Loading ...Pathetic Bear Market Action
Yes, this is what we continue to witness day in and day out. Back in the beginning of the year it took the bullion banks to stage overnight bear raids to get the waterfall declines that we woke up to almost every day. But often by the end of the trading day the stocks would recover much of those losses. But the last operation we saw was the mid-June raid which goosed the decline that had already started.
Now the market just falls on its own weight. Every day almost the bugs come in and push the gold stocks up , but they inevitably fade later in the day. Folks this is bear market action pure and simple. It amazes me how stalwart gold bugs are. They just seem to want to be abused financially. They refuse to read the language of the market. This is called dogmatic investing.
Hey I want to be bullish in the worst of ways, but I am not going to lean against the trend of the market. Here is a look at today’s pathetic initial bounce while the rest of the market rockets higher:
Sir Plunger,
You have my utmost respect.
Yes, miners have gone down quite severely.
But gold has been holding firm, and today a green close HAD to be avoided, so it seems.
In my portfolio, 50-55% of the miners, both silver and gold, both juniors and seniors, were in a range of minus 2% to plus 2% as of a a few minutes ago. To me this looks like the end of the current correction.
Of course, I did not sit on all my profits to see them evaporate.
As of 7/16/21, this year to date has been my most profitable so far, in terms of absolute/dollar value of realized profits. And rarely did I sell my entire position in any miner.
Something has to give here.
I have no motivation of proving the greats like Sir Plunger wrong.
GL
Gold price is indeed near flat, but I am commenting more on the action of the metal stocks and frankly its dismal. Their trading action is consistent with bear market action. Why do I keep spouting these words to describe such action? Well, I feel like I need to do an intervention of sorts. I see so many riding this down when the best place to be is on the sidelines
Many juniors’ charts I track, and own, were on the verge on super-breakouts. If this kind of attack was not launched, how would the weak and/or new holders, be not shaken off off the bull?
Now these juniors are off 30-35-40% from their recent highs, and nobody wants to buy them?
Seniors are much more problematic, I agree!
All I am saying is, yes, these charts are not encouraging one to go all-in, no way! But, at the same time, junior names that I have observed for a long time (and seen many of them fly away to 5x-10x-20x without buying them at all) are definitely to be nibbled at, in small sizes! If I’m wrong and they go down even 50% more from here (my buys this week and last week), I can bear those small unrealized losses without selling them, I have had that kind of patience for a few years now! That’s why I’m not on the sidelines.
GL
And again, my alias is not just my humility … this guy is still a “lossy” learner, all said and done 🙂
Let’s read what the experts have to say, one of very few who are in the game for close to half a century!
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That 6/29/21 35-39 index sell signal HAS continued to mark the exact low for gold, but the gold stocks have continued to act “strangely”, in a manner that’s never been seen since 1974. USERX rose for a few days. When the metals complex gapped higher last Tuesday (7/06/21), the 35-39 index was set-up to generate a very bullish buy signal if USERX rose to above 13.75. But that opening rise yielded a bearish reversal into a down close to avoid the buy signal. On Wednesday (7/07/21), gold rose for a 5th consecutive day (as the 6/29/21 35-39 index sell signal continued to market the exact low) and settled just above the round number $1800. That is distinctly short-term BEARISH behavior. Runs higher usually end at 5-6 days Up, and rises in Cash Gold that settle just above round numbers are highly likely to short-term decline back below the round number (and vice versa!; don’t get faked out; it’s not a perfect indicator, but it’s a high historical probability). “Magically”, gold then declined last Thursday (7/08/21) to settle at $1799.90 (!) just below the round number and down a meaningless $1.90. That also ended the run higher at 5. But the gold stocks were relatively weak/bearish. USERX dropped to a new multi-month low of 12.96, largely due to a strong decline in the commodity currencies. Focus on the Australian and Canadian Dollars rather than the U.S. Dollar index that is over-weighted to the Euro. USERX does that for you/me!
