Jordan Roy-Byrne – We Await Confirmation That US Equities Are In Secular Bear For PMs To Be In Secular Bull
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us look at the big picture technical setup, and what factors he is watching to confirm if the US Equites have begun their secular bear market, which will allow the precious metals to begin their secular bull market. One of the key technical indicators that Jordan is looking at is how the S&P 500 index will respond to the 40 month moving average, and if it breaks below that. If we see another move down this fall in general equities where that level breaks down, then it is a cue that the PMs can then start to diverge in a more meaningful way. However, if we see a bounce around the $3650 level, and then the markets head back up to make all time highs, then any moves higher in the PM sector will be more short-lived and muted.
Jordan wants to see gold break above $2100 to signal new all time highs are in the future for some time to come, and he believes a divergence from weak stock markets and the economic backdrop that comes with that will be the signal. We wrap up discussing the gold and silver mining stocks, where he sees them as more “cheap” than “undervalued.”
Good one Ex………. I bet the “sell , sell, sell guys” do not show up for a few days…….. 🙂
Those guys rarely post on nice upward-trending days in the markets, and are usually quiet as a church mouse when things do just the opposite of what they’ve been pounding the table for others to do. For some reason, they are also feel the need to advise others what to do emphatically.
This particular blowhard has yelled to “sell” in all caps 5 times in the last 2 1/2 weeks, and each time the PMs bounced nicely the very next day. Many miners have had a nice little counter-trend rally the last 2+ weeks, if others decided to pick up some resource stocks on the cheap while the getting was good earlier in the month.
For the last 2 weeks the BPGDM has had a reading of 10.34, so the poor breadth shows just how oversold this sector is, and that is often a good time to be deploying cash, not deciding at such an oversold level to suddenly sell all ones gold mining stocks to go cower in cash.
Sure eventually things will hit resistance and pull back down lower in the precious metals, but to have been advising people sell everything and go strictly down to cash down at such extremely oversold levels, and after a larger 2 year corrective period didn’t seem like a favorable risk/reward scenario. As mentioned previously, there was very little “there” there, as far as a fundamental or technical reasoning as to why the urgent need to suddenly sell everything; making it even more baffling, but still a nice contrarian indicator. 😉
seems to me he’s been saying this or months or more than a year.
Yeah good point, he’s been a permabear for sure. He was pounding the table to sell at the beginning of the year as well, right before the PM sector rallied from January to April. Again, a fantastic contrarian indicator, with very little substance to back the emphatic calls for doom. 😉
Hey, where is everybody? My name is Joe, with that gun in my hand. SELLL MINERS! Losers………
A bit soon for all the jubilation.
Bag holders still licking their wounds.
Homework Assignment:
What metals are used in computer chips?
Answer may be useful.
Question: Is lead used in computer chips?
Answer: Yes.
Hey Joe! Where are you? Did you crawl back inside your hole?
Bingo Glenn. With Silver up over 6% on the day and miners continuing to move higher, like they have the last 2 1/2 weeks as ole’ Joe has been advising everyone sell and go to cash, once again, he marked a low.
Clearly it was actually far more appropriate from a risk/reward setup to have done the exact opposite of what Joe was advising, and conversely to be deploying one’s cash 2-3 weeks ago to “buy low,” and not selling near lows to raise cash at that late oversold stage.
Dr. Quinton Hennigh Provides Update For Eloro Resources. 😎
Don’t know if you missed it but I had a sarcasm emoji there Ex with the comment about newbies possibly missing out on GASX. Warrants still don’t have an ask btw which I find unusual as they are close to being in the money now.
Yeah, I got ya Wolfster, but just wanted to remind readers that we had discussed GASX a number of times with both Doc Jones and with the company directly, and anyone that wanted to could have added more when it was beat up and as they were just getting reading to bring their nat gas production on line at new wells. It was a great setup to “buy low” but sadly few likely did.
Real Swell
Joe the Tell
Rang the Bell!
Ira the day after Fed babble…
day gdx first swing resistance at 27.61..then will be able to gauge the volume behind this run…..looks real good so far…glta
fundamentally not sure what it means when the miners are not able to rally 3x when /GC is up 2%
It’s typically not a good sign when the miners fail to provide the leverage that makes holding them worth the added risk but today’s action looks fine/bullish. For example, GDX is showing more than 2 to 1 leverage to GLD while GDXJ is showing about 4 to 1 and SLV is close to 3 to 1.
ok…right…many thanks M…..
Matthew,
Do you believe that the miners are not doing as well as expected because of the high energy cost and maybe people are putting more currency into physical gold and silver and not into “paper products”? I know I am more interested in buying physical precious metals than the miners because of how the world is today. That was not the case a few years ago.
Yes, I’d say the two year correction in the miners was lengthened and exacerbated by tenaciously high oil and other inflation. Gold and the miners topped in 2020 just as oil reached $40 so the fact that it went on to triple from there while gold fell significantly had to have squeezed profit margins hard in the gold miners. Luckily, oil is unlikely to blast off to new highs soon while gold is finally ready to rise so the gold miners should finally perform well for awhile.
