Dave Erfle – Short Covering Rally Kicks Off Once Fed Messages Dialing Back Hawkishness

Dave Erfle, Founder of the Junior Miner Junky, joins us to review the short-covering rally that kicked off in markets on the back of the messaging from the FOMC meeting press conference, where Jerome Powell indicated that the Fed may dial back the extreme hawkish tone, all this in lieu of a weakening economic picture with the Q2 GDP coming in negative for the second quarter in a row.  The mining stocks have accelerated their move up that began 2 weeks ago, but Dave gives us the data he’ll be looking for as things progress to see if we get a confirmation that meaningful low has been put in.  We also review the technical support levels he is watching in gold, GDX, and GDXJ. 



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    Jul 28, 2022 28:07 PM

    Nice to see so much green on the screen today, after we saw yet another negative quarter of GDP growth, which dovetails nicely on Jerome Powell’s presser yesterday where he seemed to indicate they were more normalized now and taking their foot off the accelerator (which is BS because 2.25% Fed funds rate is miles away from the 9.1% CPI pricing inflation reading from last month). It is also a strong departure from the we must fight inflation at all costs messaging from just the June meeting, and their plan to at least get the Fed funds rate up to 3.5%. Now they will be “data dependent” and we’ve seen that vague phasing before from the central banksters when they wanted to wiggle room as they are flying by the seat of their pants.

    Anyway, the forward-looking markets liked it, and for the PMs it simply accelerated the move higher in the stocks we’ve been seeing the last 2.5 weeks. Hopefully people didn’t “Sell, Sell, Sell” at the bottom a few weeks back to cower in cash, and instead were doing the opposite and putting cash to work buying mining stocks when they were “low.” 😉

    Jul 28, 2022 28:08 PM

    Recession semantics aside, the new GDP numbers are bad

    Neil Irwin – 07/28/2022

    Jul 29, 2022 29:57 AM

    PGE, Stillwater, oversold on the 3 year weekly, bought more recently.

      Jul 29, 2022 29:14 AM

      Shine has come off those two since it’s all about gold and silver recently. So yeah, good time to buy them.

        Jul 30, 2022 30:47 AM

        Yeah, good points Dan and Terry. Stillwater Critical Minerals looks really undervalued here, but since so much focus has been on the worse sell-off, and then rebound in the PM stocks, the base metals stocks have “lost their shine” a bit lately. It is a good time to look at picking off a few of the names in copper, nickel, platinum/palladium, zinc, etc… that have lost their luster as of late while nobody is paying them much attention.

        PGE is one of my favorites in that regards, as they have a nice basket of metals in the mix, a huge scale to their land and developing deposits, and a huge success story right next door.

    Jul 29, 2022 29:24 AM

    Xi and Biden had a two hour telephone conversation and that can’t be good. Chinese and American people are gonna be tossed under the bus, maybe the Russians too.

    Jul 29, 2022 29:24 AM

    FREAKY FRIDAY…………. once again……. and the same old crap continues to go on……
    JPM still in charge, and the FED..extends their BS another month……. lol…….
    What a JOKE,….. moronic behavior at best….
    The USSA moronic govt with the perverts in charge is not going to change any time soon.

    HAVE A WONDERFUL WEEKEND……. enjoy your freedom as long as you can…..

    Jul 29, 2022 29:43 AM

    GSR………… now 87…….. was 91………… silver looking good….. 🙂

      Jul 29, 2022 29:23 AM

      Yep. Silver is up over 10% from that low at $18.01 2-3 weeks ago. Nice to see the solid rebound in the metals continue this week. Same thing with the mining stocks… many stocks bottomed on July 11th or 12th and have been running since then. They were all really oversold though, which is why I was adding to about 30 positions the first and second week of July.

        Jul 29, 2022 29:37 AM

        Only 30? 😉

          Jul 30, 2022 30:30 AM

          Haha! Good one Jetty. That may sound like a lot to some I guess, but I reduced down my overall number of stocks held from 92 down to 56 over the last few months, and still had some funds available to deploy if we saw things break down further. When I saw the action coming out of the 4th of July holiday week, I got aggressive adding on July 5th and 7th, and even did a few more trades the 11th, 12th, and 13th. The BPGDM was flashing 13-10 for a few weeks which is a really low breadth reading, and in a way acts as a fairly good read on investor sentiment towards the mining sector as almost everything was getting smashed down. We’ve had a nice 2 1/2 week rally so far, and looking to see if this leads to a bit more positive momentum to the upside in August. Cheers!

    Jul 29, 2022 29:18 AM

    Waiting For NEM-To-Go

    Jul 29, 2022 29:00 AM

    oops……………………INDIA…………slipping in the back door…. 🙂
    By Ranjeetha Pakiam Swansy Afonso
    Bloomberg News
    via Business Standard, New Delhi
    Friday, July 29, 2022

    India’s first global gold exchange aims to create a regional bullion hub that will allow more jewelers to import the precious metal.

    The India International Bullion Exchange is expected to attract dealers, refineries and foreign banks,

    Jul 29, 2022 29:07 AM

    And they wonder why some do not LIKE the LONDON con artist (LBMA)…….

    By Marc Jones
    Friday, July 29, 2022

    LONDON — London’s High Court has rejected President Nicolas Maduro’s latest efforts to gain control of more than $1 billion of Venezuela’s gold reserves stored in the Bank of England’s underground vaults in London.

    The court ruled today that previous decisions by the Maduro-backed Venezuelan Supreme Court aimed at reducing opposition leader Juan Guaido’s say over the gold should be disregarded.

    Jul 29, 2022 29:07 AM

    Can we please hear your podcast again on Apple Podcast ?

    Jul 29, 2022 29:16 PM

    SILJ:GDX is daily overbought for the first time in 17 months and just had its best close since March.

    Jul 29, 2022 29:39 PM

    The above SILJ:GDX action is a very good sign for the whole sector since it depicts “risky” soundly beating relative safety, but it gets better. While SILJ is beating GDX, IPT is beating SILJ.
    IPT:SILJ just had its first weekly close above its 50 week MA since October which was confirmed by its best RSI reading since October:

    Jul 29, 2022 29:44 PM

    The Nasdaq 100 briefly climbed above its 5 month EMA today but failed to close July above it. I don’t doubt an intramonth move above it in August but have a feeling it will again finish the month below it.

    Jul 29, 2022 29:54 PM

    Friday: + 5.54%.

      Jul 30, 2022 30:39 AM

      Yep, about the same here Lakedweller2. The last few days have been in the 3%-5% up days in the portfolio. Nice to see the uptrend in resource stocks over the last 2-3 weeks has started to accelerate.

    Jul 29, 2022 29:12 PM

    Recessions do not happen with the jobless rate at 3.5%, and falling, not climbing. We probably are not yet in a recession.

      Jul 30, 2022 30:34 AM

      The “strong” jobs report was a bit of an outlier, as all the other jobs data has been rolling over for months, so I wouldn’t use that as proof we are not in a recession. We just had back to back 2 negative quarters for GDP growth, the PMI (Purchasing Managers Index) is below 50 which is a bust signal, the housing market is rolling over, and the labor markets are definitely weak.

      We’ve seen 5 months in a row of a rising weekly jobless stats, over a dozen large tech companies come out and announce they are either freezing hiring or letting people go, and the small business association has released stats they’ve seen companies shedding workers to deal with rising costs and falling demand all year long. The jobs number is a bit skewed to the positive currently because of the way that companies had more jobs available than required and have now reduced down that number, making it seem we are at “full employment.”