Mayhem, Misallocation and the Mockery of True Price Discovery [GBR, GTBDF]

A Brief Word on Forecasts

Each year between December 25 and January 1, every blogger, analyst, newsletter guru, or market historian like me issues their "forecast" for the upcoming year, and what CBC weatherman, Percy Saltzman, is used to track the meteorological forecasts of the famous CBC weatherman.

The one thing that has struck me on the years is that forecasting markets is rarely much different than the trackman's picks at the Woodbine Race Track or the Vegas line on the football games or Percy's chalkboard alchemy deciphering rain clouds. Great Financial Bailout, the best outcomes have been skilled at best and bizarre at worst. To watch as many dollars, pounds, euros and yen were magically created out of thin air while the two metals were prevented from levitating through the government.

I know how to do this, but I want to be able to find an amusement or value in it.

Market crash calls over six years

Stock Market Outlook: As we close out the final few sessions of 2018, I want you all to observe what I was looking for "2018: The Year of Living Dangerously," in which I gave these closing remarks:

"With the Internet now a massive source of investment knowledge, opinion and deception, you will soon be reading voluminous tomes of 'Get rich quick!' e-mails designed to free you from your hard-earned savings and critical investment capital The odds will be added to the years ahead The Fed will have a new chairman in 2018 and the critical question is 'Will the punchbowl be drained in 2018?' Has been an injection tube feeding the financial punchbowl with all manner of fiscal and monetary stimuli, which has kept all bank collateral (real estate, stocks, bonds) afloat despite massive debt and swamping entitlements obligations. has said that this tube is now shut off as the tightening cycle has begun.

",, If if if if if if if if if if if if if if prices prices prices prices disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc disc,,,,,,,,,,, prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices prices barometer by which policy pitchforks and torches are trotted out, so keep your seatbelts securely fashioned in the New Year and stay alert. Do not permit rising stock markets and rampant speculation.

"2018 will be an interesting year."

Well, 2018 was indeed an extremely interesting year. in the dark, but even more heavily ignored punch bowl-draining by Jerome Powell has finally ended the longest bull market in history, with the S & P closing out Christmas Eve down over 20% from its Oct. 3 zenith of 2,929.86. In case you did not get the memo, we are now officially a bear market, and because this bear has been hibernating with a decent decision since February 11.68% warning shot, he was an enraged, starving Papa Bear. What people are ignoring is that in the past eleven weeks he has enjoyed a massive gluttonous feast on the carcasses of shell-shocked "BTFD" -ers. While this bear was bulging-eyed ravenous on Oct. 3 years of neglect, for the past eight weeks, he devoured everything in his path and is ready for a brief respite from his engorgement, perhaps a nap for a fortnight or so as he prepares for his next Millennial Meal.

The reason for my sudden newfound bullishness lies in these two charts. January 2008, when RSI has spent literally the entire month in a plus-70 overbought condition before getting tagged in early February. It started with a volatility, and on Jan. 16, and started on the UVXY below $ 10 with a target of $ 30. Less than ten trading days later, I exited, a tad early, but averaged the mid- $ 20s. Fast forward to December, a virtual carbon-copy opposite of those of eleven months ago. I know, if conditions were screaming sell last January, they are most certainly screaming buy, less less loudly today than on Christmas Eve, 2.36 on the S & P.

FANG, understand that this year you see a tax-related downside phenomenon, where longer term investors still sitting on the terrific gains from the 2009 meltdown are 2018 trading period to book their long-term capital gains, which involve a lower tax rate in the US The ideal entry should be after Dec. 27 for those brave enough to take the plunge.

As an aside, please do not think for a 150-point (or so) pop in the S & P 500 would qualify as a "bottom" because the most violent of all upside moves within the context of the bear market rallies. Greed-fueled "hopium" is infectious and it forces investors to panic into positions that are going to miss the bottom. It is not until the last bull capitulates and swears to never buy another stock ever that real investable bottoms arrive, and I assure you do not happen two days or two weeks after a new market has just been pronounced. That being said, I should urge caution because in the New Era of Interventions, anything is possible, as we saw on Boxing Day.

Commodities Outlook

Gold: After all the late August "Back up the Truck" call on gold (and silver), after I correctly interpreted the Aug. 16 reversal as the low at $ 1.677, and then added to a few days later in the $ 14.50 range. It was a fitful start to what I think is a longer-term move to $ 1,400 gold and $ 28.00 silver. Silver, and finally, with silver, and finally, punched out through the $ 15.00 ceiling and quickly taken from the Gold-to-Silver-Ratio (GTSR) from 87 on Monday to 84.22 this morning.

You can not trust any gold rallies where the gold miners (GDX, GDXJ) and silver (SLV) underperform. They should lead the advance and by default, the GTSR should be declining. Until recently, we have seen the gold miners (HUI) put on a blistering performance versus both gold and silver, up 11.57% since the end of August.

However, on Boxing Day the silver market closed up 1.86% versus gold's late-day reversal decline of 0.16% That is the type of outperformance badly needed to fuel the advance.

