“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"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


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Saturday, May 17, 2014

Mining Shares Looking for Friends

Here is the weekly price chart of the HUI. It did not end the week on an encouraging note, with the close being the lowest since the week of January 27 this year. As such, it is in serious danger of falling further and testing the support zone noted on the chart beneath it.



For the bulls to be able to have the least chance at mounting something to the upside, the downsloping trendline will need to be breached. That could form the basis of an actual reverse head and shoulders pattern but the big downside gap that formed last year in April near 300 would have to  be closed for any serious upside fireworks to occur.

The pattern of lower highs since that month is suggesting that a "Sell the Rally" mentality currently exists in the mining sector. Downside support is also suggesting value-based buying is taking place but the question is whether or not these buyers have sufficient clout to ward off opportunistic sellers. The index is range trading with bears having a minor advantage for the time being.

With the ETF, GLD, losing gold, and with this continued weakness in the mining shares, the signals are not promising for the moment. Time will make things a bit clearer but for now, this sector has fallen out of favor with investors.

76 comments:

  1. You are spot on as always, Dan. Thank you for your work.
    All of this technical analysis can be deemed irrelevant if the IMF promises to lend 17 bil to Ukraine if the "rebels" are slaughtered in cold blood, or if Yellen, or some other FED official, said to the press that the taper business is not written in stone... So, based on all of the above, isn't trading/speculating and even investing at least 70% gambling in this new brave world we live in? Every time I execute a trade I feel this anxiety and uncertainty and can't help but think that is based more on a gut feeling and wishful thinking than on something logical and substantial. I always wonder how you pros out there feel about trading in this environment.

    ReplyDelete
    Replies
    1. Abraxas, you need to watch "The Hustler" with Paul Newman and Jackie Gleason. You gotta be fast and loose trading these commods. You can not play with scared money, so just step back for a minute and ask yourself what are you trying to accomplish? Trust yourself and nobody else. sparks

      Delete
  2. The Sky is Falling over at KWN again. Help me! Please God help me! Run for your lives! AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH

    ReplyDelete
  3. Edelson Calls a Bull Market in Gold ( after 1+ Billion Calculations)- LOL?

    Excerpt from Real Wealth Report of Friday, May 16:
    "
    First, the short-term cycles have turned decidedly positive. Simply
    look at this cycle chart of gold below. Based on over one billion
    calculations of the short-term trading patterns and cycles in gold …
    It now projects what could be a massive rally in the yellow metal
    heading into the mid-August time period, with the potential for gold
    to move as high as $1,649.
    The pattern for silver is similar (chart not shown) with a rally into
    August reaching as high as $24.
    This is constructive. Especially so since the December 31 spike
    low in gold is now lined up with the major cycle low shown on this
    computer-generated cycle chart. Moreover …
    Second, the long-term cycles remain robustly bullish.
    "

    ReplyDelete
    Replies
    1. I can't take Edelson but from other sources and cycles studies I have about the same view. looking for a low mid july. then a rally starts. we'll see in a while and no need to trade right now.

      Delete
    2. Wolf;

      I have found cycles to be useless for trading purposes. the problem is that events change without warning and sentiment changes accordingly. No one can predict that in advance. Some claim that they can but you know my view. It is nothing but newsletter writers selling money to dupes. Listen to the market and move when it moves. The best thing that could happen to traders/investors would be for all these newsletter hucksters and charlatans to actually have to trade for a living and go broke following their own worthless advice.

      Delete
    3. Dan, this post should be printed and stuck above every investor's bed.
      I'll keep it as one of your most important statements against all the buzz about cycle predictions and some guys pretending their system managed to forecast the 1987 crash by the very day, etc.. ;) (no names, no names... :) ).

      Delete
  4. That's a lot of calculations.... But seasonality suggest a summer lull for Silver. And the HUI chart seems to be supporting that at this time. Not saying models don't work, but they can't predict the future. Eldeson is also long wheat futures based on cycles work but that "work" may not account for the recent rainfall and hedge fund computer algorithms that have have changed sentiment and caused wheat to sell off about $65 over the last week or so...ouch!

    ReplyDelete
  5. The "acclaimed experts" running their funds must have lost so much money due to massive redemptions, they must run these "shocking" headlines just to keep investors from liquidating those funds entirely.