It’s always easy to envision lower lows at times like this but the miners are now the most oversold they have been in 4 years and have the sentiment readings to match so there should be at least some easy money to be made even for risk averse types who “under stay” their welcome.
XAU:
https://stockcharts.com/h-sc/ui?s=%24XAU&p=W&yr=5&mn=0&dy=0&id=p70635139471&a=1215220957
The miners are just as appealing versus gold as dollars now that they have basically crashed over the last several months.
XAU:Gold
https://stockcharts.com/h-sc/ui?s=%24XAU%3A%24GOLD&p=W&yr=7&mn=3&dy=0&id=p14533132784&a=1035677683
More decisive strength tomorrow to finish the week and month would be nice but there’s little to fault about the post-Fed action so far.
If you do decide to play the miners, just remember that even the best ones should be treated like a lit match, hold them too long and you’ll get burned (and I believe you know that).
Ken’s thoughts on central bankers
I posted this monthly SLV chart weeks ago to show how this July is like the inverse of July 2016 and now, with the month almost over, the comparison looks better than ever…
https://stockcharts.com/h-sc/ui?s=SLV&p=M&yr=13&mn=11&dy=0&id=t1158515971c&a=1134198398&r=1659027003805&cmd=print
SLV/Silver has taken back four weeks of losses in a few days…
https://stockcharts.com/h-sc/ui?s=SLV&p=W&yr=5&mn=0&dy=0&id=p86105744622&a=558582253
Gold turned up precisely at uptrend support based on the lows of 2015 and 2016:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=7&mn=3&dy=0&id=p71831751795&a=1214531882
just an observation…GDXJ does have a weekly swing low…GDX does not have a weekly swing low….it requires break above 27.38…glta
That beats the hell out of the reverse! The senior miners (quality) led the riskier stuff following the previous lows during this 2 year correction but now it’s very much the opposite and how it should be.
For example, IPT is currently up 80% versus NEM in the last month and NEM is arguably the highest quality gold stock around in addition to being the largest.
https://stockcharts.com/h-sc/ui?s=IPT.V%3ANEM&p=W&yr=5&mn=0&dy=0&id=p50592809687&a=1214138540
Yep, nice to Impact outperforming Newmont, but NEM did have a doozy of a bad quarterly report recently which tanked their stock in the aftermath, so it has fared less well than most of the other larger producers as a result.
But NEM is widely regarded as the bellwether to watch.
Relative to GDX, IPT is up 45% in one month so my point holds up.
100% Absolutely, NEM is considered a bellwether for the sector, but just pointing out they just had an unusually difficult time and share price selloff after that stinker of a quarterly report.
The IPT versus GDX up 45% is a strong signal indeed.
As I’ve pointed out a few times over the last 2 1/2 weeks, most mining stocks started moving back on the 11th and 12th of July, and so this move today is only further accelerating that move, and the juniors are finally moving strongly, which is a good signal.
Interesting GDXJ action:
https://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=6&dy=0&id=p06686066588&a=1214950952
SILJ:GDX is daily overbought for the first time since topping 18 months ago, a good sign for the durability of this low for the sector…
https://stockcharts.com/h-sc/ui?s=SILJ%3AGDX&p=D&yr=1&mn=3&dy=0&id=p92624914320&a=1214958403
Matthew, your thoughts on SSRM? I’ve a feeling it’s going to form H&S pattern and top out at $19-20 level,
I think it has seen its long term low and, considering its quality, it makes sense that this low is well above its March and September lows of last year.
https://stockcharts.com/h-sc/ui?s=SSRM&p=W&yr=5&mn=0&dy=0&id=p72395154391&a=1215016284
*I have no direct exposure to it.
Thanks, added at close
TSX-V looks good to me…
https://stockcharts.com/h-sc/ui?s=%24CDNX&p=W&yr=5&mn=0&dy=0&id=p22728610327&a=1162141959
+ 10.07% overall for a good start to recovery.
Fed hikes rates by 75 basis points as expected, but then in press conference Jerome Powell indicates that they may closer to neutral now, and will be “data dependent” on more rate hikes and by how much moving forward. That is in stark contrast to their “do whatever it takes to fight inflation for a long as it takes” stance in the June meeting, where they indicated something more like a 3.5% Fed funds rate would be more normalized. (maybe they missed the memo that the latest CPI report was at 9.1% and that will be nowhere close to “normalizing” rates, even if inflation metrics came down a lot)
Regardless, nice to see some green on the screen in most markets, and even Gold, Silver, and PM mining stocks rallied again today on the news. Sure glad I was buying earlier in the month, when some kept saying to sell, sell, sell (near the bottoms of many mining stock valuations), as many stocks have already had a nice rally the last 2+ weeks.