Archive for Opinions

Gold “Just Sits There” and That’s Quite a Feat

By Money Metals News Service

The Wall Street Journal’s Jason Zweig famously referred to gold as a “Pet Rock” in 2015. He was blasted by people who understand that gold is no passing fad, and it serves some very important roles in an investment portfolio.

Store Gold/Silver in Home Safe

The valuable roles which gold play have been well covered here. It’s a hedge against both inflation and deflation, it represents true diversification for portfolios stuffed with conventional securities, and it is a way of protecting wealth during tumultuous times.

But Jason Zweig, Warren Buffett and other notable gold critics who complain about the metal “just sitting there” fail to understand the flaw in their basic assertion.

What they believe to be a potent argument against gold is, itself, one of its great attributes. An asset which can “just sit there” forever, largely impervious to outside political and economic forces, is extraordinary.

A gold coin or bar never degrades, is always valuable and is uniquely insulated from risk. What other asset can deliver such assurances over the next 100 years?

Not Stocks…

Warren Buffet and Jason Zweig are big proponents of stocks. However, they will have a lot of trouble choosing a company today that will still have value 100 years from now.

Precious Metals Volatility

Most of the top publicly traded companies from a century ago are gone and forgotten.

In order to grow an equity portfolio, investors have to take on significant risk. They must actively manage which shares are held or buy an index fund. While an index seems like the safer bet, there is no certainty that that an index purchased today will still be functioning well into the next century.

Over that time scale it isn’t even clear whether the current financial system, laws, and property rights will persist uninterrupted. Meanwhile, a privately held gold coin can sit there hidden away, independent of all these risks.

Not Real Estate…

Land is tangible and its supply is limited, two important characteristics which it shares with gold. However, it is not private, portable, or liquid. Taxing authorities can, and probably will, continue taking full advantage of the fact that property owners can neither hide nor escape their purview.

Landowners who intend to hold for the next hundred years must also accept geopolitical risk. There is no telling when, or if, the nation might succumb to the forces of socialism and property rights disappear.

Investment real estate might be a winner during normal times, but, over the next ten decades, that is by no means a given.

Not Bitcoin…

Cryptocurrency offers some promise, and there are many reasons to hope it succeeds. There is nothing the world needs more than honest money, and crypto has that potential.

However, Bitcoin and other tokens should be viewed as technology start-ups. The amount of risk in picking a “coin” and holding it over the long haul is exceptionally high.

Bitcoins vs Gold

There are major hurdles for the technology to leap in terms of scaling. And there are lots of tokens competing for adoption. Some may well succeed, many, if not most, are likely to fail in just the next few years.

Picking long-term winners and losers will be very hard to do, particularly given the entire technology landscape continues to evolve.

Many proponents insist that Bitcoin is already a great store of value. That is a gross mischaracterization. There is far too much risk for that to be true. It may never be true.

Not Dollars, Not Bonds…

Gold, which “just sits there” retaining value over time, looks even more compelling if the alternative is holding cash which is guaranteed to depreciate. It looks downright irresistible compared to something like government bonds redeemable in the fiat currency of some insolvent government.

Nations such as Austria, Argentina, and Mexico have begun issuing “ultra-long” 100-year bonds. Officials at the U.S. Treasury Department are thinking about it. We doubt investors buying these instruments have any intention of sitting on them for the next hundred years.

They would have to be crazy. The only asset worth wagering on over that time scale is gold.

 


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

Trading Cash Indices During Earnings Season

By Orbex

The third-quarter earnings season has started. And, with it, the dynamics of the market have changed!

This is a regular occurrence that affects all cash markets, though evidently the most it affects is the stock market.

But, just like forex often moves opposite to the stock market, forex and even commodities can be affected by earnings season.

Here are some things to keep in mind about trading during this time, and what might come up over the next few weeks.

What & When

Earnings season is an unofficial period in which the vast majority of major corporations issue their quarterly reports.

This is all over the world, though the exact practices vary, depending on the circumstances.

For example, US companies report their entire earnings by law. French companies usually only report their revenues. UK companies issue trading updates, and Japanese companies report their key financial metrics.

Evidently this can make the stock of each company go up or down, and depending on the size of the company or sector, it can move the whole market.

For example, Apple is a leading tech company. If it reports sales below estimates, it can drag down the Nasdaq and weigh on the prices of its suppliers, chipmakers, tech companies and competitors. It’s not unusual for a drop in Asian stocks to be attributed to a negative report from a major company, such as Amazon, Alibaba, Tencent or even Walmart.

The third-quarter earnings season is usually the shortest and lasts from around mid-October to mid-November. This time around, it kicked off on the 15th with major US banks reporting. We can expect it to wind down in the week of November 18th, with the last major European companies reporting.

What Are We Looking For?

The third-quarter is usually when major companies start giving guidance for the next year. The key bit here is capital expenditure: how much companies are planning to invest in the coming year. This has a direct impact on economic growth, and inflation expectations.

Now is when companies tweak their budget for the year, depending on whether they’ve met their targets; and decide how much they are projected to spend next year.

If we see companies increasing their capital expenditure, this means they are going to need more money. Bond yields will likely rise, currencies can be supported, and central banks are less likely to cut rates. And, of course, vice versa.

Some Sectors of Interest

A theme that has been noticed so far is a significant drop in banking profitability as a consequence of the lower rates around the world. This puts a strain on the banking sector, making some already vulnerable banks at a higher risk of default or bankruptcy, raising the specter of a financial crisis. The subsequent market uncertainty can lead to a demand for safe-haven assets, currencies, and commodities.

In that line, CEOs have the best insight into their market, and how it’s developing. Following the inversion in the bond yield curve and the fact it’s been so long since the last recession, people are looking for where the cracks in the system might be.

Is the auto loan sector under increased stress? Look for car retailers, and auto loan specialist reports for more insight. Is the housing market about to burst again? Lennar’s quarterly report can help ease concerns or set off alarms. NZD traders will probably be interested in what Danone and Nestle’s outlook are for the dairy market.

What to Expect From Trading

Market volatility tends to increase during earning season across cash markets. This is good for day traders, but it can also increase the risk. And let’s not forget that we get a host of quarterly data coming out during this period as well, such as major GDPs.

Earnings season reaches its height at the month, after which hedge funds and major investors assess their positions and take profit from the summer ahead of tax payment dates.

Given that Brexit remains unresolved, pending negotiations between the US and China, tensions in Syria, political issues in the US, continuing unrest in Hong Kong, and now spreading protests in Latin America… we’re in for a busy season.

By Orbex

 

Can You Predict the Next Financial Crisis?

By DailyFX.com

There are speculations that the global economy is headed towards a recession. The escalation in the US-China trade war, the inhibiting growth in the US, the long recession in Germany, the Chinese debt crisis and Brexit uncertainty all indicate a looming financial crisis.

It seems circumspect, then, to look back before we try to plan ahead. How do financial crises occur, what factors cause them and what are the early signs to predict one?

Financial Crisis Headline Montage (pingnews) by pingnews.com is licensed under CC BY 2.0

What is a Financial Crisis?

When a financial crisis occurs, financial institutions face liquidity shortages, businesses and individuals are unable to pay their loans and asset prices see a slump in their value. Most often investors frantically sell off their assets or withdraw money from savings accounts during a financial crisis, fearing the value of their assets might fall if they remain in a financial institution.

