After a big week last week, and very strong close on Friday, today was a day of digesting the gains with a very modest pullback. We took advantage by adding to a few positions after waiting for the technical indicators on the 30 min bar charts to come down to oversold levels. Late morning we were able to add to a couple positions, things that haven’t yet gotten away from us on the upside, since we hate to chase prices higher. We bought more SILJ LEAP options that expire in Jan. 2023, and some shares in junior explorer Outcrop Gold (OCGSF), which is a stock we made big gains in 2019-2020, now looking like it might have bottomed out with the sector. We don’t just trade the options on SILJ, as we have a large position in the shares alongside the the options we added to today, but while the ATR’s (average true ranges) of most miners right now is low in comparison to the last year or two, along with the implied volatility being subdued relatively speaking, it makes the options contracts more attractive for a buyer.

We also had several limit orders out there, hoping to add to some miners on the intraday pullback, including MXROF, AUMN, IRVRF, and NGD but were not filled. That’s OK, we will remain patient and try again at the next opportunity, now that the half hour bar charts (intraday) have made a “golden cross” to the upside, where the 50 bar moving average has crossed above the 200 bar MA. We are confident the turn is here for the sector, as the 200 bar MA is also now about to turn and start trending higher, so it’s very much time to be invested if one isn’t already!

A few charts to consider…

Friday was not only a huge up day for our accounts as the miners decided to take off higher to end the week, the more significant event is that the day appears to have confirmed we are in a new intermediate cycle for gold, silver and miners. This suggests we should have around 6 months of higher prices, how much gains could be had we cannot know, but it is very much time to be heavily long precious metals miners. I will not be the least surprised if we take out the highs of last August in the GDX and HUI index, for example, and by a wide margin. The setup seems about as perfect as it can get, and we are betting big on this outcome. Stay tuned and see how we do, members can see just how much we made on Friday alone by accessing our daily account screenshots in the tabs above.

Many would be bulls have not yet bought, after being punished the past 12 months they are scared into inaction, or more common is they are buying way too lightly. Opportunities like this don’t come by often, when they do its important to recognize it as soon as possible and get substantially invested. A trade setup like this can change your whole life, so don’t wait if you see what I see, each day one misses that miners jump 10% really cuts into their overall returns. The way to make the big money is to be in big, and early, so as to benefit from compounding, and there are still many miners that are just leaving the gate. Let’s look at some charts, many are just now jumping back above their 200 day MA (sign of a bull), and taking out recent highs confirming we have an intermediate cycle low behind us now. In addition, long term supports on many weekly and monthly charts held up after being tested recently.

I frequently get asked about my allocation to gold miners versus silver miners as I get invested. I am more heavily into silver miners at this time because I think silver has more upside potential and I want to take part. However, I really like the silver miners for another reason, its because they are almost all 50% or more gold miners too! There are very few purely silver miners, so when we buy in SILJ, for example, we have roughly 35-40% exposure to the silver side, and 55-60% gold miners. The point is stocks like PAAS, HL, MAG, AUY and the other large holdings in the SILJ etf will be flying along with gold miners, even if silver takes some time to take off as a lagger. Of course, later in the move we would expect silver to take the lead, and that is why I want to be sure to have my miners taking silver out of the ground as well.

I also get asked about allocation to junior explorers, miners like MGMLF, BKRRF, IRVRF, MXROF, and similar stocks. While I own each already, at this early stage in the resumption of the bull move higher, we would expect the “bigger juniors” and even the big cap miners to move higher first, and with less risk. It doesn’t have to play out like that, but it is what history suggests, and it can get frustrating to watch things like GDX rise in an uptrend when a junior still isn’t yet finding lots of buyers. I think they will almost all go up a lot in this bull move, but I also like to have a good size position in something like SILJ which will definitely rise if the group and gold/silver rise. My point is we might still have time to buy more into the junior explorers, maybe even after taking some decent profits in the bigger miners first. That said, we did just buy IRVRF this week, but my focus remains on SILJ, GDXJ, and their component stocks.

