Saturday Nov. 20 Recap and Links of Interest

It was a week of drawdowns, but nothing serious. The precious metals miners have been on a solid run for several weeks and we are quite happy with our portfolio gains, some of our juniors have been on fire (like DSVSF gaining 107.7% already from its Sept. 27 low), so we should expect a week or two of corrections or sideways action. While it can be uncomfortable to ride through these periods, they occur more often than not in bull markets, and trying to avoid pain by hopping in and out can prove to be very costly, when one finds himself out on the sidelines as the bull decides to re-ignite. I’ve learned to sit tight and rather than sell, I look for areas to add to my positions. One positive outcome during the pullbacks, is that the technicals are allowed to cool off a bit, which give the bull more upside potential when the bull kicks in again. Related to our recent positions, the weekly stochastics were getting into overbought territory, and while now yet flashing a sell signal, they can now “reset”, so that the next push higher has more room to run before the technicals get near the next sell signal. The only concern is that the miners dont pull back too hard or too far, while we wait for the next launch higher. On that end, so far, so good. Miners show strength more often than not, and declines have been muted compared to the positive days of gains. Also, we see may mornings the group will open lower, only to find a low and work higher the rest of the day, thus climbing the proverbial “wall of worry”.

I’m going to post a few links to material I found useful, in fact I just got done watching Michael Oliver’s newest interview with the WallStreetSilver Reddit crew. I really respect his analysis, being he focuses much more on momentum than price, something I do in my own analysis as well. His thought is momentum changes lead price changes, and he has a great track record in the few years I have known about his work. Click here to watch the twenty minute video. Mr. Oliver says both gold and the SIL etf (silver miners) have confirmed bullish momentum breakouts already, and he expects the other etfs to follow.

On that note, let me post a link to a basic FINVIZ filter I use, showing the number of gold miners above BOTH their 50 day and 200 day moving averages. A month or 6 weeks ago there was almost nobody on the list, but that changed quickly, where the filter now shows 17 miners on the list, not bad considering most were down on the week. The week before there were over 25 names on the list, showing us that many miners are back into bull trends, as defined by trading above critical moving averages.

Next, let me post both the daily and weekly charts of the GDX etf. At first glance, one might get concerned about GDX closing below its 200 day MA, but recall that we assume support and resistance will hold, which would imply it wont be too long before GDX is back above the support line. In fact, I would wager GDX is a better buy here than it is a short setup. If it weren’t for near overbought technicals, I would be a buyer here. Actually, I nibbled very lightly on Friday, though it was a small buy until another week or two pass and the stochastics are not near overbought any longer. I will add again if GDX doesn’t immediately bounce and continue its path to overbought.

One final note, I don’t usually pay much attention to government funded institutions or industry mouthpieces and what they have to say, being they are often more propaganda than truth, but I found this report from the Silver Institute quite interesting. I have not yet confirmed if their numbers are correct or not, but if so, I don’t see a better place to be invested as we head into 2022.

The Silver Institute says “With each significant component of silver demand forecast to rise in 2021, global silver demand is set to reach 1.29 billion ounces, the first time it has exceeded 1 billion ounces since 2015.”, and later mention mining supply, “In 2021, mined silver production is expected to rise by 6% year-on-year to 829 Moz.” Lets hope they are correct!