Other situations that can be seen as a financial crisis include a stock market crash, a financial bubble burst, a sovereign default or a currency crisis. A financial crisis can be as limited as only affecting one bank or as widespread as affecting global economies. When the financial stability of individuals and organisations dwindle, it could mean an inevitable crisis.

What Are the Causes of a Financial Crisis?

Multiple issues can lead to a financial crisis. One common cause is the overvaluation of institutions and assets, which can be worsened by irrational or herd-like investor behaviour. Rapid asset sell offs can lower asset prices, compelling individuals to dump assets or withdraw savings when a bank is rumoured to fail.

Other significant contributing factors are systemic failures, uncontrollable and sudden shift in human behaviour, regulatory failures, incentives to take huge risks and contagion factors that spread crisis across geographic areas.

Even when individuals and organisations have taken preventive measures, a financial crisis can still happen, accelerate and worsen.

Early Warning Signs to Help You Predict the Next Financial Crisis

  • Consistent stock market losses – The stock market indicates the overall economic health. Though a stock market plunge is not always a sign of recession, there are plenty of reasons why we should take notice of the lows in the stock market for a hint of a looming financial crisis. The longer a bear market lasts, the greater the chances it is signalling a recession.
  • High wage growth – The top expense for businesses is employee salaries. When unemployment levels reduce there are less qualified workers in the job market and companies have to offer higher wages. Wage inflation results in an unsustainable expense for companies, and as a result they slow growth and cut jobs.
  • Rising inflation – Like growing wages, a small amount of inflation is considered a good thing. It means unemployment is low and people are paid well, which encourages them to spend money. But when inflation rises steeply it forces an increase in interest rates. That in turn makes borrowing more expensive. When companies are already expecting an economic slowdown, they are even less likely to invest in new talent and equipment if interest rates increase.
  • Low unemployment rates – Recession watchers and experts know that a super-low unemployment rate can become a catalyst for an economic slowdown. In the past the US economy has witnessed a financial crisis after nine months of the unemployment rate reaching its lowest point.
  • Drops in housing construction and sales – A major driver of the US market is the housing industry, which adds up to one-sixth of the country’s GDP. Economists like to pay close attention to the number of new housing projects, as it indicates builders are confident that the economy will grow and perform well. Otherwise, if housing projects stall and reduce, it could be a warning sign of a recession.

Financial crises can turn the economy upside down. These events can force people to change the way they work and face several challenges. It is better to be armed with the knowledge to know when a financial crisis is around the corner so that you can prepare to face the situation and fare the time well.

By DailyFX.com

 

Revisiting “Black Monday – 1987” – October 19, Part I

By TheTechnicalTraders.com

Back in the day, for those of you that are old enough to remember and have experienced one of the most incredible trader psychology driven stock market decline in recent history.

The difference between “Black Monday” and most of the other recent stock market declines is that October 19, 1987, was driven by a true psychological panic, what we consider true price exploration, after an incredible price rally.

It is different than the DOT COM (2001) decline and vastly different than the Credit Market Crisis (2008-09) because both of those events were related to true fundamental and technical evaluations.  In both of those instances, prices have been rising for quite some time, but the underlying fundamentals of the economics of the markets collapsed and the markets collapsed with future expectations. Before we get too deep, be sure to opt-in to our free market trend signals newsletter.

Our researchers believe the setup prior to the Black Monday collapse is strangely similar to the current setup across the global markets.  In 1982, Ronald Reagan was elected into his second term as the US President.  Since his election in 1980, the US stock market has risen over 300% by August 1987.

Reagan, much like President Trump, was elected after a long period of US economic malaise and ushered in an economic boom-cycle that really began to accelerate near August 1983 – near the end of his first term. The expansion from the lows of 1982, near 102.20, to the highs of 1987, near 337.90, in the S&P 500 prompted an incredible rally in the US markets for all global investors.

This is very similar to what has happened since 2015/16 in the markets and particularly after the November 2016 elections when the S&P500 bottomed near 1807.5 and has recently set hew highs near 3026.20 – a 67.4% price rally in just over 3 years.

One can simply make the assumption that global investors poured capital in the US markets in 1983 to 1986 as the US markets entered a rally mode just like we suspect global investors have poured capital into the US markets after the 2016 US elections and have continued to seek value, safety, and returns in the US markets since.  These incredible price rallies setup a very real potential for “true price exploration” when investors suddenly realize valuations may be out of control.

So, what actually happened on October 19th, 1987 that was different than the last few market collapse events and why is it so similar to what is happening today?

On October 19, 1987, a different set of circumstances took place.  This was almost a perfect storm of sorts for the markets.  The US markets had risen nearly 44% by August 1987 from the previous yearly close – a huge rally had taken place.  Computer trading, which some people suspected may have been a reason for the price decline on October 19, was largely in its infancy.

Floor traders were running the show in New York and Chicago.  The London markets closed early the Friday, October 16, because of a weather event that was taking place.  The “setup” of these events may have played a roll in the liquidity issues that became evident on Black Monday and pushed the US markets down 22.61% by the end of trading.

The US markets had set up a top near 2,722 in early August 1987 after rising nearly 44% from the 1986 end of year closing price level of 1,895.  The SPX rotated lower from this peak to set up a sideways price channel near 315 throughout the end of August and through most of September.  On October 5, 1987, the SPX started a downward price move that attempted to test the lower support channel near 312.  On October 12, one week later, the SPX broke below this support channel and closed at 298.10 (below the psychological 300 level).  The very next weekend was October 17 & 18 – the weekend before Black Monday.

Sunday night, October 18, in the US, the Asian markets opened for trading and a price sell-off began taking place in Hong Kong.  Because the London markets has closed early on the 16th due to the storm, by the time they opened the UK markets began tanking almost immediately.  Early in the day on Monday, October 19, the FTSE100 had collapsed over 136 points.

Our researchers believe the declines in the US markets in early October 1987 set up a breakdown event that, once support was broken, prompted a collapse event where liquidity issues accelerated the price decline volatility – much like the “flash crash”.  Global investors were unprepared for the scale and scope of the price decline event and panicked at the speed of the price collapse.

In fact, at the height of the 1987 crash, systemic problems (mostly solvency and brokerage house operations) continued to threaten a much larger financial market collapse.  Within days of Black Monday, it became evident that margin accounts and solvency issues related to operating capital, large scale risks and continued fear that the markets may continue to collapse presented a very real problem for the US and for the world.  Have we reentered another Black Monday type of setup across the global markets?

As new economic data continues to suggest the global markets are economically contracting and stagnating, the US Federal Reserve has started buying assets again while the foreign central banks continue to push negative interest rates while attempting to spark any signs of real economic growth.  The US stock market has continued to push higher – almost attempting new all-time highs again just recently.  The US stock market is up nearly 68% over the past 3.5 years since Trump was elected and as of Friday, October 18, 2019, the US stock markets fell nearly 0.75% on economic fears.

In Part II of this article, we’ll explore the potential of another Black Monday type of setup that may be playing out before our very eyes right now in the US stock market.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

I urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Today to Get a Free 1oz Silver Bar with a subscription – Offer Ends This Week!

Chris Vermeulen

TheTechnicalTraders.com

 

Explorer in Canada’s Red Lake District Moves Ahead with Three Projects

By The Gold Report

Source: John Newell for Streetwise Reports   10/18/2019

John Newell of Fieldhouse Capital Management explores the investment opportunities presented by this project generator in a district rich with historic mine strikes.

