Agree with all of that...
For gold and silver and the miners, for now, that means "off to the races" again... A new bottom has been made in the miners... easily confirmed with chart tools like the PMO and the KST. Silver miners I'm sorting now have the best performers up more than 10% over 4 days... the leaders up more than 25%...
Today is perhaps an outlier, not yet setting any new norms... as it is "everything up"... gold and silver are up... miners are up... oil is up... but everything in the market is all and only up today... as the market comes to grips with the reality that (for whatever reason) it is China's sudden reduction of stresses or pressure being applied on the markets, just now, and not the Fed's, that is providing the underlying impetus for a bit of renewed optimism...
Pairing that entirely separate set of market issues that are based only on China's choices... and China's subsequent responses to their own internally generated inputs... with a growing recognition that the Delta "isn't that big a deal"... after a couple of weeks of Biden Administration fear mongering ? That's now leading to the Biden Administration and CDC being openly mocked for their obvious incompetence and error ? Don't give them any sympathy... they've not only earned it... they've done it on purpose... knowingly shifting the market focus away from real financial factors back to the Covid bogeyman's fundamental pandemic risks... That effort failing means the recovery scenario (or narrative) is now back on the table... the generational scale doom and gloom now shifting to perception of... maybe a six week pause... that we're already well into...
The parallel in the recovery narrative "pause" that is seen in perception of inflation risks is also soon to be understood as a linear pairing... as the recovery mode (again) narrative picks up... the inflation mode (again) narrative will follow... likely with a bit of a lag... imposed by the fact that economic data necessarily lags...
I've predicted that as "the plan"... to subject the markets to the frog in a hot pot approach... to enabling inflation while forestalling the need to counter it by whatever means... as we see happening now.
That the "pause" will generate some data lag... maybe useful to the narrative spinners... but, don't expect the markets will be waiting for the data to prove what they can smell... as more than a whiff of inflation risks.
Might see that as... a sleight of hand... with Biden threatening to wipe the table clear, wrecking the economic recovery, by pulling the Covid table cloth with everything having already been set on the table... only to do that magic trick that has him pull the table cloth from underneath the settings, leaving everything intact. A larger benefit there... in having almost no chance of putting that table cloth back by reversing the maneuver. No one is really going to be looking to "them" for Covid guidance any more, after this... That ploy is done.
So, the point of the sort being done, in gold and silver miners now, is in looking for those that will be likely to sustain the new up move the best... sorting out those that have under-performed thus far... and finding those that are likely to succeed in playing catch-up in the next week or two... as the lowest risk bets...
The ADX +DI -DI provides a pretty good measure both of recent relative performance and of performance yet to come for those which haven't broken decisively higher, yet. Biggest movers have the green +DI moving decisively off a bottom... those that are lagging split into two camps... those under-performers that have done the ADX reversal but haven't really moved that much because of it... and those that haven't made a reversal in the ADX yet...
As was true in the bottom made in April/May... no reason to hurry... as the bigger benefit is in finding those best positioned to sustain the trends...
But, all the work done leading into April and May, to find "better" potentials... is paying off now... as you've already got a list of "better" potentials to work with...
Are those prior picks outperforming the others, generally... beating the averages... ?
A bit of cherry picking usefully done... and a bit of buying of the more volatile movers nearer to the bottom on the way down in the recent decline... should enable now beating the GDX / GDXJ or the SIL / SILJ by a nice margin in the short term...
Way too soon to become complacent... but perhaps a bit of upside momentum will be found here now... for a week or two ?
Milling time... not always the worst idea... |
