It appears the bull market in precious metals and their miners is back on track, after a short correction of a few weeks, in which I did add to positions, albeit lightly as I’m already very heavily invested. SILJ in particular is very close to it’s bull market highs, and even GDX is not too far away from breaking out again.

Today and yesterday were notable in that silver was up 5% yesterday, then after opening lower by 1.5%, closed the today about unchanged. Miners had similar action, though not as pronounced. This is typical bull market behavior, bucking people off after sprinting higher, only to finish strongly again. I like where I sit, and continue to press the long side, realizing it will get more volatile as the bull matures. I am keeping an eye out for my technicals to flash a sell signal and when they do, I will sell with no questions asked. There are great fundamental arguments to stay in the trade, like QE4 around the bend, repo markets freezing up last week needing Fed bailout, even the stock market seems to be finally weakening, which should help gold and silver miners. Every time the media whispers about a trade deal, the stock market bounced, until the last few days where I have noticed good news is being ignored. In fact, today was the first weak day (-1.3% on the QQQ’s) that closed near the lows in many weeks, and during the weakest time of year historically.

Also of note, Bitcoin got smacked for a 15% loss. MJ is the marijuana etf, it continues to break into new yearly lows, dropping another 4.5% today, and even oil can’t hold that war premium it gained from the Saudi oil refiner attack, it lost another 3% today and the OIH oil services etf is not far from making new multi year lows again. In short, metals and miners were the only green (UP) group today, and that despite a very weak start, they remain the only game in town, unless somebody wants to buy a negative yielding bond, which I do not! See the charts below…

To sum up, my biggest concern right now is that my signals get me out of this mining trade too soon, because everything else is firing on all cylinders and they clearly want to go higher. I’ve learned to ignore the noise and day to day news items as far as investing, but I don’t ever ignore my signals. I will keep you posted when I make any changes, or have something else to share.

The 50 day MA for SLV is at $15.92 today, about 60 cents away from the current price. At typical sharp pullback, like the one that occurred in May 2016 (in the middle or a rip-roaring rally in metals and miners), saw SLV go 11.7% lower before it turned up again. In today’s prices, that same pullback would put SLV at around $16.20, so only 30 cents away, and I would be fine buying there. It’s important to know that after the correction of almost 12%, the next month of June 2016, SLV rallied 17%, dna gained again the month after, bringing the total gain to 27% after the correction, well worth trying to catch. The past is no guarantee, but nothing in trading and investing is truly guaranteed, it´s all just making wise bets based on probabilities.

I don’t know when or from where my miners will turn higher again, but I am confident that they will.

Just a day later, and everything that was bouncing not only closed on the lows yesterday, but made new lows for the pullback today! I am worried? No. Do I like it? No, except that I took the opportunity to add a little to my positions this morning, and will put in larger orders to buy if GDX gets down to the $26.20 area. That seems as good a place as any to start taking shares off the hands of capitulating bulls. Let’s take a look at the charts…

While these charts suggest there could be more short term weakness, it should be bought, as the miners are clearly in an uptrend. To quote well-known commodities investor Rick Rule, ¨this bull is more typical of bull markets, and we should expect to keep grinding higher¨. It is when we see blowoff type moves that go vertical, that signals we are near the end of the bull. For now, expect two steps forward, one step back, hopefully for several years to come.

Also of note, I see the TLT 20 yr treasury bond etf is down 5.5% this week, a rather large move for bonds. I wonder what the Fed is thinking before their meeting next Wednesday? See the weekly chart below…

Just a quick post as I have been expecting the short term selloff to slow down in miners, then turn higher once again. We are at that point today, as I type this morning gold is up $21 and silver is up 30 cents so far (2%). I was asked how high and fast I think miners will bounce, but my answer is always the same, I have no idea and we will assess it as it comes. It’s possible the rally is so sharp that my monthly charts tell me to sell in several weeks, though that is not a high probability. It’s also possible we get a very weak bounce that rolls over quickly so miners can head lower and seek out an intermediate cycle low, but again this is not very high probability. If we are in the stage of the metals bull market I think we are in, we should get a decent bounce, then some more grinding sideways or a little lower, before grinding higher once again. The important thing is to remain invested until we get our signal to exit, and not leave the table any sooner or later just because emotions are leaning on us. I will keep you posted to changes, but so far all I have done is add some small portions more to our SILJ and MUX, with the hopes we saw lower prices to make more substantial buys. In any case, we have more shares than ever for the next move up, which looks to be starting now.

