Dave Erfle – The Trivial Many And The Vital Few

Dave Erfle, Founder of the Junior Miner Junky, joins us to outline some of the macroeconomic data he’s watching out for, technical support levels in the precious metals sector, and how he’s managing his portfolio.   The markets will be transfixed on the CPI and PPI inflation readings the next 2 days and will speculate on how this data may impact the ongoing Fed rate hiking cycle.   We review some of the technical pricing support levels in gold, silver, GDX, GDXJ, that are within range to see at least a short-term bounce from oversold levels. However, Dave concedes that lower levels and a “scare you out” corrective move are still a potentiality.  We contrast similarities and differences to prior bear market periods, but ultimately we are in a much different macro backdrop than any time in the last few decades.  


We then zoom back to talk about the fundamental strategies of trading mining stocks that these junior resource stocks shine very brightly “like a lit match” but that overall mining stocks haven’t really outperformed over longer time periods of time over the last few decades.   It is for precisely this reason that to make money in this volatile and cyclical sector, one needs to buy the dips and sell the rips in the mining stocks. Dave did a great job of building up cash and is starting to add to some positions, but he is still holding back a lot of that cash to be able to seize upon further drops in valuations in the junior mining stocks.


We wrap up with a discussion on trading psychology, and why it is seems to be so difficult for investors to take the simple action of buying when stocks are cheap and oversold, and conversely, trimming or selling out when the stocks have already made outsized gains.  Dave mentioned the book “The Trivial Many And The Vital Few” that highlighted why this is has always been the case, and it boils down to traders not being able to manage their emotions when buying or selling, and thus must underperform the markets as a result.



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    Jul 12, 2022 12:12 PM

    Jay Be Nimble, Jay Be Quick to Induce a Gold Reversal Candlestick

    David Erfle – Friday July 8th, 2022

    “With the “barbaric relic” being sold down 11 of the previous 12 trading sessions before producing a weak bounce on Thursday, a precious metal’s sector analyst recently touting $2,600 gold before year-end is now predicting $1,300 during the same time-span. And yet another opined this week that gold stocks are “too dreadful to touch now,” despite being grossly oversold. Simply put, uber-bullishness happens near significant tops, and uber-bearishness is generally an indication of a significant bottom being formed.”

    “Meanwhile, it’s important to consider this recent gold uber-bearishness is taking place with the gold price still nearly $100 above its sharply rising 200-week moving average at $1652. A test of this closely followed line of technical support would be a normal correction during a healthy bull market in any commodity.”

    “As silver guru David Morgan has stated in the past, precious metal stocks will either scare you out, or wear you out. Well, the current miner correction has graced its participants with both a “wear you out” phase, followed by a “scare you out” finale that could reach its conclusion within the next few weeks.”

    Jul 12, 2022 12:36 PM

    David Erfle – Gold Bear Market Firmly in Place

    Kerry Lutz’s Financial Survival Network – Episode #5547

    “Previously, we were seeing the potential for a new cycle in commodities with metal prices going up. 90 days later, the Federal Reserve is trying to fix what they created in the first place. With the lingering question of what the Fed is going to do, and where the markets are headed, there is a lot to cover.”

    “Everybody is wondering when/if the Fed is going to pivot -Congress’ first order of business is to get re-elected -If you’re leveraged or over-leveraged right now, it’s not a good feeling -The worse the bear markets get in stocks, the better it is for gold stocks -Gold price always bounces back and goes a lot lower than one would expect -Values/fundamentals don’t mean anything—the only thing that matters is the cash and leverage you can acquire in these instances -While everybody is selling, you’ll have cash and will be able to make rational decisions.”

      Jul 12, 2022 12:45 PM

      Michael Pento – Powell Pivot Just Months Away

      Kerry Lutz’s Financial Survival Network – Episode- #5555

      “A major concern in the economy is preventing recession, but it looks as if we are already in one. I sit down and chat with Michael Pento, the President and Founder of Pento Portfolio Strategies.”


      -Michael Pento has been predicting the Fed’s moves very accurately
      -Powell is saying that there is no recession in sight, but we seem to be in one now
      -A recession is two consecutive quarters of negative GDP growth
      -The Fed is forced to hike into a recession because they have no other choice
      -They keep raising and the dollar is going higher, which is killing manufacturing and exports
      -If they want to get to neutral, they have to be restrictive
      -They’re just now starting to flight inflation, but we’re already in a recession
      -With a deflationary collapse in the economy, we would need cash
      -Employment fell last month
      -The household survey shows that 315,000 people lost their jobs
      -The banks are the big winners on inflation; they get
      -When lending begins again, that’s when the banks take off

        Jul 13, 2022 13:06 AM

        FAKE FED………. FAKE NEWS………….. lol

    Jul 12, 2022 12:39 PM

    Well, Gold went down today and tagged that $1721 support level (lateral pricing support from that prior higher low at $1721). Currently gold is at $1724. Will that support level hold?

