Joel Elconin – Is This Market Rebound Actually The Start Of A Risk On Trade?
Joel Elconin, Co-Host of the Benzinga PreMarket Prep Show and Editor of the PreMakret Prep website joins us to recap the extremely volatile US equity markets. After falling hard to end last week, the markets started Monday off by continuing to selloff. However in the last hour of trading yesterday they rebounded and today are fighting into positive territory. While there is no telling how the markets will react to the Fed statement tomorrow this little bit bounce is tempering at least some of the near term recession fears.
We also discuss the selloff in commodities, especially precious metals, as well as how China’s ongoing lock-down is hurting all economies.
Clean Energy Juggernaut
Gold Newsletter w/ Brien Lundin – Free Sample Issue – May 3, 2022
“Group Ten Metals (PGE.V; PGEZF.OTC) controls a vast and growing treasure trove of critical minerals, including nickel, copper, palladium, platinum, rhodium and cobalt.”
“With the global geopolitical situation putting domestic sources of these metals in demand, Group Ten’s Stillwater West project in Montana is the right asset in the right place at the right time.”
(PGE) Group Ten is up about 15% on the news out today of the solid drill results. Woe to those who sold getting impatient on more drill results. On a project this robust, that has already demonstrated good results in the first 2 tranches and prior years exploration work, it is best to just buy the dips and wait for more good drill results to roll in. This project is still underappreciated for both the Palladium/Platinum/Rhodium component and for the Nickel/Copper/Cobalt component, and it is in Montana USA right next to Sibanye’s Stillwater complex… not in South Africa, Indonesia, or Latin America.
I saw that news release this morning on Group Ten and I liked the nickel intercept, but I failed to follow up on it during the day. My other family members still have their shares but I sold out higher up. Tomorrow is another day, I may get back in but I had a very good day anyway. That is the beauty of being a trader, your money doesn’t sit their waiting on news that could be good or bad, but if you keep informed it usually is the best news. DT
Good points DT. Yes, being a more active trader has it’s advantages on being able to digest incoming news from many companies, and react accordingly…. without getting married to only a few stories and then potentially getting stuck underwater for years at a time.
In general, within the junior mining sector, it is best to be nimble and trade them, and only a very very few companies end up being good long duration buy and holds. Most end up doing periodic pops, but mostly longer term drops… especially on the drill plays.
Most junior mining companies are like the wack-a-mole game, popping their heads up briefly on good news, then popping back down again when sentiment shifts, or new data comes in that causes market doubt, or a dilutive financing, or during moves in the underlying commodities. Really it is the same thing to some extent even for the larger to mid-tier producers or royalty companies… there are periods of time where they have wind in their sails, and other periods where they face steep operational or market sentiment headwinds.
Most mining stocks are trading vehicles, and these are not Blue chip DOW stocks or longer-term value drivers like the FAANG stocks were the last dozen years.
With Group Ten, it is one of the few that I’ve mainly accumulated (because I really liked when their neighbors at Stillwater were their own vehicle before Sibanye took them over and it is hard to find good PGM and Base Metals resources in North America). Having said that, I do still trade around the core position buying more tranches on dips, and lightening up some tranches on the rips.
I have been accumulating PGE also, I would have more $ to invest if I would have sold more pm stocks and DML at the top, that is my biggest fault.
Yeah, in hindsight I’d have liked to have trimmed back more than I did in the PM stocks and U stocks during their rallies, but I did sell of some positions a little bit…. but having some more cash here to deploy would be a boon for sure.
I’m one of the impatient guys who sold PGE few months ago but even after this 18% increase, I can still buy it back cheaper than that previous sell.
(VG) (VLMZF) Volcanic Gold intersects 11.4 g/t Au and 1,150 g/t Ag over 1.52 m within a broader interval of 10.68 m grading 2.07 g/t Au and 389 g/t Ag in the La Pena vein at Holly
3 May 2022
https://ceo.ca/@thenewswire/volcanic-gold-intersects-114-gt-au-and-1150-gt
There was a merger in Australia with Deep Yellow (ASX-DYL) and Vimy Resources (ASX-VMY) in a script takeover worth 658 Million $ AUD. It was also announced that Paladin will restart it’s Langer Heinrick mine in Namibia. This news is from the end of March 2022 but it is new news to me because I have just started to watch the uranium market since my purchase of Ivor Explorations about one month ago. DT
IMO…. To be a successful trader you must slow walk into an investment ( after doing DD ). But must be nimble enough, to jump out , when the tide turns.
