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Jordan Roy-Byrne – Be More Concerned With Macroeconomic Developments Than Technical Price Levels

Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to review both the fundamental and technical factors he is watching in gold, silver, and the PM mining stocks, now that they have clearly bottomed and are in a new bull market.  While there will be corrections along the way, there is nothing on the charts or the macro landscape suggesting another big “wash out” event being needed for the sector to move higher. 

 

Jordan provides some technical indicators he values, like the 200 day, 400 day, and 40 month moving averages, lateral price levels, and gaps on the charts, and points out that much of the other chart overlays are just based on price derivatives and momentum indicators, and he places little importance on those over the actual movement of price.  In gold he noted $1800 and $1780 support levels, and below that possibly the gap zone between $1762-$1780.  In silver, if $23 were to break then there is the $21.80 gap area, and support below $21 in the high $20s near the 200 day moving average. He also provides support targets for GDX and GDXJ. 

 

The big takeaway is that at this point, investors should be more concerned with macroeconomic developments, rather than just technical price levels. In bull market moves, the corrections are typically shorter and more shallow, and therefore don’t correct as much as people on the sidelines waiting to buy corrections are expecting. 

 

We wrap up with some thoughts on breadth readings, the advance/decline line metrics, and intermarket analysis with gold outperforming everything recently – US equities, commodities, and foreign currencies.  If those macro factors don’t change, then pullbacks will be more shallow and represent good spots for traders to scale into positions.  

 

 

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Click here to visit Jordan’s site and keep up to date on his market outlooks.

Discussion
26 Comments
    Jan 18, 2023 18:58 PM

    Don’t Expect a Big Correction in Gold & Gold Stocks

    Jordan Roy-Byrne CMT, MFTA – The Daily Gold – January 16, 2023

    https://thedailygold.com/dont-expect-a-big-correction-in-gold-gold-stocks/

    Reply
    Jan 19, 2023 19:23 AM

    In reviewing my portfolio today it was up mildly (+1%) overall, but I was startled to see the huge decline in WDO Wesdome (down – 16.7%) on an absolute stinker of a news release. Mining is a tough business.

    With just now realizing it after the trading day was over, I’m not sure if this was a bit of an over-reaction that should be capitalized on by purchasing more, if I should liquidate the position to avoid potential further downside. I realize much of the news about future production, the speed of development, and their capital concerns could be a bummer, and Wesdome has been valued richly and at a premium for a few years, so it does have room to shed market cap if there are concerns about it’s operational upside.

    My initial thoughts are that there are other operators of other producers with less challenges in their forecasts, but then again they aren’t a fire sale either. I hate losing money on a trade, or seeing investors lose money in what has already been a tough sector for some time, but don’t want to see a trainwreck happen in slow motion either. It’s crazy because Wesdome has often been referenced by a number of people as an industry success story, from explorer, to developer, to producer without many hiccups, and it got a premium for that. Looks like that tide has turned, at least in the short-term.

    Other investors have mentioned that a predatory larger producer may want to poach them now, and with proper capital fast-track some of the future production and have a go at it. So, there are times where other struggling producers get picked off at times like this (look at what we saw with Alexco as they struggled with production, Harte Gold as they struggled with production, TMAC as they struggled with production, Klondex as they struggled with production, Richmond as they struggled with production, and more recently with Superior Gold & Catalyst Minerals looking likely to merge). Yeah, all things considered, a takeover while larger producers taste blood in the water is not off the table either.

    There is rarely a dull moment in this sector. Ha!

    Reply
      Jan 19, 2023 19:12 AM

      The stock market volume today is very low, the stock market looks ragged and unsettled, and no wonder the future trend of business looks highly dubious, and America is losing its status as the Petrodollar. It is altogether too easy to foresee a time of reckoning ahead. The world has split into two forces one in The West and one in The East and they no longer co-operate. The West is being set adrift and is leaderless and this is having a huge impact on the public as they look to Washington for direction and sadly these days there is none. The world is in crisis mode because of it.

      Reply
        BDC
        Jan 19, 2023 19:39 AM

        It’s a ‘New’ West, controlled by those of eastern origin that exude the antithesis of Western Civilization’s ongoing quest for greater truth, remnants of which reside on the other side.

        Reply
    Jan 19, 2023 19:20 AM

    Good drill results out of Golden Lake this morning. Significance is that they are consistent with those reported by I-80 which is nearby. Possibly same fault and structure

    Reply
      Jan 19, 2023 19:42 AM

      “Sampling results”

      Reply
        Jan 19, 2023 19:02 PM

        Golden Lake up +27% today…means nothing except “today” it was up 27%.

