From the HRA Journal: Issue 272
Things changed a lot in the past two weeks. The US Fed’s promises to keep tightening financial conditions look a lot shakier than they did at the start of the month, thanks to a series of weak economic readings in the US.
I still think we need to be wary of central bankers but with bond yields softening again and plenty of money flows into the major markets things look less dangerous than they did in June. Not safe, mind you. Overvaluation is and will continue to be a problem. Overvalued, complacent markets are always in greater danger of a larger fall but I don’t see a near term catalyst for one. Read More
From the HRA Journal: Issue 271
I really hate sounding like the “boy who cried wolf” when it comes to major markets. Nonetheless, I’m shocked at how little impact central bankers have had as they all started talking, planning or threatening tightening. Traders on Wall St in particular seem completely unconcerned by these comments. Clearly, traders don’t believe central bank words will be followed by actions. I’m afraid they may be wrong about that this time and we may see some wild swings when that sinks in.
From the HRA Journal: Issue 270
You can sense the frustration when you talk to anyone trading gold producers or large developers. Gold has staged something of a comeback and there are good reasons to think that should continue. You’d never know it to look at the main gold stock indices though. They are lagging badly.
The editorial in this issue deals with that subject. I increasingly believe the large restructuring of the GDXJ ETF is having an outsized impact on the trading of many gold producer stocks. At a philosophical, and rational, level that concept seems ridiculous to me. Why should the ETF drive the stocks? Read More
From the HRA Journal: Issue 269
Thanks again to all of you who made the effort to attend MIF last weekend. We had a great set of talks and presenting companies. Those of you who couldn't’ make it can see everything by checking the link on this page where all videos from the event will be posted.
Metals in general and gold specifically had a pretty weak couple of weeks. That weighed on everything. Everyone has their own downside targets but it looked like we might be putting in another bottom this week. Read More
From the HRA Journal: Issue 268
Trump hasn’t started a war. Yet. Other market worries like the French election also turned out to be overblown—so far at least.
We’ve seen some zigs and zags in the past two weeks as the market bought into, then dismissed, then bought into the reflation trade. I remain cautious for both political and economic reasons but I also think we need to be realists. Traders have built such high expectations into this trade that its been overwhelming everything else. Read More
From the HRA Journal: Issue 267
I was about to hit the send key on this one when the proverbial crap hit the fan in the form of a US missile attack on Syria. I think that is a tempest in a teapot but it could have some secondary effects that will make things more interesting. The US rallies around its president when bullets start flying so this action might give Trump’s terrible approval ratings a big bounce. Trump seems to view the world in simple terms. Here’s hoping he doesn’t decide an air strike is a nice little pick me up every time he feels unloved... Read More
From the HRA Journal: Issue 266
The Fed raised rates as expected and the world didn’t come to an end, also as expected. Metals have had a nice bounce post Fed that I’m fairly comfortable will continue in gold’s case at least and perhaps base metals as well.
As always there was a deluge of PDAC news, much of it less than noteworthy. The update section is pretty long. The conference itself was positive with slightly higher attendance than last year. Most were concerned about “the Curse” as gold and most metal prices were falling every day during the show. The recent reversal has calmed some nerves though, if its maintained. Read More
From the HRA Journal: Issue 265
Traders are starting to bail in advance of PDAC. That’s usually a wise move, though the editorial lays out some counter arguments. Even if your preference is to do some selling I think you need to be selective and look at which stocks are more likely to weather a pullback.
It may seem counter-intuitive but I think some of the earlier stage stocks could be the stronger ones through the next couple of months. When traders decide to get behind a story, they can more than counter act the seasonal sellers. We’re starting to see that behaviour in a couple of the early stage companies HRA tracks, with the first company in the update section being a prime example. Read More
From the HRA Journal: Issue 264
Welcome to the Trump Years, and the Year of the Rooster. The markets were entertained, until today. Traders seemed to assume Trump would enact all the things Wall St liked and none of the things it doesn’t. However, the immigration ban looks in its final form it should disabuse Wall St of the notion that it’s going to get to call all the shots.
Trump has filled his cabinet with a number of the usual suspects from the usual power centres but he’s also shown he hasn’t given up on his tendency to react viscerally to events. That leaves room for plenty of unpleasant surprises. I think the honeymoon—in terms of market volatility at least—is now over. It remains to be seen if we get a bigger drawdown in coming weeks on top of that. Read More
From the HRA Journal: Issue 263
Gold took another drubbing after the December Fed meeting but its managed to fight its way back above the level it was trading at right before the meeting.
It’s still well below the levels it traded at before the US election. The Trump honeymoon isn’t over yet though NY markets are finding it tougher to make headway. The crowd at CNBC has been doing the “Dow 20K” cheer for a month now. The market still hasn’t breached that newsworthy but otherwise meaningless level but it’s very, very close. Read More
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