As investors we try to get involved in good ideas before they become obvious to everybody. Along those lines, we also don’t want to be so early that our capital is tied up for long periods of time unless we are being rewarded for the investment, so we look not only at the idea, but what catalysts are in the near future to make the investment blossom.

Readers know I have been stalking the precious metals and miners bull market for a couple years now, and will continue to do so until the bull has run its course. After a crazy 2020, complete with a crash and phenomenal rebound, we find ourselves in the last quart of the year, and just a couple weeks in front of the presidential election. That is one catalyst sure to move the markets, though to be honest, I can’t say in which direction with any certainty but my hunch is it will be favorable to gold, silver and the companies that mine them.

More interesting to me is the recent news that Warren Buffett has finally admitted metals and miners can be a viable investment, if actions speak louder than words. He not only jettisoned may of his bank shares, he bought his first gold miner ever in the form of Barrick Gold (symbol GOLD). Also of note, I believe it was his only new position in the quarter ending in June. So there is our second catalyst for the short term, Buffett could very well announce new stakes in miners taken recently, or adding to his GOLD stock, and we should expect to hear on this by the middle of November. Let’s take a look at the weekly GOLD chart.

A quick glance shows us Buffett didn’t get some low ball price compared to an investor looking to get on board today, in fact we can own it not too far from his entry price. I am not buying GOLD, but point this out to illustrate the professionals aren’t always ten steps ahead of the rest of us, in fact we here RealProTrader have been in miners 18 months earlier and at much lower prices.

A third catalyst is the upcoming earnings reports for the mining companies. With rocketing free cash flow and higher metals prices the whole third quarter, we can expect glowing reports and things like increasing dividends, growing treasuries reducing the need to issue dilutive secondary offerings, etc. The earnings reports should be flowing fast and furious starting in about 2 to 3 weeks.

So we have some catalysts and while many are afraid of the election and what it might do to their portfolios, I think being on a massive bull trend such as the precious metals are experiencing, we can comfortably hold through any turbulence, and I wont be the least shocked if any surprises are on the upside!

I have lots of catching up to do on this site, updates on individual holdings I have including some big winners like MGMLF, Maple Gold Mines, which is already up 176% from my purchase price. I haven’t updated it because I haven’t made any changes, I still maintain a large position there and will not even consider selling any of my little junior miners and explorers for less than a triple, and some fo them I will be holding for closer to 10x my investment. I will explain in future posts, and as always you can check up on actual holdings and buy and sell prices in my statements posted elsewhere on this site. There is simply no way to gain credibility from a reader without putting it all out there for them to see for themselves.

Look for portfolio updates, and comments on specific holdings in new posts soon, I will also bring readers up to date on what I’m seeing in not only the mining bull and how its playing out, but some other groups that might be getting ready to offer up opportunities. For now, lets not lose focus on the one sure bull we have out there, precious metals, and while the general stock market is also in a bull, it could be argued the fundamentals are not supportive of the bull. Miners dont have that problem, technicals, fundamentals, everything is suggesting further upside, and even Warren Buffett now appears to agree. Staying heavily long, and looking to add into pullbacks.

So much has happened since my last update, like a stock market crash and rebound, and the world economy being shut down with the coronavirus as the excuse. So much has happened, in fact, that I won’t attempt to get all caught up in one post, it will take some time to get back into the habit of writing. Suffice to say, my trading has been relatively active and there have been some big portfolio changes as I exited much of my miners on the sell signal my month charts gave me last month (July).

What a ride it has been! With almost 3 decades experience in the markets, I thought I had seen everything, until 2020 rolled around. I have never had to endure the level of drawdowns as I did in March of this year, I can only credit my discipline in following my trading rules for keeping me alive, and seeing me out to the other side after being submerged for weeks without air. Long story short, I was stopped out of 1/3 of my SILJ, and rode the rest all the way to hell and back, fortunately adding back my 1/3 sold earlier, at much better prices. I was expecting a huge year, everything was set up nicely, with nice unrealized gains and chart breakouts to the upside all over the place. Then came the news and the shutdown of the world economy with the coronavirus excuse. I will save me thoughts on the virus for a latter date, today I re-cap my trading through the period.