        Reply
    Jan 19, 2023 19:59 AM

    Well, AG is breaking down post earnings as the daily chart was strongly suggesting would happen for a couple of months now.

    The weekly picture doesn’t look good at all. After the incredible hammering its received over the last 2 years, AG looks like it might be stuck sub $10 until April-May at the earliest and possibly out until the later half of 2023. Contrast that picture with HL and silver itself, which are 100% bullish overall.

    And that is the bull case for AG.

    It’s got a 2 week window to completely turn it around. Otherwise I think any upside until the later half of this year will be capped around $10.

    Reply
      Jan 19, 2023 19:50 AM

      Yellow mark. Seems like it is lighting the way.

      Reply
      Jan 19, 2023 19:42 AM

      I am seriously considering switching out at least a portion of my AG position for HL. The thing is the weekly ratio charts show that price is currently at an extreme. Of course, what will probably happen with my luck is that I won’t sell and the momentum indicators will imbed for weeks or months as AG loses more and more ground. For all I know the ratio is headed back to the 2010 pivot, which means AG is going to lose a LOT more ground. hell, in a vacuum AG looks like a great short with a stop at $9.07.

      It’s so god damned disappointing to be right about the underlying and completely wrong about something that should be providing upside leverage to compensate for the extreme risk.

      My thesis that the metals and miners would pull a 2019-2022 TSLA starting now looks to be evaporating daily. The muted response of stocks like Impact also support the notion that a true rocket ride won’t be coming for months yet, although something like Impact or even AG could even gently trend upwards for the next 3-4 months–they just won’t be exploding any time soon. But when was the last time anything gentle ever happened with these stocks?

      If silver does continue upwards towards $26+ without closing below its 10 WMA in the near term, and the silver miners I own like EXK, AG and Impact continue to languish, I will be crying even more.

      Reply
        Jan 19, 2023 19:40 AM

        AG and EXK WILL move eventually but Impact is a whole different game as you will soon see. There is nothing wrong with it at all.
        I sold HL and SILJ on yesterday’s big gap up and bought back nearly triple the HL by yesterday’s close. Now I am trimming HL.

        Reply
          Jan 19, 2023 19:07 AM

          My patience is non-existent at this point. 7 years of range bound trade with nearly all silver miners well below their 2016 peaks. AG:SLV looks like it is poised to break multiyear support and head back to the 2016 low.

          stocks up, silver up, silver miners down
          stocks down, silver down, silver miners down even more

          I’ll be retiring in a refrigerator box under a highway overpass.

          Reply
          Jan 19, 2023 19:32 AM

          I’ll take your word for it with Impact Matthew cuz you are in that +90% category for being right but lately it’s been about as exciting as watching paint dry.

          Reply
            Jan 19, 2023 19:32 PM

            I want to see his chart on that!

    Jan 19, 2023 19:35 AM

    I took profits on Big Ridge after a double from when I last bought some and dispersed it among some other stocks that have lagged.

    Big Ridge, BRAU.

    https://schrts.co/QCPIJPPs

    Reply
      Jan 19, 2023 19:54 AM

      I added to Emo a month ago to take first in first out long term losses. I took the losses today, lowered the basis in Emo and bought back my shares of Magna that I have been taking short term gains on and dispersing them around. Seems like all we can do these days to keep things going the right way. 🙂

      Reply
        Jan 19, 2023 19:04 AM

        It seems to be a whack-a-mole game is going on in your account too, haha!

        Reply
    Jan 19, 2023 19:37 AM

    Added to MUX @ $6.32

    Reply
    Jan 19, 2023 19:08 AM

    HL’s got a bullet proof floor underneath it at $5.50. So you are risking less than a buck from here going long IMO. Technically speaking, it’s one of the cleanest charts you will see in the space.

    Reply
      Jan 19, 2023 19:14 AM

      MUX weekly has an embedded SLO STO for 2 months

      Reply
    Jan 19, 2023 19:25 AM

    Barring a very large reversal starting today (would like to see a hammer candle at least) and into next week, AG is probably headed to $7.50 soon.

    Reply
    Jan 19, 2023 19:27 AM

    I swear when silver ticks higher, AG ticks lower. It’s the perfect long/short pair trade if you are long silver, with a very well defined stop loss IMO.

    AG:SLV is arguably breaking the neckline of a large H&S, which projects down to basically the 2016 low.

    Reply
    Jan 19, 2023 19:50 PM

    Lucky the “paper metals” didn’t do better today. Their great day only cost me -1.02%. Everyday is red.

    Reply

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