Spec, you hit me with some beauties and I don't have all the answers. Still learning and only been posting since Nov 2019 and the market has change dramatically since then and still evolving.
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I try not to get caught up in what market makers are doing but try to recognise what and when they are doing it and profit from it. BASEL lll is another spanner that has to be understood and accommodated and will take time. In the meantime I depend on historical correlation with real rates and what I believe to be the current cycle. This market does go in cycles but not ones that remain constant.
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I suspect we are going to hear all sorts of rubbish to suit whatever narrative particularly around inflation. MSM is particularly useless and apparently do very little research these days. This is not something that can be jawboned up or down. It is what it is and CB's have always been laggards in combatting the issue. Paul Keating will never stop reminding you how slow bureaucracies are (and CB's are bureaucratic by nature) to respond to need. One of the more disappointing aspects is when the numbers do not agree with the narrative, new methodologies are created. Obfuscation, smoke and mirrors, and plain old BS. PPI is almost 2% above CPI. More to come.
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As far as stocks go, producers are looking fine. There is a lot of variation in juniors in EV/oz. Some of this may be relative to cash position These are particularly vulnerable and trends have failed. Last weekend I supplied a list to friend and colleagues of stocks that had >100% target prices. 24 in total. Only a couple have since had resets but interestingly with the recent pullback the number has actually jumped to 30. There have been a number of trend failures and much has to do with the technical structure. I suggest you have a look at the TSO chart I posted where it followed the falling leg down, then continued on to break the rising trend. Others like MGV collapsed to find and hold support and are following the rinsing trend up and still holding up. Quite a few have been spat out sideways from a consolidation wedge and are currently directionless and have neither support or resistance. The technical setup seems to be quite important in how stocks are responding to the current POG decline.
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From a technical perspective, I will put a few charts up here. A picture paints a 1000 words.
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Here is my trading chart for SLR.
I believe there has been a massive tug of war between buyers and sellers for quite a while.
Resistance for SLR was hit at $1.89 on the 16/4/21. More than 2 months ago. $1.98 was hit on the 18/5/21, another month later. Been trying to break through since and failed. I think sellers are quickly exhausted having defended a line in the sand for so long. Now sitting on support.
Note the similarity between this and the XGD chart posted previously though the scales are quite different. I got these guys at $ 1.71 last week as I was not expecting this weeks' action and the rising trend in sentiment to hold. Not a recommendation to buy as the current correction may not be over.
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Here is the short term chart for SLR. Also sitting on support though much weaker than that on the chart above. Gives a better idea of how sharp the recent correction is. The trend on the chart above is the one that counts. $1.70 was first contact of support here hence my purchase price.
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And finally, this chart gives you an idea of some of the setups I am seeing in the juniors. This is the trading chart for LCD. Not a recommendation to buy as the current correction may not be over. A buy signal generated right on support. This is a case of read my lips and having some cojones in the current market environment. All is not lost. Others with similar charts have broken trend.
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