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In this update...
- Links of the Week
- Podcasts: This Week in Markets
- Premium Sample:
Links of the Week...
Gold COT Data Showing Bottom?
Tom McClellan, CMT a well-respected and impartial technician has some good analysis of Gold's current COT data.
John Brynjolffson: Inflation to Dip then Accelerate
We've interviewed John twice in the past. He had a long career with Pimco and now runs Armored Wolf. He believes inflation will dip and then accelerate. He likes bonds in the short-term but thinks they will be a loser investment over three to five years. He thinks the Fed will end up doing more.
This Week in Markets Podcasts...
Grant Williams on Precious Metals
Grant is the author of Things That Make you Go Hmmm and the portfolio manager of the Vulpes precious metals fund. Great thoughts from Grant!
Editorial Podcast on Equities
In this editorial podcast I discuss what is going on in emerging markets and give some general thoughts on technicals, fundamentals, sentiment and how to play it if you are long-term bullish.
Premium Sample: Gold & Gold Stocks
Last week we showed you a chart that showed gold stock recoveries taking off or accelerating in the 7th or 8th week. We looked closer at the four recoveries and noticed that the 50-day MA (and 10-week MA) is very instructive. Below is part of our conclusion in premium update #312:
In this update we highlight how the 50-day MA (or 10-week MA) is very important during rebounds in the gold stocks. It appears that a typical rebound follows a pattern. The initial rebound hits resistance at the moving average, then consolidates or corrects for about a month before finally moving much higher and eventually reaching the 400-day MA or 80-week MA. Last Thursday when GDX peaked, it peaked at the declining 50-day MA. These rebounds typically accelerate in week 7 or 8 when the 50-day MA has stopped falling. Next week will be week 5. History tells us we should look for another 11+ trading days of backing and filling before the gold stocks accelerate through the 50-day MA (and GDX $31).
Not to beat my own drum but no one else has noticed this with these major bottoms within gold stock secular bull markets. We'll see what happens over the next several weeks but keep an eye on the 50-day MA in GDX/HUI, etc. The price action in Gold & GDX won't look bullish until it breaks higher. But, by the time GDX is at $32, you've missed 20%. By the time Gold breaks $1425, it will be up $100 from the bottom. Volume in GDX has been below average for seven straight days. It's been dwindling in the last four days. Meanwhile, considering the COT data, how much further can the metals decline from here? The commercials are nearly net long in Silver, their most bullish position ever while speculators net longs in Gold are at 11 year lows. In any event, our historical analysis tells us that the stocks are likely to breakout (above the 50-day) 2+ weeks from now.
What comforts me is the vast majority of those who are bearish were never long-term bulls to begin with. It is basically a bunch of empty opinions whereas others are actually putting their money where there mouth is.
Consider Vulpes Investment Management. Founder Steve Diggle made over $2B for his investors during 2007-2008. Now, with Grant Williams they are starting a $250M precious metals fund to invest in mining equities and metals. John Paulsen is way up in his career. He's made a lot on Gold but lost quite a bit on the gold equities. He's holding because he knows where things are going in 3-5 years. Small-time reporters, traders and commentators like to poke fun at him like he's a moron. They could have said the same things in 2004, 2005 and 2006 when housing was rolling. He had the last laugh.
The huge money is made by following long-term trends and getting on board at opportune times. For the gold and silver stocks, we may be at one of those times. Consider a subscription as you'll get our 46-page report on US equities, emerging markets, commodities and bonds, our 21-page report on our top 5 growth oriented producers, a report on our favorite explorers & developers (which will be updated soon) and much more.
Wishing you good health and profits,
-Jordan
Disclaimer: Sponsor Companies are paid sponsor companies of TheDailyGold.com website and this free newsletter. Do not construe sponsorship with a recommendation. The author of this newsletter is not a registered investment advisor. This newsletter is intended for informational and educational purposes only and should not be considered personalized and individualized investment advice. Investment in the precious metals sector contains significant risks. You should consult with an investment advisor and due your own due diligence. This email may contain certain forward looking statements which are subject to risks, uncertainties and a multitude of factors that can cause results and outcomes to differ materially from those discussed herein.
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