Thanks to all the KE Report guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Axel & Doc Postma.

Also thanks to all the listeners of the podcast and radio show, and those members of the KER crew that post and participate here on the blog, sharing insights with our community. Ever Upward!

Good point Matthew and I am counting on better performance near term.

Haha! I know DT, it feels a bit wrong, but I’ve traded around my core position in Santacruz for years and I took the first bigger harvest in 2020 when it outperformed all of the other Silver producers due to it’s margins improving the most #BestOfTheWorst.

Then I added to the position again earlier in the following year but took a big chunk back off when it just ripped higher in 2021 in contrast to most other PM stocks due to the Glencore transaction. I felt underexposed again so I added more to the pile earlier during tax loss selling season last year in 2021 and a little bit more earlier this year, but now I’ve completely sold out of my position in Santacruz for the first time in many years. 🙁

It’s only for about a month though, just during the wash period, and it’s been one of my best performing silver positions post-pandemic crash. It just seemed unwise not to use my other tax losses to wash out the gains I had sitting in Santacruz and a handful of other of my favorite positions that had really outperformed most of the pack.

I still really like the prospects for SCZ, and still don’t think the market has them properly valued for all the mines, production growth profile, and development/exploration upside, but I’m not expecting them to triple in the next 30 days or anything.

In a way… I’m hoping they keep grinding down a bit lower in the interim so I can get back in with a lower cost level than where I just sold. (maybe that makes me a traitor though in the short-term…) haha! 😉

Hi Matthew, I’m glad I’m on the same page as you, thanks! DT🤞

David Brady regularly posts over at Steve Penny’s Silver Chartist forum as a key contributor there, and recently clarified the points he had made in the Sprott Money article linked above. It seems quite relevant to this thread and conversation of where the metals and miners are at currently.

________________________________________________________________________________________________

David Brady – Moderator at Silver Chartist – December 3rd

“I neglected to mention this in my article today but it needs to be said.”

1. I am expecting an imminent pullback in metals and miners and a rebound in DXY

2. Don’t get me wrong, this is just “a pullback to a higher low”. We are nowhere near the next major peak in Gold, Silver, and the miners. We have a long way to go on the upside! Keep that in mind when you consider your trading…

a. Sit tight and just weather the pullbacks, perhaps adding on dips, and ride the rally higher. = Conservative. Prudent.

b. Trade the pullbacks with ST shorts but at a fraction of your overall LONG positions. = Aggressive. Risky.

“The decision is up to you. ST down. MT/LT much, much higher imho.”

– David Brady

If there is another pull back in the near future it would be consistent with keeping me range bound. That, of course, would mean intervention continuing no matter how much damage they have done to the US and World economy. At some time it must be removed from the hands of Central Banking activity. I will continue on course for a near term “junior explorer” breakout out of my range. I will know before 2022 is over.

I agree that the weekly charts are still quite constructive for the PMs, and that on rallies or corrections that they trump the shorter time horizon charts, just like monthly charts trump the weekly charts, and quarterly charts trump the monthly charts, and the annual charts trump the quarterly charts… as far as establishing more meaningful trends. Even zooming all the way back to the annual charts are quite encouraging for the PM sector, and to Craig Hemke’s point on Thursday and in previous interviews for months, it is quite possible that both gold and silver can put in a higher annual close than they did last year, which would be quite constructive.

Yes, it is easy for traders to get myopic on the lessor hourly and daily charts indeed, but they are more relevant for shorter duration traders, than they are for longer-term buy and hold investors. Different charts for different trading time horizons, and sometimes in the smaller time horizons like the hourly charts or daily charts for swing-trading, it is easy to get wrong-footed or whip-sawed. This is where zooming back to the weekly charts can be very instructive for sure.

As for people expecting a top last Monday, I didn’t see people on the KER making those comments, and most of the guests here on our show that we speak with were not really expecting that. I follow as many comments as reasonable in a day over at ceo.ca, especially the more widely followed contributors out of the thousands of regular users there or the comments that are “popular” with more upvotes, and didn’t really see comments about Monday being confirmation that a top was in, nor did I see any to that effect over at Seeking Alpha. However, apparently you are reporting back that there were some vocal folks on other platforms that were calling for a top and saw the corrective move down last Monday as confirmation that this was the case. Interesting, and I could see where that may have thrown some folks off, but yeah, that is not how things developed last week at all.

Now, there were a few people we talked with that felt Silver had likely topped a few weeks back in mid-November, when it first got above $21.41 and the briefly got above $22 and reversed back down after that, thinking that was the peak. I personally was not in that camp and remained encouraged by that move, but could understand why some felt maybe that was all there was to the current move. However, after last week’s surge much higher well over $22 (that so many saw as a critical threshold) and then over $23 to close the week… it just wouldn’t surprise me to see things pullback and digest that move a bit.

My comments on raising some cash and doing a little hedging are merely in the short-term as a trade, and not a definitive longer term position. For the medium term (several months out) I expect the PM sector to keep plowing higher before making more of a meaningful intermediate-term top and rolling over. In that sense, I tend to be more in alignment with the general take David Brady had above that short-term he’s expecting a tradable pullback over the next few weeks in December or maybe early January, and then medium term several months out to longer term a year or more out, he expects much higher levels to be achieved in gold, silver, and the mining stocks. That seems like a reasonable outlook, but the markets may take a much different track, and nobody knows what will happen until it all plays out.

