"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Sunday, April 17, 2011

Thanks to the folks who caught my stupid error

I appreciate the emails and notes from so many who took some time out to write and help me get my head on straight when it comes to interpreting my own chart.

A falling GDX to GDXJ ratio does indeed note that GDX in UNDERPERFORMING the latter. That would mean the opposite is occuring from what I wrote! 

Maybe one of these days I will get some sleep and think clearly again. My apologies to the readers and my appreciation for your forebearance.

What the falling ratio would indicate is that the large caps are underperforming against the smaller mid caps and juniors in general.

I am going to leave the former post up as a monument to my denseness. Just flip the analysis around and you will have the right picture. You might also want to focus on some of the stocks I have detailed and compared to silver to get a view of actual company performances against the metal.

I will probably be pressed for time in mentioning this, but if some of you have some particular silver stocks that you want to compare to the performance of the underlying metal send some of the names here and I will attempt to construct the charts so that you get a visual graph of how it is faring.

Thanks again to all


  1. Hey Dan,

    In reply to your last request for charting suggestions:

    EXK - GPL - ISVLF - UXG - RPMGF - AXU - CEF - SLW for starters.

    Thanks for what you do!

  2. Dan your credibility rises as your integrity is displayed.

    So don't do that to us again!


  3. Hi Dan,
    Here are my silver stocks. Thank you.

    Fortuna Silver (FVITF)
    Silver Crest (CA:SVL)
    Extorre (XG)
    Minera Andes (MNEAF)

  4. Dan, have you seen Andy Hoffman's post on LeMetropoleCafe entitled: 'OCCAM'S RAZOR AND THE PRECIOUS METAL MARKETS'? Suggest you read it, especially lower down where he challenges anyone (I think this was aimed at you) who puts forward a theory that hedgies are behind shorting the PM stocks to come up with their evidence. I'd love to see your evidence. Personally I believe only the Govt & their central bank owners have this sort of fire-power.

  5. Calum;
    No I have not seen that and don't plan on reading it as I have a full enough plate already without having to deal with guys who do not understand how spread traders operate.

    Hedge fund algorithms like to spread off risk associated with one position by taking an opposite position in a related category.

    That can be done by going long one gold mining stock and shorting another gold mining stock. You make money by plying a ratio in the amount of shares you hold on the short leg increasing or decreasing it as market conditions warrant.

    The sizeable short interest in selected gold and silver shares is the evidence that the hedge funds are using that issue as the short leg on this trade.

    It is a trade put on by professionals who do not like surprises and are content to sacrifice the chance for bigger profits by accepting the smaller gain but nonetheless still make money with less outright risk.

    Amateur traders only think in terms of how much money they might make. Professional traders think in terms of how much money they might lose if a trade goes wrong. They can also make money if a market drops and goes against them by fine tuning this trade.

    That is why they are professionals. Amateurs never survive long enough to learn this.

  6. Dan,
    SIL (Silver Miners ETF), please!

  7. Dan, thanks for the correction. I suggest you add a note to the post you are leaving up, for future unwary readers who may not see this correction.
    Thanks for the excellent work you do; I appreciate the learning opportunity.

  8. Mela;

    Thanks for the suggestion. It is excellent and has been done. I appreciate that bit of wisdom.

  9. Hi Dan,

    your correction made me laugh! I've probably read every post since you began your blog. Ironic my first comment is on this post hahaha.

    I'm nowhere near a professional trader, but I make a living....and in part that is due to your excellent analysis - unbelievable really that you put it out there for free.

    Just wanted to say thanks!

  10. Dan,

    Thank you for all this information. It really helps the individual investor.

    I have been watching SLW underperform the metal for about 20 days now. I'd love to see you run a chart on SLW. It's acting peculiar.



  11. Dan, no worries about GDX/GDXJ mixup. It happens. New meaning for backwardation? :)

    If time allows for charts, I'll add a few to the miner mix:


    Was going to add HL, but that is currently getting skewed like a piece of beef in an Argentinian restaurant.


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