Precious Metals Sell-Off Today with Stocks Getting Cheaper
Erik Wetterling, Founder and Editor of The Hedgeless Horseman joins us to discuss the sell-off in the precious metals and underlying stocks. The sell-off is hitting majors down to the juniors. It’s a tough market for metals investors and now everyone has to look to where and when the market could turn.
It was a tough day for sure David. As mentioned on one of the other blogs, it was a very active day for me with trades in 22 companies, and earlier in the session my portfolio was down 4.5% then 4.8%, but since I bought into the weakness in many stocks that clawed their way higher in the later part of the trading session I only ended up being down 3.34% on the day.
Not fun, but that has my portfolio outperforming the GDX, GDXJ, SIL, and SILJ on the day, once again, so I’ll take it. It also validates why I like the control to build my own ETF versus camp out in someone else’s picks and their weightings, where I can’t actively manage what they’ve selected, nor pick up dividends, etc…
All but 3 of mine were negative today, so the cash I got today from a couple sales has more places to go…but not until I see what tomorrow brings. The candle hit starting early this morning and running all day long was orchestrated and waiting to see if the orchestra takes a smoke break.
We’ll have to see if there is more follow-through selling tomorrow and the beginning of next week going into the September Fed meeting. If there is, however, the outside chance of a snapback rally tomorrow, then that would be music to my ears…..
And the band played on… 🙂
So what? Who cares but you?
David mentioned how his portfolio did today, and I responded with how mine did, that it was an active day in the market, and reviewed the benefits of managing one’s own ETF which we’ve discussed before. We’re just chatting about the day in the markets.
This is a blog for sharing info on investing and trading and chatting. Plenty of other folks have come on and shared what they were trading or how their portfolio did for the day. That’s kinda the whole point of the blog, to share with the community.
If you don’t care, there is no need to comment on it, just scroll on by, or better yet, post something you do care about.
So…who cares. I appreciate hearing what Ex is doing as I am neither as knowledgeable or can I handle as big of portfolio. It helps me gage whether what I am doing has some options that might be better and rather than having to stumble into something I can go research something he has already put time into. He also moves through more sectors and turns faster than I do and knowing what he is doing gets me trading rather than sleeping. It is great feedback and may open some doors or get some free advice on other directions I may go or how to rethink some things. There are not many sites where these many recorded interviews on a variety of subjects and these many posts or press releases are available on a daily basis. So I care and that’s why I share what I am doing just like the other day when I picked up Nobel Resources. Not a household trade. I usually skim and if something catches my attentions like one of Matthews charts, I look at it. Greate sitecand great info.
Thanks for the kind words David. Likewise, I appreciate learning what stocks you are trading, what moves you are making in your portfolio, what has you encouraged, what has you concerned, etc…
Often it spurs a thought to respond to, a company to research, an area play to watch closer, or contains market or life insights that I value.
In addition, sometimes it is just nice to have fellowship and a bit of camaraderie in what is often a lonely and isolating solo activity. There aren’t tons of people in one’s daily life that want to shoot the breeze on investing in resource stocks. Haha!
Again, the idea here is a chat forum on an investing site… so I enjoy all the contributors here chatting about investing.
Ever upward!
Ditto David…. EX, has this stuff down… depend on it… , if, he does not know, he will tell you straight up… JMO….
Thanks OOTB.
You are MORE, than welcome…. 🙂
Great hearing Erik again. Hunting Price to Value situations. Good advice.
Listened to Frank Holmes today: He had a novel idea. Miners with Positive cash flows ought to begin with-holding product from the market instead of building their supply of fiat. Great idea.
Keith Neumeyer at First Majestic did the same thing earlier in the year and has been an advocate for more miners to withhold metals and keep metal reserves on the companies balance sheet in lieu of cash for a portion of assets. It takes a very independent thinking CEO to do that though, as most boards of directors would cave to analyst pressures if they got any pushback for doing it (even though it makes good sense if these companies are bullish on PMs longer term). It’s the same argument that Michael Saylor made for holding Bitcoin on the balance sheet in lieu of cash.
BTW – Yes, it is always nice getting Erik’s thoughts. In general, I agree with the points he made that if it is a quality company trading close to it’s enterprise value, and then sells off hard like many miners have recently (including today) that the risk/reward set up gets more favorable. Jordan Roy-Bryne made this exact same point earlier in the week.
If the paper downside is 20%-40%, but the upside is 200%-400% but may involve some volatility and a slow slog sideways to down, it is still a very attractive bet if someone has a 2 year time horizon. Of course, different investors with different time horizons or risk profiles can adjust things to be more conservative or more risky; but the concept would be the same.
People could also use limit orders to minimize the downside even further if that is too gutsy for them. For example, Steve Penny (also on the show earlier this week) often uses trailing stop loss order to limit his downside to 7% – 10%, while also having an upside target of many multiples of that higher to capitalize on good risk/reward trading set ups.
Good food for thought.
NEM- added @ 54.94. REMEMBER, Newmont is still the largest silver producer in the world{
6.5% – Still in cash.
