A focus on gold, oil and the conventional markets
We cover a number of markets with Doc today. He stands by his call of having to wait a couple more weeks before we will be able to call any big moves in a number of investments.
Click download link to listen on this device: Download Show
Silver looking good……………71cents……….
In two weeks….what do we have…..FED MEETING?….that might make the charts rattle.
It has far to go on the upside before it is strategically beneficial to do any selling.
smart money is usually early, before anyone else notices, ….the dumb money buys at the top, holds on, sells at the bottom, and the smart money moves in, and buys, and the process starts over again.
Doc, while you may be correct, I advise you to cover your gold shorts.
Your risk reward imo is not there.
To what end? You are ignoring your own advice that you have purported
throughout the last year. You have continually said, now is a good time to accumulate good precious metal shares.
Do NOT get married to technical analysis.
The time to short was at 1900, 1800….1500.
You can seriously ruin your life. You do NOT need to take that risk at this point in your life. Even if you are proven correct, and it does move lower.
At a bare minimum buy some calls, spend the few bucks to insure you don’t
bankrupt your family.
Concerned.
shhhhhhhhh! We want more people to short as I want to see the short squeeze that is going to happen be as extreme as possible.
Who said that ?
I’m a simple man and all I know is the past history of the PM metals and the markets.
I know that gold has been treated as a store of value through the centuries.
I know the gold price over years is related to the printing of fiat currencies.
I know that Russia, China, and India make up 3 countries in the BRICS and that they also make up 40% of the global population
and 25% of the global land mass—for some unknown reason their central banks, sovereign governments and people have an affinity for that shiny gold metal.
I know that markets and their sectors swing from overbought to underbought and then overbought again.
I know that market and sector sentiments shift from time period to time period.
I know that PMs have been moving down for 31/2 years and PM stocks are bottom scraping and yawned at.
I know that the ECB and Japanese banks are now printing a large amount of their currencies.
I know that in all likelihood the Federal Reserve will again be forced in the future to figure out new ways to print many more dollars.
I know that many of the PM mines will be forced out of business in the near future and that some with good established deposits
but no money raising ability will be purchased by more liquid mines.
I know there will be a decreasing amount of PMs mined in the near future and supply will lessen over time.
I know I’ve been around long enough to have seen populations suddenly rushing the doors of dealers to purchase shiny metal
when confidence in one’s currency and government was compromised.
I’m just a simple man.
I will be purchasing more of the metal in the future even though at this time I will continue to take increasingly more positions in solvent PM miners.
Personally, I think that the falling wedge in gold can be over
and that some bullion may be missing somewhere …
thanks Gabriel. By the way you are not just a simple man!
Nice post Gabriel. That was a good read and I agree with most of it.
Sorry guys but Doc posted it few months ago !
Just wants to reminded him of what he said and I agree with that.
It seems that we have another player who thinks that gold could be bottoming
and i have a lot of respect for him:
Buy signals in Silver and Gold are setting up:
http://peterlbrandt.com/precious-metals-could-be-bottoming/
First time I read it Gabriel. I must have been sick that day and away from the desk.
Gabriel, thanks for that posting—-I’m so simple I forgot I penned that. By the way, I continue to hold to that. December will be a good time to look at your portfolio and decide which stocks are to be your “keepers”.
Great thoughts Doc. Thanks for re-posting it Gabriel!
Dave, thanks for your concern.
1200 would be a great short.
Summary: “Traders who buy into the deflation myth simply don’t understand money.”
Hamilton is correct.
My last three bear buys on the $&P were just shy of $500 after comish. Not gonna bankrupt me. 26% profit, 7% loss, 13% profit. Aiming for 40% profit on the crash. 🙂
Same old,same old…the new religion is chartism.
Its funny how often they are dead wrong…if the trend is down,inevitably they are bearish-if the trend is up and esp if one ma crosses another,its hey ho,jump aboard.
Here we have Postma hedging his bets and muttering darkly about a move in the wings,whether up or down is not discernible,but its coming.
I agree a move is coming,it could be up or it could be down,maybe even sideways for a while,possibly starting on Monday…
Not sure why anybody is talking about SILVER!
Not sure, why you wouldn’t!