    Example of such hysteria:

    "Its Far Worse Than 2008"

    "We Are Headed for Apocalypse"

    "Serious Panic"

    "Full Blown Market Crash"

    "Financial Destruction and Systemic Earthquake"

    Funny thing is, that strategy is backfiring.

    Why is that?

    Because all the shocker headlines listed above remind all the last remaining gold fund holders that it's already happened to their accounts.

    LOL....

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  6. This comment has been removed by the author.

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  7. Over the past trailing three mos, GLD down 2%, GDX down 10%. Own physical gold. Why would anyone own a miner?

    I am beginning to reassess the 1,000 gold prediction. Every talking head on TV is talking about gold being a good buy at 1,000. I hear the same things over and over, just like the 125 level on the 30 year front month contract. Everyone is getting lazy on the trends.

    Unless there are some tight ownership restrictions put on gold I think we may never see 1,000 again. I hope I am wrong, but this may be just like the long bond predictions. Bernanke says there will be no big rate increases for a long time. i take him on his word. This should provide asset inflation all the way to when Russia and China perform their offensive strike against the US early next decade.

    That's a lifetime for investing. All this talk about getting assets off the grid says that gold is by far the best asset out there to accomplish this feat. Some powerful forces are keeping gold about 1270 or so. Sharp high volume floor spikes followed by huge buying. I have to conclude that this buying is official (government).

    ReplyDelete
    Replies
    1. Interesting Eph.
      I'm watching 1270 just as well (horizontal support) and keep the 2/3 long position from my last trade (out 1/3 at 1291 the day after...but since then...nothing, nope, nada).
      Still think the offensive strike will be more than just financial?

      Have a nice day,

      Delete
    2. eventually it will be military in nature. The globalist-controlled US is acting in a way to make sure the US looks like the bad boy of the world. In any upcoming world war the US would certainly not have the high moral ground anymore.

      Our drop in world standings has been swift. These globalists (not obama, and other puppets, etc.) are not stupid, they have IQs much higher than mine, and I see that what they are doing is almost fatalistic. I am looking down the road -8-10 years. The globalists are dropping the US guard and encouraging Russia and China's bellicose behavior.

      Why a limited nuclear strike? Imagine what the globalists could accomplish with this sort of situation. A Brave New World/1984 dream. The unilateral demise of our nuclear arms has been without precedent, especially since Russia effectively no longer abides by any treaties, and Russia and China are carrying out mutual war games that are offensive in nature. Why are these two adversaries burying the hatchet and joining forces? I leave that for the reader to answer.

      Given the almost wholesale evacuation of bank assets from wealthy people, I see it very difficult for gold not to participate. In fact, I submit that the floor at 1270-1280 is a bid that the PTB are supporting.

      I will go on the record that I believe that we may see a very sudden rise in gold over the next year. It will ostensibly come out of nowhere, and all those reading charts will be caught completely off guard. Sure, the charts work well when Au is in a trading range, but I am beginning to think that gold's next large move will be up.

      Right now GLD holdings are a useful tool about gauging western sentiment, but it will in time become irrelevant when the breakout comes.

      Everyone and their mother is bearish. All the talking heads are talking about sub 1,000 gold. It may drop another hundred from here, but the problems that caused gold to rise did not go away. Most are only looking at the drop and trying to make connections with why. Sure I think velocity of money is a big factor, but even then that measure will not be able to describe what will happen to gold.

      Of course, I could be wrong....

      Delete
  8. as to miners I bought SIL at 11.40 & 11.60 a while back. still above water by a nose. lol.

    ReplyDelete
  9. Thanks Dan. Reinforces my negative feelings about the underwater miners I own. No not talking about sea bottom hot vents either although what comes out of the management is no better.

    ReplyDelete
  10. The HUI is dominated by a small number of LARGE cap miners such as ABX (Flat), NEM (Flat) and GG that has eked out an ~10% gain YTD.

    Many JR producers have made nice gains this year and are holding well given the current market sentiment.

    GPR UP 50% YTD
    EDR UP 40% YTD
    LSG UP 75% YTD
    DGC UP 175% YTD
    PAA UP 20% YTD
    PPP UP 45% YTD
    SSO UP 20% YTD
    TKO UP 25% since late Dec

    and for Jasper . . . even TNX UP 25% from its lows in DEC

    GDXJ, the index that all the above companies belong to is UP 17% YTD.