NEM – added again @ $54.54
Thursday Price Quality: https://tinyurl.com/2vc9pznu
PMs: Monday was likely a short covering rally.
Seasonality may mute the PGM turnaround.
Uranium treading general market waters.
Page order revised. Method unchanged.
BDC – I just now discovered you had the other tabs at the top and the other commodities are in the “related” tab. Nice work sir.
Thanks! GDXJ held its old lows while the rest wilted. With FED week upcoming, anything is possible, and implied timing points to the importance of Tuesday/Wednesday.
Keith Neumeier (First Majestic) (sp) has spoken about holding back product for years and talked to CEOs about this for years and said for many reasons including cash flow, he has not been received favorably. It would work, but there is too much fear the powers that be would somehow turn the system farther against them through the paper price setting system. For whatever reason, it shows how far corrupt the paper price setting system has gotten. It is like having to pay “protection fees” to your local underworld neighbor.
Haha! Sorry, I just now realized you responded back with the same point about K.N.
Yep, it would be interesting to see more companies hold a portion of cash reserves in the actual precious metals, or hold them back during weak price periods to sell in stronger metals prices, but most live in a quarter to quarter operations review with analysts world.
The trouble with holding product back is the criminal element and paying for security. That is a real concern in all countries but more so in obviously the poorer ones. Base metals are not exempt. Sometimes copper is shipped from a mine and gets hi-jacked, melted down again to remove serial numbers and shipped to China, no questions asked. Can you imagine a mine in a remote region in a third world country storing precious metal. I can’t. DT
Agreed DT, but most of the larger miners have private security forces in place already, to guard against criminal theft. There is also the option of the company holding the metals in an off-site or 3rd party repository. It’s an interesting idea for larger producers to consider, but unlikely most CEOs or boards would have the foresight or gumption to implement it.
Here’s another big acquisition in the mining space today from Sibanye.
It’s interesting that Sibanye said no to acquiring Generation Mining’s palladium/platinum/copper Marathon project, but said yes to a Lithium project. (?)
At least they didn’t pick off our Group Ten Metals “little engine that could” quite yet. I want to see that maiden resource come out from prior years drilling, and also keenly await this year’s exploration results to come out that will be upside beyond the resource estimate.
Anyway… Here is what Sibanye opted for in the here and now….
_______________________________________________________________________________
(SBSW) Sibanye-Stillwater Grabs 50% of Nevada Lithium Project For $490 Million
Cecilia Jamasmie – September 16, 2021
“South African precious metals miner Sibanye-Stillwater (NYSE: SBSW) has taken a 50% stake in ioneer Ltd’s (ASX: INR) lithium-boron project in Nevada for $490 million. ”
https://www.mining.com/sibanye-stillwater-grabs-50-of-nevada-lithium-project-for-490m/
Good idea – I had a few coins laying around and hated to miss this opportunity to spend some of them on something real so I added a bit of PGEZF. Now what else to buy?
Sounds like Cory is really frustrated with Erik’s logic Lol. But it does look like a tradeable rally from here? Time will tell.
“You’re talking about an irrational market..”
LOL
Like the old saying goes, the market can stay irrational longer than you can stay solvent.
The other comment where he says he doesn’t pay attention to the price of gold is pretty funny too.
We are getting another washout, RIGHT NOW.
If you don’t sell NOW and wait, you’ll be waiting a long, long, long time.
It’s OVER for PMs.
Once the rest of the sectors of the stock market start selling off, you will regret it.
For the next year, at least, you will need CASH, not gold or mining shares.
Prices going up on everything everywhere, and it will continue until your quality of life has been substantially degraded. That is the agenda, and there’s really nothing you can do about it.
Some think that deflation and stagflation is the future. Maybe only cash and shorts work. Hard to decide when the alternative of inflation is also possible and requires an opposite reaction. The problem with all of it is we won’t know how to react as the data/info will be false. Truth is not going to be something we can consult.
Hey EX……….. where is BIG OWL….
I don’t know OOTB. He may just be taking some personal time.
Ok,…..thanks for the reply… appreciate it..
👍 Sure thing amigo.
🙂
Gold Fails To Hold The Key Psychological Level Of $1,800
Gary Wagner – Thursday September 16, 2021
Today’s sell-off seems to have been the result of technical selling pressure. The fact that gold closed just under its 200-day moving average yesterday, which is the first level of technical resistance, and opened below that price point today was enough for short-term traders to take profit.
Reuters reported that David Meger, director of metals trading at High Ridge Futures, said, “There weren’t any particular headlines to prompt gold’s pullback and this was rather due to its “technical inability to trade up through the 200-day moving average on Tuesday.” Meger added that, “any good news is bad news for gold,” and if more positive economic data comes out, the Fed would be more willing to begin reducing asset purchases, and gold’s likely to move sideways heading into the FOMC meeting.”
Gold And Silver Trade Like All Markets
Todd ‘Bubba’ Horwitz – September 16, 2021
“Too many people get involved with markets on a tick-by-tick basis. Watching markets minute to minute, tick by tick, is the number one reason for failure among traders. I get too many emails telling me that I’m wrong; markets are manipulated or gold, silver and platinum can only go up.”