Silver DEMAND……..”.is simply through the roof”……….Perth Mint….zerohedge today.
If I ordered silver Maples today, they would set me back
C$24.55
U$18.64
-wait time? probably a month at least.
Is it local shop or you need shipping?
That includes shipping and insurance.
Doc,
Excellent analysis, as always! Good observation on the VIX.
I’m thinking the move on the dollar and gold this morning got the strength indicators on the move, and a welcome sight. I’m also thinking a short term rally on the dollar and a smack down on metals and oil next week.
Chartster, I believe the odds are with you. We’ll see.
Man the VIX did sell off today. I am getting interested in getting long volatility soon, and may pick up a position in TVIX as the general markets are going to hit their heads on resistance next week.
S&P will get risky at around 1980 to 2000 where the shorts will attack.
I’ve already got my attack position in place.
Silver may head to 16 or 17 shortly, but by next year, it will be below 10. A global commodity bust is coming next year that will feel like an eternity.
No way. Silver is consumed. No producer, no product.
We just had a global commodity bust. The CRB fell about 40% and GNX fell about 50% in the last year while oil fell over 60%. If the bust has a long way to go yet, it will probably be seen in commodities priced in gold not dollars.
http://schrts.co/jI3ZSs
The CRB is down 81% since 2000 when priced in real money.
http://schrts.co/qgccuv
The central banks of the world have papered-over the collapse in order to keep their system going.
In early August of 2015 the CRB measured in constant dollars was the lowest in 59 years. It began a rally and is still up. It’s irrational and rear view mirror investing to presume a trend will continue when you are at the biggest extreme in 59 years.
The CRB and most commodities will confound the naysayers as it continues to climb. The majority of investors are always on the wrong side of the boat.
I totally agree. My point to Velma was that we already had the bust. That’s why I started with “IF” when I said: IF the bust continues it will be versus gold not dollars. I’m more bullish zinc than gold right now.
Matthew, I am with you. However, I have stayed away from base metals since 2010. I saw so many producers coming on line to take advantage the inane high price. They are way over produced. The excess needs to be worked out for another few years. A lot of miners have to go bust. There is no driver for higher price. For PM the driver is here, inflation and financial trouble and sovereign defaults.
Just to play devils advocate, there’s no reason why commodities can’t go to -90% vs gold or a 100 year low. The debt situation, for one, is much different than it was 59 years ago.
A hyperdeflation in real terms is possible and I don’t believe that 30 barrels of oil per ounce of gold qualifies as “hyperdeflationary.”
I can see base metals dropping relative to gold and maybe soft commodities too, but mostly metals. As for relative to fiat currencies, not by much. I cannot see why coffee drop in Canadian dollar term. just saying.
Interesting discussion on commodities guys. It will be interesting to see if the August 2015 lows in the CRB were the bottom, or if we have one last leg down left where PMs, Oil, and Base metals will head to their major lows and then we get the final bottom.
I’ve heard a number of analysts make the case for select base metal fundamentals and Zinc, Palladium, and Niobium come to mind. Also, the Uranium price has stabilized and technically the spot price has already bottomed; however, the mining shares took it on the chin more than most analysts expected and are in the bottoming process.
Commodities as a whole don’t look very strong at present, and the global economy has slowed, but I’m personally getting keenly interested at some of the very depressed base metal conglomerates.
Here’s a composite chart of some Base metal Companies worth watching:
Teck Resources, Vale, BHP Billiton, Rio Tinto, Freeport-McMoran, Glencore Xstrata, First Quantum, Turquoise Hill, Antofagasta, and Anglo American PLC.
http://stockcharts.com/freecharts/perf.php?TCK,VALE,BHP,RIO,FCX,GLCNF,FM.TO,TRQ,ANTO.L,AAUKY#
Here is chart covering some of the Mid-tier and a few smaller Commodity Conglomerates:
Companies featured:
Teck, Exxaro, Hudbay, Jiangxi, Vedanta, Lundin, Kaz, Mitsui, OZ, and Capstone
http://stockcharts.com/freecharts/perf.php?TCK,EXXAY,HBM,JIXAY,VEDL,LUNMF,KAZ.L,MITSY,OZMLF,CS.TO#
Excelsior , is Tech the largest base metal producers in Canada? I haven’t followed for a while, have they down sided a lot?