While I might very well be early buying because the WEEKLY charts are not yet into oversold territory, the daily charts have reached oversold. If one believes this is a true bull market, then the thing to do is buy into these sharp drops, as timing mistakes will be corrected in a bull market, and who knows, we might just get the bottom. My plan is to add bigger positions as the mining etfs get into the oversold zone on the WEEKLY charts. It’s not the signal or the indicator that is the secret to making money, that part is actually quite easy, it’s the discipline to stay focused on the bigger picture (bull market), while making decisions in the short term from what the indicators are telling us to do.

I am aware that many gurus are suggesting miners are headed lower for a month or two, in fact most of them are doing this. I would not buy more on this contrarian thought alone, but it’s good to be invested with the big, long term trend, an especially when it is against the short term consensus. I like where my portfolios stand.

What do you know, just after I finally get around to writing about the blast higher in silver, a day or two later it’s pulled back 8.1%! Bull markets can correct quickly, sharply, and painfully. While I won’t pretend to know if just a two day smashing is enough and that SLV will head higher from here, I can say that the enormous volume suggests we are closer to finding the bottom than not. I might look to add some long term LEAP options on SLV n the next few trading days, maybe as early as Monday. One reason is the volume, but the other is that the last time SLV was in such a strong uptrend was back in 2016, when the metals and miners screamed higher, but even then there was a sharp correction in the month of May 2016. For SLV, it meant a retreat of 11.7% if I recall correctly, and it took place over a couple weeks. If anything similar occurs, we are nearing another chance to add to positions, or take on new ones like the SLV LEAP options, or maybe some more silver miners. As always, the account statements don’t lie, so you will know what trades I decided to make.

One last note, it wasn’t just SLV with monster volume, but speculative trading vehicles like JDST, the short gold miners triple leveraged etf has also had a record breaking volume day yesterday. This fund is used for short term traders, and they are often trading on emotions more than anything else. Again, this is another sign we are closer to the bottom of the correction than not. Perhaps we see another couple days lower next week, but I will be looking to add to my positions into the weakness. If they are not weak, I will wait for a bounce that peters out and pulls back again, before adding. If miners and metals just open higher and run straight out of the gate on Monday (not my prediction), I will not chase prices, instead just keep all my positions are they are. See the chart below…

While it may appear that gold is getting overbought on the monthly chart, I caution against taking profits too early. Yes, stochastics are overbought, and yes, we are up 5 months in a row now, but one cannot have any idea how far a strong bull can run. It is not a prediction, but GLD could double the move it has already made from here, and do it in very short order. That still would not even put it into new all time highs, which becomes more of a certainty with each passing day. The point is to stay in your trade until whatever system you used to get you in, is now telling you to get out. My indicators are extended but that does not mean I exit because they can stay that way for long periods of time, like another 5 months for example of similar action. Again, my emotions tell me to book profits soon, but I will stick with my plan regardless of how I feel, and for now the discipline tells me to stay on the bull.

Do I risk giving some profits back? Yes, but that is part of the game. Play big, or go home, because hopping in and out for dinky gains and losses gets a trader nowhere. We need conviction in everything we do, and that doesn’t mean stay in a trade forever, it means have the conviction to stick to your rules no matter what comes your way.

First, a quick note on the GDX mining etf. Today it closed at a new high, eclipsing the 2016 high, and confirming that 2016 was the beginning of new bull which is now back in full swing. I have lots to cover here because I haven’t been posting much with all the action in the markets staying healthy in the gym, etc. Suffice to say, I haven’t added or sold anything since the last post which asked if that was a pullback to buy. We now know it was. It think putting the next few days or week aside, it is very significant that gold and miners are making new highs and it suggests more is to come on the upside. Let’s get to the charts…

Week after week the precious metals and miners take turns leading the run into new high territory. This is a move not to be missed. I would not be buying into this sharp up movement, but if I were not fully invested and on sizable margin, I would be buying into dips that bring miners into oversold stochastics on the daily charts, or for those more conservative, on the weekly charts, which might occur in the next month or two. Until then, bulls stuck on the sidelines will find it painful to watch this rally work higher. To verify my trading claims, please see the account statements to back it up. I haven’t sold a share yet, but will let readers know when I do.

If some weakness can creep back into the general stock market, I suspect the afterburners will kick in on all the above and anything related. The gale force winds are at gold’s back, so don’t make the error of selling too early!