I managed to stay with my largest position SILJ until around $12/share in late June or early July (see my actual statements in a link on the side), when my system triggered a sell signal on the monthly charts. Since I used the monthly charts to get into the trade, my rule is to use the same timeframe chart for the signal to exit. Unfortunately, as SILJ looked tired and prompted my system to sell, it was not the best timing as just a few weeks later SILJ managed to get up to the $17 area which was my original expectation. So to put it mildly, that hurt a lot because I would have been up nicely on the year at 17 bucks, and in a year that decimated many investors and businesses. Still, the signal is the signal and must be followed, what happened was an extreme outlier and we cannot bet the extreme will happen, because more often than not, the outcome will be more average.

Today we are just below $15 on SILJ and in a mild pullback. I only focus on SILJ now because that was my largest holding and most representative of the portfolios I manage. Currently, now in late August, 2020, my portfolio consists mainly of junior explorers for both gold and silver, as well as PSLV, Sprott Inc’s physical silver etf, and a big position in SLV LEAP options that expire in Jan 2022. Having bought back into the group, but only names that had corrected already or looked ready to start their move up, got me into good positions once again. I will go over the holdings and their charts in later posts, but to give you an idea, I own about 15 or 16 positions now, with names like WLBMF, AUNFF; KOREF, ISVLF, KTN.V, MUX, IRVRF, VLMGF, MFMLF, and MXROF to name several. I have shifted to individual juniors now for two reasons. First, the etfs have many stocks that are already ahead of themselves, so putting money back to work “up here” after a massive run, is best used by getting names that have not yet moved, or if they have had a big bull run, they now have already corrected over 25%, easy to see in a chart like WLBMF below.

Or a stock like ISVLF, which I have just started to acquire near its 50 day moving average (green line on the chart).

Please note that while I have the utmost confidence in my stock picks, I am not married to any one idea or in love with the picks. That is usually a recipe for disaster in trading and investing. More important is to focus on our system and the discipline to follow it. It was more important to stay with my trades than the fact I was in SILJ, for example, because just about anything miner or metal related bounced hard and fast out of the March collapse. Go through my statements and you can see at what prices and when I started re-buying, as well as how I changed my strategy for the next leg of the bull. I have always intended to move into smaller, more speculative explorers as the bull market matured, they have the most risk and most potential to gain as well. They are notorious for being the place to be once the group gets in focus, as people look for more leverage and things that have not yet moved up a lot. Going forward, I will be focusing on metal (physical silver etfs) in case miners get shut down again due to the virus, this would drive the physical much higher and miners lower. I also have moved the miner component down the food chain to the small juniors as names above, they have much more potential upside than a big etf like GDX at this point.

That does not mean I wont enter GDXJ, SILJ, or another miner etf in the future, however if I do it will only be on a big down day where the entire group is down a lot together, getting all the component stocks trending lower together, so I am less likely to be buying some of the miners after a big run higher. In short, it has to be an obvious decline where all etf members are getting knocked lower together, other wise I will just pick and choose various juniors, and some of the better individual miners from the etfs and buy them outright. I refer to stocks like HL, which I have now sold on that monthly signal but waiting to own again, or PAAS, both of which are in the top holdings for SILJ.

I am well off margin and only about 50% invested now. Silver is looking like a particularly good place to be, we were right about the big move higher, and it was so strong, taking out so many long term levels of resistance, that the future looks very bright for the white metal. I will focus on PSLV (with some SLV LEAPS as well), since I see the metal is in clear bull mode, and its protected from many recent new events about the virus and shutdown, in fact it could benefit from shutdowns, though I do not wish for them is any way whatsoever. I am just trying to cover all the bases and potential land mines that have popped up recently. What a fantastic chart, this is the WEEKLY chart of silver futures, blowing through multi-year resistance in just weeks!

To wrap up, the accounts I manage are now 50% invested and waiting for a possible pullback to add to our winners. Everything looks great, silver is a standout, and all has gone well except my gains could have been much larger with just a couple more weeks before my monthly signal triggered, but that is how it goes and it just as easily could have started lower again on my signal to exit. The bigger picture is it kept me in, and from getting hurt too badly it what was the craziest action I have ever seen. Its good to have a system to rely on when you can’t see straight from panic created by news events and a world losing its mind, just stay the course!