That’s the first time I’ve heard Doc say to short gold. Usually, he says something like “sideways to down, but that’s okay!”.
Good loonie action the last few days:
http://schrts.co/siesrX
Oops, that wasn’t meant to be a reply to PF.
The week ended on a high note for $CAD:
http://schrts.co/dWd0PN
Copper:CAD correlation has moved up from zero in mid-September to 76% positive.
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=D&b=5&g=0&id=p56043466860&a=410147397
Thanks for pointing that out. Do you agree with Biiwii about copper at $1.50? I do not but can see why he thinks so. It sure did move up with CAD today.
http://schrts.co/b1BNE2
Thanks Irwin. The CAD and copper are what I have been talking about the past while so its nice to see that confirmation on the charts.
Matthew;
Hard to agree with Biiwii’s $1.50 call, but I’ve learned to respect his opinions. Some of his long-term calls have been very accurate.
Think I’ll subscribe to his letter for a month or two – think it’s only U$29 per month.
Thanks Irwin. I respect his opinions too.
PF; I thought I would try to make some short term coins and that’s all. I believe the next bottoming in gold before the next cycle will be between 1100 and 1120—-then we’ll see what happens with the next daily cycle. By the way, we should continue in this sideways to down channel. I’m feeling pretty good due to the fact gold had that reprieve today since the charts were looking awful for it going into today. It just insures that gold will not see 1000 (like so many have been saying) by the end of the year.
Hey Doc
Monster move in miners today. My First Majestic was up 14%! I took some profit, but am not 100% convinced in the sideways to down action in months ahead. Wouldn’t it be prudent to tell investors to take a core position and start to accumulate (like Al says) vs telling them to short or stay on the sidelines. The downside is limited, but the upside is just insane.
Ryan, personally, I have no problem with your thoughts. For me, I figure it’ll be awhile before technicals show we’re starting to have a new bull. In the meantime we’ll have ups and downs and starting to take slow positions at this time (long term holders) is no problem when you purchase companies that are going to be around. You’re right—if you want to purchase here and are willing for a little downside risk to hold long term, it’s not an issue.
Here comes the yen:
http://schrts.co/HB9qms
I think shorting gold is a mistake here. It is time for them to take it above 1200 and suck in some people. Create that bottom is in feeling. Then they will take it lower. My target is $500, possibly in the first quarter of 2016. Oil may had over 50 also. Then, it too will fall–probably to the teens by next year. A global commodity bust is coming that cannot be stopped. The seeds are sown. The Fed has lost control.
Velma…..$500 in first quarter 2016….Are you mad ?. But there again who really knows in this crazy world….Me I think $1250 +….But then again, I might be mad.
Who knows after all us humans are playing against the machines..HFT’S.
You’re definitely stark raving mad Irish, but that’s we love about you man!
Cheers to you sir.
I’ll eat your hat if gold ever drops under 850 again…
Velma,
that’s some serious preduictions! I really hope you are wrong because if you are right then the stock market is gonna be -75 % to where it is right now!!!
Confused, yes. I am predicting that too. I expect that the 500 range is coming for the SPX.
WHAT A GLOOM AND DOOM. I DON’T AGREE. BOTH GOLD AND STOCKS WILL GO UP NEXT YEAR INCLUDING SILVER. BASE METALS ARE OVER PRODUCED AND OVER PRICED FOR OVER A DECADE. THEY WILL STAY BEHIND.
Unsafe to drive with the shift key stuck like that!
Ha Ha, just want to make a point. I am not a Harry Dent fan, you know.
✔✔✔
Nice check marks.
Dragonite, you could be very correct. I’ve been mentioning for over a year that I feel 2016 will be the transitional year for the PMs. In my view the bottom will be in and toward the end of the year and into 2017 we’ll know most likely that the carnage is over and the bull will start (note the start) snorting again.
Yeh.
Doc I think the PM Bull will start snorting by the first quarter of 2016, but we still have many crazy months left in 2015 before we get there, so I’ll be interested in the monthly charts in going into 2016.
Doc!!!!
As long as I’ve been listening (years)…. I’ve never heard you say that you went short gold. To anyone that listens to this interview,…BEWARE HOLDING YOUR LONGS!!!
