Ed Moya – A Bi Earnings Week Ahead, Bear Market Rally In Place, What About Gold and Cryptocurrencies?
Ed Moya, Senior Market Analyst at OANDA joins us to first recap the position of US markets so far this month, with most sectors in the positive. This is going to be a big week for markets as we will see earnings form the big tech companies. As Ed outlines the rally over the past couple weeks looks like nothing more than a bear market rally. We tie this into the gold market, that is mostly neutral this month but did not break to lows for the year like the equity markets. We also discuss the crypto market with a focus on Ethereum’s recent merge.
Click here to keep up on Ed’s daily market notes over at OANDA.
I’ve been debating scaling back my Coeur and scaling up my Hecla position. Any thoughts Matthew on the CDE:HL ratio chart?
I see them as peers in the silver/gold/base metals production space, but was curious which one may have more room to run versus the other on the next leg higher in PMs.
The ratio chart is interesting. HL went up more than 5-fold versus CDE in less than 3 years and has been either topping or bullishly consolidating since March. It’s been a long time since I’ve owned CDE and I have no plans to own it again but I can see how it might outperform HL once silver really gets moving. CDE is easily the riskier play in my opinion but it can move when things go right.
Both have tremendous upside potential that is not nearly as far fetched as most currently believe.
https://stockcharts.com/h-sc/ui?s=HL%3ACDE&p=W&yr=5&mn=0&dy=0&id=p80435691649&a=1275690795
Interesting. Thanks Matthew.
Yes, I see Couer as the riskier between the two as well, but with CDE needing to still finish funding their Rochester expansion, and still needing to get the Silvertip mine back online next year, I figured HL may have the advantage in the near-term, and the CDE in the medium to longer-term when the PM bull really gets moving.
The short term picture looks good but will obviously be much better when the crowd is convinced that the metals have bottomed.
https://stockcharts.com/h-sc/ui?s=HL&p=D&yr=0&mn=9&dy=0&id=p25038529627&a=1084873463
If holding for the long term I’d now probably keep CDE if I owned it.
https://stockcharts.com/h-sc/ui?s=CDE&p=D&yr=1&mn=8&dy=0&id=p35298580426&a=541041866
Based on the monthly HL:CDE MACD I’d be surprised if CDE doesn’t outperform HL for a long time:
https://stockcharts.com/h-sc/ui?s=HL%3ACDE&p=M&yr=25&mn=0&dy=0&id=p89938388810&a=1275705701&r=1666658869550&cmd=print
OK thanks Matthew for that feedback and the charts. As mentioned above I was looking at it from a shorter duration standpoint where HL may do better (next 3-4 months) but yes in the longer run starting in early 2023-2024 then I’d anticipate CDE to have the better performance over HL, because it has had a few setbacks that will be overcome by then. I guess for now I’ll just leave the heavier weighting in CDE and if HL does outperform in the near-term, then I may scale out of HL more and gradually roll those funds into other more speculative silver producers. This was helpful to consider and thanks again for your responses.
Two things are almost sure if CDE does outperform HL for days, weeks and even months from here:
1.) Silver will be doing well.
2.) Both CDE and HL will be doing well in dollars.
So as a Hecla holder I am cheering for CDE outperformance. CDE has outperformed HL since the lows of July and September and I hope it continues due to the implications for the sector. CDE has comparatively more to gain from higher silver.
HL vs CDE daily looks shaky:
https://stockcharts.com/h-sc/ui?s=HL%3ACDE&p=D&yr=0&mn=11&dy=0&id=p60994078639&a=1275771787
Good thoughts and agreed it will be good for Silver and the PM sector as a whole if/when CDE starts outperforming HL. I own both and like both companies, but was feeling like it was redundant to own both, however will just keep things as they are for now, and then gradually rotate out of HL if it moves first before the junior producers.
I was startled by how well CDE did during the 8 month surge in 2016, and it showed me some of these mid-tier silver producers can really move like torqued up microcap juniors during the bullish runs. Looking forward to seeing that environment return once again.
Evidently Biden stirred up things about Nicaragua and triggered a day trader attack. Remembering Volcanic, I moved Calibre to I-80, Impact and Silver Tiger.
Let’s see where it goes.
All Canadian companies, so you’re sanctioning US miners?
No …. I am against “Sell The News”, gaps have to be filled, front-running trades, intervention sanctioned by governments, fat-fingered trades, prices for commodities determined in paper markets, and those type of things. In other words, corrupted markets.
Yeah Lakedweller2, I saw that news out today about Biden sanctioning Nicaraguan mining operations, and that both Calibre and Mako got hit on that news. It still seemed odd though, because to Terry’s point, they are Canadian companies, not US companies, so I just don’t see how those US sanctions are relevant.
I slightly reduced my Calibre position first thing out of the gates today, not knowing exactly what to expect, but it is still my heaviest weighted position. I didn’t take any action on Mako because I still see it as vastly undervalued, and most investors just do not appreciate (yet) their expansion plans to double production, and the massive exploration upside. I’m more interested in their current drill campaign than most of the drill-play explorers.
The one that really crapped the bed today though for me was Pure Gold Mining. They had been putting out mine improvements and had Mark O’Dea at the helm as of recently, but based on todays sucker-punch news release, they may run the risk of going bankrupt due to their debt issue. It was compounded by their realization that the warrants they thought would come in, bringing funds into the company, are not getting exercised. What a bummer… down over 80% in one day. I sold it for a loss.
I had made a nice swing trade in it for a quick 30%+ gain in September, but had come right back into it a few days later with a first tranche starter position, which was also initially up another 30%+, and I had considered exiting again… but wanted to let my winners run….
I felt good about it being a good turnaround story, and was considering adding a second and third tranche, but then bam! outta the blue… total annihilation.
That really stung, but at least I had made some cheddar first on the swing-trade, and only had 1 tranche into it thus far. I guess many got spanked much harder than I did, but dang mining is a tough business.
I missed the Pure Gold hit but only by luck. A couple of weeks ago I consolidated some stuff into more Silver stocks as I had reduced them earlier in the year to concentrate in base metals. I have developed such a distrust in JPM that I finally concluded their intervention was stifling silver and I was wasting my time. Recently the theme has been that the Silver market will overcome the fraud so I sold some of my most speculative Gold stocks and rebuilt the silver portion. Now I am sitting and waiting to see if the thieves get long in the paper side to get some movement. But no matter the composition of my portfolio, it doesn’t move with any clarity. Too bad fundamentals don’t matter to thieves.
Good on ya Lakedweller2, and welcome back to the silver stocks. 🤑
Calibre puts out a news release indicating they are in touch with the US Treasury telling them they are in compliance. The Magic Fairies from the underworld hit them with another -20%.
Ouch! I just don’t get why it matters what the US is sanctioning if they are a Canadian company?
We’re going to have Mako on tomorrow, and I’ll ask Akiba about it.
A post on Yahoo comments declares a shareholder of PGM with 700, 000 plus shares. (Always could be worse). Insiders were recent buyers also
Based on weekly closes HL has not yet taken back its broken H&S neckline. Finishing the week near $5 will do it but there’s Bollinger Band and fork resistance to overcome as well…
https://stockcharts.com/h-sc/ui?s=HL&p=W&yr=2&mn=5&dy=0&id=p93410028342&a=1275342229