If the adage in the mining business is “that the best place to find a mine is next to an old mine,” then by extension, the best place to explore for gold is next to a successful exploration play, and GoldON Resources Ltd. (GLD:TSX.V) is a company that we believe deserves a closer look.

Background
In our first Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) article, linked here, we saw a company that checked a lot of the boxes when looking at potentially investing in a gold exploration company. Great historical gold-producing district, where discoveries have been turned into mines for the past century. Great management and geologists. It is also helpful to have tight share structure, with management owning shares so that their goals were aligned with the other shareholders.

When we first started following Great Bear Resources, like most juniors it was hard to raise money. The shares bounced around with the volatility that comes with sector, the company did not have any big investors championing the story, and while we researched the story, we had no idea that everything was about to change.

The now-famous drill results came out, and the famed Red Lake investor and former Goldcorp chairman and founder stepped in and bought ~10%, coupled and with continuous better results, and the rest as they say is history. Great Bear’s share price went from $0.50 to over $9/per share in less than 18 months.

So, we are motivated to look for other companies that could also mirror that kind of success, while recognizing that mineral exploration is a high-risk business, and replicating Great Bears success is a mighty tall order. However, it is also true that it has been success in the discovery phase of a mining project’s lifespan that has created the greatest shareholder wealth in the resource sector. We look for those companies for a part of our portfolio on mining companies, knowing the odds are 1 in 1,000. Our research led us to GoldON Resources Ltd., and we decided to have a closer look.

Who is GoldON?
GoldON Resources Ltd. is a mineral exploration company with a project generator business model. GoldON, as the name reflects, is a company focused on exploration in Ontario, Canada. It is focused on discovery-stage properties with a goal of adding value by defining, or redefining, using new exploration methods and exploration opportunities, and then sourcing a well-financed partner to advance the project by way of option or joint venture participation.

The company has, and continues to, seek and acquire properties by staking or [acquiring an] option in mining-friendly jurisdictions, and is geographically focused on some of the prolific gold mining districts of Ontario, Canada, notably the famous and prolific Red Lake camp.

The Red Lake Camp

Excerpt from the Red Lake Regional Heritage Foundation Web page:
The Legend of Red Lake
According to Ojibway legend, thousands of years ago two warriors of the Chippeway nation came upon a very large moose beside a lake. They believed the beast was Matchee Manitou (evil spirit) and tried to kill it. Wounded, the animal escaped by diving deep into the lake. A large pool of blood colored the water red, and the hunters named the body of water Misque Sakigon, or Color of Blood Lake. Over the years it became known as Red Lake.

While Canada has had many prolific gold- and silver-producing areas discovered over the past 100 years, and many famous gold rushes, few rival the prolific Red Lake District, where some of the richest grades of gold have been found. Gold was first discovered in 1925, and as the word got out it quickly grew. Since 1925 there have been 28 operating mines producing in excess of 25 million ounces with an average grade of 0.5 ounce of gold per ton. Much of the gold deposits are discovered in a greenstone formation that has come from structurally controlled vein-type gold deposits near regional mafic volcanic sediment contacts. Gold will generally occur where the greenstone rocks come together with the sedimentary rocks. At that point, the rocks have been stretched and folded, creating the cracks and openings that can fill with gold.

The Company
GoldON is led by Michael Romanik, who is CEO, president and a director, and has assembled a great management team, geological team, drilling/exploration crew and advisory board. Mr. Romanik has demonstrated the ability to raise capital with strategic investors and leading industry executives, while using the funds on careful, well-researched drill targets, on ground that offers great discovery potential.

GoldON has three main properties we will cover in this market awareness report, Slate Falls, West Madsen and Bruce Lake. The other properties are likely going to wait until next year to see any meaningful work done.

Share Structure
The company has a good share structure, with a focus on discovery-stage projects, with over $1 million in the treasury to complete the upcoming drilling at Slate Falls and the next phase of exploration at West Madsen.

  • Issued and outstanding: 15,152,282
  • Warrants: 3,625,350
  • Stock options: 1,561,150
  • Fully diluted: 20,338,782
  • Insider holdings: ~24%
  • Insiders & close associates: ~50%
  • Goldcorp. founder and head of McEwen Mining (MUX) (Rob McEwen): ~5%

Slate Falls
GoldON is currently preparing to drill its flagship, 100%-owned Slate Falls property. The 5,687-hectare Slate Falls property is in the Meen-Dempster Greenstone Belt between the Red Lake and Pickle Lake Gold Camps (see location map below).

The Fry Lake-Bamaji Lake Deformation Zone passes through the property, representing first- and second-order crustal-scale structures that cut stratigraphy that is similar to and contemporaneous with the stratigraphy that hosts the past-producing Golden Patricia gold mine, which produced 620,000 ounces of gold at 15 g/t Au between 1988–1997 and lies 30 kilometers to the northeast. Also, the almost 5 million-ounce Springpole project being run by First Mining Gold Corp. (FF:TSX) (news release on Springpole) is ~30 kilometers to the northwest, so we know we are in gold country.

This news release, dated June 25, 2019, strengthens our belief that GoldON is in the right rock type. News release: Selected Rock Grab Samples Assay up to 331.76 g/t Au and 3,025 g/t Ag at GoldON’s Slate Falls Project.

Just as being in the right neighborhood for finding gold gives confidence. So too does good prospecting and fieldwork, sampling, reconnaissance mapping—all are vital to identify quality drill targets while saving time and money, before the drills start turning. Fieldwork in 2019 returned the highest-grade surface sample results to date and turned up priority targets, which include the Trail Zone, where high-grade values up to 861 g/t Au in drill core and 3,025 g/t Ag in surface samples will be included in the current drill program getting underway.

It is also worth mentioning that Mr. Bob Singh did the detailed review and compilation of all historical exploration data on the Slate Falls property, and was the Qualified Person (QP) on the project in 2017. Then his lead role on Great Bear’s Dixie Lake Project required his full attention, and the Slate Falls QP role was handed over to Mr. Mike Kilbourne, P.Geo.

Michael Romanik, president of GoldON states it best:

“We are early in the project life cycle at Slate Falls and the results from our 2019 prospecting and sampling program will be instrumental in guiding our drill plan. We have clearly defined our initial high-grade targets and look forward to commencing our maiden drill program on the Property.”

West Madsen

Sometimes you’re smart or lucky in mining, and whichever it is in GoldON’s case, we’ll take it. With Great Bear Resources very busy with their new, ever-expanding discovery at their 100%-owned Dixie Lake Project, only 20 kilometers away, Great Bear optioned off its other 100%-owned, royalty-free West Madsen properties to GoldON, whereby GoldON has the option to earn a 100% interest in Great Bear’s West Madsen gold property (see GoldON’s news release from May 28.)

The West Madsen property is on strike to the historical, past-producing Madsen and Starratt Olsen mine, which is directly contiguous to Pure Gold Mining Inc.’s (PGM:TSX.V; PUR:LSE)‘s Madsen property, which is Canada’s highest-grade development gold project, currently being developed. Pure Gold is fully funded, with planned production for late 2020.

West Madsen is composed of two contiguous claim blocks (Blocks A and B; see slide below), each roughly 6 kilometers (6 km) by 3 km in size, for a total area of 3,860 hectares. GoldON has hired the Red Lake specialists Rimini Exploration as project manager for West Madison. Their work is so respected at the now-famous Dixie Lake Project of Great Bear that the company had the Bear-Rimini zone named after them.

