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Where is the current rotation trade for the markets?

Cory
March 23, 2021

Joel Elconin, Co-Host of the Benzinga Pre-Market Prep-Show joins me for a general assessment of the markets. It seems a lot of the upward momentum has dissipated but the markets are not crashing. It is a time where we are waiting to see where the money will rotate. We also discuss the relationship between yields and gold as both are heading lower.

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

Discussion
55 Comments
    cfs
    Mar 23, 2021 23:32 AM

    Frank Holmes and mining cryptos:

    https://www.youtube.com/watch?v=-LXRrxZdYNE

    Mar 23, 2021 23:00 AM

    I Posted a waz ago…Bearish on PMs. Still bearish.
    Will post back when GTI turns up…
    Go cut some firewood for winter!
    Cheers to all contributes.
    Hay Holy!

      Mar 23, 2021 23:10 PM

      Howdy, Straight Shooter Bill , what’s that sound “”PM BLOWBACK”” deflationary juggernaut that could derail this whole move we’ve had since gold bottomed few years ago. Although, the PMs have a lot of bullish fundamentals. We have just as many bearish fundamentals. Just a very quick briefing we have a commercial real estate crisis that’s here. More big haircuts are coming most likely. All these moratoriums with consumers paying rent and mortgages is going to come back to haunt us the domino’s could start flying soon. All this historic monumental leverage in the financial system it’s very unhealthy and extremely dangerous.

      The precious metals will be decimated in a serious deflationary crisis in the very beginning. The reason why, stocks equities paper assets and real estate have all moved up in tandem together. Everything will be sold off we will repeat 2008 there’s no question about it. Everyone’s going to rush to the exits for liquidity. The masses will be wiped out and to get rich quick schemes are all going to end abruptly disappear instantly. The Central Planners are not going to accommodate this frenzy any longer I don’t believe. Not everyone, like I said in other messages are going to be allowed to get rich and that’s just a fantasy the dreamers who can’t separate themselves from this everything bubble.

      So, right now I’m more bearish than I was a few weeks ago. I can’t see anything that’s real bullish here because of those bearish fundamentals that can’t be ignored or eliminated.

      There’s always an outside chance that we could have a continuation of all these inflationary pressures. I’m not in that camp, too many people have jumped on board and everything is leveraged to the stratosphere. The precious metals can bounce around with lots of fake outs however I believe the trend is going to be down till this deflationary collapse has come to a conclusion.

      Maybe it’ll never happen, but I’ll be waiting for the fire sale prices of a lifetime. All these analysts and the bullish propaganda doesn’t impress me at all. it’s all snake oil and they’re trying to sell their newsletters to people that want to get rich in precious metals. These are shark filled Waters on steroids.

      I’m not impressed Bill, not at all ! With all this leverage in the financial system I want to see everyone deleveraging all their physical gold positions and gold equities. There’s a ton of leverage in the gold space. So, that leverage is going to come undone and you can’t stop it and that means falling prices I’ve been around this business for decades. If people are investing in the gold space and their that naive thinking that people have paid cash for all their positions in gold bullion that’s far from reality its leveraged to the stratosphere just like everything else.

        Mar 23, 2021 23:05 PM

        Hay Holy
        Thanks for posting back!
        I totally agree. We are in the most bazar times. I only have the gold I bought in 2001 left.
        I just put most of my cash in a 1.75% account…..
        The sell is… INFLATIONs here. That’s priced in for now. Like you said EVERYones on that band wagon.
        Bring on the implosion we need a purge. I have zero debt on all my properties.
        My commercial is GOOD. My Tenants are the biggest cell company in the country, security firm on Vancouver island. The biggest Heat pump guys also. Engineering firm in biz for 30 years. Pretty defensive business’s so Im not sweating to bad if the pooh his the fan.
        I guess my point is if you have retail restaurant space that’s ugly Location maters also.

        I gotta run always love reading your post cause we think alike…done same kinda stuff. You bigger 😉
        Were are you at… US side?

        My guys posted:
        These leveraged DJIA gained 103 points to begin the week, attended by a persistent non-confirmation with the NASDAQ and with bonds.
        Last week the highest number of “buying climaxes” was posted in 11 years. Back then, it kicked-off a 15% decline over a 48-day period. A “buying climax” is defined as a stock posting a 52-week high then ending the week down from the previous week’s close.
        We believe a top of generational, perhaps historic, extremes compels us to take on additional short positions to an unprecedented extreme as technical conditions warrant it.
        The higher markets are when the balloon finally, likely soon, pops, the bigger the implosion… which may have already begun.
        Do not be complacent, and do not grow tired of making prudent moves whether those pay off or not.
        1/2 Laramide – LAM, was sold at the open today for a gain of 145% in 13 months.