    There has been, and will continue to be, opportunities in this sector for those that want to get their hands dirty looking under the hood.

    ReplyDelete
    Replies
    1. Andy, I find the same thing. Lots of money can be made trading the miners, but the risks are also much greater than being in the mainstream. I sold my position too early on the way up, so I missed some serious action. It looked like I was left at the station and my train was gone with my luggage. However, I can pick them up now for much less then when the proverbial train left the station. The question is, of course, for how long am I to wait, and the answer to that, I'm afraid, no one will be able to tell me.

      Delete
    2. Up from 1.60 to 2 dollar.

      Thats a great relieve for the pernsioner that cleaned out their pension plans, GOTs and took TRX certificates..

      That was in In 2011 and they paid "this is it" prices at well over 6 dollar just after Jim was done selling his millions of shares and just before Jim raised the salaries of the board betwee 200% (from under 100k top 220k for the corporate sevretary) 300% (from under 100k to over 300k for the COO) and 500% (from under 100k to over 550k for the CFO)

      Thy sky has fallen but not for the TRX board of Directors. These markets may be amoral, Jim is immoral.

      Delete
    3. Andyrama;

      Please go back to 2011 and tell us how many of these companies are up since then and if so, by what percentage.

      The Index you mention, the GDXJ is currently trading at 35. Back in 2011 it was trading at 160. In three years time it has lost OVER 75% of its value. How many people can you point to and tell us who sold their shares of juniors at the highs back in 2011 and waited until precisely December of last year to buy back into the mining sector?

      I recall many, if not nearly all of these self-proclaimed "experts" in both gold and silver confidently proclaiming how this was just getting going and they had not seen anything yet.

      Come on Andy - A pitiful blip from 32, which is where the GDXJ closed in DEcember of last year to 35 hardly qualifies as a "spectacular return" on investment. The honest truth is that the vast majority of those who bought into the mining sector back in 2011 are so far underwater that it is unlikely they will ever recover from their paper losses. Do you not realize that the GDXJ would have to TRIPLE in price just for some of these poor souls to breakeven. I am being charitable here but giving them the credit for not having bought at the top but instead having bought into the sector in early 2012.

      Compare that with XLE for example which was trading near 80 back in early 2011 and is currently trading near 93.

      And that is just one sector we could use as an example.

      In the future, please broaden your comparison to include a much longer time frame when making these comparisons. It is rather misleading to those who do not have access to longer term charts.

      Let's fact it and be brutally honest - the mining shares have been absolutely miserable as an investment class for the last three years and counting. there is no way to sugar coat this.

      You mention these juniors but take GG. It was trading near 56 back in 2011 and is currently near 25. By contrast to most, if not all of those juniors, it is down a bit more than half. It has held better than the juniors and those who bought it back at the highs are at least a bit better off than those chasing those miserable junior mining shares.

      I think a lesson can be learned here. Stick with buying the physical metal or the better run majors and leave the high risk juniors alone if you insist on having gold miners in your portfolio.

      If it's leveraged exposure to gold that you want, buy gold futures at the Comex.



      Delete
    4. Miners always make me think of that great joke:

      Q: What do you call a stock that is down 90%?

      A: A stock that was down 80%, and then got cut in half!

      Delete
    5. Dan,

      Using 2011 as a start point will only show how much they lost since the peak. Instead, I’ve selected a 5 year chart for the comparison that will take us back to a point in time where people who had their portfolios demolished by the 2008 wash out should have been cleaning house and repositioning.

      I’ve compared EDR, GPR and FR to the SLV and S&P. All three of those silver miners have outperformed the S&P and have provided leverage to the price of silver. They all show gains over the 5 year period, ranging from 150% to 400% while silver rose 40% and the S&P 100%.

      [IMG]http://i59.tinypic.com/2126ffa.png[/IMG]

      The gold miner comparison gave a surprisingly different result. I selected LSG, DGC, ABX, NEM and GG to compare to the GLD and to the S&P. All of the miners selected have underperformed the price of gold and the S&P by a wide margin. All of these gold miners would have left you holding losses even though the price of gold has risen some 40% over the past 5 years! During that period, none of the majors – ABX, NEM or GG outperformed GLD. However, there were periods when LSG and DGC did provide leverage to the price of gold and to the S&P.