Not a lot of action today, at least in the markets, though plenty in the news such as the crisis in Afghanistan. I will keep the post short and to the point, as there wasn’t even an intraday buy signal in the mining sector until late in the afternoon. We added to our Wallbridge Mining (WLBMF) shares, but that was our only activity today. We will look to add to this position as we are not yet up to a full-risk size, but there is no rush as we are heading into September which is historically the weakest month of the year (for the general markets). It feels like we are in the “quiet before the storm” period, so will keep some powder dry to take advantage of potentially lower prices, though I still think the lows might already be behind us.

Let’s looks at the WEEKLY chart of Wallbridge Mining, one of Eric Sprott’s largest junior explorer holdings the last time I checked his SEDI holdings here. I’ve included the fibonacci retracement levels from the most recent low of the year-long pullback to the all-time high, which strangely enough occurred after the August 2020 high the sector made, when it made a second and higher high. This was an obvious show of strength, and one reason it was on my buy list. I expect Wallbridge to perform among the best once the group turns around.

Wallbridge Mining’s weekly chart shows a nice uptrend, with plenty of upside and new all-time high in Sept.

Trendlines are very subjective in nature, so some might not agree with how I have drawn the uptrend, but that isn’t the most important takeaway from the chart. Prices don’t lie, and they have been in an overall uptrend for a few years now. With this lengthy pullback time-wise, to old resistance levels which should now be support, when would one buy into this stock if they wouldn’t do so now? 🙂

It’s a half hour before the close of trading today, but the day has been more quiet than anything else. In fact, I only made one transaction today, a buy adding to my EQX (Equinox Gold) position. Members received real time alerts, and should access the tabs above to see total position sizes, as well as other pertinent information like unrealized gains and losses. We show the actual account statements here each day after the close of trading, unlike any other site I have visited, so make good use of it!

Let’s looks at EQX. I’m showing the weekly chart below…

With not many trades to report, all I can say is today was a typical day after a big move up in the days prior. We are still looking to add into oversold technical situations, which is when we picked up the extra EQX today, into a late morning pullback. Basically everything we own is pulling back slightly after the surge higher on Monday. That applies to things outside of the mining sector too, like our KWEB etf (Chinese internet giants), so there wasn’t much to do other than wait and watch for the next opportunity. We are loaded up, but still have a good amount of cash to access if something sets up correctly. If not, we will be content to sit with what we already own.

I didn’t have time to write up a recap yesterday, but it was a stellar day for the precious metals and miners. Big day, big reversal, and more importantly than the gains, was the fact the HUI gold miners index closed above the breakdown level on the charts I posted over the last few days, the 247-248 level. This serves as confirmation that it was a “false breakdown”, which usually serve to washout out the last weakened longs before a sustainable bull move higher.

I also mentioned last week that James Flanagan at Gann Global was looking for this to occur, to confirm his analogs suggesting not only have miners bottomed out, but this could very well be lining up to be one of the largest rallies in the sector over the next couple years. At the moment, he is offering a discount to help people get on board for what he feels might be a historic move, so here is a link to watch his most recent video and more on the offer. I am in no way compensated by him or Gann, no affiliation whatsoever, I just appreciate his work. His video is very interesting to say the least, and if I recall correctly he has only issued 4 buy recommendations in the last 25 years with similar potential, so he isn’t shooting at anything that moves, so to speak. He waits patiently for the most optimal setups then acts fast and aggressive, or does nothing at all for long periods of time. My own research and charts confirm what his work suggests, that miners might be embarking on a huge move of several hundred percent over the next few years. All this is in regard to precious metals miners, and I will post a few charts of those indexes and etfs, but even China’s KWEB got into the action in a major way today, up 11%!! We made up over half out unrealized losses just today. There has been too much to cover in this one post, so I will try to post more frequently this week, maybe a couple posts each day until we cover everything happening. It will be more important to do so as we near our next action points, like the next time to add to positions, but for now they are taking off and we don’t like buying into strength in downtrends, which is the case right now. We will wait patiently for a pullback to make additional buys. We are happy to have been adding heavily late last week, turned out to be a fortunate decision.

