The John Tumazos Mining Conference in New Jersey is an Unmitigated Disaster

By Otto Rock

[biiwii comment: and dat ain’t bearish, but it is funny]

Following on from the photo of Rick Rule presenting to a 3/4 empty hall in London yesterday, here are two shots of the scene at the Tumazos mining gig in New Jersey, June 27 and 28:

Here’s the SRO show put on by Royal Gold (RGLD):

McEwen Mining (MUX), with Rob McEwen him very self:

Continue reading The John Tumazos Mining Conference in New Jersey is an Unmitigated Disaster

Can Silver Rally Without Gold?

By Steve Saville

The article titled “Silver’s Critical Role In Electrification May Fuel Its Rise” contains some interesting comments about the silver market, but with one minor exception the information presented in this article has no bearing on silver’s risk/reward as a speculation or investment. The minor exception is the high (by historical standards) gold/silver ratio, which suggests that the silver price is likely to rise relative to the gold price over the next few years. However, none of the information about silver ‘fundamentals’ presented in the article is relevant to the silver price.

It isn’t relevant for the same reasons that most of the information presented by the ‘experts’ about gold fundamentals is also not relevant: It treats the annual output of the mining sector as if it were the total supply (annual mine production is a small fraction of the total supply) and it confuses flows from one part of the market to another with changes in total demand (every ‘flow’ involves an increase in demand on the part of the buyer and an exactly offsetting decrease in demand on the part of the seller). Furthermore, it isn’t relevant for another reason that can be illuminated by asking the question: within the past 80 years, when was there a major silver rally in the absence of a gold rally?

Continue reading Can Silver Rally Without Gold?

The Thing About Wesdome (WDO.to) and the Gold Price is…

By Otto Rock

…it doesn’t really matter what the US Dollar print for the price of gold is.

Wesdome Gold (WDO.to) runs its books in Canadian Dollars, its workforce is paid in Canadian Dollars, its costs are in Canadian Dollars, its sales are in Canadian Dollars and its share price is in Canadian Dollars. So gold is down in USD terms? Okay, so is the Loonie and look at what happens as a result above. Anyone who thinks WDO dropped under $3.00 today because “gold was down” is looking in the wrong place and falling for the same hypnosis as those who sold, the Kiena numbers are sparkling and even though it’s up sharply from the recent $2 line, there’s tonnes of upside left to run. Don’t say you weren’t warned.

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There is Only One Global Trade War

By Jeffrey Snider

IHS Markit reported last week that its composite Purchasing Managers Index (PMI) rebounded slightly in its first reading for June 2018. In January, the index had managed nearly 59, the highest in a very long time. It was taken as a definitive sign that Europe’s economy was not only booming, that boom was sustainable.

Global liquidations struck at the end of January and now Europe’s economy doesn’t look so steady. In terms of IHS Markit’s PMI, it reached a low in May of 54.1 before picking back up to 54.8 this month. The small rebound was the work of the services sector alone.

European manufacturing may be entering a phase of even greater uncertainty. The manufacturing PMI for Europe came in at 55, the lowest in a year and a half. It’s not whether the number is above 50 or not, nor does it matter how far above, rather what these things tell us is the possible marginal direction as it may be changing (second derivative).

From IHS Markit’s press release:

Continue reading There is Only One Global Trade War

Misconceptions About Volatility Can Lead To Investor Missteps

By Chris Ciovacco

VOLATILITY IS ALWAYS STRESSFUL

With lingering concerns about trade, markets sold off Monday with all three major U.S. indexes posting intraday declines of greater than 1%.  Red screens create stress and doubt.  Therefore, it can be helpful to take a step back and check the big picture.

In August 2016, the S&P 500’s 30, 40, and 50 week moving averages told us to be open to better than expected outcomes from a long-term perspective.  The chart below shows the same moving averages as of 1:15 pm ET Monday.  The NASDAQ’s chart looks even better.

short-takes-06-25-208-spx-a.png

To give us a bearish reference point, the same weekly moving averages over a one-year period in 2007-08 are shown below.

Continue reading Misconceptions About Volatility Can Lead To Investor Missteps

Mark It On Your Calendars

By Kevin Muir

It’s that time again. At the end of this month, the Federal Reserve has over $30 billion of notes maturing. I won’t rehash what this might mean for the market, rather for those not familiar, I ask you to go read Pink Tickets On QT Days.

Let’s do a quick recap at what happened at the previous big QT day – last month end – May 31st, 2018:

Another large QT maturity day, and another down day in spooz.