      [IMG]http://i60.tinypic.com/303fqkl.png[/IMG]

      The key to have made $ was to have bought fear in late 2008 and early 2009 and sold euphoria in 2011. We are at another peak of fear in the PM sector and elevated euphoria in the S&P. I know what I’m buying and what I’m selling right now.

      I don’t see any benefit to your readers of me responding to the rest of your post directed at me so I’ll end here.

      GLTA

      Delete
    6. Andyrama, you might also look a little further back to 7 years at how in 2007 after the S&P peak in October the HUI then peaked about 5 months later (sell), and it had begun its climb 2 months before October of 2007 (the 1st buy in). I think the actual turn date was August 23rd. During the same period the ETF GLD also climbed with the HUI. However, after the peak in early 2008 the HUI steadily declined for 7 months (2nd buy back in) while GLD declined as well, but not as much as the HUI in percentage. I'm with you on anticipating a possible repeat of two buying opportunities with a sell in the middle. I compiled a list of Jrs on the decline that started in late 2012, and took advantage of the better ones late December 2013 through the early part of the year. Learned a lot in the decline about how to identify as a well run operation. I tend to stay away from ETFs, but have also made lists of explorers as well by looking at what is in GLDX then doing my due diligence through their list of holdings. They can also be interesting, but tend to demand a closer eye and a different timeline. We shall see if late December 2013 will resemble an August of 2007 in the HUI. Take a look just a bit further back at the 7 year span if you have a chance.

      Delete
    7. Gladius,

      Thanks for the comment.

      I find it interesting that you used a period of decline to continue observing market behavior and are now incorporating into your strategy going forward.

      More common is to read a comment along the lines of I got burned by that sector of the market, I'm not going back again. If a trader suffers losses they need to understand why they lost money, or they are doomed to repeat it again regardless of the sector they invest in.

      Delete
    8. Andyrama, a good adviser that I have observed in an entirely different sector always studied a decline, and sometimes had a way to cover his clients retreat handy to preserve their gains made earlier. Another very bright friend who knows this sector well actually has shared a third dimension to this, a unique hedge. I'm using these techniques in combo to advise myself on how to make educated trades in this sector to ultimately fulfill the ultimate longer goal; which is to acquire more physical later at a future opportunity.

      Good management and engineering mining companies do this as well, simply because they have to. It is an interesting sector for me because it reflects that if you work hard and are disciplined and have good solid simple plan that you stick to; then there is a higher probability that you will win. This is not, IMHO, a buy and hold sector. It is for a fairly active trader when the trades are 'on' They have to know the companies they are trading. You also have to have a educated grasp on other larger moving parts of the broader global markets, and when the HUI initially breaks its tandem with some of them (buy), then rejoins them before the deeper dip (sell). The guys who got burned badly should follow the next big decline in the HUI along with the S&P. Compare the better companies against the ones that they lost money on. At the end of the decline they may meet the opportunity they will need to begin to recoup their earlier losses. At that point I'm hoping that I'll be able to use it to off set the inflation that will ultimately surround us. I think inflation is already setting up for a Pincer move, so I'm planning a simple counter move with the possible help of this sector and ultimately more physical.

      Delete
    9. You might be interested in the conversation taking place here.

      http://proprietarythinking.wordpress.com/

      Delete
  11. Miner fans are looking for love...in all the wrong places.
    I've lost a significant stake in miners twice in my life. Never again.
    The only good call I've ever made in miners is when I got out, and watched them drop 50% without me. :)

    https://www.youtube.com/watch?v=FAyDmJvjxbg

    ReplyDelete
  12. I see both silver and miners as useful charts, to add insight to what gold is doing, but I'll never own either one of them again. I'm just not desperate enough, or greedy enough, to take that sort of lottery ticket style chance again.

    ReplyDelete
  13. Gold and silver can't break out of their chart patterns, but the chart patterns are heavily influenced by manipulative trading (massive dumps irregardless of price action). So there's no possibility of a breakout to the upside based on technicals, but there are frequently chart busting moves the other way. It's all something of a farce, especially now that more is known about the Exchange Stabilization Fund.