I’m waiting for the stochastics on the weekly charts to get oversold, which could take another 2 to 4 weeks, if GDX is on track. It would be ideal if the oversold stochastics coincide with the etf price pulling back to the $38 area (or $39 now that the 50 MA is creeping higher), more or less. It can go lower than that, its just a guess, but a decent enough pullback there for me to start adding to positions again. I’m happy that my recent buys in the junior explorers have me sitting on doubles already, in a few positions, and while the temptation to book profits can be strong, it usually pays to push on winners like these and let compounding take hold to really make the big gains. It seems at the moment lots of people are looking for a big pullback so they are underinvested, which has me thinking the pullback wont be as deep as most would like to see. If miners don’t pullback much over the next 4 weeks, I would then be ok paying up todays prices, because nothing says we have to pullback hard in such a strong uptrend. In trends like this, the risk is being out, sitting on the sidelines with nothing.

As always, check my portfolios in the links to verify my actual trades and gains, with position sizes. Claims mean nothing without transparency and verification.

Welcome to 2020, what opportunities will present in 2020? We already know I am heavily long the precious metals miners, and my focus remains there along with the money I manage, but what else is shaping up for possible investment?

I think commodities will see a good place to have money for at least most of 2020, and probably longer as in a few years. The US dollar seems to be breaking support levels, and while due for a bounce soon, the damage has been done on the longer term charts. Let’s take a quick look at the daily chart.

The above chart supports the long commodities thesis, and while I think all commodities will rise, some will of course do better than others. I will stay focused on those already in strong uptrends, like precious metals and their miners, while being ready to step into other areas once they can turn their moving averages higher on the long term charts, like oil exploration (XOP), and oil services stocks (OIH). I have mentioned these in the last few months but have yet to take a position despite their rallies. This doesn’t concern me, rallies in downtrends will fizzle out more often than not, so if they get away from me and keep rallying, I just have to look to setups in other groups to invest. Here is the XOP weekly, since they daily I can tell you has been basically straight up, but the weekly now is nearing overbought by my stochastics measure. Since the monthly chart is trying to turn higher and has already just recently come out of oversold, the trigger I like now to get long is to buy into the oversold WEEKLY stochastics, when and if they occur.

I have found that it can take a long time to turn a chart higher, not always, but usually this is the case. One pitfall to watch out for was shown this week with the midday bankruptcy announcement of the once mighty McDermott (MDR). It was experiencing a nice bounce off the recent lows after bottom-pickers came in looking for bargains, then by surprise they filed bankruptcy and the stock was taken out back and shot, losing over half its value in minutes. Expect to see more of these type events as the fundamentals in the group are still weak, yet keep an eye out to get long because it is exactly these type of news events that once slowing down will provide some of the best setups. Let’s look for the stocks to go up on bad news, as the moving averages flatten out or better, they turn and trend higher. One other reason to stay focused on miners for now is that the gold to oil ratio (GLD:USO) has potentially turned again, which would see gold outperform oil on a relative basis. However, the biggest reason to stay long metals and miners is the strong uptrend in which they remain.

Outside of commodities, let’s take a look at the MJ etf (marijuana stocks). I have no particular opinion politically on this group, nor should anybody if they want to invest successfully. The MJ etf looks severely washed out, especially now that tax-loss selling season has just passed. While this is no guarantee that the MJ stocks are going higher soon, this is the time of year that big losers in the year prior can find buyers looking to get long at low prices. I won’t pretend to know enough about the fundamentals of this group, sure it’s a growth industry, but which players will take the lead or get bought out is something I do not know. What I do know is that big bounces, even longer term uptrends often initiate after a huge decline and then some sideways basing. I will look for this group to bounce over the next month or two, say into February or March, which I might look to trade in AND out of, but then look to get long again after a pullback, once the moving averages have turned higher again. The expected near term bounce aside, we cannot know how long it will take for a new bull to emerge in this group, but we will be comfortable going long the etf when it does. If I trade the bounce, it will be reflected in the posted statements elsewhere on this site.

I think 2020 will offer up some big gains in the precious metals and miners, and possibly both XOP, OIH, and MJ as well, but that latter ideas will require patience. I first mentioned them a few months ago, to give you an idea of how much patience we might need. Still, the gains come quick and furious once the market decides they are in favor again, well worth the wait!

