B.S. in T.A. with a Minor in Miners

Sat, Aug 20, 2011 - 3:46pm

I don't know about you, but I'm beginning to feel an instinctual pull toward the miners. They have beaten down for so long that they finally just feel like they're ready to go higher. My gut tells me that, having reached a point where their relative valuation versus metal is several standard deviations away from normal (whatever that is), something is bound to happen. My brain tells me that prices, some of which have fallen all the way back to pre-QE2 levels, are bound to turn around soon. So, let's take a look.

Any discussion of the miners must begin with a look at the overall stock market because, at the end of the day, these are stocks we are talking about. Unfortunately for our bullish case, the S&P looks downright awful. Though fundos for most miners are improving with every uptick in the PMs, a falling stock market makes buying miners a bit like rowing upstream and a swift current can wash you away no matter how hard you are paddling.

That said, the HUI (gold miners index) doesn't look too bad. In fact, its at a point where it appears to be breaking higher. We'll know more in a week or so but, for now, keep a close eye on the 580 level. If the HUI can stay above there, base and move higher, it will create a favorable environment for most all of the mining stocks, regardless of their current technical picture.

Now, here's the kind of stock we're looking for. Note how Yamana struggled for the longest time to get through 13. Each time it tried and failed, the shorts were emboldened and more certainly joined the cause. Ah, but look what happened once it broke through 13! It based and used 13 as support before igniting a short squeeze that has driven it to 15.50. Pretty good stuff.

So, what we want to find are stocks that look like AUY but haven't broken through and taken off...yet. Below are four candidates. If the HUI holds 580 next week and you end up looking for a miner to buy, I'd start with these four or any other stock that has a similar-looking chart.

Now here are four that don't look so good. You can certainly nibble at these if you want and I'm not sure I would sell them yet if I'd ridden them all of the way down. However, if you're looking to buy, I'd stay away from these and any others you find that look the same.

Time prohibits me from giving you more charts but I think you get the picture. If you're interested in a stock not mentioned above, pull up a chart yourself. I think you'll find that it either looks like the first group or the second and it will then be clear to you whether or not it is something to consider buying.

If all else fails, just daytrade the UGL and the AGQ. Mister Hyde gave up on the miners about 8 weeks ago and has been trading these two ETFs exclusively ever since. He's made about 30% and is feeling quite pleased with himself. A word of warning, though. UGL and AGQ...particularly AGQ...are quite volatile and not for everybody, particularly the faint of heart. If you don't like the heat, don't go anywhere near the kitchen. In fact, stay out of the house completely.

In time, a portfolio of miners will treat you just fine. A little patience and a little homework will take you a long way. Good luck! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 20, 2011 - 4:53pm

SVM + mouser

Mouser like your fundo on SVM. I have been a buyer of SVM for years and will continue.


Aug 20, 2011 - 4:54pm

ten year note @ 2%


This is article makes me nervous for my gold calls... Turd, what do you think?

The Vet Dave T
Aug 20, 2011 - 4:57pm

Dave T on GLD

instead of doing battle with an 800 lb. gorilla I’d rather be running right behind that gorilla in the same direction he’s going. Would help to know which way he’s running though. GLD will de-couple from the spot price of gold some day and it would be wise of everyone to realize that.

I agree that riding the coattails of the EE may be more profitable than fighting them, but there is always the slight possibility that the SEC gets religion and bans shorting of the commodity backed ETFs. That will have exactly the opposite effect to the price and it would run away on the upside as the shorts could only cover by bidding for stock well above fair value.

This type of ETF structure is completely unstable if short selling is allowed, because of the ability to remove value from the assets of the trust with the short shares. Every share being redeemed from GLD right now is being redeemed for 7% more than its proportion of the real value in gold in trust. If nothing else happened except redemption of the traded float of shares, the last 7% of the long share holders would be left holding a completely empty bag and the shorts would be short 31 million shares worth zero! A wonderful outcome for them!

With normal short selling of a company stocks, the actual intrinsic value of the company is not affected by the short selling so the real asset value is unchanged regardless of what happens to the share price or number of extra shares generated by the short sale.

With these ETF's like GLD and SLV short sold shares can be redeemed for actual metal so the underlying value (which is only that metal) is being eroded by the short sales. The SEC should never have approved short selling for these entities and it will eventually increasingly destabilize the market. Selling GLD shares short affects the GLD price adversely in relation to the actual POG and is likely to eventual collapse of GLD with the asset going to the shorts and the longs being effectively defrauded.

The GLD trust will not have done anything illegal but the SEC, by allowing GLD to be sold short has created a time bomb.

Aug 20, 2011 - 4:58pm

Thanks TF, have a good weekend

Any thoughts on SVM and why it seems to be underperforming? Is it the strong Chinese influence on the business?

Hecla puzzles me. Supposedly so much silver and such low costs yet it 's just a dog. Large short presence maybe. I guess the same could be said for NG.

I hope Silver Wheaton has a good run. If silver explodes within the next two weeks all of the above stocks might just explode to the upside once fresh money comes pouring into them.

I think were that close to something amazing happening in the markets with 2-3 weeks and I think were closer then we might realize.

We've been waiting for this to happen for such a long time and we have so much doubt or cynicism about the EE and their daily thievery that it seems almost hard to believe that their short scheme might just blow apart. It's becoming unraveled.