I don’t know about being short here but I sure as heck did not want to stay long either. I think I will let the miners tell me what’s what next week because gold itself is an enigma right now.
The miners are very telling A Listener and I believe the ETFs are still telling us we have some further work before we get a meaningful rally. Just my thoughts.
My thoughts too. Especially after that reverse split on NUGT shares last week. Even they worried it was going to fall below a dollar if gold itself did not stop its relentless declines. Today’s gold price rise is showing as a nearly formed H&S pattern on the futures charts for Sept/Oct though so maybe you will be exactly right that a short is the place to be next week.
Listner,
I’ve been holding nugt for the last week expecting this bounce. White knuckling it! Mostly because you were agreeing with Gary about the bounce up. When you to agree it’s generally accurate. Hope it sustains long enough to at least get’ me my initial back.
Doc Fan; as mentioned above it’s just a short term trade. I’ve added some technicals to my basic technicals and have watched to see how successful it is—-it’s been very successful and I guess I’m going to play with some real money short term which I haven’t done in the past. I’m not a day trader and usually take medium to long term positions. I thought I would shorten my time frame on some trades to see how my system works.
Doc, can I ask what technicals you are adding to your repertoire? I have been toying with some I don’t normally use and while they are sometimes helpful they tend to bog me down and add a layer of confusion because they often conflict with other signals. Maybe its just interpretation and more regular usage to get familiar with them……but its time consuming.
Thanks Doc!!. Based on your commentary lately, I figured as much. Lookig forward to seeing how things play out over the next 6 months. Scared too though.
Shad…if you are out there….EXCELSIOR!
Hey Doc Fan. Good to hear from you. Yes, ever upward!
DOC:
Did you use the ETF NUGT or something else, for your 7-10 day gold short position? Thanks!
All The Best,
JIM
DUST or JDST (3x Bear) would be best, I’m guessing.
I’m a pretty conservative guy–dzz.
Those 3x ones look to me that they may have to fall more. I like the ones with less risk.
I think this trend in gold in encouraging. Everyone enjoy your long position.
Good luck to all.
I closed my long on Friday
Gold has not been a safe haven for the past three years.
Sure it has. Insurance always carries a lower premium when risks are believed to be lower. Note that gold priced in oil made a 26% higher high in 2015 than in 2011. When priced in commodities in general, gold is still higher than it was in 2011.
So don’t let the rambunctious dollar fool you. It went up more than gold went down. If Apple stock went up, you would not claim that your dollars went down; so why assume that your gold went down just because your dollars went up?
Holding gold instead of stocks the last four years came with a substantial opportunity cost but no loss at all compared to many goods/assets.
http://schrts.co/ccwPf6
Three years? that cannot be considered long term.
What about the past three thousand?
Very strong buying at the close in all markets, even miners. Those that waited for the last 15 minutes paid much higher prices. Follow through on Monday could very well happen in the PMs since many of the charts show a breakout on the triangles in many charts. Wouldn’t want to be short gold. Conventionals, maybe. JMO
It was an amazing day Silverdollar. Thanks for mentioning the spike at the close. I checked and was pretty surprised especially about the DOW. Will wonders never cease. I actually started to feel bullish metals for a change as well. But I don’t want to get ahead of myself and say it too loudly or the thing will be jinxed!!!
I am very much in agreement with you.
I would also not want to be short gold if the Syria mess gets any worse.
Good thoughts Silverdollar. I trimmed a few gold mining positions, but held onto the core positions. I am thinking of going long volatility next week if things start looking dicey, but want to see how the markets behave on Monday.
Franky,
re: your question on NUGT.
It is simply a RE-PRICING of the instrument (in technical terms, it is called a “reverse split”)
This happens once in a while with these levered ETF when their price gets too low – the same happened this week on JNUG/JDST.
For your NUGT, I just checked and the ETF manager did a 1:10 reverse split. So whoever had 10 shares at $3 before the reverse split got in exchange 1 share worth 3×10=$30 after the reverse split. That is why you see the price at >$30 now.
Hope this makes sense, and hope all is well w. you.
With love,
LPG
UWTI split recently as well. I am currently playing all three.
LPG – What sectors are you liking these days?
Good to see you pop up to help out our buddy Franky.