+1 good thoughts IrishT.
Yes, it’s best to slow down and do one’s due diligence before speeding up and jumping in, but after that, and once one has confidence in the company/projects/team/strategy, then it’s more a matter of choosing compelling entry points and exit points on the technical trading of the stock.
Since my portfolio has a fair number of stocks in it, sometimes people say, “I don’t know how you follow all those companies,” but they miss the point that most of the companies don’t change much day in or day out, or month in and month out. Once the company is vetted, there can still be surprises that catch one off guard, but that’s when one can react accordingly. For the most part there aren’t many radical changes though in 99% of companies on a given week, so once they’ve been vetted in one’s own DD process, then it’s really more a matter of buying during good value, and selling some back once they get more richly valued… or if the trade turns too much against one’s initial buying price and so it needs to be taken as a loss before further damage ensues…. Then rinse and repeat the process.
To that point… most of the bellyaching we hear or read from investors is that they bought in at the wrong time first of all (during the end of powerful move higher like in 2016, 2019, 2020 at the frothiest moments) and then they just sat on that position watching it move lower by 20%, 30%, 40%, 50%, 60%, 70%, 80%+…. In most cases there was nothing wrong with the company/projects/team/strategy, but more that they bought at the wrong time when it felt good, and neglected to buy when it was better value and didn’t feel good.
Look everyone makes ill-timed trades from time to time, but some people specialize in it, and that is mostly because they are trend followers and only jump in sectors or companies when they become the talk of the town. Once something is being celebrated and it’s made multibagger returns, then it is usually closer to a top and not nearly as attractive on a risk/reward basis.
Why in the world did they not buy when the sector or the stock when it looked like a much more attractive value from a technical standpoint? (some of those people will say they ignore TA as just squiggles on a page, but then those same people will whine about how much their stock corrected after they bought at the tail end of an impulse move higher.) Just some basis TA would have had them selling at least partial positions into extremely overbought scenarios, and adding to positions during extremely oversold periods, so it’s a key tool to have in one’s toolbox. These aren’t Jessie Livermore buy right and sit tight scenarios for the most part, and that advice was from him trading traditional main-stream US equities on the big boards.
Also, if things started correcting in a stock someone holds, and the pricing dipped down worse than 20%-30% pullback from where they purchased it, then why in the world didn’t they cut the position as a tax loss, and rebuy it again after the 30 day wash period at a much lower cost basis, rather than watch it correct 40% or 60% or 80% ?? They also could have just cut the position completely if there was something fatally wrong with the stock (like some mining stocks, cryptos, cannabis stocks, growth stocks, or biotech stocks are apt to be failures).
Even if they still think the stock has a short-term to medium-term catalyst that they want to be in position for, then why didn’t they average down if it sold off 20%- 30% to lower their overall cost basis, if they are so convinced it’s a medium to longer-term winner?
Most of the damage done investing in risky sectors like mining stocks, or biotech, or growth stocks, or cryptos, or cannabis, etc… is when investors buy everything in one lump sum at peak optimism, and then sit in it for years or even decades at a loss without taking the appropriate corrective action in their portfolios. They then go on to blame the sector, or blame the CEO, or blame newsletter writers, when the real issue is the person looking back at them in the mirror, and their own poor investing rules and actions taken.
Probably the most important first step
before buying is to determine the stop loss.
If unreasonably deep, better to look elsewhere.
Yes BDC, that is one trading strategy. Personally I don’t use stop losses when trading such a volatile whipsaw market, as it is easy to get stopped out intraday and then have that reverse if the stops are run, but do use limit orders during the day if I want to to sell or buy a stock at a specific price. To your point, all investors should have an idea of where their cry uncle point is to cut a loss, and conversely where a stock has accumulated enough to take some chips off the table, and that point or percentage amount will differ for everyone based on their unique risk tolerance and investing goals. Sadly, many investors don’t really have a plan for if things turn against them or if a stock starts to run and they just blow with the sentiment winds of the day.