          Mar 23, 2021 23:31 PM

          Right on Bill, you’re shooting straight as usual… You said,.bring on the implosion we need a purge. I like it, I really like it a lot. BRING IT !!! Most likely it’s going to happen anyway. The odds are up there. The system has to unwind.

          I’m just now rollin it up out of here. Great hearing from you really good comments and I’ll be back later for the wrap up and we can go from there. GO GOLD ! unfortunately, we are a long way from a bull market and a lot of subtracting to do most likely. Bill, there’s a lot of hopefuls and dreamers on here. Much hype with links to analysts and have really bad track records at best. Precious metals have a lot of headwinds from a deflationary collapse sometime in the future. Although I have precious metals and all that but I’m not invested up to the eyeballs and I’m not going to do either you never know about something so I’m not selling anything and not buying anything. I’ll be back at ya. It’ll be late or first thing in the morning. ☑️ In reply to the rest of your comments

          Mar 23, 2021 23:52 PM

          Spot On Bill, most likely you’re right on the money , inflation priced in. That’s why I started to get some impulses generating thoughts about a week ago I posted on the board that I was not sold on the inflation trade anymore. It’s an overcrowded trade. It’s not something I would bet on and definitely the odds are not there it’s probably 30% chance that you’re going to be right. Like I said before, I have a lot of PM’s but I’m not betting the farm on it and you need them because if something happens you’ll be totally locked out if we have a situation inflation just takes off right out of the gate.. get-go you ..don’t know. Gold and silver could bolt and never look back. They would just keep it moving up rapidly and everyone would be locked out, that wasn’t in. That might happen, probably will too. I don’t know. So, I’m just keeping what I have and I’m not selling anything no matter what happens. I’m not all in with the farm and it takes off I’m not going to have any regrets because I can’t break my trading rules or my investing rules that’s just the way it is. I’ll do really well with what I have so it’s not going to be a problem. In fact, it’ll be more than enough so don’t want to be a hog right now with everything so leveraged. That’s how I’m playing it Bill and I’m not listening to any analysts out there. I do my own analysis and that has served me well, very very well. I trust no one and I listen to no one. Your guys seem to know what they’re talking about from reading your messages here that’s what I was thinking the last few weeks if you’re reading my messages I think you were anyway short the equity market. I need to have the odds clearly up there 95%. I play to win every trade it’s not just two out of three trades every single trade with huge positions. Once I have the timing in there then I might do three tranches over a couple weeks it just depends on how everything looks. How I’m managing the risk with derivatives only if that’s part of the equation. I try to eliminate all the greed completely out of the trade because a lot of financial losses can be avoided. I don’t do this, just to pay bills there’s no way. It’s just a chess board. By the way, I’ve never seen so many expert gold analysts. That’s very disturbing because it’s not a good sign I don’t know just not something I’m getting excited about at all in that regard.

          Commercial real estate is not going to be too bad if you have a good tenants in a really upscale area. I see all the disparities in commercial real estate in areas where there’s just the average surrounding neighborhoods etc. Commercial real estate never interested me because I couldn’t turn into an oasis residential type dream place. There’s some commercial properties though I would love to turn into a living space however the fire department would crack down end up throwing a lot of money away probably I don’t know that much about it. You could probably get away with it just have to really make sure that you can show it’s being used for commercial purposes. So it’s quite possible because I’ve seen some people do it but they have business interests and so it’s not all just living space. I’ve seen some projects downtown type areas with old buildings that they have done and it’s a very very cool living space. Massive square footage all one grand area. All tricked out. Never went out looking for anything and speculating on it because there’s a limited amount of buyers probably for that kind of property. Have no idea. No experience there at all. Old buildings don’t interest me anyway that’s something I wouldn’t want to be around. New commercial, thats really nice if you can turn into a showplace.

          Junior miners that are fairly new and you’re explorers or micro mini Juniors whatever you want to call these companies I think it’s very high risk with a deflation route possibly coming here in the next 12 months seems like it, maybe, looks very likely to me. Those companies will disappear in a heartbeat quit trading and the zero out. Mid caps are fine I believe that have been around a while not a big deal. Those new Juniors explorers micro minis I wouldn’t touch them not a fat chance not right now.

          Yep Bill, I’m down here in the US. Americano here on the West Coast way south mediterranean climate you can probably guess where that is. Anyway good hearing from you thanks for the message and I believe that you’re following really reliable analysis lined up with what I’m doing and thinking.

