Comments on the recent Midland results and a bullish case for base metals
John Kaiser, Founder of Kaiser Research joins me for an update on “The Great Canadian Area Play” in the back of the Midland Exploration results from last week. We also look at the new bullish case for base metals after recent comments from China.
Click here to visit John’s site. It is well worth your time when doing your DD on any junior resource stock.
A $20 plunge might have actually been better if you want to get this show on the road. There’s a lot of support in the 1250-60 area.
As for silver, I think all we need is for it to recapture the 200 day MA…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=8&dy=0&id=p83917674820&a=647228156
Whatever happens, happens at this point. Lots of mixed signals. We are definitely at a potential inflection point, but the status can change from minute to minute (e.g. gdx:$spx).
GCC is getting slammed again. If it is not the yen, then I guess it is the trade wars. You can’t win being long commodities.
The cynic in me thinks nothing really changes regarding the metals and miners until the Fed is forced to relent. Until then, if I had to speculate, it would be long gold bullion, and that is it.
That would have screwed the intermediate cycle picture up though.
That picture could obviously easily still be screwed up in the coming days, but for now it’s alive, and so is weekly cloud support–and for now I have to stick with the facts in front of us.
Arguing more for your $16 is the $15.78 pivot…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=9&dy=0&id=p1788155595c&a=635076710
Well, I meant to say, it needs to make a higher high that I can see across the room on the weekly chart. It’s a pretty fundamental aspect of any bull market.
Yes, and three of those were taken out in 2016 on the weekly chart. The long term bullish implications of that action are still intact.
you could have said the same exact thing about the spike higher in 1987 too. The chart action looked equally miserable back then too.
EXK=DB. Actually, the 6 month chart looks worse, lol.
Yes, and the stock market was about half as expensive then with a Shiller PE in the teens and the Dow traded at roughly 5 ounces of gold, not 20, as it does now. So I would count on silver taking out the 2015 low.
Good back and forth guys! Thanks for simply bringing thoughts and charts to the table. All great comments 🙂
Oops, big mistake but I’m sure most of you caught it: “I would *NOT* count on silver taking out the 2015 low.”
Matthew,
That sure would not be the first big mistake you have ever made.
That’s true, smaul paul.
This big fork also argues for the need to get to $16…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=9&dy=0&id=p1788155595c&a=635076710
HL is up 2 cents. To the mooooooooooooooooooon, Alice!!!!!!
I didn’t think my 1000 share purchase would have that effect, but…………glad I could help.
good buy. Or is that good-bye? lol.
Seriously, I would be somewhat surprised if HL didn’t put in a significant counter trend rally now. I would also be pretty surprised in this week’s low is taken out any time soon.
Big outside day reversal candle in UUP so far today. The fact that it is coming at a 52 week high is pretty significant.
Short miners, long bullion pair trade appears to back in full effect. Actually, that pair trade has worked for the last 15 years save for two 6 month windows in 2009 and 2016.
EXK is printing an ugly black candle on the daily chart atm. It can’t catch a break. At all. It’s been what, 40 trading days since it touched its 20 dma. I’m speechless. It literally down against silver bullion on a day like today, after an absolute merciless and frankly surreal 2 months.
Looking at the way miners are selling off, one would have to assume today’s move is nothing but another pump before the dump.
How can you not despise miners at this point. They are underperforming bullion for 14 of the last 15 years. whatever. Just take the $HUI sub 100 and get it over with already!
Of course, the second NYMEX closes, it’s a free for all to sell gold and miners into the close. This occurs basically, 999 out of 1000 trading days.
You NEVER will get a close in gold above the NYMEX close by the end of the trading day by more than a buck or two. It is always either sideways or down after NYMEX closes.
It’s hilarious. People shorting the US stock market cover at the drop of a hat apparently. And who can blame them with the WSJ ready to report the latest FOMC musings at the drop of a hat.
My take is the below article from Avi Gilburt is very telling. TLT started to rall in October and still has a ways to go. As the credit markets typically smell things out before the equity markets, it seems that timing is right for a significant correction in the general stock markets. As gold and miners historically have had negative correlation with the stock market, gold and silver should be do immenently for a reversal of fortune in my opinion.
The Fed Is Caught Behind The Curve
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— Published: Thursday, 23 May 2019 | Print | 1 Comment
By Avi Gilburt
Pease note: This article was originally posted on FATRADER.com on Thursday May 22 before the breakout in bonds.
I have written many times about how the Fed follows the market and does not lead it. And, we are about to see yet another example of history’s lessons.
For those that followed our work over the years, you would know that we called for a top to the bond market on June 27, 2016, with the market striking its multi-year highs within a week of our call. Since that call, TLT dropped 22%, until we saw the bottoming structure develop in late 2018.
