Here are the links during a quiet week...

 

A Bit More Downside Potential in Gold Stocks
Penned Friday. Our review of the technicals on GDX, GDXJ. 


Weekly Market Summary
From the Fat Pitch Blog. Good coverage of stocks, bonds and some economic data. 
 

Video: Dow Theory & the Stock Rally
Chris Ciovacco's weekly video covering the stock market. 


Jim Rogers' Latest Comments on Markets
From Zero Hedge. They put all of his comments in text form. 


Increasing Speculation in Paper Gold
Post is from Steve Saville, one of my favorite analysts. 







Premium Snippets 


Chart 1: TDG Junior Gold Index

This is our proprietary junior gold index. This is the index we construct the analog from. The chart is a daily candle chart and its denominated in US$.  

The index corrected 18% from its recent high down to Thursday's low. In July it corrected 20%. We can make a case that the juniors have been range bound since the middle of June (the peak was at the end of June). So the consolidation could be well into its 3rd month.

The index closed at 842. It has support at 775 (or 770) and the Brexit Gap is down to 725. A decline down to 770 is around 9%. A fill of the Brexit Gap would be a decline of 14%. That in my opinion is the realistic worst case scenario. That would be a 26% correction from the peak. 








Last week we noted that miners had 5%-10% downside. We didn't expect a 10% decline for the week and technical damage to be inflicted.

Another 7%-10% weakness from here creates a good buying opportunity. That doesn't mean miners will vault back up to new highs. They may continue to consolidate for several months. But if you buy the sector when its down 20% and in a bull market, that entry point will likely look better and better as time passes. If a stock moves from $1.00 to $3.00, it does not matter much whether you bought it at $1.05 or $1.15.     

Corrections can allow you to scan the sector for things that you had missed. What are the stocks you passed on but would like to own at lower prices? Take a look at those now. In TDG #480, a 28-page update we mentioned a exploration company that had a huge run but recently corrected +40%. We aren't sure if we will buy it yet but it has some strong fundamental points and is obviously much more compelling today than two months ago. (And no, this company hasn't been marketed aggressively). 

That is all for now. I hope to have much more for you when this quiet period passes.

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-Jordan

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