Cheers!
Hello Excelsior,
I almost exclusively invest in nat resources (think about “almost exclusively” as a proxy for >95% of the time , but not necessarily meaning >95% of my capital).
Within nat resources, my focus is still the PM space as it is the one which I believe I understand the best.
So I will be boring and will repeat myself but I’ll say that I still like the PM space, and this is where I put my investment money.
On top of this, volatility has nicely picked up on the conventionals, so I do a large amount of intraday trading on levered instruments on conventional markets, on top of those in the PM space (which I trade regularly).
Best to you & GL investing/trading.
LPG
+1 LPG
At just >92% of the time dedicated to nat resources, I must have less conviction than you do. 😉
Franky,
If you own shares of NUGT or those ETFs that do reverse-splits, I think that normally, your broker informs you in advance about this event.
BUT if you don’t own the shares, you are typically not informed.
Irrespectively, the manager of the ETF typically communicates on the reverse-split a few days before it happens.
For example, re: NUGT, there was a few press releases (I suggest you check news on Yahoo Finance in the US, it is typically very comprehensive):
–> go to http://finance.yahoo.com/ and put the ticker you want on the top left corner and click on “Go”.
–> If you type “NUGT”, you should reach the following URL: http://finance.yahoo.com/q?s=NUGT&ql=1
–> Under “Headlines” you have a list of news and comments about NUGT.
–> If you look at the various headlines, you will see one that says ” Reminder: Direxion to Execute Reverse Share Splits of Six Leveraged ETFs” PRNewswire (Tue, Sept 29).
–> Click on the headline, and you reach that link: http://finance.yahoo.com/news/reminder-direxion-execute-reverse-share-203000576.html
–> All details are there regarding the reverse split are in this communication
ALTERNATIVELY… you can check once in a while on the website of the manager of the ETF (in this case, it is Direxion) for news about reverse-splits:
–> go to http://www.direxioninvestments.com/
–> Check the “News” section at the bottom left part.
I think all of this should help you in/for the future 🙂
Best to you & have a good week-end Franky.
With love,
LPG
Thanks LPG
Gold will be a safe haven for a few days.
Trader mentality-possibly it might,but its been around for a long time and suprise suprise it aint going to disappear…..(except from western central banks).
Dow closed exactly 200 points up from being down 250. There are special powers out there. S&P at 1951 which exceeds the past 7 trading days.
Its temporary
Sites still screaming “shortage”, I checked silver, still looks to me there is more supply than demand, and supply increased from 13-2014.
In any case I decided to buy some physical o sure enough gold decides to spike, lol,
think thats happened about the last six times I bought now.
I should actually buy a penny miner before I buy just to pay for the physical. lol
Anyway, first time its happened, just for Mathew, I could not get what I wanted, I buy coins, I had to buy bars, so I cant say “all you want” this time.
This is obviously the sign that there will be zero of any PMs available by next Friday.
Its “to the moon” for sure now.
bb – “Its “to the moon” for sure now.”
I won’t let you forget you said that.
ok Irwin, I dont know if you would call that kinda sign technical or fundamental,
if it was actually true I might be inclined to call it eerie or plain weird. lol
COT report as it relates to the commercials’ positions. The report is based on Tuesday’s closing for the PMs. Silver was basically a wash whereas gold showed another net increasing position of about 6000 contracts. This was in spite of gold trending down at the start of the week. One wonders with the big move today what the report will show next Friday if gold hangs around these levels the first of the week before the close of next week Tuesday.
The net increase for gold was about 6000 SHORT contracts.
Someone will correct me if I’m wrong;
but the commercials would be the miners who have to sell their product if they want to stay in business.
So, with gold moving from 1100 to 1150 they took the opportunity to sell some pet rocks.
Irwin; yes, they’re made up of the producers. They are generally referred as the “smart money” and often are more right then the speculators, etc.
Thanks Doc.
The amount of buying and selling is done by three groups: Commercials, Large Traders, and Small Traders. The largest powers in the marketplace are the Commercials. These are the large users and producers of the commodity. They do not use the commodity markets to speculate or directly make money in the markets. They are producers and users of the commodity, so they sell forward or hedge their production/demand. They use the markets for selling and delivery, not speculating.