Also, the multitalented VP Exploration, Mr. Bob Singh, from Great Bear Resources, will act as a technical advisor, along with Mr. Perry English, often referred to as a one-man prospect generator in the Red Lake District, who will join as a strategic advisor.

Pure Gold’s Madsen Project includes the Madsen deposit and the Fork, Russett South, and Wedge deposits. Pure Gold announced bonanza-grade gold results from the Wedge deposit on July 30, 2019, and the expansion of their 2019 exploration drilling program (from 12,000 to 20,000 meters) on October 9, with the aim of making new discoveries and continuing to grow the resource base.

This high-grade discovery is less than two kilometers away from GoldON’s Madsen’s Block A, with the best grades at the southwest end of the strike. Pure Gold’s exciting discovery and continued drilling success appears to be getting closer to GoldON’s property boundary.

More evidence that a major crustal break between Balmer Assemblage rocks and Confederation Assemblage rocks is interpreted to trend from the Pure Gold land package onto the West Madsen property.

Within the Red Lake Greenstone Belt, these major crustal breaks are associated with extensive gold mineralization, hosted both in the Balmer Assemblage and within the felsic to intermediate volcanic rocks adjacent to the interpreted fault zones, as recently identified by GoldON’s option partner, Great Bear Resources at their Dixie Project (see Great Bear’s press release from May 28, 2019).

GoldON’s phase I fieldwork on the West Madsen property in summer 2019 included a property-scale, grassroots prospecting and a 3D spatiotemporal gas hydrocarbon (SGH) soil survey. SGH is an extractive procedure that releases organic compounds absorbed on B-horizon soil samples. The SGH procedure provides a highly focused and sensitive method that measures compounds in the C5–C17 range down to the low parts-per-trillion (ppt), which has been effectively used at Great Bear’s Dixie Lake discovery. A drilling program to follow up on the gold zones identified from the SGH surveys is planned after further prospecting and mapping work.

As Pure Gold’s new discovery, and continued and expanded drilling success, continue to find more high-grade gold, it seems likely that the rich gold-bearing zone could continue across the property line to include both the historic and current work that has returned gold at West Madsen. GoldON appears to be in the right rocks and getting the right evidence, which could lead to a significant discovery at West Madsen.

Bruce Lake
GoldON recently signed an option agreement to acquire a 100% interest in the Bruce Lake property (news release of March 28, 2019). This road-accessible property with hydro lines running through it sits in between Great Bear’s major Dixie Lake discovery and Great Bear’s 3,100-hectare Pakwash property.

GoldON’s Bruce Lake property consists of seven claims covering 2,490 hectares in a structurally active area spatially associated with east-west trending deformation zones and northeast-trending faults. These faults have been central for gold mineralization to occur. This ground is unexplored, with gold anomalies yet to be explored; however, lake sediment results along with MMI (mobile metal ions) is especially well suited for deeply buried mineral deposits. MMI measures metal ions that travel upward from mineralization to unconsolidated surface materials such soil, till, sand and so on. Using careful soil sampling strategies, sophisticated chemical ligands and ultra-sensitive instrumentation, work suggests the property could be a source of gold.

The Technicals
After a sharp run up in the price in early to mid-2019, Goldon has pulled back ~60% from the initial move off the 2018 lows. This could represent a good entry point in the company as it ramps up exploration on at least two significant exploration properties this year and next.

The chart of Great Bear, below, is a reminder that the path to higher is sometimes volatile and ~60% corrections are not uncommon before a move higher.

In Summary
While the company’s exploration efforts are still early days, GoldON has assembled at least three high-priority properties that after preliminary and advanced geological work, are drill ready. GoldON has assembled a technical team with deep experience in the Red Lake area, a tight share structure with much of the shares owned by management, friends and family who believe in these projects. The company can run cost-effective exploration on all their road-accessible projects with a ready, experienced workforce and infrastructure including power and roads nearby.

GoldON has positioned itself in a mining region that has been turning discoveries into mines for a century. Given the recent drop in the share price, this area could be a good time for patient investors, with some risk tolerance, to look at GoldON Resources Ltd.

John Newell is a portfolio manager at Fieldhouse Capital Management. He has 38 years of experience in the investment industry acting as an officer, director, portfolio manager and investment advisor with some of the largest investment firms in Canada. Newell is a specialist in precious metal equities and related commodities and is a registered portfolio manager in Canada (advising representative).

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Disclosures:
1) John Newell: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: GoldON. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures/disclaimer below.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Great Bear Resources. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports (including members of their household) own securities of GoldON, a company mentioned in this article.

Additional Disclosures and Disclaimer from John Newell, Fieldhouse Capital Management

Legal Notice / Disclaimer:

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

John Newell has based this document on information obtained from sources he believes to be reliable, but which has not been independently verified.

John Newell makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of John Newell only and are subject to change without notice. John Newell assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

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Neither the information, nor any opinion expressed constitutes a solicitation for the purchase of an investment program. Any further disclosure or use, distribution, dissemination or copying of this message or any attachment is strictly prohibited; such information, whether derived from Fieldhouse Capital Management or from any oral or written communication by way of opinion, advice, or otherwise with a principal of the company is not warranted in any manner whatsoever, is for the use
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( Companies Mentioned: GLD:TSX.V,
GBR:TSX.V; GTBDF:OTCQX,
PGM:TSX.V; PUR:LSE,
)

COT Report: Speculators cut back on USD, Gold & Silver bets. VIX bearish bets rise

By CountingPips.comReceive our weekly COT Reports by Email


Here are the latest links to our coverage of the Commitment of Traders data changes.

This week in the COT data, currency speculators decreased their US Dollar Index bullish bets for a second straight week following a streak of six straight weekly gains that had pushed USD index bets to 2-year highs.

Japanese yen bets also dropped this week and fell back into overall bearish territory for the first time in eleven weeks. The sentiment for the JPY has turned sour after surging throughout the summer.

Precious metals speculators sharply dropped their Gold bullish positions this week after small gain last week. Gold bets have now fallen in two out of the past three weeks and slid to the lowest level since July 23rd.

Silver speculators were back to shedding their bullish bets this week for the fifth time out of the past six weeks. Silver positions are at the lowest level of the past nine weeks.

Copper speculators reduced their bearish bets this week following three straight weeks of higher bearish positions. The copper speculative position continues to be strongly bearish although off the record high bearish level of September 3rd at a total of -58,841 contracts

VIX speculators added to their bearish positions for the sixth time out of the past seven weeks this week. The VIX spec bearish position is at the most bearish level since the April 30th record high position.

The 10-Year Bond speculators once again cut back on their bearish bets for the sixth straight week and dropped the net position to the least bearish level in ninety-one weeks. Speculators have decreased their bearish bets by a total of 278,175 contracts in the past six weeks.

Lastly, the WTI Crude Oil speculators slightly edged their bullish bets higher this week following four consecutive weekly declines. Despite this week’s small gain, the overall bullish position is under the +400,000 net contract level for a third week.


Speculators shed US Dollar Index bets for 2nd week. Japanese Yen bets fall into bearish level

Large currency speculators decreased their net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. See full article.


WTI Crude Oil Speculators slightly edged their bullish bets higher after 4 down weeks

The large speculator contracts of WTI crude futures totaled a net position of 356,884 contracts, according to the latest data this week. This was a change of 1,799 contracts from the previous weekly total. See full article.


