What’s Driving This Rotation Back Into The Market and Out Of Risk Off Assets?

October 15, 2019

Joel Elconin, Co-Host of The Benzinga Pre-Market Prep Show joins me to chat about the market moves over the past few trading sessions where money has been rotating back into the US markets. We start with the pop in bank stocks today and the overall narrative from some central banks discussing higher long term rates. We wrap it up with comments on the earnings seasons that is just kicking off.

Click here to visit the Benzinga website and listen to the recordings of the Pre-Market Prep Show.

    Oct 15, 2019 15:48 AM


    JPMorgan and Citigroup would both be bankrupt if they marked to market all assets.

    Oct 15, 2019 15:02 AM

    We’ve heard about the lifestyle companies mentioned on interviews before, but they are almost always the exploration companies with nothing but a wing and a prayer that they’ll hit paydirt.

    For example: (MXR) Max Resource corp – down 50% just today.

    Another lifestyle exploration company on the Vulture exchange bites the dust. Unlike the real companies (Producers & Developers) there is no actual asset underpinning these development hope and pray plays…. a lesson all investors in the resource stocks should take to heart when getting enticed by marketing narratives.

    $0.025 down -0.025 (50.0% loss)

    I must have had 5-6 investors private message me over at CEO.CA trying to pump MXR to me, and I warned each of them that I wasn’t impressed, hold mostly producers and developers, and only speculate on a few exploration companies at a time as so many return to their intrinsic value of $0. One guy even got hostile toward my critique even though they were trying to promote the stock to me, and while I don’t wish ill on any investor, I only post this as a warning to others to understand the risks they are taking when they bet on a “Drill Play” and it doesn’t work out.

      Oct 15, 2019 15:59 AM

      lol Ex.

      How many of those does it take the average person to figure them out?

        Oct 15, 2019 15:03 AM

        On the other hand, when gold is going up in price on a steady basis, those totally valueless plays can pay off big time, kinda depends on the name.
        Gold in it is always good.

        So is alot of gold in the ground, couple million onces for example, even when it is so thin its not possible to mine at a profit.
        And who needs infrastructure?

        Bring on the bull!!

        Its not called a bull market for nutin.

          Oct 15, 2019 15:06 PM

          Good point b – in a bull market even the turds float higher. (lol)

          There are companies with some trenching and hit a few nice drill holes with much higher valuations than actual development companies with a solid resource estimate and their economic studies done, or the actual producers with defined deposits producing the actual commodity.

          The thing with “drill plays” is that people start extrapolating out their few great holes to the entire proposed strike length, and get smoke coming off their calculators trying to estimate “just how big this could get…..”. 🙂 As a result the lemmings follow it all the way up and over the cliff.

          Your other point about companies with a couple million ounces of sub-par non-economic material in the ground, are those often referenced “optionality” plays. If the prices go higher, then suddenly those sub-par resources become above par and go in the money. I can think of a handful of developers and advanced explorers with deposits like that, which in a high enough pricing enviornment would likely go on an insane run higher.

          As you stated – “Bring on the bull!”.

    Oct 15, 2019 15:09 AM
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    Oct 15, 2019 15:17 PM

    GDX is heading down to that 24-25 level we were talking about. The odds are for a significant move down on the PMs. Multiple stocks getting hit. The past rally was just another fake rally for most PM stocks. It’ll take much higher PM prices to get them back up to the 2016 highs. A great opportunity to add again in November/December. It looks like a lot of folks may make November a tax loss selling month again. Best bet for a significant rally for most PM stocks will be 2020 now.

    Oct 15, 2019 15:28 PM

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