    Dan, I know you have to look at the charts. But do you study the efforts of parties who are interested in the real price of gold, as they try to establish cash and carry markets and move from the dollar to gold in trade settlement? It seems like those are trends worth examining, and your view would be of interest to many,

    ReplyDelete
  14. When the GLD ETF loses gold, isn't that just the banks and possibly a few others as there are restrictions on who can redeem, redeeming shares for the physical gold at a discount since price is low?

    ReplyDelete
  15. Silver Bulls, $26 did not turn out to be a triple bottom and I do not think $18.50 is going to hold either, so unless you are a dyed in the wool Denver Donkey 15-1 fanatic, prudence might be in order here shortly, as even the perma pm bulls know, summer is not a particularly bullish period; swb

    ReplyDelete
  16. The fact is indisputable.

    Holding on to junior mining stock certificates "out of the system" after the 2011 "This Is It!" calls will go down as one of the worst market timing calls ever.

    Hey, even seasoned pros like Bob Brinker get it wrong sometimes, he totally missed the 2007 top and his subscribers rode through the 2008 - 2009 bear market.

    But lucky for "Marketimer" subscribers, since Bob only approves Fed-sponsored and TPTB-approved financial assets like stocks and bonds, Brinker's subscribers saw their portfolios recover in stunning fashion after only 2 years and are now way ahead after 5 years.

    While the GATA boys, KWN clowns, and the CIGA crowd will be licking their wounds for years and years, unable to recover since time is running out for most of those retirees.

    ReplyDelete
    Replies
    1. Mark, I agree in the retrospect. However, Jim did predict $1650 for January 2011 back in 2001, when very few people even dreamed of it, and he missed it just by 6 or 7 months. I do not condone many wild claims, complete refusal to admit own fault, and sheer arrogance, but when criticizing, also give credit when credit is due.

      Delete
    2. Just to clarify, I was referring to Jim's refusal to admit wrong calls, not Mark's.

      Delete
    3. That is exactly the problem. Jim made a great call 10 yrs out and why people listened to him post 2011 and rode the miners all the way down wiping out 10 yrs of gains, sad for those retirees who bought into gold "is going to and through 3500"

      Delete
    4. I have in my posession a fax from jim where he proclaims the bearmarket in gold is absolutely over and predicts a 1979 style rally.

      In 1993!

      He called himself sr precious metals advisor back then. These ware the days he was milking the sutton resources company like he milks trx these days.

      Delete
    5. Jasper, it appears that Jim has been blessed (cursed) with moral flexibility. I am sure that in his mind everything he does is thoroughly justified. It is the mark of the modern times. I will never listen to people who claim they know precisely where certain price will be to the penny to the exact day and hour. Those who do, deserve what's coming to them. It is important that people like you speak up when they spot dishonesty and hypocrisy; It may help the others from being duped by the same charlatans.

      Delete
  17. Talking about miners here are a few I have started to nibble on:
    Good valuations, good charts and nice growth in output :
    HL and FSM. ( KGC has been whacked as a result of a large percentage of its output from a mine in Russia-- I am betting that the fear that their business will be in jeopardy in retaliation for Western sanctions is oveblown;
    I am nibbling but am NOT recommending on this blog). If you are a shopper at the Dollar Store you may want to GAMBLE a few dollar bills on PLG.

    I also am a contrary investor in a coal stock ( ACI )-- 7 year lows in thermal coal inventories at Utilities and a bet that the composition of the Senate and House will change in November tilting slightly in a favorable direction for COAL. This is also a bet that Nat Gas prices have bottomed in 2013.
    I would not touch stocks like ANR or WLT which have a large percentage of sales in met coal; some how I feel China's growth rate in this decade will be half of what it was in the last decade.
    NO GUARANTEES ON ANY OF THESE FROM MANAGEMENT.

    ReplyDelete
  18. I'm glad so many of you are bearish on the gold mining sector. I will continue to buy shares at these bargain valuations. Buying mining shares right now when they are this hated is the definition of buying low.

    ReplyDelete
    Replies
    1. Yes Alex, you are right!...or rather, you would be if the whole community of this blog were making the whole market and were the only buyers / sellers on the mining sector.
      I'm sure this is the case, right? :)

      Delete
  19. This comment has been removed by the author.

