Gold vs treasuries and US equity data
Another slow day in the markets but there are a couple noteworthy moves ahead of us. I look at the sell off in gold to slightly below $1,200 but also note the treasury chart (TLT) which is showing a potential bounce to come. There are also a couple data points that focus on the equity markets and central banks that when considered together make the rising markets make more sense.
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Dr. Hussman is always a good read, but the post-2008 market has not been kind to his funds. I suspect that’s about to change.
“I should observe that across all investment strategies we monitor, we presently expect short positions in the major U.S. equity indices to be associated with stronger prospective returns over the coming 2-year period than virtually any other investment class. Again, pure short sales are outside of our own discipline, but it’s still a point worth noting.” – John Hussman, February 20, 2017 Weekly Update
Epstein End of Day TA:
Tragically funny series of statements, but anyone taking that big of a gamble with all their retirement money and saying “Get Me In!!’ is not being responsible in preserving their capital. If someone squanders their whole nest egg on a few risky resource stocks and doesn’t have the discipline to mitigate risk (ie… a plan for when to take profits or cut a loss, position sizing, diversification within a sector, and diversification in multiple sectors) then they have no business speculating with their “Retirement” money.
Cory, I understand why you are worried about CoT data and Open Interest.
Historically high open interest, e.g. in Silver, has implied that sooner or later the bullion banks will take the price down to cover their exposed shorts.
That is a zero order analysis.
A first order analysis looks at the volume and price movement of both paper and physical.
The problem arises for the bullion banks when the rate of increase of physical longs exceeds the rate of increase of paper shorts.
historically since the bullion banks have very deep pockets, it has always been possible to short sufficiently to drive the price down. The bullion banks know where the stops are and the volume contained therein.
In silver over recent times, however, it appears to be getting harder to reduce open interest by driving the price down. I believe we are beginning to see something “different”.
CFS:
To cover shorts, the investor has to buy. How do you make the price of any commodity go down by buying?
You and most people look through the wrong end of the telescope. It is the action of the speculators that make markets go up and down. The commercials are nothing more than the casino in Vegas. They cover all bets.
My protest today about the Devil:
Did you know that in his last year of office he spent $36 million of tax-payers money on attorneys to evade legitimate FOIA requests? I know that is peanuts compared to what he spent on golfing trips at the tax-payers expense, but evading a legitimate FOIA request is NOT authorized spending. He should be in jail.
Glad the joker is gone..
Except he’s not, is he….
should have said……..glad he is gone from the oval office…
PENSION funds are doing the chasing simply because they are always invested.
It is in the interests of the money managers and the pension funds to stay invested 100% of the time. All they care about is their take of your pension.
The inventory of GLD increased by 6.18 tonnes on Monday, that’s a lot of buying going on!
The open interest in silver fell by 1158 contracts on the COMEX to
118, 390 total contracts. (The banks are not covering a lot of their shorts)
When listening to left wing neoliberals like Schumer and Sanders pontificating on the short-comings of the Repulblican healthcare plan (which I believe is very poor) and their praise of Obamacare, just remember the Quality of VA care which is the intended direction of Obamacare…..a single-payer rationed incompetent system run by government bureaucrats.
I can’t believe so many are long the conventional markets. If there’s ever been the perfect storm for a crash, it’s ” right now “!
..ahh.. the good ole buy high and sell lower episode..
Tomorrow the fed rate hike.
Tomorrow debt ceiling issues.
Mmuchin said he will take extraordinary measures to prevent default.
Tomorrow is the last day of the fiscal year.
The debt bubble… ( looming for a year now..)
UK could trigger article 50…
The Netherlands election.
Other stuff I’m forgetting and don’t know. ( oh yeah, the chart? )
Yup, the market will take a….
Kodiak-Bear-Sized-Dump!
( but I won’t say the G word.. )
Gary?
Here’s an interesting article to add to that list for tomorrow – March 15th 2017. 🙂
James Perloff: Should We Ourselves Brace for March 15?
March 7, 2017
https://www.henrymakow.com/2017/03/james-perloff-march-15.html
Debt ceiling should be interesting…………
sheeple do not care……..they can not even balance their check book, till the bank calls them,…….and then they rush out and get a pay day loan at 59% interest
The 401k people are just listening to a ” keep it in long term broker “. But there are others that should know better. Now, watch the market go up. LOL
If the market goes up? I’m buying Bob M’s book!
