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Chart 1: TheDailyGold Junior Index
Here is an updated daily bar chart of our 55-stock index.
The index appears to have failed twice at the declining 50-dma in the past few weeks. It already failed at the 200-dma in April. Also, note the three highlighted areas which show bearish price action around resistance. After the previous two, the index sold off hard. Initial support is at 340 followed by 300 which is a confluence of strong support (62% retracement, 2016 low). I would be a buyer at 300.
Chart 2: Silver daily line chart
Silver formed an ugly bearish reversal on the weekly chart. The daily looks just as bearish. Silver recovered from its major selloff but failed at the declining 200-dma and is back below a declining 50-dma. Silver closed at $17.22. The strong support around $16.00 is what stands between here and a
potential retest of the December 2015 low.
The yellow box highlights what appears to be corrective action after the second half (of 2016) selloff.
Saturday evening we published and sent a 34-page update to subscribers. In this update we highlighted the downside risk in the sector and the potential for imminent declines. We have been bearish and cautious for a few months (though we called the May bounce) but Gold has trended higher and some miners have held up quite well. In our view, the present setup could lead to losses in the coming weeks.
The outlook for Gold beyond the next few months will depend on the Fed hike cycle and its end. If miners get really oversold in the next month then it would lead to a good bounce. But the bounce won't be sustained if the Fed hikes in September and December. There are some similarities to the Fed cycle in 1999-2001 and the cycle now. In short, the next significant low in precious metals could be around the time of their last hike for this cycle. Will it be June? September? December?
Right now, the Gold market is hinting it probably isn't June.
In the meantime, we continue to believe it is best to buy value and buy quality when it is very oversold. It is hard to do and there are only a few opportunities to do so every year. The last opportunity was 5-6 months ago. The next could be in 5-6 weeks.
Consider a subscription today as we can help you get positioned in the junior companies with significant upside potential at reasonable entry points. This is exactly our plan in the months ahead. We discuss and cover what we are actually buying, unlike the majority of our competitors.
Dr. Jeffrey Kern, who we recently interviewed, had this to say regarding our stock-picking abilities:
I am simply a pure market-timer for a broad basket of gold stocks and precious metals. Jordan, on the other hand, has provided superior STOCK-PICKING abilities over the longer-term. I am familiar with most gold stock subscription services over the past 30 years. I rarely provide endorsements of any kind, but Jordan's ability to analyze individual gold/silver stocks has been among the top 5 services over the past decade. First and foremost, I respect his
integrity.
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Recent subscribers' comments......
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I am subscriber of yours. Just wanted to pass along a huge thank you for all your analysis and information you share. I was able to recoup my losses from the latter part of 2016, during my first 6month subscription with you, by adhering to your advice.
I have subscribed to many investment research services over the years, both TA and FA, both within the gold sector and also from different sectors. Your report is right up there amongst the best.
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We seek to own the companies with the best fundamentals that have the best risk/reward potential. We want to own the leaders while avoiding laggards with limited potential.
We tell you what we are buying and selling. Hence, we are completely transparent.
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Weekly updates are sent on Saturdays while flash updates are sent when we make a trade. Reports are sent sporadically. Upon signup you receive all recent reports and updates. Unlike most other editors, we answer subscriber questions.
Thanks for reading. I wish you all great health and prosperity.
-Jordan
Disclaimer: 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.
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