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Adrian Day – Insights On The Newmont Goldcorp Deal

Cory
January 15, 2019

I highly respect what Adrian Day has to say on the metals markets so when the deal between Newmont and Goldcorp was announced yesterday I reached out for a comment. We get into some of the finer details of the deal and find out who the real winner is.

Adrian Day – Newmont/Goldcorp deal

Click here to visit the Adrian Day Asset Management website.

Discussion
20 Comments
    Jan 15, 2019 15:32 AM

    As I have been saying for weeks, I expect a retest of the 100 dma for GDX. A solid target is 19.36, which will be the Kijun-sen (Base Line): (26-period high + 26-period low)/2)) starting next week for GDX. I would expect that level to be tagged. Buy with both hands and feet at 19.36 or below, IMO.

    The equivalent level for $HUI is 147.5, but I would expect us to go quite a bit below that figure given HUI’s weakness relative to GDX. Then again, maybe the HUI stabilizes relative to GDX over the next couple of weeks and we don’t go much below 147.5.

      Jan 15, 2019 15:39 AM

      I suppose it’s also possible for both GDX and $HUI to reverse once $HUI gets to about 147.5, which is not too far now. You will have to decide for yourself.

      Personally, I think GDX adheres much more closely to TA than $HUI, likely because its actually traded.

      Of note, $HUI is hitting the 50 dma today. It’s possible it bounces a bit from here in the next couple of days. Alternatively, we may need to wait until GDX gets to the 50 dma to see a bounce.

    Jan 15, 2019 15:27 AM
    Jan 15, 2019 15:30 AM

    At least for today, a fork support apparently mattered more to the HUI than completely filling the post Fed gap…
    https://stockcharts.com/h-sc/ui?s=$HUI&p=D&yr=1&mn=5&dy=0&id=p5442261187c&a=609092018&listNum=6

    Jan 15, 2019 15:38 AM

    The HUI could fall quite a bit further without destroying the intermediate term bullish case…
    https://stockcharts.com/h-sc/ui?s=$HUI&p=D&yr=1&mn=0&dy=18&id=p2205148160c&a=634861179&listNum=6

    Jan 15, 2019 15:07 PM

    I agree with Stewart on this: “A pullback to key Fibonacci retracement lines in the $1250-$1260 area would be healthy but even that may not happen. Current technical action indicates a very healthy gold market.”
    http://www.321gold.com/editorials/thomson_s/thomson_s_011519.html

    Jan 15, 2019 15:12 PM

    Silver miners getting smashed today with silver down less than a nickel. good stuff.

    As I have been saying, GDX is the far safer play until the next intermediate cycle low is hit. GDX has actually been stomping all of the other mining indexes as well for the last 2.5 years. will this reverse? I think so, but that won’t stop things getting to an extreme in the very short term.

      Jan 15, 2019 15:45 PM

      When it comes to volatility and the risk of bankruptcy, the senior golds will ALWAYS be a safer play than the silver miners.

      A couple weeks ago, you said that GDX looked like it would outperform silver stocks for years. I still say there is no chance of that and silver stocks will beat GDX for this intermediate cycle as well.

      At the moment, SILJ is still up 9% vs GDX in the last three weeks. There is nothing wrong with this action…
      https://stockcharts.com/h-sc/ui?s=SILJ%3AGDX&p=D&yr=1&mn=8&dy=22&id=p0423130118c&a=640421351&listNum=7

        Jan 15, 2019 15:53 PM

        Until the December 24th low in that ratio is taken out, you are right.

        I do hope you are correct as I have been heavily skewed towards silver miners for years (unfortunately). Let’s see what happens.

          Jan 15, 2019 15:07 PM

          My draw-downs get large too since I do not attempt to exit positions just because of short term tops.

    Jan 15, 2019 15:56 PM

    Hi Matthew – Are you still accumulating Brixton? Nice charts by the way.

      Jan 15, 2019 15:05 PM

      Hi, Charles – Yes I am. I keep hoping it will make it to about .11 but my buying is part of the reason that it hasn’t!

        Jan 15, 2019 15:47 PM

        Matthew – What was that China ETF you posted a few months back? I wanted to look at the chart.

          Jan 15, 2019 15:13 PM

          I’m away from my computer until tomorrow night but I think it’s FXI.

    Jan 15, 2019 15:23 PM

    LOL!

    Jan 15, 2019 15:47 PM

    That is the one. Thx.

    Jan 15, 2019 15:10 PM

    The gold rally is starting to look tired. Multiple stocks are now signalling an impending downturn for the metal. However, in spite of that the long term charts still look favorable for the future of the metals.

      Jan 15, 2019 15:35 PM

      Yes, I noticed it too, I sold a few gold shares today. DT

        Jan 15, 2019 15:39 PM

        As soon as there is a bit of a rally the selling starts.