Let’s update the table with the recent QT maturity days to have a peek at what it looks like now:

Continue reading Mark It On Your Calendars

Moving Averages and Volatility

By Charlie Bilello

The Dow closed below its 200-day moving average this week for the first time in two years.

That ended the longest streak above the 200-day moving average since 1987. At 501 trading days, it was the seventh longest run in history.

Data Source for all charts/tables herein: Bloomberg, YCharts, Stockcharts.com. Note: all data in this post is price data, not total return.

How common is a close below the 200-day moving average and what has it meant for the Dow historically? Let’s take a look…

Continue reading Moving Averages and Volatility

Atlanta Fed: Q2 GDP Forecast Upgraded To 4.7%!

By Anthony B. Sanders

Is The Fed Going To Take Us Higher?

The Atlanta’s Fed’s GDP tracker has upgraded Q2 GDP to … 4.7%!

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.7 percent on June 19, down from 4.8 percent on June 14. The nowcast of second-quarter real GDP growth decreased 0.2 percentage points after the Federal Reserve Board’s industrial production release on Friday, June 15, as a decline in the nowcast of real gross private domestic investment growth from 10.9 percent to 9.2 percent more than offset a slight increase in the nowcast of real consumer spending growth from 3.6 percent to 3.7 percent. After this morning’s new residential construction release from the U.S. Census Bureau, the nowcast of second-quarter real residential investment growth increased from 0.3 percent to 2.9 percent.

atlgdpq218

This likely means that The Fed will want to take us higher … in terms of interest rates.

Fed Chair Jerome Powell: “Boom shaka-laka-laka Boom shaka-laka-laka.”

jpow

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The Money of Metals; More Gold Beyond Repo

By Jeffrey Snider

In all honesty, I do mean to beat this one particular dead horse. In fact, I intend to pulverize it until there is nothing left but the smallest particulate matter. This is everything that is wrong with how things are right now. Either they are willing to put out what could only be legitimately classified as outright propaganda (lies), or they are so thoroughly incompetent they don’t know what else to say.

Those are the only two choices. I’m not sure right now which option would be worse.

Bloomberg (where else?) dutifully outlines (from June 15) the deceased equine in question:

As Treasury Secretary Steven Mnuchin increases issuance to plug swelling budget deficits, the department’s choice of maturities has had some unintended consequences. America’s fiscal stewards have chosen to lean short, ramping up sales of bills and short-dated notes. The approach has created distortions in funding markets that have curbed the Fed’s ability to control its key rate and influenced the debate over the size of its balance sheet.

We are actually being asked to believe that the fate of the entire global economy just as it is about to take off into a recovery now eleven woeful years in the making rests solely on the market outcome of this one thing:

Yeah, no. Either they are lying or they have no other account. It’s an enormous problem whichever way. Both leave the world without any answers, and therefore no solutions.

Continue reading The Money of Metals; More Gold Beyond Repo

June Swoon

By Tim Knight

In spite of all my pissin’ and moanin’ about the lack of direction in the market, if you take a step back, at least we’ve got a little bit of a trend since June 13th. On that day, equities were in many cases nailing lifetime highs, and the S&P was approaching an importance resistance point. On an intraday basis, we have been carving out a fairly clean set of lower lows and lower highs.

Around the 18th and 19th, there was an usually strong surge (was it due to North Korea? I don’t remember, and it doesn’t even matter at this point…) so it seemed that maybe this downtrend would be ruined, but we have “caught down” once more, cementing the firmness of the move.

Two weeks isn’t a lot of time, but sheesh, in a market like this, that practically constitutes a secular market cycle.

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Or better yet, subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas to get even more bang for your buck. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.

Financial Economy is Different Than the Real Economy

By Kevin Muir

First up – sorry for the lack of posts recently. I have some excuses, but they aren’t good ones, so I will spare you the details.

Even though lately I haven’t been following the markets as much as I would like, I can’t help but chirp in regarding market action.

Recently, it has become popular to believe the Fed has hiked into the next recession. I am seeing this idea repeated throughout my ‘fast money’ crowd feed.

Last week, Alex Gurevich tweeted a comment, that on top of being rather witty, also perfectly epitomizes this thinking.

Now I doubt Alex thinks the last rate hike is behind us – after all, the front end of the curve has at least a couple of hikes priced in between now and year-end. Yet, more and more market participants are discounting the Fed moving to neutral much sooner than was previously the case.

Continue reading Financial Economy is Different Than the Real Economy