Supply: Michael Ballanger for Streetwise Reviews 06/10/2019
Sector professional Michael Ballanger describes why he has swung from lengthy to quick on the dear metals and miners.
Earlier than we go any additional, let it’s recognized that within the days main as much as this missive, i’ve gone from “web lengthy” to “web quick” on gold, silver and the miners. These receiving my e-mail blasts and people following me on Twitter (@Miningjunkie) have been placed on discover that this advance, whereas spectacular in its blunt-force trauma, lacks the perfection of the This autumn/2015 advance, which arrived from multiyear polar extremes in sentiment and COT construction setups.
All final week I used to be emailing and tweeting how frail this advance seemed and why I used to be a vendor. With Friday’s COT, you have got the rationale:
Now, I may spend the remainder of the day explaining the place they obtained 58,773 new longs representing 5,877,300 ounces of gold bullion—which they declare to have bought. However I will not. You all know the drill. There’s zero protection nor superior warning from a Cartel raid with exception of the COT report, which is, whereas useful, nowhere close to an ideal indicator. Even when the quantity seems favorable, it’s nonetheless extremely subjective. Due to the incessant circulation of intervention and interference, decoding the COT and performing upon it’s without delay each troublesome and imperfect, and whereas it’s comparatively simple to quick Goldman Sachs, it’s painfully troublesome to quick valuable metals as a result of, for laborious cash advocates like me, it’s like promoting a member of the family.
Monday morning goes to convey a couple of violent sell-off within the valuable metals as a result of they’re significantly overbought because the chart beneath was clearly screaming late final week.
Gold miner ETFs (NUGT/JNUG) have been each wildly overbought by final Friday, and whereas I used to be in awe of the influence of the shopping for, I added to the DUST and GLD July $125 put positions late week (confirmed by a number of tweets when motion was taken), and now stay comfortably quick with gold down $15 going into the Monday opening.
I will likely be including to shorts on Monday, on any sort of bounce in each the GLD and the miner ETFs. The DUST was purchased on the $16.47 and $15.90 for a mean of $16.18 and can most likely open within the low $17s on Monday.
We’ve all seen this film earlier than, and whereas it’s each maddening and infuriating, it by no means alters my longer-term bullishness on gold and silver. What this does illustrate is simply how corrupt the Comex (“Crimex”) has turn into and the way essential it’s that you just flip off CNBC and ignore the table-pounding gold bugs that may have us leveraging up at exactly the improper time (like final Thursday/Friday), with RSI (relative power index) readings within the mid-to-high 70s and the funding convention rock stars all feverishly tweeting out targets of $1,400-plus by July four. When the bullion banks are sellers, you do not need to be lengthy. Interval.
Initially written on Friday, June 7.
Initially educated through the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis College the place he earned a Bachelor of Science in finance and a Bachelor of Artwork in advertising earlier than finishing post-graduate work on the Wharton Faculty of Finance. With greater than 30 years of expertise as a junior mining and exploration specialist, in addition to a strong background in company finance, Ballanger’s adherence to the idea of “Laborious Property” permits him to focus the apply on deciding on alternatives within the world useful resource sector with emphasis on the dear metals exploration and growth sector. Ballanger takes nice pleasure in visiting mineral properties across the globe within the unending hunt for early-stage alternatives.
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This letter makes no assure or guarantee on the accuracy or completeness of the info supplied. Nothing contained herein is meant or shall be deemed to be funding recommendation, implied or in any other case. This letter represents my views and replicates trades that I’m making however nothing greater than that. At all times seek the advice of your registered advisor to help you together with your investments. I settle for no legal responsibility for any loss arising from the usage of the info contained on this letter. Choices and junior mining shares include a excessive stage of danger which will outcome within the lack of half or all invested capital and subsequently are appropriate for skilled and professional traders and merchants solely. One needs to be conversant in the dangers concerned in junior mining and choices buying and selling and we advocate consulting a monetary adviser in case you really feel you don’t perceive the dangers concerned.