As always, I understand that you want a clear conclusion/prediction. I could provide the bearishness in May. I could not provide a clear prediction in June, but had partially bought the plunge. The current potential bull market bottoming process is UNIQUE since 1974. Jeff dislikes “uniqueness”, BUT I do know the following SKI PriceXTime:
It HAS been 14 trading days since the decent 16-20 index buy signal at USERX 13.18. “Normal” would yield some rise this week into a 16-20 index first resistance sell signal at about 20 trading days from that 6/18/21 buy (its profit). The major sell-stop is just too low. The 35-39 index buy signal and a new 221 index buy signal are just too high. Historically, it can take up to 35-39 trading days to complete a bull market bottoming process.
Best Wishes, Jeff
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GL
I’m “enjoying” the PM bear market from the sidelines with a clear head. The carnage has to thoroughly exhaust itself before the energy for a new impulsive bull price advance can ensue. I can tell from the posts that it has a ways to go.
LOL, Sir Leftenant1 !
Hopefully you are not a left-wing, Democrat! LOLOLOL!
Have you experienced that entering “an impulsive bull price advance” a day or a week late, can halve your %age gains?
GL
Gold Learner stated very eloquently my sentiments. The one point of contention I have with your post above is you relating today’s action in the miners with what is happening in the general stock market. When has that EVER been relevant? The general stock market is one thing and has it’s own set of behaviors. The gold and silver markets and their mining equities is an entirely different animal with very different dynamics. Yes, in extreme risk off times it seems at least for the freefall phase, everything seems to go down together(like March 2020) but bull markets in equities and in gold equities are not necessarily correlated.
Thank you for your kind words, Sir CM.
I also have some stake in the “broader” equities market.
My concern (or strategy) is that: over the next few months, the percentage of gains that can be made in miners, even entering today (in a haste?) is more than what the broader equities are offering. TSLA? AAPL? A correction is looming … August/September/October … when? Can I get in and get out of the general equities if I chose to enter them today?
Heck, I have been following C3.AI ready to press the buy button any day now … but I can’t!
GL
Yes, there is some confusion regarding this issue. Yesterday was a hard down day in ALL sectors (except bonds). Gold and silver stocks went down hard along with the general stock market. Today’s action is characteristic of a relief rally and we saw the general indexes rally hard. It’s the markets chance to breath in. So the downside pressure is not existent. So after yesterday’s hard down day in the PM stocks they have not staged any kind of follow through whatsoever off of their initial knew jerk opening bounce. They rapidly fizzled. This is demonstrably poor action, not something that one should see as a base to buy out of. Again bear market action.
Agree, that the general stock market has topped as I stated last week in my “Peak Everything” post. As far as AI, I was early in recommending it(I often am early but look up all my non precious metals recommendations and almost every one went on to be big winners in this year since I started posting, even the many that went down first). I wish my miners had all done so well. Anyway, if I am going to be correct about AI, it has bottomed. It will be interesting to see if it can buck a general stock market bear?
“Agree, that the general stock market has topped as I stated last week in my “Peak Everything” post.”
I will dissent. We’re not really that close. Maybe in points, not in time.
I’m with you Plunger and have been sitting on the sidelines riding this one out after trying to catch a few bounces here or there the past year. The SILJ chart over the past years is a bloody mess. Meanwhile, we all could have bought the shit out of the oil and gas sector, base materials, etc. and made huge bank the past year. (many have I’m sure, but I missed the bus there)
Yes, you highlight the sad story. I myself had been watching the steel and oils back in Aug/Sept but got sidetracked when they took off and never got in except for some recent trades (bought XOP yesterday and sold today)So note to self put that down in your market diary. But for now I think those great runs are over. Oil may have a few more weeks left in it, but the base metals and commodities are pretty much done. They should be cycling down now. I am avoiding them now. I have sold my copper stocks etc. The big play now IMO and I am focusing all of my mental energy on it is to find short entries in the general stock market and to be prepared to enter into the PM stocks when it is time. That’s the play for me.
Totally agree, COPX has a large H&S, uranium has large topping patterns…Maybe DBA might be primed for a bit more? Shorting this overall market is such a pain in the butt. The streamers have held up nicely in the metals, KL actually looks pretty good but the rest BLECH