10-Year Note Speculators once again trimmed their bearish bets for a 6th week

Large speculator contracts of the 10-Year Bond futures totaled a net position of -99,692 contracts, according to the latest data this week. This was a change of 22,868 contracts from the previous weekly total. See full article.


Gold Speculators sharply dropped their bullish bets for 2nd time in 3 weeks

Large precious metals speculator contracts of the Gold futures totaled a net position of 253,027 contracts, according to the latest data this week. This was a change of -22,536 contracts from the previous weekly total. See full article.


VIX Speculators pushed bearish bets higher for 6th time in past 7 weeks

Large stock market volatility speculator contracts of the VIX futures totaled a net position of -155,980 contracts, according to the latest data this week. This was a change of -17,300 contracts from the previous weekly total. See full article.


Silver Speculators cut back on their bullish bets for 5th time in 6 weeks

Large precious metals speculator contracts of the silver futures totaled a net position of 43,989 contracts, according to the latest data this week. This was a change of -6,765 contracts from the previous weekly total. See full article.


Copper Speculators edged their bearish bets lower for 1st time in 4 weeks

Metals speculator contracts of the copper futures totaled a net position of -47,255 contracts, according to the latest data this week. This was a change of 838 contracts from the previous weekly total. See full article.


Article By CountingPips.comReceive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

Pan Orient Energy: The New Orient Express

The Energy Report

Source: Chen Lin for Streetwise Reports   10/16/2019

Veteran investor and newsletter writer Chen Lin explains the upside he sees with this energy company.

In late 2008, when the world was in the middle of the great recession, a young energy company was looking to take advantage of the circumstances by bargain hunting. Led by CEO Jeff Chisholm, a well-known goldbug, Pan Orient Energy Corp. (POE:TSX.V) has always maintained a strong balance sheet. When the market crashed and everyone, including the largest energy companies in the world, was looking for cover, POE was able to take advantage of it. One of POE’s key acquisitions was East Jabung PSC. POE was the sole bidder in that bid round. (Where were Exxon, Repsol and PetroChina?)

In the years prior to the tender of the East Jabung PSC, the surface area covering the majority of the Anggun prospect was re-classified from restricted forest (where only seismic is allowed) to production forest (where both seismic and drilling are allowed). Jabung PSC is in the region of the most prolific oil and gas fields in South Sumatra, Indonesia. It hosts the largest gas discovery in the past 18 years in Indonesia. That news was announced earlier this year by Repsol. POE had acquired the acreage next to it for a song!

As the sole bidder, POE became 100% owner of the concession. This was a huge concession and POE decided to partner with Talisman (now part of Repsol) for down payment, part of Repsol exploration concessions and to carry the cost of the first two wells. Repsol drilled one well at the edge of the structure two years ago and had a very promising find of oil and gas. Now they are moving the rig to the center of the structure. We expect the rig to be spud in late October and TD in 30–40 days.

Repsol had high hopes for the East Jabung target. A permanent road was constructed so they can use it in the long run to drill more wells, should they have a major discovery in the area. The permanent road probably delayed the drilling for about one year and add a lot to the cost. However, it will be a good move if they hit the next high impact well.

Now the long wait is over and the stage is set for the next high impact well, Anggun-1X, in East Jabung. We are hoping it will be one of the largest discoveries in Indonesia and potentially one of the largest onshore conventional discoveries in the world. We should have the results in late Q4. If it is successful, Repsol will pay for this well. Repsol will continue to drill out the area in 2020 and beyond and POE will need to fund 49% of the cost. With POE’s current strong balance sheet and a strong cash flow from Thailand, POE should be able to fund the continuing exploration without the need of raising money from the market. In the past decades, very seldom we see junior companies involved in the major discoveries in the world. Usually majors, well connected and well capitalized companies, took all the best prospects. We have a unique opportunity to participate in this potentially huge discovery without any major dilution. After years of waiting, the key drilling is about to happen.

In addition, POE already has made a new discovery in Thailand in the past year. So far almost every well they drilled in the past year was a hit. The drilling cost is low, less than $1 million. The payback time is 1–2 months. Oil is trucked to a nearby refinery, which is eager to take domestic oil as Thailand is an oil importer. Cost is below $10 and free cash flow is strong. POE used some of the cash generated to buy back the shares from the open market.

As you can see, POE experienced a dramatic rise of oil production and reserves lately. This is only the beginning. The reserve report at the end of 2018 shows it is primary composed of DD1, bright green on the map below. POE already hit DD4 dark green, AA south and AA successfully. They are planning to explore more AA, AA north and BB high-impact targets in the next two months. You can see clearly that upon successes of 2019 as well as 2020 exploration, POE can easily expand their oil reserve by many-fold and its net asset value can be worth many more times than its current share price. No wonder insiders have been busy buying shares in the past years.

In addition, POE has about 50c cash per share as of last quarter, no debt and strong free cash flow. It can potentially own 49% of one of the world’s largest discoveries in the next few months. The time has come for this potentially huge return we have been waiting for for a long time.

My family has accumulated a large position of POE stock in the past years and we are one of the largest POE shareholders, for full disclosure.

Chen Lin is a full time manager of his family assets. He started to write the stock newsletter What Is Chen Buying? What Is Chen Selling? in 2009 he after successfully navigated his family portfolio during the 2008 financial crisis. For more information on Lin, visit his website at chenpicks.com.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Chen Lin: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Pan Orient Energy. My family accumulated a large position of POE stock in the past years and we are one of the largest POE shareholders. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Pan Orient Energy. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Pan Orient Energy, companies mentioned in this article.

( Companies Mentioned: POE:TSX.V,
)

Federal Reserve’s New QE Transfers Wealth; Bill Holter: Credit Seizure

By Money Metals News Service

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up Bill Holter of JSMineset.com joins me for an explosive conversation on why he is convinced there will eventually be a failure to deliver in the futures markets which will trigger a run on gold and silver… and if that happens, inventory would completely dry up and become unavailable. Holter also describes the scary amount of credit that exists in all facets of the economy and the credit crisis that could ensue due to a monetary hiccup. So be sure to stick around for my conversation with Bill Holter, coming up after this week’s market update.

Precious metals are catching some mild buying interest this week as the U.S. dollar slumps. On Thursday, the Dollar Index fell to a two-month low.

Global equity markets didn’t seem bothered. They are posting gains this week, which is limiting the appeal of gold and other safe-haven assets.

Gold prices currently come in at $1,492 per ounce, up a fraction of a percent since last Friday’s close. Silver, meanwhile, is posting a slight 0.2% decline on the week to trade at $17.60 an ounce. Silver prices have ranged around the $17.60 level for the past few weeks. A heavy commercial short position in the futures market appears to be keeping a lid on rally attempts for the time being.

Turning to platinum, prices are down 1.1% this week and currently check in at $889. And finally, high-flying palladium is up 2.9% on the week to trade at a lofty $1,756 per ounce.

Metals investors are positioning themselves for rapidly developing political and geopolitical events, as well as a rapidly expanding Federal Reserve balance sheet. What started out as a limited intervention to provide temporary liquidity to overnight lending markets has morphed into a massive $60-billion-per-month Treasury-buying campaign. By some measures, it’s even bigger than the last Quantitative Easing program.