Hi Shad … Thanks for the reply.
Hi amigo. Good to see you commenting here and slumming it with us here on the investing side of the site. 🙂
(IAU) (IAUCF) i-80 Gold Drilling Returns Best Intercept To-Date in the South Pacific Zone at Granite Creek 16.3 g/t Au over 15.7m and 33.7 g/t over 3.7m in hole iGS21-18
May 3, 2022
Highlight results from hole iGS21-18 in the South Pacific Zone (and adjacent horizons):
– 16.3 g/t Au over 15.7 m (0.48 oz/ton Au over 51.5 feet)
– 33.7 g/t Au over 3.7 m (0.98 oz/ton Au over 12.0 feet)
https://ceo.ca/@newswire/i-80-gold-drilling-returns-best-intercept-to-date-in
(AU) (AIRRF) Aurion-B2Gold JV Intersects 2.05 g/t Au over 77.50 meters at Helmi
4 May 2022
“2.05 g/t Au over 77.50 m from 41.70 m (IKK22018), including 4.18 g/t Au over 24.55 m from 81.90 m.”
https://ceo.ca/@newswire/aurion-b2gold-jv-intersects-205-gt-au-over-7750
Billionaire trader Paul Tudor Jones says investors should preserve capital now: ‘Clearly you don’t want to own bonds or stocks’
Brian Evans – Tue, May 3, 2022
Billionaire hedge fund manager Paul Tudor said we’re in a worst-case scenario for markets.
“We’re in uncharted territory,” he told CNBC. “Clearly you don’t want to own bonds or stocks.”
Instead of trying to make money, Jones said “the most important thing” investors should do now is to preserve capital.
https://www.yahoo.com/finance/news/billionaire-trader-paul-tudor-jones-152650369.html
Central Banks Added Nearly 84 Tons of Gold to Reserves in Q1
May 3, 2022 By SchiffGold
“Despite a number of big sales, global central bank gold demand remained brisk as net holdings increased by 83.8 tons in the first quarter of 2022.”
“That more than doubled the 41.2-ton expansion of central bank gold reserves in the last quarter of 2021 but was 29% lower than the first quarter of last year.”
https://schiffgold.com/key-gold-news/central-banks-added-nearly-84-tons-of-gold-to-reserves-in-q1/
there you go. Banksters actually net buyers LOL
so much with the constant blame of evil central banksters purposely suppressing the price of gold with their selling. Mind you it’s only when it goes down. Banksters never mentioned on the way up.
This excuse is a Savage go to answer whenever things don’t go his way and repeated here.
Hell this news increase in purchases paint the banksters as gold bugs.
jonsyl, all markets are manipulated up and down, always have been always will be, nothing new there!
absolutely the case DT. Yet somehow spewed as a ridiculous excuse with market gurus missing the mark with their calls.
Jonsyl, there is a difference in central banks buying gold to put hard assets on their balance sheets, and bullion banks or mid-size banks like JP Morgan or Goldman Sacks and other larger institutional companies playing games at off-peak times in early morning or after hours trading of futures contracts.
Those are 2 different things and two different kinds of banks… so apples and oranges.
While I don’t personally subscribe to all the narratives surrounding manipulation, and agree that many people blame things on manipulation too often, there are some big boys in all markets, not just precious metals, that push things around to their will to paint the tape on short-term trading. Longer term, no organization is big enough to manipulate an entire market though, and so short term anomalies and suspicious behavior… Sure, a number of banks were caught red-handed spoofing the markets, but it’s just a piece of the equation and where is the manipulation when markets are ripping higher for months at time?
(PGE) (PGEZF) Group Ten Reports 13.2 Meters of 3.33% Nickel Equivalent Within 401 Meters Continuous Mineralization from Resource Expansion Drilling at Stillwater West Critical Minerals Project in Montana, USA
May 3, 2022
“Group Ten Metals today reports wide, high-grade intervals of nickel sulphide with palladium, platinum, rhodium, cobalt, copper and gold in a third tranche of drill results from the 14-hole resource expansion campaign completed at the Company’s flagship Stillwater West PGE-Ni-Cu-Co + Au project in Montana, USA.”
https://ceo.ca/@accesswire/correction-from-source-group-ten-reports-132-meters