Christmas week trading is usually dull and low volume, but not this year! The miners took off to the upside, creating a “recognition week” on the charts, basically a standout move that is easy to spot on a chart from across the room.

SILJ was up over 10%, and even the slower moving GDX was up over 7%, and they had big volume as well. Let’s take a look at the charts.

I like to focus on the weekly charts because I am longer term focused in my trading, but now let’s check out the daily chart to feel how dramatic the moves were.

The daily chart above is simply splendid, I can’t envision a better confirmation that my betting long on miners is correct, not to mention being up around 40% on the position is the greatest confirmation of all. A clear breakout, huge volume in a typically low volume week due to it being holiday shortened with markets closed a day and a half. Simply put, nothing has changed except my adding slightly to my positions recently on the weak days (see account activity to confirm). I will continue to hold long and strong as we are now beginning the best time of the year seasonally for silver, and the miners in general. Several sites cover seasonality, such as Seasonax or Mish Shedlock wrote an article quoting a study where the average gain for the metal is 17% between now and the end of February each year. Of course, if the metal moves 17%, we can expect the miners to move at least twice that amount, so I will stay heavily invested for quite awhile longer.

I will report any portfolio changes as they are made, and you can verify holdings for yourself on my accounts or portfolio pages. It’s been a Merry Christmas, perhaps we will see a Happy New Year as well!

If you look back to the sharp 2016 move higher in the charts above, you will recall it looks exactly like the rally in gold, silver and miners back then. Miners often outperform in bull markets, which they are doing now so this must be a bull, and underperform (go down more than the metal) in bear markets.

Sure enough, our hunch that miners were just testing the bulls before moving higher has now been confirmed with conviction, as the whole group is blasting higher. Note that many of the silver miners are already making new 52 week highs, and while most miners are doing well, including gold miners, they are not as strong as the silver miners as they charts below will show. The SILJ etf is closer to making new 52 week highs than the GDXJ etf, though both are rising in tandem. What’s better, we are heading into the seasonally strongest time of the year for precious metals and their miners, so stay long and hold strong.

In addition, we the US dollar and the stock market appear to be rolling over, which could put added wind in our sails. I did add to SILJ a few days ago and forgot to post because it wasn’t a large buy order as I am already very heavy and on margin in all the accounts I manage for friends and family. As always, I tell the truth and you can verify these “after the fact” statements by simply going through the account statements posted on this site. After all, claims mean absolutely nothing in this world, if they cannot be independently verified.

Potentially more fuel for the fire, I still see lots of bulls on the group that are either uninvested, or have ver small positions compared to what they wanted to buy on a further dip in gold that never came. I think after a few weeks of disbelief and waiting, they might also decide to chase prices higher as miners now appear to be the only game in town. In short, I’am looking forward to very good gains over the next several months, at the least, for my miners, gold, and silver.

Regarding other opportunities, my system has luckily kept me out of the XOP and energy stocks, despite my having interest from a value perspective. I will discuss this more in future posts, but suffice to say that as soon as my indicators flash a buy signal, I will be getting involved there as well. I mention it now because this could happen soon, then again I was getting prepared a couple months ago for a signal that never came, so we will just wait patiently. I fully realize the fundamentals are terrible and worsening in the oil and gas sector, but the real question is how much of this is already factored into the stock prices. We cannot know for sure, so will let the charts tell us when some more well-connected investors and insiders believe the upside is worth the risk. My hunch is we are close, but keep in mind I am also a longer term trader and often have to wait a month or two, or more to start making the big gains. No problem for me, as long as they materialize.

For now, I’m staying laser focused on silver miners, gold stocks (juniors), and the metals, in that order. It’s still early enough in the intermediate cycle (lasting several months), that I will continue to look to add on dips and pullbacks.

It’s been a few weeks since I wrote anything here, so I apologize for that, but I have a good excuse as I have been on vacation on the southern coast of Spain, and expect to be here around 3 more weeks. To pick up where I left off, the miners were getting sold lower and many were calling for a significant move lower in gold to levels that would test the multi-year breakout in the $1375-$1400 range, and for GDX and GDXJ to get down to test their 200 MA’s, neither of which has materialized as yet. I know many who are looking to get long, waiting to buy into a larger pullback than we have already seen, but my hunch is they might not get that opportunity. Bull markets are funny like that, the stronger they are and the more you want to be in them, the less they give you the chance to buy. So the question is, does this remain a bull market?