Let’s review a few charts, first we can see KWEB with a close to ideal MONTHLY setup, note the stochastics not only oversold but now turned and trying to emerge from the zone. Recall that this was a signal we expected to be in for 6-10 months or so.

Now lets go to some miners charts.

SILJ etf WEEKLY chart with Fibonacci levels.

Moving further out, lets take a look at the GDXJ MONTHLY chart where the 50% Fibonacci retracement level has come into play. It’s already been tested and now starting back higher…

This GDXJ chart and the some other miner etfs that look similar are all suggesting huge potential upside over the long haul. It won’t likely be a straight up rocket ride, there will be pullbacks all along the way, but these charts tell us to be long and strong, we will try to hold on tight as the gains could be spectacular!

I will try to make more posts with charts of individual miners each day, to show readers what we are seeing, but it looks good. Even better, many people are now washed out and thoroughly sick of miners, so have no interest in buying ever again, just as they look to have put in a bottom. We are looking to add on dips, when and if they come, but miners are famous for flying once they get started, and not making it easy to wait for confirmation without missing a big part of the move. It’s the best of all worlds for a trader and investor, and it might turn out that the biggest risk is selling out too early!

Long term charts have more significance because they not only show more history but have wider ranges and more contact points for items such as trendlines. Here we see the HUI MONTHLY chart with fibonacci retracements connecting the bear market low in beginning of 2016 to the bull market high in August 2020, with the all-important 50% retracement coming in at the 237-238 area, and 238 was tested just today, Friday, August 20, 2021.

And that isn’t all! The horizontal trendline touching the highs supports and resistances over the last 20 years also sits right in that area, about 238 on the HUI. Combine the above with the likelihood that as the month ends we will see the stochastics reach oversold (if we close here or lower), all suggest the is an ideal area for the index to find support, and perhaps mount it’s next long term bull trend higher. Something to think about this weekend! 🙂

If I had to rely on just a single chart to trade the bull market in precious metals miners, this would be it!

Just a brief update while I am not busy doing any buying today, to report on a very active day yesterday. We were out buying several miners, SILJ etf, MUX (McEwen Mining) and MGMLF (Maple Gold). We out more money to work yesterday than any other day in the last few months, being the miners were getting smacked down again and I am suspecting we have a false breakdown below horizontal support in just about everything miner related except GDX, which got within pennies of a new low. The plan is to add more if we get further weakness, or if the HUI Gold Bugs Index breaks above 248, so for now all there is to do is wait patiently.

I won’t chase strength while miners are mired in a down trend, either we buy into weakness, or we buy the breakout I mentioned. There isn’t much new to comment on as we wait for miners to find a bottom and turn higher, but I will leave you with a WEEKLY GDXJ chart, showing the 200 WEEK MA is now very close by. I still expect a bounce sooner rather than later, as more and more areas of potential support are coming into focus. Here is the chart…

Let’s see what next week brings!

Since didn’t write a recap yesterday after the close, and since I have made a few trades this morning, I wanted to put up a quick post explaining what I’m doing. I added to both SILJ etf and MUX (McEwen Mining) this morning as the beating continues. I waited until stochastics on the half-hour bar chart got oversold intraday before making my buys. I won’t lie, this is a VERY trying time for precious metals miners bulls. All we can do is maintain focus and keep errors to a minimum. It’s not all bad, for example we were fortunate with our sales of NOVRF, which announced a secondary offering and was halted all day yesterday, not opening until this morning and down 15%!

Let’s take a quick look at the longer term SILJ charts, since we have a large position in it, and we added again today. Let’s start with the WEEKLY chart…

Now let’s take a peek at the MONTHLY chart…

I haven’t been very active the last few days in light of the breakdown, but today we have now broken below James Flanagan’s trigger level at around 247 on the HUI Gold bugs index. We don’t know where the will stop and reverse, but I want to add in this zone and lower if we go there. As I type the HUI is down below 243 already, so we are getting there. Stay tuned!