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  20. Agree bearish sentiment in Gold and miners is telling the market deflation is winning. Apart from Gold and miners not much else has priced in the deflation yet but I suspect at the first signs of collapse it won't be long before FED and CBs realize the nightmare before them. The answer will be QE on steroids so you no what to do get Gold and the miners now forget the negativity relax and wait for panic to start. The FED CBs ponzi promoters will not forsake power for free markets. They will print for their survival, global conflict may well be the cover. Gold and miners the best insurance yet looking better and better.

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  21. The basic materials sector is one of the smallest sectors in the S&P 500. Precious metals miners are in turn a vanishingly small portion of the basic materials. I'm sure someone could crunch the numbers, but I'd venture a guess that PM miners are something like 1% of the equity universe.

    The amount of time, effort, and capital applied to PM miners by the few true believers is far, far, outside the bounds of prudence. And in the aggregate, they pay the penalty for it.

    ReplyDelete
  22. GDX/GLD ratio now plummeting fast towards the world record, all-time lows set back in June 2013.

    MUX and TRX within inches of breaking below $2.00/share, thereby putting them into "Pink Sheet" territory, LOL....

    Meanwhile, XRT is only $5 away from world record, lifetime highs.

    Who are you going to bet on? Gold mining? Or the Resilient Consumer?

    Looks like the consumer has already won.

    Stay in the System.

    ReplyDelete
  23. Dow transports about to take out all time highs.

    Richard Russell still clutching his GDX and GDXJ wondering what hit him in the face.

    Frank Barbera, Dave Morgan, et al nowhere to be found, they must be selling men's suits somewhere and quit the investment business.

    Bill Murphy found down at the pub guzzling down Wild Turkey, he's aged 20 years in the last 3 years.

    ReplyDelete
    Replies
    1. Mark the bitter. You and the Wolf should get a room...

      Delete
  24. the biggest of big money does follow seasonality, as the risks are great. it's probably better right now in the doldrums for precious metals to wait til end of june-early july when a real good low is often made.
    http://blog.stocktradersalmanac.com/post/GCF-GLD-Gains-Hampered-by-Seasonal-Weakness

    looking to play a turn around tuesday in the ags, either tonite or after the 'morning pause'... in july contracts 1450 beans, 475 corn, and 650 wheat look decent and we've been selling down for over a week.

    cheers!

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    Replies
    1. 77, back to back to back pretty sizeable corn and bean crops down south and up here; El Nino looking more and more likely, and if so, these mkts will take on a huge southern accent; take care; they slide faster than they glide!

      Delete
  25. I think it would be fair to say at this point, that if this is what friends do the to mining shares, then having some enemies would be the best thing.

    ReplyDelete
    Replies
    1. arnie, you are begging for relief; cut loss and come back and fight another day

      Delete
    2. SWB,

      Have a look at the 5 year chart I posted above in response to Dan.

      Buy and hold select silver miners outperformed silver and beat the S&P over the same time period.

      You would be sitting on gains somewhere between 150% and 400% if that had been your trade.

      Delete
    3. Andy;

      If "IF's and BUT's were candy and nuts, what a Merry Christmas it would be".

      Mining shares have stunk to high heaven over the last three years. If your point is to convince folks to pour their money into the sector into hopes of outperforming the broader market, you are not going to make many converts here. There are too many people who have been financially destroyed by loading their portfolio with shares from this sector and leaving out investing in other sectors which have done remarkably well.

      I am glad you are happy with your select silver miners and are wealthy beyond all dreams. Please give it a rest already. I am growing weary of the Ra-Ra stuff.

      Here is a simple fact - the HUI, the XAU and the GSXJ charts stink to high heaven. If you want to do your due diligence and see if you can find some pearls among these pigs, I would encourage you do continue to do so. That is what makes for good investing practice. But if you attempting to sing the praises of the mining sector, your notes are falling on deaf ears. The charts tell us that you are horribly wrong at this point.

      I am the one who gets the emails from folks in their 70's who are running out of time to recoup their losses in this sector. Maybe you are young and have 20-30 years ahead of you to recover. Many do not. Remember that.

      Delete
    4. Dan,

      Not trying to make converts here. Only trying to counterbalance my perception that there is alot of overly bullish commentary about the merits of investing in the S&P while its at all time highs.

