Friday was a bit of a shocker, wasn’t it? The employment report was far more sanguine than anyone had anticipated. All recent economic news and reports were indicating a sluggish, and perhaps even slowing U.S. economy. So, when those employment numbers were released Friday morning, all kinds of opinions and allocation of assets were being changed. How bad was it? Are we in trouble? Is the Bull market in metals fatally wounded, etc., etc., etc.?
In a word… No!
While the rate of metals and miners price decline looked bad initially, an actual study of the charts will say differently. Yeh, I looked at the charts before I commenced to write, which I typically don’t do, but I was checking out a new computer, and went through my charts before I began this post. With this hard a one-day decline, you’d expect a high-volume sell-off. So, just what do Friday’s charts look like?
I’m finding those that went down on only average volume, as did: CDE, AG, SLW, MUX, FSM, IAG and RGLD.
Some fell on light volume, as with: HL, PVG, ASM, PAAS, SSRI, RIC, SGDM and AUY.
Heavy volume losers would be: ABX, GDX, SLV and GLD.
Now, I find this to be extraordinary. The largest miner, ABX, most popular gold mining fund, GDX and the two metals ETF’s themselves, SLV and GLD, all went down on the heavier volume… whereas everything else went down on average, or light volume! What are we to make of that?!?!?
I have an opinion. First, the price declines in no way threaten current price support found at the Monday, July 25 lows… yet. Further, the ‘amateurs’, so to speak, buy their metals in the market primarily through the metal ETF’s and the mining fund, as well as the very largest gold mining stock, ABX. The more professional, or sophisticated, (ah hem), tend to buy theirs through individual miners, as we have here.
If that makes the best sense, then the ‘amateurs’ were panicking and dumping their shares at the first sign of trouble, while the more metals-astute traders and investors considered the action relatively inconsequential.
Anyway, that’s my story, and I’m stickin’ to it… for now! What is anyone else thinking? Or, what questions might anyone have?
Despite any sell-off, we’ve still 5 that have better than doubled… two of those in excess of 160%. Overall, we’re ahead in these by 63%, in total! All this in less than 4 months since April 8. As I have been saying. This is a Bull Market, and it is only really just getting started. I’ll watch it daily, and should the actual circumstance look to be changing, I should be able to spot it. For now, watch the price lows of Monday, July 25 for support.
Here’s to your accumulation of real wealth!
Harold F Crowell