Kidding, I’m going to buy it anyway. 🙂
get me a copy………. 🙂
tell BOB, to put it on our tab
Meanwhile in Europe, no fewer than four European leaders have asked for a European “Federal Union” to build up the relationship between European nation-states.
Brexit may never happen, with dithering May not even starting the two year process yet; she should have stayed a house-wife. Maggie; May is not.
If the selling starts in earnest tomorrow your stop losses won’t do anything, you will be looking at defeat in the face. Maybe JPM was right in buying all that silver. By the way where’s our stock guru’s Matt and Ex. They are conspicuous by their absence. DT
I’ve posted enough today, actually. There’s just not much to add right now.
We’ll see if it means anything but today was yet another in which my risky tiny caps trounced the ETFs by falling much less: down .3% vs 6% for GDXJ.
Bear food for thought: GDXJ would still have to drop another 20% in order to take out the December low.
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=2&dy=13&id=p57180706604&a=511146714
Sorry DT. I’ve been in 5 meetings all day, and had a big drive to get back home, and am just now making my rounds. Today was a down day for me but not too bad – around 1.2 %. Thank goodness for diversification in sectors and different subsectors.
My worst performer today was down around 8.8% and my best performer was up 9.8%. Most of my portfolio (and I’d wager I hold more stocks than most on this board….other than Bonzo Barzini 🙂 ) only moved 1-3% or many were essentially flat on the day.
Despite some selling in the actual metals, for me it was mostly a wash for the day, so I don’t know why people were so much more bearish today, than many other days where the sector sold off much harder.
I’d say much of the moves are in anticipation of the Fed rate hike tomorrow, but that’s all baked in now. As a reminder, this same thing happened at the end of 2015 and the end of 2016 right before the fed hiked, only to see 2 of the largest rallies in the metals and miners right after both hikes.
My minus .3% was based only on gold/silver stocks. I think my worst performer was Primero.
http://stockcharts.com/h-sc/ui?s=PPP&p=D&yr=1&mn=1&dy=0&id=p31806688667&a=512347622
My MUX, GORO, and EXK were all down over 9% today, and PVG wad off 7.7%
Mother said there’d be days like this.
Sorry to hear that Bonzo Barzini. There were 2 stock that I had down over 8% but they both have big Copper exposure. Argonaut was my worst Gold producer down over 7% and Primero at 6.5%. As for EXK I was able to exit with a nice quick profit, but luckily I trimmed yesterday in 2 tranches during the market and in after hours trading. I sold the rest this morning at lower levels, but have rolled most of it into UVXY or to cash waiting on Wednesday to see how things play out.
My favorite silver miner (and largest silver miner position), IPT, finished up 4.6% today.
http://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=0&mn=9&dy=13&id=p04340289993&a=508320044
Impact has been pretty resilient since last Fall. It’s mostly been channeling sideways in a trading range. What a great Jr. Silver producer / explorer.
(IPT) IMPACT Silver named to 2017 TSX Venture 50
February 27, 2017
“IMPACT Silver Corp. (“IMPACT” or the “Company”) is pleased to announce that it has been named to the 2017 TSX Venture 50, a ranking of the top performers on the TSX Venture Exchange over the last year. ”
“Frederick Davidson, President, CEO, and Director of IMPACT, commented, “Last year was a historical year for IMPACT and all our employees and shareholders who have seen the company grow from a small restart miner explorer in Mexico to a silver producer celebrating a decade of operations at the Guadalupe production center. I would like to take this opportunity to congratulate and thank all of our staff and investors for their continued dedication to IMPACT. In 2016, our stock was one of the leading silver equities that achieved over 442% returns from an all-time low in the year. This was attributed in part to the rebound in silver prices and continued exploration which has been made possible from a key financing that will enable us to target new areas. We are excited to celebrate this milestone and hope to deliver even more shareholder value in 2017 and beyond.”
Matthew, that’s not too shabby at .3% for the day. Like I mentioned, today was mostly a flat day across many of the stocks in my portfolio and on my watchlists, but overall things were down. Luckily I wasn’t glued to the screen really watching the action all day because I was tied up in meetings, but for me the day was kinda — meh.
Glad to see you back Ex, usually the rates are baked in as you say but the buyers seem to have dried up, tomorrow I expect we will know the direction from the get go. DT
Thanks DT. Yes sir – The Fed Rake Hike cake is baked, and I don’t believe a word of what they say as far as projections for the rest of the year.