      The 'lesson' that you drew from our convo upthread that investing in well run majors is safer than those 'risky' JR miners was demonstrated to be fallacy, dogma and your personal bias.

      The gold chart I posted showed that owning those would have an investor under performing gold and the S&P and then adding to the pain by declining twice as fast as gold on the way down.

      Everybody, the free analysis and advice that's posted on the internet is worth exactly what you paid for it. Zilch! Mine included.

      Delete
    5. Andy;

      How does my "own fallacy, dogma and bias" enter into hard statistic facts?

      The HUI is down 63% from its April 2011 high while the GDXJ is down 78%. That is, as an astute reader observed, AFTER a reverse split in the GDXJ.

      Give it up already.

      The junior miners are fool's' gold for most people. If you want to play in there and see if you can pick winners and losers, have at it. Most do not want to do that sort of thing.

      I will stand by my original comments. If you do want to invest in the mining sector, then use a well run major. It has less downside than those juniors.

      Do what you want however. If you can make money doing it, I am genuinely happy for you. Just know that you are looking at a sector that has been abysmal for the last three years. Maybe it will perform better as we move ahead but I would not bet the farm on it.

      Delete
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      Delete
  26. New lows for the move on GDX.

    KWN should alter some of today's headlines on its blog page:

    "XAU Suffering From Catastrophic Losses."

    "Seeds For A Much Bigger Crisis Now Being Sown in Metals and Mining"

    "HUI Crash Is Far Worse Than 2008 Collapse"

    ReplyDelete
  27. Steve,

    New highs today on SWC, confirming strength in PALL and PPLT.

    The economy is booming and demand for industrial metals is soaring.

    Contrary to the predictions of the gloom and doom crowd.

    ReplyDelete
    Replies
    1. Mark, palladium is notoriously volatile, as it is so thin; if you are right, I am wrong, and let's drink to that.

      Delete
  28. Wow, NEM is getting croaked, just like Lehman Brothers did in 2008.

    Only inches away from decade lows.

    ReplyDelete
  29. TRX only 5 cents away from becoming a "blue light" $1.99 special.

    Gee, I can't even get a cheap breakfast at Denny's for that.

    ReplyDelete
  30. I am not convinced that gold and silver and some select miners are necessarily bad investment at this point. Nobody can (nor they should) dispute that they were one of the worst assets ever from 2011 until 2013 inclusive. What does that say about the future? Absolutely nothing in my opinion. They could crash again and they could soar, who knows. That is a personal choice, but I cannot believe that some of you professionals out there are actually recommending buying S&P and DOW at the all times high. Why? Well, they went up 5 years in a row!!! If the trading is this easy, I'm quitting my day job right away. What went up in the past is bound to go up. What went down, will collapse.

    ReplyDelete
    Replies
    1. based on share pricing, the miners are a much better investment than three years ago. With that said, the miners all up and down the spectrum have totally busted balance sheets. the repair takes years. I mean 6-8 years, at least, if ever. Many of them will be bought out in bankruptcy, especially if gold drops further.

      To make matters worse, these miners will shut down productions, streamline, etc, at the worst time, just before gold takes off again. They have poor management, and will continually mistime the market, over and over again.

      Are they cheap? Their shares are cheaper, but that is for a reason.

      Own the physical, less volatility, and the leverage theory of the miners is bunk. they never are able to realize that goal.

      Miners offer busted dreams and hopes. I wish these retired people who believed in the levering of the gold price just owned the metal. Anyone who has owned gold for at least five years is fine. I cannot say that for the miserable miners.

      I sold the last of my Vanguard Precious metals fund in my IRA at 25-26/share in 2011. It's 10.97. I sold 2/3's of it in the mid 30's back in 2008, when Lindsey Williams said the price of oil was going to 50. I think many remember that. Indeed, for that one time he was very prescient. I was very lucky in my timing, I guess, but the third I had left went from that level down to below 10. And that was a five star-rated fund. I dumped that last bit at 25-26.

      It is a loser sector, and will always be a loser sector.