    Silver is back down near that $18.75 support zone (currently at $18.86). Will that support level hold?

      Jul 12, 2022 12:44 PM

      Could the CPI inflation data be the trigger for the turn Gold and Silver back up at support, or will it pierce through support in the precious metals?

      It could be a pretty interesting Wednesday. Time to make the popcorn…and watch the show unfold…

      Jul 13, 2022 13:58 AM

      Ex, no; that support will not hold.

        Jul 13, 2022 13:52 AM

        Bummer Doc. With Silver, if $18.75 breaks through, where do you see support coming in below that?

        With Gold, do you think we are going to head back down to test that March double-bottom low from 2021 of $1673-$1675 again that got tested again in August 2021 down to $1674?

        I’d have preferred to not see $1780 or $1721 support levels from prior higher lows fall, but really didn’t want to see gold get anywhere close to that $1673-$1675 level again, because if that falls, then we’ll have officially broken the trend of the pattern of higher lows, that has underpinned the gold bull market since the major low of $1045.40 in December of 2015.

          Jul 13, 2022 13:31 AM

          Actually Doc, it looks like so far those support levels will hold at today’s close.

          Gold has bounced up to $1738 so far.

          Silver has bounced up to $19.24 so far.

            Jul 13, 2022 13:01 AM

            The PM mining stocks are having a nice bounce on the day as well. My account is up over 4% on the day, so I’ll take it. 🙂

            Maybe it will just be short-lived, but at this point, any green on the screen is a welcome sight.

            Jul 14, 2022 14:57 AM

            Well, the rally was short-lived alright, and Doc you are correct that those support levels did fall.

            Silver got down to $18.01 today (Currently at $18.18)

            Gold got down to $1695 today (Currently at $17.06)

            Looks like we are getting the capitulation leg down that Dave Erfle and I discussed earlier this week as a potential.

    Jul 13, 2022 13:03 AM

    U.S. Inflation Hits New 4-Decade High of 9.1% in June

    Geoffrey Smith – – Jul 13, 2022

    “Consumer inflation in the U.S. leaped to a new four-decade high of 9.1% in June, exceeding analysts’ forecasts and piling further pressure on the Federal Reserve to bring it down with faster interest rate rises.”

    “The Bureau of Labor Statistics said prices rose 1.3% on the month alone, which was itself the biggest monthly gain since 2005. That was due largely to big increases in prices for food, gasoline, and shelter.”

    “Stripping out the more volatile areas of the consumer price index, core prices rose 0.7% from May, their biggest increase in a year.”

      Jul 13, 2022 13:22 AM

      If one had a time machine and went back just a few years and asked people where they thought Gold would be trading after the planet was locked down for over over a year, after the US spent trillions of dollars in stimulus, with an ongoing war in Ukraine with Russia, and a CPI inflation reading at 9.1%, I seriously doubt most would have answered – “Oh, the low $1700’s of course.” 😉

      As I mentioned to Dave Erfle in the interview above, a CPI reading that came in “hot” like today’s reading, above estimates, and just high historically (especially compared to the last 2 decades), would simply mean that Powell stays the course longer on hiking rates, and that has thus far punished gold (despite many last year and earlier this year projecting that once the Fed started hiking rates it would cause gold to rip higher – Nope).

      If everyone is waiting for the Powell Pivot to pause or reverse course and start cutting, then they are just going to have to keep waiting. I just don’t see the Fed making July their last rate hike, and think it is far more probable that they still cut in September, and maybe even December, but we won’t know until we see how the numbers trend over the next few months.

      Regardless, the Fed hiking rates another 75 basis points next week only takes the Fed funds rate up to 2.25% , which is a far cry from normalizing rates above inflation that is a 9.1%. That will be a negative real rate of -6.85% once they hike next week, and is a negative -7.35% rate currently until they hike the 75 basis points in July.

      Typically negative real rates are a boon for gold, but it appears it isn’t going to be released from the hurt locker until the Fed pauses their rate hikes, signaling to the market that the Powell pivot has arrived. Maybe after September’s meeting and before the December meeting, or maybe in Q1 of 2023 we’ll see a policy change.