“If we look at each item on its own, market manipulation certainly happens, but it doesn’t matter. Manipulated or not, there must be a buyer and a seller to complete a trade. In other words, worrying about manipulation is a waste of time and energy. Metals don’t always go up. Traders can make money on both sides of the market by playing the trend. Too many forget that a trade and investment are different. I can be bullish long-term but bearish over the next day, week, or month. There is no direct correlation.”
https://www.kitco.com/commentaries/2021-09-16/Gold-and-silver-trade-like-all-markets.html
Cory, you sound like you threw in the towel today! Sentiment is at Zero. As Bob M. Says, you buy when things are cheap and no ne wants them.
This is the beginning of the next leg lower—-the PMs and stocks will be under pressure as I’ve mentioned over and over through the end of the year with many double bottoms occurring with the March 2020 meltdown. There will be ups and downs as you would expect in markets but the trend remains down. When we bottom, that will be the time to be aggressive in purchasing.
IS THERE ANYONE HERE TODAY ?
When they finally admit inflation is a problem that’s the time you need to be looking in the other direction. Temporarily. One of my trading rules. Extremely reliable. There’s a very good chance of a deflationary rout. The Fed. will overreact and most likely that’s when the real hyperinflation takes off. We have so many variables here and dynamics. If a war breaks out with Taiwan they are capable of taking out all six ports in China. This will kick off hyperinflation in a heartbeat. The debt ceiling is also a consideration although it’s said they always extend it anyway which is true but maybe this will be different this time because the debt is so astronomical. There’s a lot of pushback especially from Joe Manchin. He’s the shot caller in the Senate right now. I’m not fully on board with the inflation train just yet. As far as going all in with the jugular catching a parabolic move in gold into a sustained gargantuan monstrous trend. This is where the real money is going to be made. That’s all I’m interested in nothing else and the challenge moving the chess pieces around. Year end will be the time to buy, positioning for my jugular trade in the gold space.
The voice of reason. Always Doc.
R U saying, that the bottoms of any interim rallies into year end will hold at the March 2020 low meltdown,
appreciate your response
Jonsyl, I believe most of the PM stocks will hold at that meltdown.
thanks for response doc.
Sounds like it’s a time to watch the paint dry.
I bought more BBB, IPT and KTN today. I didn’t want the 8/23 gap filled but it’s better that it happened in this fashion rather than trickling lower.
IPT is still 24% off of its low while the others went lower on very unimpressive volume which is a good thing. In addition, SIL and SILJ provided very little leverage to silver which is impressive considering silver’s plunge.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=6&mn=0&dy=0&id=p88181657921&a=1024983509
SLV:GLD finished well off of its low.
https://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=1&mn=1&dy=11&id=p10128149204&a=1027681306
Although GDX, HUI and XAU broke August lows, they closed above. GDXJ did not break. However, GOLD, NEM, FNV and WPM all broke, and remained under. Keep an eye on them!
P.S. Royalty companies Franco Nevada and Wheaton are both negatively saturated, with the latter at MaxSat(6).
Snorkel Time?
Juniors are like a fresh caribou to my hungry wolf …. I’m gorging!!!!
Mechanical walk down of gold started a couple of hours ago with bigger candles about 30 mins ago. Let’s hope they turn it off for at least a day ….but then it depends if they hit the “sweet spit” on options expiration to maximize profits for the banks. Then next week we can look to making The Fed look like they are important rather than they just transfer wealth. But, once you ride the gravy train you want it to keep going to the Infinity Station.
Strange how most of the downward activity, on a daily basis, comes from London and NewYork. Since gold is a 24 hour market, I wonder if the Regulators have an answer as to why gold sales are concentrated at certain times and certain locations…I should say non-existent paper gold sales. But, we must move along ….
That is an OLD STORY…. There are NO REGULATORS….
Darn OOTB…there are regulators. They are everywhere. They just selectively regulate.
Darn David…….. You know what I meant…. I guess , I will have to write an article on all the stupid stuff, going on and has gone on for centuries… 🙂
Plus, we were talking about CRIMEX… LOL… 🙂
Oh yeah…all that. 🙂
🙂
New annual low in GDX this morning…………….ugh.
well hate to say it but more of the same. typical Mid morning action followed by a flounder for the rest of day. As they say, maybe will be different this time. Many continue to think so.
Notable that the much touted silver vs gold doing exactly the opposite to what has been touted for weeks and months. Kitco gold shows gold down roughly .32% and silver down over 2.27.
Here’s a flash of news for the bored and nappers:
Vizsla lost 50% on my Schwab screen and then within seconds went back to +2.4 %. Hmmm…
Vizsla did it a second time
Third time. Very suspicious or something wrong with Schwab. More likely the latter.
Won’t have cash until Monday. I wanted to catch the drop…maybe next time I will get a chance to try. I don’t see anybody complaining about getting stopped out on the 3 crashes so I guess that is the good news.
It was a Schwab thing. Other trading places did not show anything. Hate it when that happens to me…but I don’t have any stops placed.
-5.75% in morning. +1% at lunch. -5.67% at close. I wish I owned an algo.