This next chart shows how well the gold miners have done when measured against the spot price. Bullion since mid-September but must continue this outperformance to avoid non-confirmations, which always bring out the bears.

Tactics: For $ 25.00 for added leverage. I am going with two exploration juniors, Getchell Gold Corp. (GTCH: CSE) and Gold Stakeholder Corp. (SRC: TSX.V), plus one junior discovery, Great Bear Resources Ltd. (GBR: TSX.V; GTBDF: OTC ), as my proxies for gold ownership. I particularly like GTCH for reasons mentioned in previous missives and I am adding to SRC because of the upcoming drill program in Nevada by Seabridge Gold Inc. (SEA: TSX; SA: NYSE.MKT) on the Snowstorm property located adjacent to SRC's Goldstorm property. This could be a serious tailwind for SRC as we move out of winter.

Silver

2019 is going to be the silver year outperforms gold, copper and the mining stocks. It has been undergone by the big base metal miners. After the 2016 peak above $ 20, silver went into total "lockdown" with the bullion bank behemoths, acting under the guise of "hedging," opening massive open interest in CME futures and smothering all forms of momentum, sentiment and upward movement. JP Morgan for manipulating the silver market a few months ago did it at least "appear" as though the shackles had been finally broken. Needless to say, it is to be owned-period.

Tactics: I have owned the SLV (iShares Silver Trust) [ARCA]) April 13 calls from mid-November, when I advised purchases over three-day period and averaged $ 1.00 per contract as an average price. Coins Mining Inc. (CDE: NYSE), originally recommended in December in the $ 4.25 range; this stock was above $ 8.00 in July 2016 and the first upleg of this bull market in 2016. I will carry at Q1 / 2019 target of $ 8.00 and use at $ 3.95 stop-loss. Silver is my odds-on favorite of all the metals for 2019.

Uranium

The uranium outlook is based on the Fukushima incident seven years ago. I've been in a long and agonizing bear market since then, I decided in 2016 to look into the industry because the one thing that leaps off the page for uranium stocks is that when the price turns up, they absolutely rocket.

In 2016, I was introduced to the founder of US-listed Energy Fuels Inc. (UUUU: US), George Glasier, who was then and now the founder and CEO of Western Uranium & Vanadium Corp. (WUC: CSE; WSTRF: OTCQX), a Colorado-based uranium / vanadium developer whose primary asset is the Sunday Mine Complex (SMC), located in Nucla, a uranium-friendly area of ​​the state. By assisting them in money, I was forced to do a great deal of research on the uranium industry, and also because there was a large vanadium resource at the SMC. "metal, whose primary use lies as a hardening agent in steel production.

In the stroke of a legislative pen. The price was peaked just under $ 35 / lb in November before correcting to $ 20 in December. Nevertheless, with a 75 million pound uranium resource and a 35 million pound vanadium resource, the in situ metal value of the SMC resource is approximately $ 2.9 billion. 27.2 million market cap, the valuation case for investment is compelling. Less than 1% of its resource value is usually a wise move and I decided to do exactly that.

Because the Sunday Mine Complex has been set up to become a buyer, it can be bought in the same way. Section 232 investigation petitioned by a couple of domestic producers, purchasers of WUC could pay up to US $ 100 million for WUC and secure to US-based supply source for a metal increasingly strategic to American security interests. The existing infrastructure at the SMC is anticipated to be ready for sale in early 2019.

I am not expecting WUC will be able to enjoy the upcoming lift in uranium prices because it will be acquired by another entity in desperate need for vanadium or feed for an existing mill. With a 52-week high at $ 3.32, the current $ 1.50 level appears to be a reasonably attractive entry point.

Tactics: Buy WUC / WSTRF in the CA $ 1.50 / US $ 1.20 range with a stop at CA $ 0.95 / US $ 0.70. Target: US $ 3.40

The last trading week of the year has been incredibly volatile, with Dec. 26 and 27 recapturing about 150 S & P points. 2,351.10 on the S & P 500 on the Christmas Eve, before the Plunge Protection Team (PPT) came riding on a huge white stallion.

Trump would fire the Treasury Secretary or the Fed Chairman first. Big N.Y. money went to work and pounded out the largest one-day advance in history, with the Dow flash-spiking over 1,000 points in the final hour. MNUCHIN '"PPT call" all weekend, CNBC was forced to change its scripted narrative, and after broadcasting Mnuchin's "PPT call" at the weekend, they changed their story to credit "Pension Fund Rebalancing" as the reason for the turnaround. The PPT-fueled updraft saw the RSI nearly double, but still left the S & P down 9.12% for the month and that was after the late-week rebound. It would seem that intervention in "free market capitalism" is alive and well.

Tactics: Avoid buying anything until we get the retest of S & P 2,351. If I see 2,550 next week, I will be looking to buy. I will issue an alert by email or Twitter. (@MiningJunkie )

Base Metals

The base metals (ex-batteries) will be slave to the trade of the rhetoric and clarified, I am avoiding them with a special aversion to copper.

