Dave Erfle – The bounce in gold, silver and the stocks continues, here’s what to watch for this rally to continue
Dave Erfle, Founder and Editor of The Junior Miner Junky joins us to share his thoughts on the bounce in precious metals and the stocks. There are some key resistance levels to watch on the way up but the pop from the breakdown levels a couple weeks ago has been strong and is encouraging for the higher quality metals stocks.
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The stock market is very likely to fall versus gold for months.
SPY:GLD weekly
https://stockcharts.com/h-sc/ui?s=SPY%3AGLD&p=W&yr=5&mn=11&dy=0&id=p35958767386&a=1015547995
It is very unlikely that this is an oversold bounce because of what it has accomplished. The miners have been taking back broken supports of all kinds (moving averages and trendlines including forks, speed lines, Fib fans, etc.) and doing so while greatly outperforming the metals themselves. The March low came with no such hurdles above. For example:
https://stockcharts.com/h-sc/ui?s=%24HUI&p=W&yr=3&mn=3&dy=0&id=p61163397055&a=933405939
The bears will have to hit the miners hard before tomorrow’s close if they want a chance next week.
HUI:GLD weekly
https://stockcharts.com/h-sc/ui?s=%24HUI%3AGLD&p=W&yr=3&mn=3&dy=0&id=p42987459906&a=1043060938
This is the best setup in 6 years in some respects including sentiment. Overall, the technical setup is much better today than it was before the huge move of 2016.
https://stockcharts.com/h-sc/ui?s=%24XAU&p=W&yr=5&mn=11&dy=0&id=p12932541153&a=949748838
AEM is at important resistance. Let’s see if it pulls back or plows right through it first…
https://stockcharts.com/h-sc/ui?s=AEM&p=D&yr=1&mn=3&dy=0&id=p47156345741&a=977703006
ASA just jumped above two Schiff fork resistances:
https://stockcharts.com/h-sc/ui?s=ASA&p=D&yr=1&mn=3&dy=0&id=p43524649224&a=982748961
Maybe it will go to resistance around 22 before taking a break (that’s not a prediction)…
https://stockcharts.com/h-sc/ui?s=ASA&p=D&yr=0&mn=11&dy=0&id=p13289622206&a=984268795
GDXJ has taken back its 6 year MA and looks superb overall (it took back its 10 year MA last week):
https://stockcharts.com/h-sc/ui?s=GDXJ&p=W&yr=6&mn=1&dy=0&id=p37022836482&a=1040017498
Correction: GDXJ took back its 6 year EMA. The 6 year MA was never broken in the first place:
https://stockcharts.com/h-sc/ui?s=GDXJ&p=W&yr=6&mn=1&dy=0&id=p17932566926&a=1040017498
Brixton’s daily RSI(14) reading has bullishly broken out to a new 14 month high. That’s an observation and not advice. I own plenty of shares and am biased even though I try not to be.
https://stockcharts.com/h-sc/ui?s=BBB.V&p=D&yr=1&mn=5&dy=0&id=p71818184549&a=948101665
Impact Silver’s daily RSI(14) is at a 15 month high after breaking through several resistance levels. A pullback to .53-.52 would be a gift and a strong buy in my opinion. Again, that’s not advice and I own plenty of shares.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=0&mn=11&dy=0&id=p06848946591&a=1043153940
Silver has confirmed a head and shoulders bottom that targets $25+…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=5&dy=0&id=p86590224183&a=937970450
SLV has its own H&S bottom that targets just over $23…
https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=3&dy=0&id=p23593164672&a=983056813
We have new daily chart buy signals for the stock market today. The following is the Nasdaq 100 but the others are similar…
https://stockcharts.com/h-sc/ui?s=%24NDX&p=D&yr=1&mn=1&dy=0&id=p22995774920&a=979061888
The weekly picture is still bearish:
https://stockcharts.com/h-sc/ui?s=%24NDX&p=W&yr=2&mn=1&dy=0&id=p23551582177&a=1043249446
I think John Q Public has figured out that inflation is for real. Most of my Jr’s doing well, a plus for being all in.
Agreed Buzz.
Matthew:
You have been putting up a bunch of good positive charts lately. I am running behind this week, bur just wanted to say thanks.
+1
Thanks David, I appreciate it.
2012 the Aussie government was worried about survival of Tasmanian Devil so they moved a few of them to an island in the Tasman Sea which was home to about 3000 penguins. 2021 not one penguin sighting on the island…. all gone.
Maybe put a few in the New York lobby of JPMorgan.
SLV:GLD closed above its daily P pivot for the first time in 5 weeks and has broken its 4 month downtrend. It’s a good thing for the whole sector when silver outperforms gold…
https://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=1&mn=0&dy=0&id=p71972687495&a=665566953
Those who bought the MACD buy signals that I pointed out over a week ago are up about 8% in GDXJ and SILJ and much more in individual miners.
HMY is up 22% since I posted this on the 4th:
HMY opportunity knocking…
https://stockcharts.com/h-sc/ui?s=HMY&p=D&yr=1&mn=5&dy=0&id=p76564258430&a=985516989
Miners were way oversold and this is just an oversold bounce. They may rally for few weeks but they will eventually come back down to test lows again. Only miners that may move and hold is off they have super drill results. So if you added months ago and are close to breaking even on those shares sell, keep long term stocks that you bought when they were really low and hold for long term, but gold will disappoint again and drag juniors down again.