Let’s remember this is the same FED that projected 4 rate hikes last year and we got 1. There was a sell off before it and a nice climb in the metals and miners for 2 months afterwards. When they hiked the rates for the first time in 8 years in late 2015, it was succeeded by one of the strongest rallies in mining shares we’ve seen in many years.
What I am much more interested in is if they kick the can down the road and raise the debt ceiling (again). If they don’t for any reason, then things will get much more lively.
It sure would be fun listening to a conversation with Trump and Janet Yellin.
Trump: ..So Janet, you say the American people owe the fed 20 trillion?? Janet: yes sir, and that’s how we see it. Trump: Ok.., prove it! Janet: 😳😬😡poof
Ha! Yes, that would be GOOD “Reality TV”. 😉
Really, anyone holding US paper should be very concerned by 20 Trillion in totally unservicable debt, that is likely to continue adding Trillions as far as the eye can see. I tell ya what gang, let’s raise that debt ceiling even higher, and just spend our way out of this conundrum with even more debt. How does that sound world?
Unfortunately for the world, there are few options in other currencies that have the liquidity and breadth of the greenback.
or………Janet: Well Donald, if you just cut me a check, made out to me personally, for say two million , we can forget the whole thing. I will need that amount because no one will buy my book, when they realize I did not know my XXX… from a swamp swirl…….
It’s like trying to fix a sinking ship by filling it with more water, faster and faster, to get it to try and rise above the waves……. (Uh….yeah….. that’s not going to happen).
Honestly, the only discussion I’d like to hear Trump have with the Federal Reserve is this:
Too funny… ( swamp swirl..)
I imagine her XXX is pretty close to a “swamp swirl” so I can see where she’d be confused.
All he has to do is audit. We don’t “owe them” squat!
They would have to stay as some sort of banking oversight or have a compliance authority. But, they should have monetary policy taken from them for good. The institution is too big to shut down completely.
Opinion: What would happen if we shut down the Federal Reserve?
Published: May 27, 2016 – By Diana Furchtgott-Roth
http://www.marketwatch.com/story/what-would-happen-if-we-shut-down-the-federal-reserve-2016-05-24
How Do We Get Rid of the Fed?
Jeffrey A. Tucker – Monday, September 21, 2015
Trump’s has on the campaign trail questioned the future of the Federal Reserve’s political independence, but Allison takes that rhetoric a step further. While running the the Cato Institute, Allison wrote a paper in support of abolishing the Fed.
“I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed,” Allison wrote in 2014 for the Cato Journal, a publication of the institute.
Allison said that simply allowing the market to regulate itself would be preferable to the Fed harming the stability of the financial system.
“When the Fed is radically changing the money supply, distorting interest rates, and over-regulating the financial sector, it makes rational economic calculation difficult,” Allison wrote. “Markets do form bubbles, but the Fed makes them worse.”
If The Federal Reserve Is Abolished, What Then?
Mark Koba | Wednesday, 8 Feb 2012
As interesting as those pieces all are as thought exercise…… the status quo will continue.
They’ll raise the debt ceiling and kick the can down the road…. (again)…..
The alternative of not raising the the debt ceiling, and shutting down the US government, on the same day where the Fed raises interest rates would be pretty wild.
the debt ceiling will be raised……..do you think the congressmen are going home without a check….can you imagine…Hello honey, we shut down the govt and we will have to move back home with your mom, we decided not to pay ourselves today for the good of the country.
Bingo.
Nobody wants to move in with their mother-in-law….
What if the US was to default? I doubt that will happen, but if it did? The president would have complete authority to pay debts line by line item basis. And he would also have the excuse to ” shutdown needless criminal beuracracy entities”!
If they shut down the government for a while, how would he fund his infrastructure projects?
Most of the infrastruture will be privatized. It won’t be government and as I understand, it won’t create more national debt.
Where will the money to pay those private companies for roads, bridges, dams come from then?
Trump will trigger a unique finance mechanism. I know some of it, but not all of it. And certainly not enough knowledge to explain it. What there will be is, plenty of opportunity abound soon in the good ole USofA. It’s more Main Street. Not the stock exchange. There also will be billions of repatriated dollars hitting the US soon.