Having been around farmers most of my life, I equate a gold mine to a 5,000 acre wheat farm.
When harvest is done, if the price of wheat is low, the farmer can store his wheat for a few months, but come January, his banker is going to give him a call and ask, “have you started delivering any wheat yet?” (hint hint)
Even if the farmer is fortunate not to have debt, he still has to sell within ten months or so after harvest, because he needs the storage space for the new crop.
I said all that to say this – I don’t see commercial shorts (selling) as a negative for the commodity. A producer has to sell at some point, regardless what his opinion might be about the future price of the commodity.
One notable exception was Goldcorp when McEwen was CEO. He was able to hold back 10% of production and wait for higher prices. He sold off the stock pile shortly before leaving Goldcorp, and I don’t know if the new CEO continued the practice of holding back a portion of production.
Sounds like a pump and dump Doc.
Perhaps we will get one of those big dumps of contracts early one morning next week.
Yes and for each short there is a long
Richard, The HUI weekly did close at the top of its range and above its 10 wma today (Friday). There was also a positive cross for the weekly MACD (barely). Nascent trend change?
Off topic since I have said enough about gold….but I think we have a double top in the 30 year and next week she will be going down. Have a look at the futures chart and judge for yourselves if those candles are telling us anything useful.
So maybe a rate hike is in the cards for this month. Hmmmm.
Futures 30 year bond chart– Daily
http://finviz.com/futures_charts.ashx?p=d1&t=ZB
SINCLAIR, HOLTER, AND MILES FRANKLIN…………join forces, posted this twice for general business info. should be interesting. just got the email from Franklin
correction……not joining forces, nor merging …..just exclusive dealer to…..sorry.
Jeff Brown from Beijing:
The Rise Of China And The Collapse Of The West (33 minutes)
It is nice to know there are some western reporters willing to go to china and report something more real. Otherwise I see the news out of the west become 100% anti China and more And more like the cold war Era. The real picture can also help us to improve our investment strategy.
I was curious to see what you thought about the report about China.
One never knows if they only spout BS or if there’s some truth.
I would say what he said is true as what you see as a westerner and stay in china for a period of time. There are a lot of impressive stuff and the country is rather dynamic. Since even I am surprised by the progress, you can understand how a westerner will be impressed considering what they have been told here. Since i have friends and relatives there, I probably can see deeper and something you would not see on the surface. If you go into any Chinese discussion group, you will find every one curse the government and blame the system. Not dissimilar to this forum. People have on average very negative view towards the country and the society. They will complain about corruption, complain about leaders and even the people around them. This is very different than average American. Americans are trained to be confident and happy and Chinese are just opposite. As for the economy , the consensus is it is not as easy as before but people still don’t feel hardship. There are still plenty of jobs and wage has been gone up very quickly. So there is still growth. But since a lot of my friends are very senior and some you can call in the elite class, they do feel the economy is slowing and the time is tougher than before, especially it is dangerous to be corrupt. So I feel this is more like early 90s, in which a slow down was brought by political tightness. Leaders who used to work hard to enrich themselves and their subordinates get scared of being punished so they do things more careful. The top leader need to reform the the economy to release the energy again. This is what they are doing. One major push is to privatize the state own enterprise and give the ownership to people. Xi has proposed many reform plans and most of them sound very good. So I feel in the nrxt few years, the economy will step out of slow down like it was in 1994. chinese leaders know they cannot ruin the economy since they would be in a tough spot. I feel China has had the luck of having 3 generations of practical leaders and this generation are more educated and willing to go the extra mile, e.g. the anti corruption movement which put their own lives on the line just to release mass anger. So this slow down will pass. And it is good for the country since there hasn’t been one since 1994.
Good overview of the Chinese sentiment from the perspective of people living there, versus the global perceptions. Interesting points on corruption as relates to politics and business, and how things may progress from the new generation of Chinese leaders.
I got a chuckle out of the part about – no safety deposit boxes available in Beijing because they’re all full.
No idea about it but I know people usually have a safe in the family
What does Doc think of the platinum collapse. Another commodity falls out of bed.
It’s interesting that palladium:platinum ratio has jumped up a load on the downmove on platinum and recovery in palladium.
Yes! The doctor’s in! Click