So, in November of 2018, I noted to my subscribers that I was going long TLT just as it broke below the 113 level. At the time, many were telling me that I was crazy to go long bonds, as the Fed was still raising rates. The main reason many thought I was crazy was that “you cannot fight the Fed.”
Well, in my case, I recognized that the Fed cannot fight the market. And, the market was suggesting to me it was bottoming out and about to turn up quite strongly. Since that time, TLT has moved from just below 113 when we went long to as high as 126.69.
And, now, the Fed is no longer talking about raising rates, are they?
As far as my expectations, I still think TLT will rally up to at least 131, with a strong potential to see the 135/36 region on the next rally. However, I am still uncertain if that will be in a direct break out over 126.70, or if we see a bigger pullback first. At this point in time, I am leaning towards the direct break out. And, should we see TLT move over 126.70, that would confirm this expectation.
What this means is that the Fed will not only stop talking about raising rates, but you will start hearing discussions about them lowering rates. You see, the Fed follows the market. And, right now, the market is signaling that rates still have lower to go. So, the Fed will have to follow suit.
So, my current prediction is that the Fed is caught between a rock and hard place, and they are behind the curve. Rates will likely still drop in 2019, and the Fed will have to follow the market, and lower rates before the year is out.
did Trumpster tweet something? Dow jumped 100+ pts in minutes.
VERY ugly black candle printing in GDX right now.
Damned if you participate in the US stock market and damned if you don’t. The miners suck.
lol.
I think my IPT indicator is working and that the low for the sector is very close.
Still, like I said yesterday, I think GDX is heading for a dip below $20.20.
Do you see that giant H&S on the GDX chart? It projects down to $16-17. Once $20 goes, it’ll be on its way to at least $17, guaranteed.
I suppose I was nothing but an ignorant dreamer to think it could hold up. good luck to you and see you in October.
Maybe, but take a look at the giant H&S of 2016. It pointed to a new multi-year low but didn’t make it even half way there.
I bet the worst case is around $19 but that’s based on the big double top currently in play.
You are probably wrong. Would not be the first nor the last.
Nope, I am most likely right about that. You’ll see.
GDX faded HARD into the close, probably closing at the low of the day. Lucy pulls the football yet again. lol. SMH
Just a joke at this point. Miners are the whipping boy for the markets, without question. They have been faded for 15 years.
Here is another interesting article from Michael Oliver:
Silver’s Massive Weekly Momentum Structure
May 22 (King World News) – Michael Oliver: “Silver continues to command our attention due to its ripe and massive weekly momentum structure not far overhead (and it’s getting closer with each week).
This action also tells us that what’s next for these markets is upturn, not sustained downside. Silver’s weekly momentum is not confirming the recent new pullback lows, and instead has carefully constructed an upside starting gate at the zero line/3-wk. avg. Next week that average is projected to adjust down to $14.54 (the 3-wk. avg. is $14.69 this week). That’s a breakout structure defined two ways—a downtrend and a flat line. Trading above that level should unleash a strong upturn. We say that because this structure is clear and massive.
Aside from its clarity and the non- confirmation, the market is oversold as of last week’s action (the upper SD band dropped below the zero line).
Gold Miners Acting Better
And also as noted in the weekend report, the tonal behavior of the gold miners is unusually firm and continues so into this week. That tells us that money flows are beginning into this small stock sector, and we’d bet those aren’t from traditional gold-buying funds.
It is interesting that Michael is seeing buying in the small stock sector of the miners. IPT.V had a relatively nice reversal today. Volume was not that strong so we will see. No black candle there.
OK guys, I am for real taking a break for a few months. Today was the last straw, The frustration is beyond bearable. I’ll be back in October. I have absolutely no clue how any of this plays out on any timeframe and its not worth worrying about at this point. It’s hard not to feel like an absolute sucker on days like today.
Good luck to everyone in the interim and have a great summer.
ditto , ….have a nice one……the beach sounds good to me…….
Not a bad plan. Enjoy your summer.
We came within a couple of bucks of the $1267 weekly swing low this week. Obviously, one day is meaningless (and the day isn’t even over yet), but I will take this instead of a $20 plunge any day.
There are still PLENTY of reasons to be weary as a metal bull that have been articulated ad nauseum over the last few days. No hootin and hollerin from me until silver clears $16 (that really isn’t asking for much, but in the grand scheme, it would be monumental). At this point I wouldn’t be shocked to see gold down $10 tomorrow, so whatever.
That being said, the $1267 swing is still alive. We have bounced off weekly cloud support yet again it appears (we will have to wait for tomorrow’s close). Also, at least as of this morning, the GDX:$SPX ratio broke above the weekly Ichimoku cloud, just barely. This could change by tomorrow’s close, but it is a pretty noteworthy and technically significant event if it sticks, IMO.