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.

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Gold Mid-Tier Set for Growth

Zeal032814AIn 2014 B2Gold is targeting gold production of 410k ounces from three different mines.  This would be record output for this new mid-tier, a whopping 159% increase in volume over just a couple years ago.  And with its fourth mine on schedule to pour its first gold in Q4, B2Gold is looking at an annual production rate of 550k+ ounces by this time next year. [Read more...]

Gold-Stock Golden Cross

launch rocket verticalThe gold-mining sector is on the verge of flashing the fabled Golden Cross buy signal.  This is one of the most powerful and revered indicators in all of technical analysis.  When it arrives after the right conditions, it flags the critical transition from bear to bull markets.  And today’s gold-stock environment is perfect to spawn such a pivotal Golden Cross.  Seeing this milestone will accelerate capital flows back into gold stocks. [Read more...]

Big Gold-Futures Buying A Major Bullish Harbinger!

Zeal031414AGold’s strong rebound upleg this year has been driven by big gold-futures buying.  After abandoning gold last year, American futures speculators are returning to the yellow metal in droves.  These capital inflows are a very bullish harbinger, as major futures buying is the primary fuel for young gold up-legs before investors return to take the baton.  And this big gold-futures buying is likely less than half done! [Read more...]

Gold – GLD Inflows Return

Stock-market capital finally started flowing back into the flagship GLD gold ETF for the first time in 14 months in February! 
Though this buying was small, this is truly a momentous event.  Extreme gold-ETF outflows were the dominant culprit behind last year’s epic gold selloff.  Without that massive influx of additional supply weighing on the global markets, gold is going to surge on strong physical demand. [Read more...]

Zeal: Gold Stocks on Fire!

it begins collapseGold stocks have been on fire this year, blasting higher to 2014’s pole position of best-performing sector.
And this powerful rally’s internals are looking as good as its headline gains.  The recent months’ gold-stock buying has been on big volume, with large capital inflows. 
This is very bullish behavior revealing a sea change in sentiment and strong conviction among returning gold-stock investors and speculators.
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Gold Breakout!

gold bullGold stocks just surged to a major technical breakout, a very bullish omen.  Investors are actually starting to redeploy capital in this battered sector, catapulting gold stocks into the early lead as 2014’s best performers!  This year is shaping up to be the polar opposite of last year’s epic carnage, with gold stocks mean reverting back up to fundamentally-reasonable levels.
The vast majority of the buying is still yet to come. [Read more...]

The Stock Selloff Has Begun!

dollar collapse panicSelling has finally returned to the US stock markets, short-circuiting their year-old levitation.  This new downside action of the last couple weeks looks very different from anything witnessed in 2013.  Is it just another minor and short-lived pullback, the vanguard of a full-blown correction, or the dawn of a new cyclical bear market? 
The prudent strategy for traders varies greatly with this selloff’s likely magnitude. [Read more...]

Zeal: Silver-Junior Struggles

Historic Horn Silver MineIt’s been an incredibly tough last couple years for the miners.  Not only have they had to endure sharply falling metals prices, they’ve had to battle continually rising operating costs.  For the producer companies this combination has been a margin killer.  And for the non-producers it’s been flat-out devastating.
Mining companies that are non-producers obviously don’t generate any revenue.  They are junior-level companies in various stages of exploration and/or development.  And they primarily rely on investor capital to fund their operations.  In some cases they are able to procure bank loans, but this is the exception.
If it costs more to operate, and the prospects of juniors’ metals of focus fade via falling prices, investors lose incentive to subscribe to their shares.  And if investors aren’t subscribing to their shares, then capital quickly runs dry.  This is a major problem in a capital-intensive business! [Read more...]

Adam Hamilton: Gold is Bottoming

gold bottomGold is bottoming, showing incredible resilience over the past 7 months.  After suffering an epic plunge in last year’s second quarter, gold has held its ground ever since.  This is despite still facing the same howling headwinds that forced that extraordinary selloff.  Gold has found strong support and carved a massive double bottom.
Thus 2013’s gold super-storm has passed, and a mighty new upleg is dawning.
[Read more...]

Zeal: Gold Drives Silver!

Zeal011714B(1)Investors’ interest in silver is starting to rebound after last year’s carnage.  As capital prepares to return to this beaten-down asset, many investors are wondering how to game silver price action.  Gold is the key.  The white metal closely mirrors and amplifies the price action in the yellow one.  Gold is not only silver’s primary driver, but its overwhelmingly dominant one. 
Gold is critical for timing silver buying and selling. [Read more...]

Zeal: Big Dormant Silver Investment Demand Ready to be Unleashed!

bankstersDespite its miserable 2013, latent investor interest in silver remains strong.  This manifested in robust worldwide demand for physical silver driven by its lower prices.  The hidden strength in silver was also evident in the holdings of its flagship ETF, which held steady in defiance of plummeting silver prices.
SLV’s massive bullish divergence reveals big dormant silver investment demand ready to be unleashed. [Read more...]

Massive Silver Short Squeeze Looms!

Silver is on the verge of a massive short squeeze.  Speculators’ silver-futures shorts surged to extreme bull-record levels less than a month ago.  And they’ve barely started to mean revert, which means big buying to cover is still coming soon.  While speculators’ silver-futures positions are always a great contrarian indicator at extremes, exceptional shorts are the most bullish portent of all.
Unlike new long-side buying, short covering isn’t optional.  Silver futures’ hyper-leverage guarantees that speculators have to quickly buy to cover as silver’s price rises.  This feeds on itself, igniting a buying frenzy as traders rush for the exits.  The bigger their aggregate shorts, the greater the rally their covering sparks.  So the recent bull-record shorts are a super-bullish harbinger for silver and its miners’ stocks. [Read more...]