Another down day for the miners, as well as most stocks for this Monday. There was big news in the final US withdrawal from Afghanistan, and the Taliban seizing control of the entire country in less than 9 hours. Twenty years, thousands of lives lost, and trillions wasted for the American taxpayer finally comes to an end, and yet gold can only gain $10, not a very good sign for shareholders in miners thus far.

I didn’t do any buying today, instead I did cash out of NOVRF (Nova Royalty) and UROY (Uranium Royalty) to use the funds in other areas where I think there is more potential. Typically I wouldn’t sell early like this, only exiting on signals to leave a trade, so let me explain. The CRB index (Commodities Research Board Index) is extended along with with the stock market on the upside, and is looking more vulnerable to a correction near term, which also meshes well with my thought gold, silver and miners might get one more last flush lower. I want to get as heavily invested into miners as possible, into this potential false breakdown. We got good prices on our sales today, cashing out near the day’s high after waiting for the 30 minute bar chart to get extended intraday on the upside.

I won’t deceive readers, this has been a very difficult time to hold positions. I hope you appreciate the honesty and admissions of losses enough to stay around and see the gains that will be made overall. While it’s hard to hold through corrections, we have rules in place to make it easier to do so. I will revisit the stocks are groups (copper and uranium) that we sold today, but likely after the CRB index has a solid correction. The stock market also got weak today, so the correction might not be far off, especially considering where we stand seasonally, about to head into September which is historically the weakest month of the year for stocks. We might also get stopped out of KWEB, but I have decided to give it just a little more room since everything I stop out of lately bounces big the next few days!

I don’t need to post any charts today, instead I need to manage my psychology and emotions so as to stay balanced and ready to strike as the next opportunity presents. It could take awhile, but I am certain that miners are closer to the bottom than the top, and closer than most investors think. We are still very much in the game, just suffering temporarily. If somebody doesn’t admit to having times like this, they aren’t telling you the truth. Stick with me to see how it all ends up!

One last note, the intraday stochastics finished near the high of the day, meaning tomorrow morning near the open there won’t be a trade setup in the miners. It will be late morning at the soonest, maybe even the afternoon before we get a buy setup. I’m happy to sit on the cash as long as needed, while we wait for the expected final flush.

While the GLD etf closed up 1% on the week, the GDX miners etf closed down 1% again. I continue to think we are close to a turn higher in miners that could usher in a very significant rally, and Friday might prove to be the start as miners managed to close strong. If members caught my last post mentioning James Flanagan’s analysis at Gann Global, they know the next big rally could be a multi-year, several hundred percent gain. He uses the HUI index (Gold Bugs Index) for analysis and believes the support around 247 could prove very important, a flush lower would be a washout, clearing out stops and setting the stage for the next bull. He has been quite accurate in the past, so I don’t take his projections lightly, it would be great to experience this rally, but also he thinks the HUI goes lower first, breaks below the 247 level in a panic style collapse that gets bought up heavily by the professionals. I’m not wild about riding miners lower first, but at this stage there is more risk in missing the upside bc jumping out, only to try jumping back in at the exact correct moment. I will stick with positions and let our stops decide if we stay in the position or not. Even if we are stopped out, we will look to get back involved on a rise BACK ABOVE that 247 level on the HUI index. Here is the MONTHLY HUI chart with the horizontal trendline at 247. To be exact, the HUI did break below the old lows, but only by about 30 cents, and we would be hoping for a more obvious break to really scare longs out of positions.

The GDX etf will confirm a cycle low with a close abo e $32.87, and closed only a nickel below that on Friday. My hunch is that it’s quite likely, note the stochastics just beginning to exit the oversold zone with force.

So the situation is starting to improve for our miners, now is NOT the time to sell, in my opinion. However, when we hit stop levels, we will exit as our discipline requires. It can hurt at times, for example our recent stop out of FreeGold Ventures (FVL.TO) occurred, only to see the stock rebound 7% on Friday! We are getting close enough to the bottom that we prefer not to be stopped out of any more shares, we want to own as much as possible for the impending rally. Let’s see what the new week brings.