A “unique finance mechanism” sounds like a nice way of saying…. more “debt”… and it’s hard to do that if they don’t raise the debt ceiling and shut down the government. How could they even vote on it in Congress if the government is shut down? Congress controls money and the budget after all.
Governments don’t produce any money or generate profits. They spend money raised through taxation, and Trumps said he’d be cutting taxes not starting new ones, so surely that can’t be the answer.
Again, where will the money come from to pay the private sector to build roads, bridges, dams, etc… if they shut the down the government?
I doubt the government will shutdown. They got a lot to do.
Here’s a mind melt (and vague) answer to your question. Think about a bond that triggers funding, then collapses, and off-sets it’s self. You’ll see soon.
I agree that they’ll raise the debt ceiling and keep the party going….
It’s the hangover that concerns me.
They will be at a silver dealer buying.
Always a good time to buy.
Today GLD added another 2.93 tonnes of inventory.
For silver Open interest went down, another 223 contracts on the COMEX to 1188,147.
Andy Hoffman today:
Worlds #1 Hedge Fund Manager Warren Irwin on the Investing Process, NexGen, and the coming Cycle
CEO.CA – Mar 14, 2017
“Tommy Humphreys (CEO.CA) sits down with Warren Irwin and gets his take on the current market, the NexGen story, and his investing process.”
In Ky. coal country, a potential embrace of nuclear power
By ADAM BEAM, ASSOCIATED PRESS FRANKFORT, Ky. — Mar 14, 2017
http://abcnews.go.com/US/wireStory/ky-coal-country-potential-embrace-nuclear-power-46111740
Uranium Spot Might Hit $51-$54 In 2018
Mar. 14, 2017 – Michael Bryant
http://seekingalpha.com/article/4055170-uranium-spot-might-hit-51-54-2018
SLV increases inventory by 1.136 million oz today. Lots of silver buying going on.
After 50 yrs…….US wants Cambodia to PAY for all the bombs dropped during VNwar……….the people are outraged……zh
Sounds like someone needs to raise some cash……..
Next…IMC…….will be going after Germany, for WW2 bombs
Joe Lowry: Argentina Will Produce More Lithium than Chile
Jocelyn Aspa • March 14, 2017
“Although Argentina doesn’t have the lowest-cost brine, it has a greater diversity of resources. So my expectation is, in addition to $FMC FMC and $ORL Orocobre, who are now producing, within four or five years, you’re going to have two other world-class assets developed. That would be Cauchari, which is the $SQM SQM / $LAC $Lithium Americas [joint venture], and then you will also see $GXY.AX Galaxy Resources develop Sal de Vida.”
– Joe Lowry
INN: I’ve read that cobalt may garner more attention than lithium in 2017. What are your thoughts on that?
Joe Lowry: “I hope Cobalt gets a lot of attention, because honestly I’m in the Lithium space, but too many people are talking about lithium. There’s too much talk and too little action. So I’d like to see more production come online, and less talk about “lithium’s the next big thing” — lithium’s had its 15 minutes of fame, let’s put operations into production and move forward with real assets producing real product rather than talk, and let cobalt be the darling of the media in 2017.”
ISome positive news out today for (BHS) (KXPLF) Bayhorse Silver
“The upgraded material will be stockpiled at the mine in 1,000 kilo (2,200 lb) supersacks, that will be individually assayed.”
“Samples of the material and the assays will be submitted to interested potential purchasers.The Company anticipates that up to 10,000 kilos of sacked upgraded material will be available for shipping by the end of April, 2017, with increasing quantities available as upgrading operations ramp up.”
“Three supersacks containing 3,000 kilos (6,600lb) of crushed mineralization will be shipped to Steinert US to refine the Ore-Sorting equipment algorithm settings to ensure maximum Ore-Sorting separation of non-mineralized from mineralized material. By removing non-mineralized material from the process stream, substantial processing cost savings can be achieved.”
“With the crushing/upgrading plant commissioned, the Company will now focus on extracting up to 30,000 tonnes of mineralized material from the intermediate and upper workings of the Bayhorse Silver Mine for upgrading.”
Cool Bayhorse Silver photos:
https://orders.newsfilecorp.com/files/5015/25646_a1489526751602_85.jpg
Graeme O’Neill at $BHS $KXPLF is quite the character in the large cowboy hat. In case you didn’t see it, check out his interview with David Morgan at the end of last year:
http://www.bayhorsesilver.com/bayhorse-silver-ceo-graeme-oneill-interview-with-david-morgan/
Another GOLDMAN SAKER nominated to treasury by Trump…..
