his kid again !! pray s

      Jan 25, 2018 25:54 AM

      If only you had a clue, Russ.