I'm also half expecting some other country to announce their gold/silver nationalization sooner then later. If that happens I'll say $2500-$3000 happens quicker then we could ever imagine.

Aug 20, 2011 - 4:59pm

Haven't seen this posted yet.

Haven't seen this posted yet. I love me some Schiff.

Peter Schiff on record gold prices: I told you so!
Economical Disaster
Aug 20, 2011 - 5:02pm

Japan, U.S., Canadian governments complicit in covering up

..Fukushima radiation

Leuren Moret: Japan, U.S., Canadian governments complicit in covering up Fukushima radiation
Aug 20, 2011 - 5:10pm

@Red Pill & Blue Pilot

"Put that stuff in the right section and no one will mind at all." - Red Pill

Thanks for the respectful comment and suggestion. I'll take the credit/blame for getting that Chemtrail conversation last night. My intention was to chime in on a comment from a few days earlier, and post an instructive video to let folks who may not know of the toxic spray become aware of them through a credible, professionally produced video... and to alert those that may have not yet taken the "red pill" as you say you have.

Since I do believe the Chemtrail situation is urgent and important, I felt and still feel it is a topic that needs to be known on 'Main Street' and not relegated to a forum page that is the equivalent of an invisible back page story requiring many clicks just to find.

By the number of comments, there obviously was an interest. While I don't think the discussion got in any way out of hand, I'll concede that you are right about the intent of the main page and the forums. Perhaps it would be best, when posting something we feel people should be aware of, to make a brief comment to alert Main Street and provide a link to that forum. I appreciate it when others do that because I don't have the time or inclination to scour all of the layers of all the forums.

Then, if I'm led to a forum by a compelling subject and link and find that the information is not credible or respectful, I'll quietly ease out the door before noticed. If the same person repeatedly baits Main Street with links to useless, nonsensical or boorish content I'll not need a “rule”, I’ll use my own edit/delete/discern mechanism... without needing a blog structure to guide the decision or anyone else to .

If we don’t occasionally put off-topic stuff on the main page, we run the risk of getting pretty dull… or having a monopoly on red pills. :)

"I can respect questioning everything, these things are out of my control and I'm just worried about the task at hand....investing in PM's/Miners and being prepared." - rckymtn

Respectfully, with your interests of investing in PMs, miners and being prepared, you've just listed multiple subjects that all have places in the forums. Many hundreds (thousands?) of comments are there in each category of your interest. Assuming health, survival and warning signs are a part of your “preparation”, you'll find many fine comments in all sections, including (hopefully) the main page.

To be fair, the takeaway might be...

1) Respect the situational timing: Some/most already do this by keeping lengthy off-topic comments away from the trading hours and/or on weekends. This is a good thing, even though the pro/semi-pro traders have their own well-seasoned forums (they don’t typically use Main Street). Regardless, when the action is hot during trading hours, if it’s off topic keep it short and helpful. I'm not suggesting a ban on all things not trading or pm related... just not going overboard with it.

2) After-hours or weekends: Comment on anything that you don't mind being associated with. What you post is what you are and how you think. Post anything YOU feel is useful, helpful or humorous or inspirational, from hams, animals, rockets, music and history videos to chemtrails, EE, JPM, Fed, Cartel, CFTC, SEC, MENA, Oil, war updates and, uh, pm's. If any topic begins to take over the thread or become disruptive, then we should all remember to move it to a forum while it's fresh and hot (or stale and cold).

3) For urgent or critical information: Let us all know as soon as possible on Main Street if what you have might make us money, protect our money, guard our health or save our lives.

How's that? Fair enough? Now, if I can just figure out how to link to a forum for my latest Chemtrail comment. :)

Now back to your regularly scheduled program...

Aug 20, 2011 - 5:13pm

HUI and the Turd Community

Turd, Norcini, Santa and others are convinced that breaking and holding above the 600 HUI level virtually guarantees a big run up in the pm equities. Judging by the number of hits on the tfmetal site, sometimes over 15,000 per day, could we begin to act collectively and commit to buying one or more of the Turd's pm recommendations in an effort to push the HUI above the lift off level. Maybe we can't do it all by ourselves, but the extra nudge could make the difference. Let's all become E-trade babies Monday morning (but with discipline).


European American
Aug 20, 2011 - 5:19pm

To Life, Love and Miners

and some "Loot"! Aye Mate

Captain Morgan's 'To Life, Love & Loot'
Aug 20, 2011 - 5:19pm

Turd's highlighted stocks above

Well, for the good and the not so good currently, I own'em all. I've long held every one Turd listed. Hope SVM comes around. Now, if someone can help me out with Faber's Ivanhoe (IVN) and Santa's TRX I'll really be appreciative. Any insight?

@ Olderman - yes. I like that idea very much. Let's buy en masse and throw in a Faber and Sinclair to buy as well!

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Forum Discussion

by HappyNow, Sep 23, 2019 - 9:46am
by NW VIEW, Sep 22, 2019 - 9:01pm
by SteveW, Sep 22, 2019 - 11:58am
by sierra skier, Sep 22, 2019 - 10:55am
by atarangi, Sep 22, 2019 - 4:09am
by atarangi, Sep 22, 2019 - 3:03am