The Fed has yet to fully explain why this is all necessary given the lack of an immediate crisis in the real economy. Last week, Fed chair Jerome Powell took great pains to insist that their expanded repo market operations are “not QE” – only to announce a massive new Treasury bill buying program on Friday.

Is there some emergency going on behind the scenes that Fed officials don’t want us to know about? It could well be that they are engineering another bailout of “too big to fail” banks on a scale they aren’t admitting.

Naturally, they don’t want to spook the markets or trigger a public backlash against an unpopular bailout program. But Powell’s QE denials are only adding to growing suspicions that the Fed is trying to fix something much bigger than a plumbing issue in the repo market.

More than a decade after the Fed initiated secret bailouts of U.S. and foreign financial institutions, we still don’t know where all that money went. Or on whose authority winners and losers were determined.

All we do know is that since 2008, trillions of dollars have been pumped directly into the banking system. And the Fed is showing no signs of stopping.

If the Federal Reserve ever became truly transparent, the public would likely be shocked at the cronyism, corruption, and outright parasitism involved in the banks’ relationship to the Fed. It would be a far bigger scandal than the corrupt crony capitalism practiced by Hunter Biden, that’s for sure.

Unfortunately, the Fed has its own lobbying arm in Congress that always finds a way to shoot down the “Audit the Fed” bill in the Senate even though it has previously passed with broad bipartisan support in the House.

President Donald Trump has called for greater transparency at the Fed and repeatedly jabbed Chairman Powell. This week, the President clashed with the foreign policy establishment over his controversial decision to withdraw military forces in northern Syria. Trump called out the “military-industrial complex” for pushing never-ending wars and occupations overseas.

Trump’s words echoed those of Dwight Eisenhower. In his farewell address, President Eisenhower, himself a military man, warned Americans of the dangers of a self-serving military-industrial complex.

President Eisenhower: In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination in danger our liberties or democratic processes.

A similar warning could have been issued about the dangers of a self-serving and wholly unaccountable central banking cartel. The Fed has strayed far beyond its dual mission of pursuing stable prices and full employment. It has effectuated a massive wealth transfer into the hands of those who are first in line to receive its monetary emissions. It has artificially extended and amplified bull markets on Wall Street while diminishing the purchasing power of cash savings.

There will one day likely be another great wealth transfer – from artificially overvalued financial assets to undervalued hard assets such as gold and silver. If the Fed continues to damage its own credibility by saying one thing and doing another – growing its balance sheet QE style while insisting it’s not QE – investors may begin preferring the unassailable credibility of physical precious metals.

Well now, without further delay, let’s get right to this week’s exclusive interview.

Bill Holter

Mike Gleason: It is my privilege now to welcome in Bill Holter of JSMineset and the Holter-Sinclair Collaboration. Since leaving Wall Street more than a decade ago, Bill has made a name for himself as an astute and highly respected market commentator, writer and has teamed up with Jim Sinclair to help others discover the inherent dangers of our debt based economy and how to protect yourself against it.

Bill, it’s great to have you back and I very much appreciate the time today. Welcome.

Bill Holter: Thanks for having me, Mike.

Mike Gleason: Well Bill, let’s talk for a minute about what the Fed has been up to. They announced some intervention in the repo markets late last month. The program was initially sold as something very short term, there was absolutely nothing to worry about. Now that program has been extended through at least January and the Fed is seeing daily demand for short-term loans of $50 to $80 billion. Again, that’s per day. We know lying is part of the job description at the Fed. It sure seems like something serious is going on when banks start charging one another huge interest rates, or stopped doing this short term, fully collateralized lending altogether. Something is definitely rotten, but the markets aren’t really reacting. There isn’t that much talk about it in the financial press. What is your best guess about why the Fed has had to step in there with hundreds of billions of dollars? Are they bailing out Deutsche bank, another bank? What’s happening here?

Bill Holter: Well, we don’t know for sure what bank it is. Basically something has broken in the plumbing system or the background, whatever you want to call it. And the result is banks don’t trust each other. There’s demand from a bank or a group of banks that need capital overnight. The reason banks need capital overnight is because they carry positions, if you want to call it the carry trade. They carry positions overnight. They have to finance it. And what’s happened is from bank to bank, there’s a lack of confidence and banks are balking at lending to each other and there you have the rate going higher.

Mike Gleason: On top of the hundreds of billions being pumped into the repo markets, the Fed just announced another 60 billion per month in treasury notes. They haven’t come up with a clever name for this quote new program yet, but we definitely aren’t supposed to call it QE.

Bill Holter: Right, it’s not QE.

Mike Gleason: We’re told this is also just a routine preventative measure, nothing to see here. Well they can say what they want, but one thing should be clear our markets are hopelessly addicted to Fed stimulus. We’ve definitely learned that over the last several years. Quantitative tightening has failed and the Fed isn’t going to be able to normalize interest rates. The question is how goofy things will get now. They printed a few trillion dollars last time and didn’t get all that much economic growth. What will it be this time, do you think? $10 trillion in bond purchases? Will they finally resort to dropping money from helicopters as Ben Bernanke once suggested? What do you think?

Bill Holter: I have no idea what the number is going to be, but what this basically means is the real economy is not generating enough cashflow to support the financial economy and the Fed by doing QE, by shoving liquidity into the system is trying to make up for the gap that is not being created by the real economy. It shows you, I think the best way to look at it is the financial system is a patient on life support and the central banks, the Fed, the ECB, Bank of Japan, they’re all acting as life support for the financial markets, which without the central banks, the financial markets would basically just, the tents would fold up.

Mike Gleason: Has it surprised you how little response there’s been in the markets in terms of investors showing signs of worry? It’s really quite amazing to us that we haven’t seen this become a bigger story. Did you see it the same way?

Bill Holter: Yeah, I agree wholeheartedly. It’s amazing. I mean the very first day I heard that they had to do overnight repos. It raised eyebrows and then it was day after day and now it’s we’re weeks into it. It tells me something is broken and it’s shocking that nobody cares.

Mike Gleason: Thus far metals markets haven’t responded to the Feds new measures either and the prospects for even more rate cuts. We’re well below the highest put in over the summer. In fact, most of the markets that seem to have met the news of extraordinary measures with a collective shrug, as we just talked about. Stocks have moved a bit higher, 10 year bond yields are actually moving higher as well. The dollar hasn’t done much. What do you make of the market’s response? Talk about metals specifically, you would think that they would maybe be getting a little bit more of a safe haven bid. You almost have to wonder at this point what it will take to rattle investors. Are these markets so tightly controlled now that fundamentals have stopped mattering all together?

Bill Holter: I think that’s right. I think fundamentals they matter less today than at any point in the past. Yes, we should have seen a movement higher in the metals, but rallies have been met with paper. If you look at the big up days, the open interest explodes on up days and that’s not so much from the buy side. That’s the short side meeting the demand with paper as opposed to meeting it with metal.

Mike Gleason: Obviously, the metals investors have been frustrated for a long time. You see this, so you think you’re going to get some kind of a market reaction. You certainly think gold and silver should be getting more of a pop. What does that say to you in terms of the fundamentals? Obviously fundamentals may not have the impact that they once had. Eventually, will they? I mean how does the story end and how does somebody who sees all of these black swans and has so much concern about what’s going on in the financial system and their angling and positioning themselves for all of that risk, how do they benefit in the long run or do they?

