Here are the links from this past week...
 

Gold Stocks Climb Epic Wall of Worry
Penned on Friday. Gold Stocks could be starting a correction here but there is a major wall of worry in place!


Interview w/ Palisade Radio
I discuss the state of the precious metals market with Collin Kettell. On Thursday.  
 

Video: Precious Metals Update 
Published on Wednesday.  


New All Time High in SPY
The Fat-Pitch Blog has permabull tendencies but their work is top notch.   


More Encouraging Developments
Thoughts on the economy & markets from economist Scott Grannis at the Calafia Beach Pundit blog. A number of interesting charts are included.


Jeff Christian Interview at FinancialSense
This is a transcript. Most gold bugs hate the guy but it is best for us concerned with making money to listen to all points of view. 









Premium Snippets 



Chart 1: Junior Gold Index Bull Analogs, daily data

We take data from the major bottoms (from our own index) and put on the same scale. The major bottoms were 2001, 2008 and January 2016. We also include 2005 which would be the next most significant bottom. 

Thus far the rebound from the recent low has followed the October 2008 rebound very closely. That is also true of the HUI index, which I showed in my editorial. 







Chart 2: S&P 500 Historical Weekly Data w/ 5 & 10 year rolling performance

This chart was not included in the premium update but will be in a forthcoming report. Considering the oversold condition and future rebound, the 1942 bottom in stocks was the greatest buying opportunity of all time. You can't see it but the market was at the same level as 41 years prior! A few years earlier, the market was more oversold on a 10-year basis then in 1933.

The market gained 6.7x over the next 15 years and only endured one real bear market in the process. It was really the best buy and hold period ever when you consider the consistent performance and lack of drawdowns along the way. The S&P 500 also had a 6.2% dividend yield in 1942. You would have profited nearly 150% if you had a 6.2% yield for 15 years!    






How does this relate to gold stocks?

The recent bottom in gold stocks could be its own "1942 bottom". 

First, the Barrons Gold Mining Index was at the same level as 42 years before. Second, its 5 & 10 year performance both were the worst ever. (Our data is back to 1938). Third, the gold stocks endured a 4.5 year long bear market, nearly matching the 1937-1942 bear market. Fourth, the absolute worst time for stocks was in 1932 while the best buying opportunity proved to be a decade later. Is there something similar in the gold mining sector as 2000 was the worst point ever, with the best buying opportunity coming more than a decade later? The parallels between gold stocks in 2016 and the stock market in 1942 are quite interesting.

Turning to the present, I do think its possible the miners correct 10%-15% here before moving higher. Some juniors are very overbought and could correct much more. Some are not as overbought and might correct as much as the sector. If there is a correction it could be swift or could take the form of a consolidation for a month or two. 

Given the strong trend and likely historical significance of the recent bottom, I am holding onto my stocks. Trading in and out could be extremely hazardous to your portfolio. I plan to prune my portfolio by removing laggards, overweighting certain names and reducing my overweighted positions that did not perform.   

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Thanks for reading. I wish you all great health and prosperity. 

-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 do your own due diligence before making any investment decisions. 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.