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Erik Wetterling – A Bad Day For Gold Stocks, Where Is Sentiment Currently?

Cory
April 21, 2022

Erik Wetterling, Founder and Editor of The Hedgeless Horseman website joins me to discuss the selloff in PM stocks today. From the big stocks down to the little ones there is a lot of rd on the screen. I have Erik share how he views this market for the junior stocks. We focus a lot on sentiment and if it truly at a bottom.

 

 

 

Click here to visit Erik’s site and keep up to date on the stocks he is liking.

Discussion
33 Comments
    Apr 21, 2022 21:59 AM

    SILJ moved up over 40 percent in 6 weeks since late January and has been consolidating that move for the last 6 weeks. At the moment, it is still up almost 30 percent. To avoid more downside and/or lost time next week, it probably needs to close tomorrow at 14.15 or better, preferably much better.
    https://stockcharts.com/h-sc/ui?s=SILJ&p=W&yr=3&mn=0&dy=0&id=p54948145998

    DL
    Apr 21, 2022 21:20 PM

    Here is the sentiment chart I use. When the venture exchange new high percentage is out of proportion with its usual levels. Gold mania and total despair are pretty easy to spot in the percentages of new highs in the venture exchange.
    https://schrts.co/fNUIKqcG

      Apr 21, 2022 21:56 PM

      Thanks DL, I’ve never looked at that one.

        DL
        Apr 21, 2022 21:24 PM

        One thing to watch out for is a crypto surge. That can skew the venture new highs. But it’s easy to check the price of bitcoin and gold and see which is the likely cause of the froth.

          Apr 21, 2022 21:05 PM

          It seems a crypto surge to the downside is becoming more likely so we could get a skewed reading going the other way. The TSX-V contains a lot of sectors which is probably why the November high for the gold sector came with a reading of just 28 (compared to 84 in 2020, 81 in 2016, 138 in 2010 and 159 in 2006). The fact that the huge move of 2016 resulted in half the reading of the 2006 top just shows how sectors within the TSX-V can move very differently from one another.
          https://stockcharts.com/h-sc/ui?s=%24BTCUSD&p=D&yr=1&mn=1&dy=0&id=p66739952139&a=1102559533

            DL
            Apr 21, 2022 21:03 PM

            My thinking is that zero on the new highs means a cross sector venture exchange lack of breadth extreme. Those are probably the only results you don’t have to dig deeper into the sectors for because it’ll be no sectors with any new highs. So maybe the venture exchange new highs as a sentiment gauge is best reserved for identifying total sentiment collapses, but not much else because of sector noise.

            Apr 21, 2022 21:39 PM

            Thanks for this discussion about sentiment DL and Matthew…It is something I need to work up more…glta
            some ideas on the daily GDX…price closed back with in the TAS profile over 37.95 and may bounce briefly…if that support fails to hold then fibs below and the TD9 breakout support will be area looking to go long…in the area of 34 ish to 33ish looks favorable now as long as this remains a controlled decent….

            https://tos.mx/mDi45fe

            Apr 21, 2022 21:51 PM

            The odds just improved a lot for your 34-33ish entry level but maybe it matters that the 40 day MA held to the penny today? I don’t know but a convincing reversal is needed immediately. A gap below 37 tomorrow might do the trick…..
            https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=9&dy=0&id=p50631423240&a=1148557377

            Apr 21, 2022 21:59 PM

            right…it is interesting that the 40 ema you look to for clues Matthew also happened to correspond like exact to my TAS profile bottom control line(which moves all over with the algos of price and volume)…Always is amazing…..I missed this whole leg up from my 2/11 buy signal…i could not pull the trigger after three rapid flurries up only to roll over in failure…I think this set up is totally different for the best….In my world this is only leg (a) down in a TD9 count of 2 out of 9….so we have a lot of time between now and the trigger date…Eventually the sector is buy and hold for the mania…tough tough tough stuff no doubt….on a weekly i must wait until the mid may time frame due to recent time harmonics…all just speculation…the weekly below shows a perfect 200% fibs expansion…..and the daily was with RSI divergences…so it was touchy stiff up there….https://tos.mx/mqtk94N

            Apr 21, 2022 21:31 PM

            Thanks for the details and chart. Do you ever look at the cycle that takes roughly 18-19 months?
            https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=11&mn=11&dy=0&id=p49604214383&a=1148591596&r=1650593427511&cmd=print

            Apr 22, 2022 22:08 AM

            now that is unique…i never saw an 18 mo cycle until you just pointed it out….it is there!…what is interesting as you know is that there has been failure about mid-cycle….no bullish right translations…will this cycle be the same…humm….i will be saving that chart…..my thinkorswim platform is so vague i am not sure how to create and save one off charts conveniently…i may be adding another platform even if just a free version for study charts…thanks Matthew…very great investigations you are doing….i am not a yper or tecchh guy..lmao

    Apr 21, 2022 21:23 PM

    I feel a little better today about the sector after listening to Eric. He always makes sense to me. One ought to be spending his time on days like today, trying to figure out at what price will it make sense to take some of your money off the table, since really, that’s what it’s all about. At this point in my life, I have no alternative places to put the money I’ve got invested in mining stocks, so why would I sell today and recognize some losses when I really believe that in the near future, it’s going to get a lot better! JMO

      Apr 21, 2022 21:10 PM

      Great to hear that Silverdollar! I am a bit (positively) surprised my rants makes sense to anyone haha. I agree, we are way past the point of focusing on downside. If it comes, it will not last, and therefore risks are to the upside. Especially the Risk/Reward is to the upside. Whenever it materializes one will be happy to have bought the lows like every previous sentiment bottom… The never ending cycle of ebb and low. On that note I just made a new video discussing why I like volatility like today: https://youtu.be/3BE2B2uuqu0

      Best regards,
      Erik

        Apr 21, 2022 21:13 PM

        Keep the rants coming… they are much enjoyed.