          Catch you on the rebound. You get an idea what I’m doing I don’t know if it helps. I’m just doing what I’ve always done that’s all what I feel is the right place to put my money. The more everyone hates my decisions the better off I’ll be. Then again, the trend is your friend. However I like buying on the cheap when the fire sales are coming in and it’s screaming at me ….it’s right in my face. Buy Buy Buy…. bye …it’s nice to sleep well at night and no Whack A Trades. If I need to be second guessing I made the right decision, then it’s the wrong decision. The decisions being made with greed. Whacko Trading Investing !!!!

    Mar 23, 2021 23:27 AM

    (ECR) (ECRFF) Cartier Increases Gold Resources at Mine Chimo Property to 684,000 oz Indicated and to 1,358,000 oz Inferred

    by @nasdaq on 23 Mar 2021

    https://ceo.ca/@nasdaq/cartier-increases-gold-resources-at-mine-chimo-property

    cfs
    Mar 23, 2021 23:57 AM

    Getting closer to the magic 2 million oz for a takeover/buy-out ?

      Mar 23, 2021 23:17 PM

      Yes, Cartier is moving things along nicely and will be getting on the map with this resource update, and particularly when they get their PEA finished later in the year.

    Mar 23, 2021 23:31 PM

    87% in the red. All my miners are bad…even the good ones. How much to send a robot to school so they aren’t so fixed in their beliefs.

      Mar 23, 2021 23:03 PM

      How much did the banks and hedge funds make today?

      Mar 23, 2021 23:08 PM

      Yeah, this is the first ugly day in the miners we’ve seen in a while, but really we’ve seen pressure across the board today with falling commodities (Copper, Oil, Zinc, Lead, Gold, Silver, Platinum, Aluminum, Uranium, etc…), a rising US Dollar, falling prices in Cryptos, Cannabis, the Dow, Nasdaq, Russell 2000, S&P, and pretty much most sectors.

      I nibbled at a few stocks, trimmed back a few stocks, and did a little reshuffling of the portfolio.

        Mar 23, 2021 23:10 PM

        Here’s a new position I added today, now that WDO has had a nice retracement of it’s high levels from last summer.
        _______________________________________

        (WDO) Wesdome Discovers New High Grade Zone in Footwall of the Kiena Deep A Zone Including 34.1 g/t Gold Over 18.0 Metres Core Length

        by @nasdaq on 23 Mar 2021

        https://ceo.ca/@nasdaq/wesdome-discovers-new-high-grade-zone-in-footwall-of

          Mar 23, 2021 23:13 PM

          As we’ve been discussing a lot lately, there are many quality names on sale.

            Mar 23, 2021 23:39 PM

            Hi Ex, could you put up your charts of the various gold miners so we can all see the damage done. DT

            Mar 23, 2021 23:44 PM

            Hi DT. Sure. I’m running errands but later on I could post some 1 year charts an year-to-date performance charts of some of the key Gold & Silver producers & developers. It also may be helpful to look at performances since the sector highs last August.

            When I get back in front of a computer later, then I’ll work on some of those.

    Mar 23, 2021 23:32 PM

    Lithium Americas down to US$ 15

    It is only four weeks that they closed the US$ 400 million financing at US$ 22

    Shares are at 30% discount now

      Mar 23, 2021 23:05 PM

      Good point Thomas. I’ve gotten my hand slapped with LAC Lithium Americas and have bought a number of tranches to average down, but I wasn’t expecting the severity of the pushback at Thacker Pass and for the government to flip flop after already issuing the permit, to now going back into a review period. That is what has hurt the stock so much the last few weeks.

      I initially got a stake on Jan 20th @ $22.24, but then sold it right back for a wash on Jan 22 @ $22.25, as I had another use for those funds. I then started a new position on Feb 19th @ $20.94, then added more Feb 23rd @ $18.23, then added more Mar 3rd @ $16.76, then added more on Mar 4th @ $14.75, then added my last tranche on March 5th @ $14.33. My cost basis is now $17.72, so it’s a bummer to see LAC at $15.33 on today’s close, as I’m underwater by over 2 bucks. However, once they get the permit issue resolved on Thacker pass, I’d expect to see LAC bolt back up into the mid $20’s again in short order.

      _________________________________________________________

      The Battle of Thacker Pass

      Grist – March 12, 2021

      https://grist.org/climate/the-west-has-a-new-front-in-the-war-over-electric-cars/

        Mar 23, 2021 23:18 PM

        State of Nevada Should Expedite Licensing Of Lithium Mines

        Northern Nevada Business Weekly – John Scire – March 18, 2021

        “This opinion is directed to Governor Sisolak and the Nevada Legislature: I urge you to expedite the licensing of lithium mines in Nevada. The president has stated that he wants to bring the entire lithium production and electric car battery production cycle into the United States.”