By the classic definition of rising 50 and 200 day moving averages, yes this is still bull market, and not even a mature, tired one. I like the looks of these next two weekly charts, it helps to step back and get the big picture. First is the GDX etf, then the GDXJ.

Both charts look like they have clearly made up their mind to move higher, and did so, since around May of 2019. Now they seem to be catching their breath and going mostly sideways after a small pullback since September. Anybody loaded up in the miners through September through November will feel it has been hell, but only if they are not stepping back to look at the big picture as we are here. This is all normal, and the “big” pullback has to be enough to change some minds, get bulls to sell, then bring out the naysayers and even new bears on the group. Sure, prices might correct lower and for longer, but the last few weeks have been very kind to the miners and they look again like they have picked a direction and are just waiting for an excuse to turn on the jets. How do we know it is a bull and that we should stay long, well we can never know anything for sure, but take a look at the moving averages in both charts and they will tell the story. After many years heading lower, they now have not only turned higher, but they both have also made a “golden cross”, where the 50 MA crosses above the 200MA. This suggests we are likely still early in the bull market, so own some miners before it gets fashionable.

I did make some recent changes and always promised to let readers know when I do so. Last week I sold MUX around $1.61 because it failed to partake in the rally the group was enjoying. That turned out to be a good decision, as today the company announced a stock offering which knocked it back 18% on the market opening! I also trimmed some SILJ from the accounts I manage, to the tune of 12 or 14%, because it has enjoyed a handsome rally and being we are still not out of the woods seasonally, I would like to see a pullback over the next few weeks to put the money back to work at lower prices. If the miners just keep moving higher, I’m still heavily invested at around 150% as I am using margin as previously mentioned.

I am also circling around the XOP oil and gas exploration etf, which made another new 52 week low just today. It is still too early on this one, and poor earnings and bankruptcies still rule the day, so I will not take my focus of the metals bull and its uptrend treading me so well. I just point out that there will be some great opportunities at some point in the XOP and its components, and I intend to capitalize, but just be warned that it bear market maulings like the energy sector has seen (-80% over 5 years) take quite a long time to turn around. For proof, just look at the gold and silver miner charts since 2011, down a similar amount as the XOP at the lows, and only briefly turned it around in 2016 with a rip, roaring move higher, that was sold off the following three years once again, only to slowly start rebuilding (from a higher low that 2016’s) the bull slowly once again, step by step. Stick with miners for now, maybe big profits will be moved over to energy stocks before they do the same thing and slowly turn their ship around. Bonus chart of chart of the OIH is enough to make one sea-sick!

Just a quick post to point out miners might be resuming their trend higher soon, maybe as soon as today. Above we see the $HUI gold bugs index breaking it’s two month downtrend, as while this is no guarantee we are headed back up again, when it does occur, this is how it will start. Now let’s take a look at some individual mining stocks, and note how they are acting similarly. First, CDE…

How about SAND…

Or the larger streaming company WPM…

So we see the index and several miners all moving together, only a step or two in front or behind of the others. While we have stayed long throughout this correction, we did manage to add shares here and there into the sharp down days, so now we have the most shares we have had in the trade just ahead of them starting higher again. If for some reason they head lower first, I will use that as an opportunity to add more, as action like today’s is tipping their hand, they want to go higher.

As the charts will confirm, metals and miners have been moving lower again, testing my intestinal fortitude. While it can be uncomfortable, I try to focus on the things I can control, vs. the ebb and flow of markets, they give and they take. I have seen a good portion of my unrealized gains get forfeited, for the time being. People will ask, why not sell at the top and buy back lower, like where the miners are now? Well, if I knew it was a top I would sell, but nobody can know that, and if we see how many times I chose to stay in a trade that looked “toppy”, but kept on moving higher, we would see how the numbers work better by staying in a winning trade until you get your signal to exit. Anything short of your full signal to exit, will find you leaving more money on the table than you would like. In short, it’s costly to the bottom line trying to sidestep what seem like obvious areas to pull back. If it were that easy, all traders would be rich, but we know that is not the case!