Bill Holter: Well, you asked how it ends it. I’m convinced that it ends in a failure to deliver, whether it be out of COMAX or LBMA or wherever. There’s going to be a failure to deliver because there’s more demand than there is global production and the demand for years and years has been met from already mined and hoarded gold that’s leaked into the market as a salve if you will for the price. It seems to me… we’re here in North America, the little guy is burned out. The little guy for really the last year or so in North America has been a seller. There’s not been big demand and that tells me that the average retail person has just thrown up their hands and is surrendering and liquidating… everyone else is making money in the market, so I might as well put my money in the market, which is a huge mistake.

Because once the unwind really begins, it’ll be like a light switch. At some point in time I’m convinced that you’re not going to be able to source gold or silver for fiat. Now you’ll be able to trade gold for silver or silver for gold or gold and silver for something real, but I think metal is going to go into hiding and you’re not going to be able to buy it anywhere near current levels and there will be a point in time I think that you won’t be able to buy metals or source metals at all for fiat until the smoke clears.

Mike Gleason: Yeah. That’s one thing we’ve always said in the metals markets. I mean when you really look at the overall participation among the buying public throughout the world, it is such a small percentage and if we just go from say 1% ownership, whatever it is, it’s a very small fraction.

Bill Holter: I think that’s high to begin with. I think 1% is high, I think it’s under 1%.

Mike Gleason: Yeah. If we just see like a doubling of that or a tripling even in a black swan type of scenario, there’s just not that much metal out there, Bill.

Bill Holter: Right. It’s a supply and demand equation and you know, often people say, “Oh, well you can’t go to a gold standard because there’s not enough gold.” Well, that’s true at current prices, but you markup gold to $10,000, $25,000, pick a number at some number there’s enough gold and that’s where we’re headed is to wherever that clearing number is.

Mike Gleason: Certainly presidential politics are going to be a big story in the year ahead. We’ve got quite the slate of socialists running for the Democratic nomination. In normal times, you would think that the nomination of someone like Elizabeth Warren would mean limit down in the stock markets the next day, but these are hardly normal times. The only thing we can be pretty sure about is that the battle to defeat Trump is going to shift into even higher gear, if that’s even possible. Talk about some of the implications you see for the markets based on the political theater over the next 12 months?

Bill Holter: Well, obviously the next 12 months is going to be a circus. From the left, it’s nothing but impeachment and I actually watched about 10 minutes of the debate last night. It was the first one I watched and I just turned it off. I mean, you’re talking about blatant socialism, communism, whatever you want to call it, which is an abject failure. If one of the 12 that… well, let’s leave Tulsi Gabbard out of it… but if one of the remaining 11 does become president, it’s pretty much over because you’re looking at income redistribution as opposed to capital formation. We’ll go through a phase of total capital destruction as opposed to what capitalism is which is capital formation.

Mike Gleason: Do you see any real possibility that that could happen? Obviously these are fringe candidates for the most part. Usually when you get to the general election, they’ll come back to center and try to get those moderate voters to swing their way. But is it really just going to come down to the economy? People will vote with their wallets. If the economy is going to remain in a kind of similar spot that it’s in now, 12 months from now, then Trump’s probably fine, but if we go off the proverbial cliff, then he’s in trouble. Is that kind of how you’re viewing it?

Bill Holter: When President Trump back in 2017 started taking ownership of the stock market, I wrote and had done interviews saying that that was very, very dangerous. He should not take ownership of the stock market simply because within the four years I didn’t see even a possibility that it could be held together. So here we are, not quite three years, we’ve got another year to go. Yeah, I do see that as a danger. I’m also on record as saying that none of the current candidates from the left will be the eventual nominee. I think someone else is going to come in. If I had to guess, it might be Michelle Obama. That’s just a wild dart right there, but I don’t think that any of the current candidates will be the nominee.

Mike Gleason: Yeah, interesting theory. I’ve seen that elsewhere. Michael Bloomberg I know is as a name that some people have thrown around too. But yeah, it’ll be a very interesting theater for sure.

Well, Bill, before we go, I want to ask you to comment on any of the other stories you think investors need to be watching here and then also comment if you would, on whether any of the recent market reaction to everything we’ve just been talking about here today, perhaps has made you rethink your belief about the importance of owning precious metals or has it given you more conviction about that? Give us your thoughts about any or all of that as we wrap up today, if you would.

Bill Holter: Market action, well, you’re always rethinking. I mean you come to a conclusion and then you try to break your conclusion. You come at it from a hundred different angles and I’ve done that over years and years and mathematically, pure logic says that if they’re printing paper for free, it doesn’t have any value. And if they’re digging gold and silver up out of the ground and it takes capital, labor and equipment to do that, it has value. My premise for years now has been this is a credit problem. It’s a credit bubble that has been created over, well literally over my lifetime since 1960 say. The world runs on credit and I actually started writing a short article, What if Everyone’s Credit is Ruined. And that’s what I think is going to happen.

I think you’re going to see a credit event where credit basically ceases because you have distrust from counterparty to counterparty and you get a disruption in credit and then our everyday life is disrupted. I’ve said this probably, gosh, I don’t know, 50 or a hundred times in interviews and articles that if there’s an interruption in credit, you’re going to go to Walmart and find that if it is open, there’s nothing on the shelves because there’s not little elves in the back room that make loaves of bread or shoes or whatever. For a loaf of bread, there’s like seven or eight uses of credit from the wheat field to the shelf. And if any of those instances of credit get shut off, the loaf of bread doesn’t make it to the store. So, I think that’s the most significant thing that people just don’t think about it because your everyday life, “Oh, well I need this, or I need that. I’ll go down to my store or go online and order it, whatever.” But shipping, trucking, distribution, all of that, will stop with a credit implosion and that’s where mathematically we’re headed.

Mike Gleason: Yeah. And at the end of the day, if you look at precious metals, it is like a form of insurance more so than it is an investment per se.

Bill Holter: Well, they’re not credit, gold and silver are no one’s liability. They’re not a promise. Everything else is a promise. Gold and silver are merely proof that capital, labor and equipment have already been expended, so they’re pure assets. They’re pure money.

Mike Gleason: Yeah, that’s a great way of summarizing that, very, very well stated. Well Bill thanks so much for your time, enjoyed visiting with you and I certainly hope we can do it again before much longer, great insights as usual from you and we appreciate the time. Thanks for coming on and all the best to you.

Bill Holter: Appreciate it. Thanks Mike.

Mike Gleason: Well, that will do it for this week. Thanks again to Bill Holter. The site is JSmineset.com, be sure to check out all the great commentary that Bill and Jim put out there on a regular basis. Again, JSmineset.com.

And check back next Friday for our next Weekly Market Wrap Podcast. Until then, this has been Mike Gleason with Money Metals Exchange. thanks for listening and have a great weekend everybody.

 


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

Treasuries Pause Near Resistance Before The Next Rally

By TheTechnicalTraders.com

Our research team believes the US Treasuries and the US Dollar will continue to strengthen over the next 2 to 6+ weeks as foreign market and emerging market credit and debt concerns outweigh any concerns originating from the US economy or political theater.  Overall, the major global economies will likely continue to see strength related to their currencies and debt instruments simply because the foreign market and emerging markets are dramatically more fragile than the more mature major global economies.

We believe the US Treasuries may surprise investors by rallying from current levels, near price resistance, to levels above $151 on the TLT chart.