        Jul 13, 2022 13:19 AM

        yep the Hot scenario played out….Capitulation then recovery…rally mode will take more time to materialize…

          Jul 13, 2022 13:58 AM

          Yep, the hot CPI scenario played out, which will just embolden the Fed to keep hiking rates longer and higher, pressuring the markets. I think those expecting an immediate pivot after next weeks July rate hike are going to be disappointed.

          Having said that, with the commodities rolling over trending lower all month, and in lieu of the year over year comparables to this time last year, I would anticipate the trend of CPI inflation to start heading down for the balance of the year. This June reading is likely at or near peak inflation finally.

    Jul 13, 2022 13:28 AM

    Euro Falls Below Dollar Parity For First Time Since 2002

    Elizabeth Howcroft – Reuters – Jul 13, 2022

    “The euro dropped below parity against the dollar on Wednesday for the first time in almost two decades, as a hawkish U.S. Federal Reserve and growing concern about rising recession risks in the euro area continued to batter the currency.”

    “The latest slide came after another hot set of U.S. inflation data.”

    “Europe’s single currency started this year on a strong note given a post-pandemic economic recovery. But Russia’s invasion of Ukraine, surging European gas prices and fears that Moscow could cut off supplies further has raised the spectre of recession and hurt the euro.”

      Jul 13, 2022 13:29 AM

      The US Dollar is up to 108.23 as of the time of this post.

      That isn’t doing the commodity complex any favors.

        Jul 13, 2022 13:15 AM

        Dollar is hanging in…The TD9 signal is still intact unless today closes over108.085…..I think this will not be a V recovery for anything….The euro economic weakness/collapse trajectory is disproportionately supporting the dollar strength…however, you guys here taught me that that is illusionary due to its purchasing power collapsing….Not easy is it?

          Jul 13, 2022 13:05 AM

          Agreed Larry. Unlikely to be a V-shaped anything, even if we do see a relief rally in the general markets or PMs. More of a grind lower then a gradual climb higher in the rebound for the medium term.

          Yes, the US Dollar strength is illusionary, as it is only “strong” in relation to other more troubled and ugly fiat currencies like the Euro, Yen, and Pound.

          In reality, the purchasing power of the greenback is getting eroded quickly by the 9.1% inflation reading (and true inflation is even higher than the massaged government stats).

    Jul 13, 2022 13:09 AM

    HANG TIGHT…………..

      Jul 13, 2022 13:32 AM

      Note from Schiff
      This is very dangerous for the US Treasury. Interest cost will soon blow past $500B and then continue racing ahead. Can the Fed sit by and watch this happen? – No!

      This is why the central bank will almost certainly reverse course sooner than anyone thinks. This is not something that plays out over 12-24 months. The impact is being seen now and will get stronger each and every month.

        Jul 13, 2022 13:15 AM

        Thanks Jerry…I will save this quote by Mr. Schiff…Why…Because the way he states it is sort of an ascorbic no BS hard reality check prediction…I have to agree, but da markets are less secure in the future than is Mr. Schiff…lmao

          Jul 13, 2022 13:31 PM

          You are welcome………larry

      Jul 13, 2022 13:35 AM

      3) The Fed is Throwing Up a Hail Mary

      The Fed can talk tough, but it can’t actually fight inflation. The central bank simply can’t raise rates high enough to get ahead of the inflation curve. However, rate hikes will inevitably inflict major damage on the economy and drive us into a recession if the Fed continues along this path.

      Rising interest rates are already causing big problems for a government buried in debt. In the past year, the federal government’s annual interest cost has increased from $323B to $423B. More concerning, the impacts of the recent 75bps hike and the upcoming 50-75bps hike are not even registering on this chart yet which is only updated through May!

        Jul 13, 2022 13:06 AM

        Agreed OOTB to those points above.

    Jul 13, 2022 13:17 AM

    The Bank Of Canada today raised interest rates by 100 basis points instead of 75. Real Estate is going to get hammered big time. Prices here have been in outer space for years. DT

      Jul 13, 2022 13:10 AM

      Yeah the tightening in Canada is going to be the pin that pops the real estate bubble there. The Canadian real estate market has been in lal-la land for years now, and as gravity sets in the prices will start falling back down to Earth, which has been long overdue.

    Jul 13, 2022 13:27 AM

    Gary says the bottom in gold will likely happen this week:

      Jul 13, 2022 13:43 AM

      I am listening to the Bob Hoye interview for the second time that you posted a couple days ago. I can hardly believe what I am hearing him say… I haven’t heard him so excited for years.