      Delete
    2. Eph 6:7, your points are well taken. I love coming to this website because of several reasons:
      - the host is level headed down to earth guy with tons of experience and wisdom that he does not mind sharing (unlike TF who knows nothing but milking the dupes and some others who probably knows a lot on how to shear the sheep)
      - guests who are generally knowledgeable and now how to keep their Egos in check, resulting in meaningful posts (unlike ZH where anything goes)
      - Overall feel that you are finally grounded in reality somewhere between the mainstream and cuckoos calling for an armed struggle against the forces of evil
      I respect your opinion, but I disagree that the miners are destined to be the losers forever. Some of them will be wiped out, and some of them will surely under-perform, but some will be forced to clean up their act and when the price of the underlined metal (not if) goes up, they will prove themselves to be better performers than many mainstream stocks. I agree with you that buying the metal itself is less risky, but if the price of the metals go up, the miners will give you the leverage. I am looking 3-5 years from now and not the next month, of course.

      Delete
    3. Abraxas and Eph; William Randolph Hearst is the only miner I can think of that made any $. Guys like Levi Strauss made much, much more regarding gold and silver strikes. Physicals are nothing more than insurance and we should all hope that we never have to use/cash it in. Nothing is ever too high to buy and stks still want to go up, so go with them, BUT, trail with stops, because all parties end. swb

      Delete
    4. I only make sober observations. Look at the past 3, 5,10 years. Look at any time frame There is a Latin phrase that is very appropriate: Res Ipsa Loquitur: The thing speaks for itself

      Delete
    5. Gold should be viewed differently than insurance. Now that gold fell this is what the patriot shows say. They keep pushing silver this way, because most cannot afford to buy a lot of gold. This is what the gold dealers are now spinning it.

      Is gold really insurance? The globalists own it as an asset shield. It is money that cannot be traced. They buy it and then lock in some with futures contracts to guarantee some principal. There is nothing wrong with selling it. My observation is that those who own it for insurance are sitting on capital losses. Why? It should be viewed like any other investment.

      I remember what happened in 2008, that was some insurance policy. In fact, owning gold as insurance seems to be the most costly policy I have ever encountered, and I pay tons a year for insurance policies of all kinds.

      When the time comes that we file a claim on our gold insurance policy, it won't matter.

      Delete
  31. btw, whatever happened to Preditor1976, Concord, and Taylor? Did they all go tap city, or what?

    ReplyDelete
    Replies
    1. Excellent question. The role of commenters has changed.

      Delete
  32. This is about the bond market. Many times in gold it is said that the category of long traders are not the right kind of longs and the market is subject to big breaks. In the bond market, are there any long traders on the wrong side of the market, or is everyone long right and everyone short wrong, no matter what category they fall in? Sentiment is bullish, but a one way market??? Any dangers to the "wrong" longs? Thanks

    ReplyDelete
  33. Dan,

    I was wondering if you follow PVG at all....I lost big in that one not only when gold was coming down but there was also a scandal about their measurements of gold and their independent review team actually quit over the issue which sent the stock in freefall...now i have been out of gold for over a year and made some a decent amount back in SPY/QQQ sectors , but apparently they really do have i think it is a record amount of gold deposit and it has been reocvering very well and looks like its expanding its operations.....do you have any comments on this stock, or do u just prefer to focus on HUI/GDX?

    ReplyDelete
    Replies
    1. precious wood.
      apologies for the delay in getting back to you. I honestly am not the best with equities. my specialty is commodities so anything I could say about it would be based solely on a price chart and not anything fundamental in nature which you are light years ahead of me for that one!

      Stock picking can be a real challenge because you have to get so many things correct.

      again, my apologies for the delay.

      .. best of success to you however!

      Delete
  34. Gold in and around 1286 as we speak. I'd buy now or wait a little bit longer as it will most likely resume it's range trade.

    ReplyDelete
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    ReplyDelete
  36. XME getting obliterated today, worst sector performance of the day, down over 2.5% on heavy volume.

    As usual, if there is any doubt about the economic recovery or a slowdown, the first items blown out the back door by the institutions are:

    - Steel stocks
    - Mining equipment stocks
    - Gold and silver stocks

    In stark contrast, the "ideal" placed to hide during market convulsions are:

    - U.S. Treasury Bonds
    - Muni-Bonds
    - U.S. Dollars
    - JGB's
    - German Bunds

    ReplyDelete
    Replies
    1. Russell @1092, but it is early Mark; not saying we can not go another leg higher, but warning top signs beginning to add up; swb

      Delete

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