    Apr 21, 2022 21:36 PM

    It’s time to bring Frenchy of Marseille back for a chat

      Apr 21, 2022 21:11 PM

      Ask Frenchy if he is voting for Le Pen or Macron.

    Apr 21, 2022 21:42 PM

    The high for GDX last quarter and this quarter, so far, happened at its quarterly upper Bollinger Band…
    https://stockcharts.com/h-sc/ui?s=GDX&p=Q&yr=15&mn=0&dy=0&id=p30396073168&a=1130055242&r=1650577111876&cmd=print

    Apr 21, 2022 21:57 PM

    Interesting fork action today from the gold miners versus gold. If the current level breaks on a closing basis, the miners will likely drop another 6% versus gold.
    https://stockcharts.com/h-sc/ui?s=%24GDM%3A%24GOLD&p=D&yr=2&mn=0&dy=0&id=p29288399492&a=982099007

    Apr 21, 2022 21:30 PM

    The same important fork resistance that capped the HUI 6 weeks ago capped it again this week. It is absolutely possible that we just saw a high that will last for weeks. Another 6% drop from here should put it at good support.
    https://stockcharts.com/h-sc/ui?s=%24HUI&p=W&yr=5&mn=0&dy=0&id=p75591367923&a=1114697834

      Apr 21, 2022 21:38 PM

      On the bright side, the senior golds appear to be getting ready to fall versus the gold explorers. It’s not a “done deal” yet but could be soon from the looks of those oscillating indicators…
      https://stockcharts.com/h-sc/ui?s=%24HUI%3AGOEX&p=W&yr=5&mn=0&dy=0&id=p06637586297

        Apr 21, 2022 21:05 PM

        Sounds like good news to me.
        Thanks for all you do Matthew! You have been working overtime.

          Apr 21, 2022 21:01 PM

          Yes, it will be nice to see the juniors outperforming the big stuff for a change. Things could get much worse in the short term without harming the longer term picture(s) one bit so even if tomorrow is disappointing, I won’t be selling any of my tiny caps.
          Since we are on the cusp of the most important silver breakout of at least the last 4 decades, maybe we shouldn’t be surprised by this action at all. The best moves always start when most people are bearish and fearful.
          https://stockcharts.com/h-sc/ui?s=%24SILVER&p=Q&yr=50&mn=11&dy=0&id=t6961156374c&a=1139425735&r=1650603746074&cmd=print

            Apr 22, 2022 22:06 AM

            If silver breaks above $26 before late July it will be an absolute miracle.
            Personally, I don’t see any catalyst whatsoever to propel such a move between now and then. Additionally, the weakness in the small cap silver stocks to me suggests range bound trade until much later this year–certainly they won’t be breaking above last November’s highs, although an important pivot low may come well before the winter months (June-July for example).

            I believe we are going to have to see Fed capitulation or at least enough pain in the stock market for the market to anticipate Fed capitulation for silver to have any hope whatsoever.

            Apr 22, 2022 22:22 PM

            My comment that silver is on the cusp of a huge breakout must be taken in the context of the of the quarterly chart of the giant 40 year fork that I posted with it. In other words, “on the cusp” in this case doesn’t mean tomorrow, next week or even next month. But you are right to assume that I do think it will happen by the end of June/this quarter.
            I’m not concerned with identifying catalysts because they are already in place in a huge way and not reflected in the price of silver or even gold.
            SILJ did rise 44% since the end of January but it’s still true that the silver juniors didn’t perform as they typically do when the sector is bullish; but, as I’ve pointed out several times, that’s easily due to the fact that silver hadn’t, and still hasn’t, managed the necessary breakouts to “confirm” gold’s action. In addition, I have no doubts about the negative effects of the ongoing stock market selloff taking a toll on silver stock performance. In fact, they did quite well considering that angle.
            In just one week, SILJ has retraced 50% of its entire move since late January. Such quick and scary corrections are more typical of bull markets than bear markets since they destroy sentiment and thereby shakeout more players. Gradual declines don’t spook the herd. Still, I think we need a convincing/obvious reversal next week to avoid many more weeks of decline.
            https://stockcharts.com/h-sc/ui?s=SILJ&p=W&yr=6&mn=3&dy=0&id=p56193312082&a=1149156069

        Apr 21, 2022 21:31 PM

        About time! Thanks Matthew

    BDC
    Apr 22, 2022 22:08 AM

    Price Quality: https://tinyurl.com/yc794bru
    Likely NatGas/PM Bottoming Begins.
    Low MaxSats Start Today!

      Apr 22, 2022 22:18 AM

      yes could be the where bottoming begins. Meanwhile the decades long demise of US dollar, dxy, put on hold once again as the best in a very dirty currency laundry basket. Rinse and repeat B.S. which has the predictability value of buying a lottery ticket and little more except for those who enjoy reading doom porn.

    Apr 22, 2022 22:45 AM

    ELRRF- Fair market value for ELORO IS ITS 100 SMA ~ 3.30 next week, until there is a multitude of collaborating drill results to warrant the stratosphere that Eric dreams about.

      Apr 25, 2022 25:58 AM

      VOILA! My only stink bid: ELLRRF $2.80