        “We have a unique opportunity in Nevada to increase employment by thousands of jobs and to increase state taxes on the mine sites and related sales and property taxes by hundreds of millions of dollars over the next 40 years.”

        “But we must expedite the building of new mines and the processing of the ores here. Right now we have one lithium mine at Silver Peak and two near the beginning construction level on the Rhyolite Ridge (Ioneer Mining) and Thacker Pass (Lithium Nevada Mining Co.). ”

        “The total number of construction jobs to build those mines and their ore processing facilities is about 1,600 for several years and the operational jobs are about 600 for about 40 years. The tax revenues will be in in the millions every year.”

        “The bottom line is that we will have millions in revenues for the state and lots of high-paying jobs.”

        “And both of the mines have a very low impact on the environment and use very little water. And, of course, we already have two battery manufacturers, Panasonic at the Tesla Gigafactory and Dragonfly Energy in Reno which can use the lithium hydroxide produced at both mining sites.”

        “If we can crank up our total production, there will be more electric battery manufacturers moving to the state. And there is already a lithium recycling company, American Battery Technology Company, in Fernley.”

        https://www.nnbw.com/news/2021/mar/18/state-nevada-should-expedite-licensing-lithium-min/

        Mar 23, 2021 23:01 PM

        How does this fit with one of the big oil companies now investing in the Clayton Valley?

        https://www.reuters.com/article/us-schlumberger-new-energy-lithium-idUSKBN2BA1OS

        Mar 24, 2021 24:32 AM

        Lithium Americas LAC now on offer for US$ 14.52

    Mar 23, 2021 23:47 PM

    It took 8 months but IPT has finally returned to its .68 pre-covid high. The covid crash gave it the energy to reach 1.25 and now it can move without any covid related psychological baggage. There’s no doubt that a lot of dumb money now thinks the sector is dead and has sold out. What most don’t know is that monetary/debt issues are behind this bull market, not the plandemic.
    https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=9&dy=0&id=p79235723409&a=926555989

      Mar 23, 2021 23:48 PM

      I added a little to my Impact Silver position this afternoon.

    Mar 23, 2021 23:52 PM

    A 4% drop for GDX will take care of its March 9 gap:
    https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=0&dy=0&id=p10085360662

    Mar 23, 2021 23:03 PM

    With oil and other “risk-on” commodities now cracking, we can expect a rotation back into the gold space. XOP, OIH and COPX more than doubled since November but are now picking up bearish momentum.
    https://stockcharts.com/h-sc/ui?s=XOP&p=D&yr=1&mn=1&dy=0&id=p72844182058&a=833146621

    Mar 23, 2021 23:19 PM

    I believe that March “bump” I’ve talked about is about over and reality kicks back in —I continue to believe the rest of spring is not going to bail this PM market out. Also, as mentioned previously the conventional market is starting to look very vulnerable. We could have one more month (April) where we see some choppiness at the top and this year the adage of “go away in May” could be very appropriate. The long term chart (monthly) is your key. The MACD after April will be in nosebleed territory again and will be challenging its’ previous high back in early 2018. As is true in multiple technical eamples of this nature the pricing is much higher then 2018. As mentioned before, the 12 month SMA is significantly separated from the 26 month SMA and if it turns hard right in May the conventional selloff will be painful. The only thing against that possibility is for the 2 SMAs to levitate at those heights for some time. Flip a coin: I believe the odds this time favor the FED letting long term rates ravage the conventional market early in this administration.

      Mar 23, 2021 23:20 PM

      Yes, good call Doc. It is looking like we got that March bump in the PMs you discussed, and now we have the further grind to lower part of the range you outlined.

      Are you still looking at $1620 as a lower target for Gold in the middle of Q2?

    Mar 23, 2021 23:32 PM

    I might just mention that those hyping silver over the last few weeks are now about to be disappointed since silver is now tracking gold lower. Expect that area of $23.00—$23.50 to be met before there is any chance for a significant relief rally. Silver sold off much more then gold on a comparative basis today.

      Mar 23, 2021 23:26 PM

      Doc don’t let the WallStreetSilver crew know that or they’ll flash mob ya… Haha!

      I haven’t really seen much Silver hype since early February, but there have been a few Silver company CEOs over the last few week reiterate their triple digit $100+ calls for the longer term. Personally, I’d be thrilled if Silver could bottom at $22-$24, and then move up above the $29-$30 resistance to the mid $30’s for a while, as that would do wonders for the Silver miners. It would also be ideal to a more orderly rise in Silver on the next leg higher, as the rapid ascents don’t allow the miners to keep up with the price action, like we saw last year in 2020’s rocket ride. It would be great if Silver got up into the mid $30’s or even the low $40’s later in the year and consolidated up there to give investors time to revalue projects at those higher levels, and save the “new all time high” and “triple digit silver” talk for 2022 or 2023.