10/10/16 recording of Rino Ryan:
figures………Ryan the little weasel
Ryan just part of the establishment ……..two headed snake system Obama lite, is not going to make it, and he knew it.
CFS>>>>>>>>>>you need to repost this on Wed.section under Chris Temple….
Oil has reached major resistance near 49 and should head lower.
I may have missed a major bottom in XOP at 35.
Mnuchin Warns Congress on Debt Ceiling “Extraordinary measures.”
8:07 AM, MAR 13, 2017 | By TATIANA LOZANO
“As you know, the Bipartisan Budget Act of 2015 suspended the statutory debt limit through Wednesday, March 15, 2017. Beginning on Thursday, March 16, 2017, the outstanding debt of the United States will be at the statutory limit,” Mnuchin wrote. “At that time, Treasury anticipates that it will need to start taking certain extraordinary measures in order to temporarily prevent the United States from defaulting on its obligations.”
“As I said in my confirmation hearing, honoring the full faith and credit of our outstanding debt is a critical commitment,” he continued. “I encourage Congress to raise the debt limit at the first opportunity so that we can proceed with our joint priorities.”
http://www.weeklystandard.com/mnuchin-warns-congress-on-debt-ceiling/article/2007185
Beware the Debt Ceiling
MARCH 15, 2017 – Carson Block
“Euphoria has been pervasive in the stock market since the election. But investors seem to be overlooking the risk of a U.S. government default resulting from a failure by Congress to raise the debt ceiling. The possibility is greater than anyone seems to realize, even with a supposedly unified government.”
“In particular, the markets seem to be ignoring two vital numbers, which together could have profound consequences for global markets: 218 and $189 billion. In order to raise or suspend the debt ceiling (which will technically be reinstated on March 16), 218 votes are needed in the House of Representatives. The Treasury’s cash balance will need to last until this happens, or the U.S. will default.”
https://www.bloomberg.com/view/articles/2017-03-15/beware-the-debt-ceiling
IMPACT Silver Announces Fourth Quarter 2016 Financial and Production Results
+1
Fred Davidson, President and CEO, stated:
“Recently, IMPACT was named to the 2017 TSX Venture 50. In 2016, our stock achieved over 442% returns from an all-time low in the year. Over the past decade, I have seen IMPACT bring six mines from #exploration to #production through organic cash flow and continue to operate through challenging economic times. Operationally, the Company continues to improve its mine operating income, achieving income of $1.4 million in 2016 compared to a loss of $0.1 million in 2015. EBITDA1 improved to $0.7 million in 2016 from $0.4 million in 2015. The Company continues to achieve positive cash flows in each quarter of 2016. We continue to focus on improving profitability by increasing our processing capacity, expanding our resources, and carrying out an exploration program which will include drilling a number of key targets, all made possible by capital raised from supportive long-term investors who share our vision. We are excited to continue to deliver even more shareholder value in 2017.”
According to Kitco, silver turned precisely at Fibonacci support this morning:
This chart will update to show today’s action this evening:
http://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=1&dy=13&id=p55297878652&a=449326423
Epstein TA:
https://youtu.be/vS8B1GDp1NA?t=32
Ides of March, not April, Ira.
Just took a nice gain on my big at&t position as the s&p hit the high from yesterday.
Agree with your bearish thoughts Cory. Here is something interesting from Hussman’s latest that is at least, entertaining: In April 2000, I described the psychology that investors could expect to play out over the completion of the market cycle:
“This is my retirement money. I can’t afford to be out of the market anymore!”
“I don’t care about the price, just Get Me In!!”
“It’s a healthy correction”
“See, it’s already coming back, better buy more before the new highs”
“Alright, a retest. Add to the position – buy the dip”
“What a great move! Am I a genius or what?”
“Uh oh, another selloff. Well, we’re probably close to a bottom”
“New low? What’s going on?!!”
“Alright, it’s too late to sell here, I’ll get out on the next rally”
“Hey!! It’s coming back. Glad that’s over!”
“Another new low. But how much lower can it go?”
“No, really, how much lower can it go?”
“Good grief! How much lower can it go?!?”
“There’s no way I’ll ever make this back!”
“This is my retirement money. I can’t afford to be in the market anymore!”
“I don’t care about the price, just Get Me Out!!”