Our belief is that further economic concerns related to trade, foreign economic metrics and data and the forward perspective of many emerging and foreign markets will continue to weaken much more dramatically than the US or other major global economies.  Thus, we believe capital will continue to pour into the US and more mature major global economic markets (Canada, Japan, Great Britain, Swiss) as a move to safety just as capital is moving into the precious metals markets.

When fear enters the global markets, capital seeks out the safest and most secure environments for investment.  If the rest of the world’s economies are becoming weaker and more fragile as trade and economic factors continue to hit the news wires, the more mature major economic countries are naturally going to benefit from their more robust and secure economic power and strength.  The flight to safety will result in capital moving away from risk and into the safety of these more mature economies simply because they provide a level of security and risk aversion that can’t be found elsewhere. Make sure to opt-in to our free market trend signals newsletter.

Daily TLT Chart

This Daily TLT chart highlights the resistance level that we believe is current constricting the current price advance from breaking higher.  We believe this resistance channel is causing the TLT price to pause below $147 and will continue to keep prices within this channel until some economic news event or positive US economic news item pushes the price higher.  The US and global markets are waiting for some type of news event before attempting to make another move.  We believe the future news will result in an upside technical breakout and a new rally towards the $152 to $155 level in TLT.

Weekly TLT Chart

This Weekly TLT chart highlights the extended bullish price rally that started back in late October 2018.  This upside price move has already rallied more than 40%, but we don’t believe it is over yet.  Our Fibonacci price modeling system is suggesting $154 to $155 is the next upside price target.  To be a bit more conservative, we’ve targeted the $152 level for skilled traders to work with.  Once price achieves the $152 target level, look to cover any open long trades you may have.

If you are an active trader of gold, gold stocks, bonds, or the SP500 and would like to hear a trading style that reduces the amount of trades you take while making the same or better returns listen to this conversion with Adam Johnson who is an x-Bloomberg anchor, and now active trader.

Understanding how pricing and global market dynamics work throughout the stock market and the global market can be confusing at times.  How can one attempt to understand what will move in a certain direction, why it will move that way and how one can profit from these opportunities and be difficult for many people to grasp.  We do our best to try to help you by highlighting trade setups, explaining our thinking and research, sharing some of the charts with our proprietary trading tools and to help you identify strong opportunities for success.

Bonds are likely to continue to trade in a sideways price range before breaking higher near the end of 2019.  This aligns with our expectations that foreign markets may come under intense economic pressure while the US economy continues to provide safety for investors for the long term.  The support level above 157 is critical going forward.

Daily Price Cycle Predicted Price Trend

While cycle analysis helps us paint a clear picture of what to expect looking forward up to 45 days I still rely on my market trend charts to know when I should be buying or selling positions.

The Technical Traders Concluding Thoughts:

Right now, we believe the markets are waiting for some news events to make their next move.  This is the time to take very measured positions when trading.  This is NOT the time to go “all-in” on some trade.  Be prepared for a spike in volatility and a new price trend to establish within the next 3 to 10 trading days.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

I urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Today to Get a Free 1oz Silver Bar with a subscription – Offer Ends This Week!

Chris Vermeulen

TheTechnicalTraders.com

 

 

 

Weekly SPX & Gold Price Cycle Report

By TheTechnicalTraders.com

Today I want to talk to you about the SP500 because it’s on the verge of making a very significant move. We could experience a 15% rally or a 15% decline and it could be just around the corner.

Let me recap on both the short-term top this month, and then a look at the bigger picture of what happened last October through December and if we are going to see that happen again. There is the possibility we get a massive rally if the market breaks to new highs. The market is loaded and ready for action. Whichever way it breaks will have a strong impact on precious metals and bonds. Make sure to opt-in to our free market trend signals newsletter.

21 Days Then A Breakdown?

Let’s look at the SP500 for the last 6 months in the chart below. If we were to just draw support trendlines across the lows and a resistance trend line across the highs, you can see we still have some room for the SP500 to work itself higher and still be within the pattern.

Do you see the blue line that is on the chart? You will notice it follows price very closely and you’ll notice the purple line on the hard-right edge as well. This purple line is the forecasted projected cycle price that we are anticipating for the SP500 over the next 45 days.

I should note that as the market evolves and moves this price cycle forecast will change, but it gives us a good idea of current cycles in the market and where the price should go next.

Overall, we’re all you’re looking for SP500 to struggle to move higher because it acts as resistance. If resistance holds then it is likely the market breaks down and tests the August or September Low.

S&P 500 October – December Market Crash to Repeat?

Let’s step back and look at last year’s price action. You can see that the cycle analysis is pointing to potentially another market crash down to those December low. If that is the case then it could be the start of something very significant like a new bear market.

So that’s where we’re at in terms of the SP500 and at this point, we’ve got another 21 days or so before the SP500 should start breaking below our white trendline support level.

While cycle analysis helps us paint a clear picture of what to expect looking forward up to 45 days I still rely on my market trend charts to know when I should be buying or selling positions.

Bonds – The Natural Investor Safe Haven

The first safe haven investors flock to when they become scared are bonds. By looking at the chart we can see they should start to find a bottom based on our cycles.  Bond prices are stuck within a large sideways channel and should hold their ground until the SP500 starts collapse. If the SP500 breaks down then we’re going to see bonds move higher and should eventually break out and make new highs.

Gold – The Safest of Safe Havens

The true safe Haven is gold when it comes to a global store of value for all countries and individuals.

Take a look at the price of gold, as you can see it rallied in June and again in August when the cycles bottomed and started an uptrend. Right now the price is in a much larger consolidation (bull flag pattern) which is a positive sign. In fact, this multi-month pause makes gold even more bullish in my opinion. The longer a commodity trades sideway the more powerful the next move will be.

You can see based on our cycles analysis and forecasted price gold still has some potential weakness for a couple of weeks.

Understanding cycles and how to trade with them is much harder than most people think. If you do not understand cycle skew then you will struggle to turn a profit. I have been trading with cycles since 2001 and still, I find them very deceiving at times.

In laymen terms, cycle skew is when a cycle moves against the direction of the underlying asset’s trend. The chart below shows this clearly with the white lines. In short, gold is in an uptrend, and when the cycle moves down against the assets trend price will in most cases trade sideways. Do not try to short cycle tops when the trend is up, no matter how tempting it may be.

The key is to wait for cycles to bottom, then get back into position for the next upward move in the cycle and price.

I had a fantastic chat with Adam Johnson from BullsEyeBrief today and if you are interested in more juicy details on the SP500, Gold, and how I trades be sure to listen to the most recent podcast we did together at the top of his website https://bullseyebrief.com/podcast/

The Technical Traders Thoughts:

In short, the stock market continues to keep the bull market alive, but investors have started to move into gold as a safe haven. The fear of a market downturn is growing which is why gold has rallied and started a new bull market. The money flow into gold is very strong and is warning us that US equities could enter a bear market in the next few months and that possibly something much larger globally could be at play as well.

Gold continues to just hold up well even with the current cycle forecast trending lower. Overall, we’re looking at about 20 days or so and we could see metals and equity prices make some incredible moves.

Keep reading our research because our proprietary tools have been nailing all of these price targets and move many months in advance.  The next bottom in metals should set up when our cycle bottoms – then the next upside leg will begin.  This time Gold should target $1800 and Silver should target $21 to $24.  This will be an incredible move higher if it plays out as we suspect.

I urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Chris Vermeulen

TheTechnicalTraders.com