        Jul 13, 2022 13:04 AM
          Jul 13, 2022 13:11 AM

          My next indicator is when 3-5 of my stocks are up 10% or more on a single trading day, that may not happen for a few months or could happen today.

          Jul 13, 2022 13:15 AM

          Yeah I’ve been following some of the James Flannigan TA videos the last 2 months and he’s been getting more and more encouraged that a bottom is near. It’s yet to come so far, and he mentioned in some prior videos how the length and amount of weakness has surprised him, especially in lieu of the macro backdrop. Still he’s getting more encouraged that we are near the turn.

            Jul 13, 2022 13:31 AM

            So, Hoye is bullish based a lot on historical factors; Gary says the bottom should happen this week; Gann is looking to go 100% in if another washout occurs but he says it may not happen. I’m all in so feeling better at the moment. HUI up 3.86% at the moment!

            Jul 13, 2022 13:41 AM

            Well, the bearish sentiment was palpable, the sector has been extremely oversold, and if nothing else, we are due for a relief rally soon. Yep, I’m pretty much all in at this point as well, and did a little horse trading today to reduce my overall number of positions and get more concentrated in some of my higher conviction positions.

            I had postulated last night that with Gold hitting that $1721 support yesterday and Silver down around it’s $18.75 support yesterday, that it was possible we’d see the CPI inflation reading today be a catalyst, and nice to see that it was a bounce to the upside (even though the initial kneejerk reaction was quick selldown, but it was quickly reversed as a false breakdown). We’ll see how it goes…

      Jul 13, 2022 13:38 AM

      GS is almost always right.

    Jul 13, 2022 13:06 AM

    Early GDX OTM options anyone?
    Split pre-market low play.
    GDX break & turn.
    GDXJ turn.

      Jul 13, 2022 13:48 AM

      Well BDC…i have enough action w the double beta funds…remember early in the year trading BOIL…triple nat gas…lmao…that was insane imho….actually though at this instance in time the day macd has not confirmed this gdx bounce…all other times have confirmed w 240 minute barely slow stoch signal…i actually hope that technicals are slow to perk up…makes for more sustainable moves imho…thanks BDC

        Jul 13, 2022 13:23 AM

        You’re right about that, Larry. Wild fluctuations.
        It’s imperative to follow NatGas news,
        such as the Texas LNG bust.

        Jul 13, 2022 13:39 AM

        Period (“.”) suffix for GDX and GDXJ mean pre-market.
        Neither one qualified low when the bell rang!
        (In-process per shaded date.)

          Jul 13, 2022 13:14 AM

          so BDC..your system is saying no bottom yet in gdx…is that correct

            Jul 13, 2022 13:48 AM

            “Grey : Possible [or Intermediate] Turn” means a swing low may be in, but more proof is needed to ‘paint it black’. However, this will be for the swing only, and not necessarily long term. As highs are approached similar, though opposite, indications will be shown.

    Jul 13, 2022 13:16 AM

    There’s no longer any real technical “need” for silver to go lower. Of course that doesn’t mean that it won’t or can’t but the situation is much better than at any of the previous lows of the last 18 months.

    Jul 13, 2022 13:21 AM

    right now at 11:18 EST…GDX is showing off a big honking bullish engulfing candle accomplished w huge volume and huge acceleration…..glta

    if volumes keep up, for myself and Wykoff(lol) understanding, that implies buyers more than just shorts covering and profit taking….

    Jul 13, 2022 13:28 AM

    Congrats Matthew. I believe that Impact has temporarily escaped the mental ward.. 🙂

    Jul 13, 2022 13:33 AM

    GLD & UUP (notice how the two moved roughly together from October until April):

    Jul 13, 2022 13:14 AM

    It was true 6 months ago and it’s true today, the big picture setup is the healthiest of any we’ve seen in over a decade (and that’s being conservative).

    Jul 13, 2022 13:46 AM

    XAU vs CRB (the CRB part of the pair won’t show today’s action until after the close so the “price” you see now isn’t right):

    Jul 13, 2022 13:48 AM

    XAU vs Gold speed lines and Fibonacci fan (the gold part of the pair will update after the bell):

    Jul 13, 2022 13:57 AM

    The last 3 weeks of HUI:Gold have been interesting (accurate after the bell):

    Jul 13, 2022 13:05 AM
    Jul 13, 2022 13:49 PM

    kootnay ktn may finally be a buy in here at near a dime, off roughly fifty percent since first of the month.