Ah-ha! So now the truth comes out with you also selling some Santacruz… (looks like we are traitors together then…. Haha!) I think Dan (in Calgary) sold a little bit of his SCZ as well, so he can join in our posse.

For clarity, I’m still very constructive on Santacruz for the medium to longer term, and really like their prospects to evolve into a solid mid-tier silver and base metals producer in both Mexico and Bolivia. I’m only booking the profits from Santacruz in 2022, so that I take advantage of other tax loss sales I’ve got in place for tax purposes, which will wash them out, but in early January I intend on getting right back into position.

Yes, all joking aside, that makes sense DT, and nothing wrong with taking some profits along the way, and rotating into stories that you think may outperform in the future.

As for HighGold, yes, that is nice to see AEM taking a 10% strategic position for sure. As mentioned in response to your posts on HighGold earlier in the week, I was also very impressed by those recent drill holes, and have reached out them a few times about trying to get them on the show, but haven’t received any responses back yet. I talked to both Darwin and his IR lady Naomi at the New Orleans Investment Conference about getting them on the KER, which they seemed receptive to, but that was before the recent bonanza-grade drill results. Maybe now they are getting swarmed with requests for interviews, but I’ll keep trying to get them on the show here for an update. Cheers!

Good points Matthew, and I agree that the weekly charts are in charge, more than the more concerning overbought signals on the daily or hourly charts. As stated a few times up above in prior comments, I’m still expecting much higher prices in gold, silver, and the mining stocks several months out in the medium term, and a year or two out in the longer term. My comment about a pullback in the near-term would be a corrective digestion of this recent move higher over the next few weeks and maybe into early January, but I’m not expecting a big or damaging pullback, just backfilling and correcting down 20% or maybe 30% of the recent rally from September to present. If all we saw was a sharp intraweek drop and then recovery, then that would be great, but likely wouldn’t be enough to fuel a more sustained move higher into the seasonally strong Q1 Run. I’d rather see a mild gradual to down move for a few weeks in December or maybe the first week of January, and then a continuation of the rally for Jan-Mar, but we’ll see how it goes…

To be clear, I don’t think the vast majority of investors should be trying to trade shorter-duration moves, or even managing their own money in many cases. Using the shorter-term charts are best suited for active traders that are nimble enough with enough trading experience to get into and out of trades based on what they are seeing in the pricing action. We do have some more experienced traders that comment or follow this site, just like on any site or in any sector.

We also have guests that we bring on the show that regularly discuss their shorter-term trading strategies, that may only be relevant for a few days or few weeks… but clearly those comments are also not suited for most investors. However, they are quite helpful for short-term traders if that is their approach.

Conversely, we have other guests on discussing their trading strategies for longer time frames, and many of those didn’t work out so great or align with what many of the commenters here on the site are discussing with their trading day in and day out. There is no one-size-fits all discussion or analysis that will fit everyone’s unique risk tolerance levels, trading psychology, investing approach, or time horizons.

Most investors are not good traders, so I’d never presume that what I’m doing personally or highlighting as a potential pathway in the near-term, as a more active swing-trader, or sometimes medium-term position-trader, is the best approach for most investors. My comments are just my own unique take on things, just like everyone’s comments are. That is what makes this such an insightful forum of different ideas from different contributors. Investors should know themselves and what comments are actionable and appropriate for their trading strategies, and which ones are not.

However, it should also be noted that most investors are not even that good at timing medium or long duration moves, and repeatedly miss getting positioned correctly for several month (or even several year) rallies or corrections, so it’s all relative and comes down to people’s timeframes for a trade. This is all evidenced by the majority of investors of all stripes getting fleeced in the general markets, in commodities, in the precious metals, and the cryptos since the last part of 2021 to present. It’s not easy, and most fail to act decisively when trading situations arise, or to admit they are wrong and limit losses if a trade turns against them. That’s always been the case and always will be the case.

Agreed Terry. Think about the moves we’ll see in the Silver miners in that kind of environment.

Since the Fed is wrapping up their rate hiking cycle in the first half of next year (likely in Q1), and the US Dollar appears to have put in a top this year and is now entering a period of a longer-term decline (with some counter-trend rallies of course), as we move into a period of economic malaise next year with stickier than desired inflation, then it seems like an ideal environment for the PMs to have a good run in 2023 all things considered.

Now, obviously if there is a big “sell everything” market rout that could derail things for the PM sector too; or if the recession got particularly ugly, it could impact commodities, thus Silver’s industrial component side. However, it’s more likely that investment demand in the monetary metals side strength would outweigh the industrial component side weakness and drive Silver higher alongside Gold. The second half of 2023 should be pretty interesting indeed.

I think copper and nickel will do well in ’23 but not nearly as well as silver.
https://stockcharts.com/h-sc/ui?s=%24COPPER&p=W&yr=5&mn=11&dy=0&id=p99931593382&a=1185404692

Stockcharts doesn’t support nickel charting for some reason.

Wonderful trip down musical memory lane this morning with those two bands.

Hope you are right about silver Matthew but I have gotten to the point that exterterrestrials are bleeding silver at low prices to take outside our galaxy and have a 50 year contract with JPM to buy below spec.