Zeal: Gold Stocks’ Major New Upleg

launch rocket verticalThe gold stocks are almost certainly in the early stages of a major new upleg.   Given the widespread apathy and antipathy still plaguing this beaten-down sector, that’s hard for most traders to swallow.  But the gold stocks’ performance this year has already been outstanding.
And heading into gold’s strong season, their gains should only accelerate.
Gold stocks’ overdue mean reversion higher is well underway. [Read more...]

GLD Holdings Set to Surge

GLD(Editor note: the question is where will GLD find the physical gold to replace the inventory that was sucked East in 2013?)

The mighty GLD gold ETF’s bullion holdings have remained stable in 2014, an impressive feat.  Last year they suffered an epic outlying record plummet as the Fed’s stock-market levitation sucked capital out of alternative investments.  (and as the East sucked every ounce of AU out of the vaults)
This year’s resiliency in the face of the ongoing stock-market melt-up almost certainly means the bottom is in.  GLD’s holdings are set to surge as weaker stock markets entice traders back. [Read more...]

Cheap Gold Stocks Breaking Out

gold bullGold stocks have surged dramatically in recent weeks, defying the odds to catch a serious bid.
Extreme bearishness still plagues this sector, which is certainly the most despised in all the stock markets.
So why are investors returning?  The universally-hated gold stocks are absurdly cheap, easily the greatest bargains anywhere.  And after a long year of basing, they are finally breaking out relative to the gold price. [Read more...]

Zeal: Stock-Bull Topping

falling-bearThe US stock markets’ Fed-driven melt-up has accelerated again in recent weeks, with a string of new nominal record highs.   This has reignited truly extraordinary levels of greed, euphoria, and complacency.
But for traders who have witnessed past bull toppings, there is an ominous sense of deja vu. 
It turns out this past year’s strong stock-market action nearly perfectly matches that leading into the last bull-market top in 2007.
Today’s stock markets look exactly like a bull topping.
[Read more...]

Something Wicked This Way Comes

gold stormThe current crazy/frustrating/scary/pick-your-expletive level of instability in today’s market is actually GOOD news.
The disconnect between financial asset prices and fundamentals simply must — per the laws of Nature — resolve itself.
And given the interruption-free 45-degree ramp the markets have experienced since 2009, we can definitively say that we are closer to the coming correction than we have been at any time in the past half-decade .
The bullet has been dodged for five straight years — given the instability and the inevitability, how much longer can it be dodged?   Not for long, is our conclusion.  And given the uninterrupted rise to record highs, the potential energy stored in the system now should be much more kinetically destructive than it would have been had it happened sooner.
So, we are at a time in the markets when confidence is high that a big move will happen soon, and happen to the downside.

[Read more...]

Record Shorting of PMs: Massively Bullish!

Massive shortsThe precious metals plunged last week, knifing through key support zones to unleash an explosion of bearish sentiment.  This troubling heavy selling wasn’t news-driven, it emerged out of the blue.  Who was dumping gold and why?  Later data confirmed it was American futures speculators short selling gold and silver at record levels. 
Extreme shorting is very bullish, as these bets soon have to be covered. [Read more...]

Top Mexican Gold

Historic Horn Silver MineMexico has been a popular destination for mining companies seeking out their fortunes amidst gold’s secular bull market.
And considering the huge lack of modern exploration across its rich precious-metals belts, some of the first movers like Alamos Gold have found smashing success.
[Read more...]

Zeal: Energy Stocks No Bear Refuge

falling-bearThe lofty US stock markets have stalled out, looking more and more top-heavy with each passing day.  This is spawning growing unease among prudent investors, who sense the long-overdue major selloff is nearing.  Many are seeking shelter in sectors they hope will weather the storm.  And energy stocks, with their lower valuations, are a leading one.  Unfortunately history proves they too offer no refuge in stock bears. [Read more...]

Silver Stealth Buying

silver rushSilver has suffered as a market pariah this year, dragging along doggedly near major lows.  Investors have seemingly abandoned it to chase the Fed’s general-stock-market levitation, an affliction plaguing most of the alternative-investment realm.
But rather provocatively, silver buying remains quite strong even in this dreary sentiment wasteland.  This stealth buying will likely explode once gold starts running. [Read more...]

Major Stock Selloff Looms

freefallA major selloff is brewing in the lofty US stock markets, which have been grinding sideways for a couple months now.  Momentum has faded despite selective positive earnings-season news and Janet Yellen’s jawboning.  Stocks remain very overvalued, way too expensive for prudent investors to buy.  And it’s been far too long since their last necessary and healthy correction to re-balance sentiment, so one is seriously overdue. [Read more...]

New Gold in the Pipeline

goldNew Gold’s 2014 midpoint guidance has it producing 400k ounces of gold at all-in sustaining costs of $825 per ounce.  This production profile, which is the product of a well-diversified portfolio of mines, places NGD among the mid-tier elite.  But perhaps most impressive about this company is its spectacular pipeline of growth projects. [Read more...]

Gold-Futures Selloff Wanes

gold vaultGold’s sharp sell-offs since mid-March have been mostly driven by American futures speculators’ heavy selling.  These traders dramatically slashed their long bets on gold while ramping up their shorts.  The resulting deluge of supply flooded the market and temporarily overwhelmed demand.  But intense bouts of gold-futures selling quickly burn themselves out, and today’s is waning.
Thus gold’s upleg is due to resume. [Read more...]

Fed’s Stock Market Levitation Running Out of Steam!

fiscal cliffThe lofty stock markets are starting to wobble, with selloffs’ frequency and sharpness increasing.  The dominant reason the Fed’s stock levitation is running out of steam is severe overvaluation.  Stocks are just far too expensive today compared to historic precedent, a dangerous state seen when bull markets are topping. 
Rampant overvaluation is a glaring warning sign to investors that selling is just beginning. [Read more...]

GDX Gold-Stock Benchmark

Zeal041114BThe American GDX Gold Miners ETF is slowly becoming the de-facto standard for measuring gold-stock performance.
Now on those rare days when gold stocks are discussed on CNBC, the HUI is never mentioned.  In this new ETF-dominated world, the dominant ETFs have replaced minor sector indexes as the leading benchmarks of choice.  So to mainstreamers not steeped in gold-stock trading experience, GDX is the gold-stock sector.  So we’re long overdue for revisiting its construction, components, and performance. [Read more...]

Gold Stocks an Extraordinary Contrarian Buying Opportunity

Zeal040414AThe bottom line is the hated gold stocks remain an extraordinary contrarian buying opportunity today.  They’ve almost never been cheaper relative to gold, which drives their profits and hence ultimately stock prices.  After the last episode of similar extreme undervaluation during the stock panic, the leading gold-stock index more than quadrupled over the subsequent years.  Mean reversions always follow extremes.
So another epic mean reversion higher in gold stocks is all but certain in the coming years.  This sector that has fallen out of favor for so long will gradually return to favor, as markets are forever cyclical.  This will largely be driven by gold’s own mean-reversion recovery upleg out of last year’s extreme lows, which will lead to gold-stock buying.  As gold stocks start outperforming, capital will flock to chase their big gains.

[Read more...]