    Mar 23, 2021 23:37 PM

    If roughly 24.90 doesn’t hold on a weekly basis, silver could go below 23.
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=5&dy=0&id=p68156659783&a=679857650

      Mar 23, 2021 23:55 PM

      Most Silver miners would get a hefty haircut if Silver falls to $22, but the producers will still be profitable at those price levels, and most developers are using a silver price around $22-$24 in their economic studies, so while it may drag down valuations in the short to medium term, it won’t be like when Silver was trading below the cost of production for years.

        Mar 23, 2021 23:16 PM

        IPT has always been a good bellwether so I bet we will see lower silver very soon based on today’s action. When the low is near, I bet IPT and others will again let us know in advance.
        Wherever silver goes, the miners will probably diverge bullishly as the markets detects the bottom in advance as it often does.
        My GGO impressively remains 38% above its low of just two weeks ago but that might change tomorrow as weak hands get home from work and see how today went.

          Mar 23, 2021 23:26 PM

          Few were interested in selling Scorpio today so it went up 4% on low volume (68,000 shares according to IB).
          https://stockcharts.com/h-sc/ui?s=SGN.V&p=W&yr=7&mn=2&dy=0&id=p80462867521&a=580081294

            Mar 23, 2021 23:54 PM

            It’s less likely that Scorpio will see too much downside pressure, because the Titan Mining deal is underpinning it’s current value proposition, and really it is still undervalued based on what they will be receiving from Titan.

            Mar 23, 2021 23:00 PM

            I agree but with such thin trading, it could be knocked down another 4-8% very easily on one dodo hitting the bid. In other words, it could drop hard on low selling pressure. It is definitely cheap.

          Mar 23, 2021 23:52 PM

          Good point about IPT being a good bellwether stock, and yes, it appears the stocks are signaling a move down in the metals as well.

          When Impact sold off by 9% today, it seemed like a good place to add just a little to my core position, but based on the trend it may keep heading even lower, and I probably should have waited a bit longer.

            Mar 23, 2021 23:03 PM

            A bird in the hand is worth two in the bush. I bought recently in the high .70s and again today and have zero buyers remorse. No matter what the sector does, we do not know when IPT will turn and I would rather buy at a price I like than to chase when it comes to my speculative juniors that I have confidence in.

            Mar 23, 2021 23:04 PM

            *when* it comes to my speculative juniors…

            Mar 23, 2021 23:09 PM

            Good point Matthew. I was happy to add at today’s price, and would rather accumulate a larger position in to weakness, then go chasing it higher when the worm turns. Impact is a stock I’m happy to bulk up on for the longer term trend.

            Mar 23, 2021 23:23 PM

            Yes, IPT’s risk profile is rather blue chippy for a junior so I’m a happy buyer when it’s a bargain. As you know, juniors can turn up way ahead of the underlying metal.
            We should now hope for a big drop for the whole sector tomorrow to end this correction once and for all. A big bounce would feel good but would also keep the correction alive for another week or more.

            Mar 23, 2021 23:53 PM

            Yes, it would be nice to just rip off the bandage and get the bleeding over with, exhausting the selling in a capitulation move, as opposed to another bounce that will just prolong the bottoming process out for weeks or months, as many are proposing.

        Mar 23, 2021 23:18 PM

        Interesting charts—it looks like the stocks once again are leading the metal lower. There will be some real decision times coming up when pricing on some of the silver stocks hit major support. Does one start to “nibble” or does one take a stronger position.

          Mar 23, 2021 23:58 PM

          I don’t have nearly the percentage of funds left to deploy that you do Doc, but as the miners head lower, I’ll be deploying most of what I have left, and I’ve already did quite a bit of buying in late Feb through early March, and have still added to a few positions over the last few weeks, and trimmed back a few of the larger more profitable positions to take some winnings off the table and disperse them around to some of the companies that have taken it in the shorts harder, but stand to conversely bounce more when the correction is through and the PM stocks begin their next upleg.

    BDC
    Mar 23, 2021 23:00 PM

    Markets(active): https://tinyurl.com/3fjs3ex8
    A bounce is possible, but no surprises in these.

    BDC
    Mar 24, 2021 24:08 AM

    Michael Boutros on Gold (38:00):
    https://www.youtube.com/watch?v=bFwW6zmcS5w