Let’s look at a few charts, and start with SILJ, which is now coming back down to it’s 200 day MA, which should be a relatively low risk buy zone. I have funds to put to work down there, but have already started nibbling again today in the $9.20 area, give or take a few pennies.

I like this setup, the only thing that I am keeping a skeptical eye on is the fact stocks like CDE, a component of the SILJ etf, didn’t even stop for coffee at it’s 200 MA, instead it blew right through it today. We also see similar action in MAG, another component of SILJ. While one day is not a huge worry, I would like to see these two snap back soon above their 200 MA’s.

One other small concern is that GDX might not be done making it’s trip lower, and being its the largest mining etf, it can weigh on prices in the group if it wants to go lower before finding a bottom. Still, I see the $26 area as a potential pit stop, then $25.50 as another support, and lastly the 200 MA down in the $24+ area. Let’s hope it doesn’t have to visit $24 before turning higher, but it might so we need to be prepared.

And a quick look at GDXJ has me itching to buy. Yes, excited to start adding to miners in the face of all the negativity I am reading now on the group. So many people are looking for $1340-$1370 on gold to be tested that I feel it is unlikely to happen, even if it is a logical area. The fundamentals or new QE money printing, geopolitical risks, and a weakening world economy all support higher gold prices. In addition, my reading on the internet forums shows many of the smaller players not only shorting miners or looking to add to the short side, they have almost abandoned the search for an area to buy and get back on the side of the longer term trend. While many groups appear washed out, like the MJ etf or XOP (energy stocks), they are not yet in uptrends like the metals and miners, as defined by the 50 day MA above the 200 MA, and both sloping upwards. For that reason alone, I will stick with miners and buy/add into these dips. The goal is to have more shares than at any other point in the trade, with positive marks (unrealized gains) so can hold strong, for the next leg up in a bull market.

The general stock market continues to close in on new highs, but if it doesn’t respond to QE like it did the first three times, a weaker market could send miners flying. Not to mention the dollar is starting to wobble up here after a run lasting several years. Lastly, bonds are a flight to safety like gold typically, but even the treasury market seems to be tired running higher after a 30 year bull market. We can’t know what day things change, but we can be positioned in front of it, then enjoy the ride. So while I am getting tested, bruised up a bit and wishing I had sold a bunch of my holdings over a month ago, I still know that feeling is an impediment to greater gains if I let it rule my decision-making. I will stay long and am eagerly waiting to add some sizable positions in the very near term. I did add today very lightly, buying some more SILJ and long term LEAP options on SLV out to 2021, but the sizes are nothing compared to the orders I am readying should we get GDX down to $25 and change.

While waiting for this correction play out, I pulled up the GLD:SLV ratio going back to the 2016 bull rally, mostly because I am seeing signs that this pullback either might not go too deep, or last too long. We can see that after the initial move lower in the ratio (pushing miners higher), we still had another drop, which let the miners make another big leg up. Importantly, the second drop in the ratio occurred just after the “death cross” in the moving averages, which is exactly where we stand right now, complete with the rebound higher to kiss the 200 MA. If this played out again, we would see around 3 months higher in another strong upleg for miners. I am not sure where that would put us cycle-wise, especially since Jan to March is the strongest time of the year for silver, I suppose it might imply we could extend the move through March 2020 which would make the move that much larger, but that is just a guess. One last note, if we are indeed in a longer term bull market resumption, that ratio might trend lower for much longer than occurred in 2016. In any case, the worst to happen if we see similar action to 2016 would be a roughly doubling of the gains already made in the most recent run we have enjoyed.

In short, the risk now seems in being out of metals and miners waiting for a deeper pullback to buy. If one is a bull, it might be best to start or add other positions in here, as lots of individual miners are performing very well, and gold doesn’t seem to want to stay below $1500 very long. Regarding the more volatile silver market, the metal has already corrected 50% of it’s gains, landed in an obvious support zone, and bounced with force the last few days, even outpacing gold to turn the GLD:SLV ration lower once again. We also see the miners starting to outperform the metals again, indicating a low is near, or is already behind us.