Tactics: The ProShares Ultrashort "basic materials" ETF is the inverse or bearish vehicle for shorting the base metals. The SMN is an example of a risk-oriented punter.

No matter what happens next, remember that I will not be too late in making the "go for a long time" call on Christmas Eve, I am convinced that we are in the very , very early stages of what history may prove to be the Grandfather of all Bear Markets. That is not to say that stocks can not trade sideways for a while. But based on the RSI reversal last week (19 to 41 in three days), the time to be short has been spent at least for the next few weeks.

Tonight I am typing in the wee hours of the 'morn and quite a lot of people forty-four years as a market investor, I have never scans for a global currency benchmark. Pumpathons warning you of impending social chaos; I was first exposed to That in 1976 with Harry Schultz. For a return to fiscal sanity by all nations in order to restore the sanctity of the work ethic.

To be a non-elected government officer traveling executive class drinking champagne and arguing with the flight attendants on their own "right to a meal of my choice" is worthy of Marie Antoinette and her elitist intelligentsia. Made money in markets over the years based on my ability to understand and predict reactive outcomes. In the "Knives and Bearskins" it was of the 1970s, I would either buy the balance sheet or income statement that looked extraordinary, I would buy or short the company's stock and be fully prepared to take my lumps if my assessment of future performance was faulty. Since 2009 (and many would argue long before that), the markets have been behaved in a most unusual manner. Stocks no longer respond to news but rather to the tape action; fundamental causation is now dead.

We have been left behind a new wave of tech-savvy Millennials that watched their grandparents go virtually bankrupt by plunging their savings into gold and silver in response to the credit-creation, money-printing orgy of the post- 2008 meltdown. These youngsters saw through the charade of intervention and government-sponsored fraud post-2008, and instead created their own "safe haven" in the form of cryptocurrencies. While it is true that I called the top in Bitcoin in 2017, I was nowhere near as smart as those kids who embraced its introduction at a penny-pricing levels somewhere in 2009 by a Japanese computer whiz called Satoshi Nakamoto. If you had mined 1,000 Bitcoin units as a response to the bankster-driven bailouts of 2009, your cost base would have only been "labor," and if you were lucky enough to have it sold in 2017 at the December top, your "labor "would have yielded $ 19,891,000. These kids took the Dot.Com Model of the late '90s and they perfected it to the point where the CNBC was flashing the BTC minute-by-minute price late last year right beside the Dow, S & P, and NASDAQ!

So, with the cryptojunkies now neutralized and the potheads in full retreat, it is my expectation that 2019 will return to true, full and plain discovery of price. The terms "price discovery," "transparency" and "integrity" are three of the most important assumptions on which investment decisions are made. If there is any hope of avoiding a devastating outcome for portfolios in 2019, it will lie in the restoration of these three factors Interventions must be eliminated from all markets where the malodorous misallocation of capital has gone unpunished and where market mayhem is encouraged to run amok. If you believe in the monetary metals, we need to be expunged, then the only place to be in the monetary metals, where physical possession avoids confiscation and corruption.

I'm going to be quick, here is what I'm going to be doing with the idea of ​​the model portfolio. In 2019, I am offering an informational service that will allow subscribers (US $ 799 per year) to access changes to the portfolio as well as short-term trading ideas via my GGM Advisory e-mail alerts. Please forgive the brazen solicitation of your hard-earned after-tax dollars but please remember that the taxman considers investment publications as legitimate business expenses. Also, when you look at the January 2018 VIX trade where I rode 5,000 UVXY from around $ 10.00 to $ 25 in eleven trading days, a 100-share position would have been paid for more than twice.

I wish everyone out there for Happy New Year and prosperity, health and peace of mind in 2019.

Born in the 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in Finance and a Bachelor of Arts in Marketing at the Wharton School of Finance. "Hard Assets", with a career as a junior mining and exploration specialist, as well as junior mining and exploration specialist, Ballanger's adherence to the concept of "Hard Assets" emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe.

[NLINSERT]

disclosure:

1) Michael J. Ballanger: I, or members of my immediate family or family, own shares of the following companies mentioned in this article: Getchell Gold Corp., Gold Stakeholder, Great Bear Resources, Western Uranium Corp. and Coeur Mining. Get the Gold Company and Western Uranium. My firm no longer does the consulting work for Gold Stakeholder. Iph which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Seabridge Gold, Great Bear Resources and Energy Fuels. Click here for important disclosures about sponsor fees. An affiliate of Streetwise Reports has a relationship with Western Uranium and Vanadium. Please click here for more information. The information provided is for informational purposes only.
3) Statements and opinions expressed the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports. This article is not a solicitation for investment. Streetwise Reports should not be considered as a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees, or members of their securities in the open market or from the time of the interview or the decision to write an article the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. Goldsmiths, Goldsmiths and Stakeholders Gold, companies mentioned in this article.

Charts courtesy of Michael Ballanger.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all of invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and trading options and we recommend consulting with financial advisors.