I was pretty active yesterday adding to my core names- Alamos, Sabina, New Gold, Teranga, Balmoral, Platinum Metals Group, Pilot. I started a position in Premier Gold at 1.92 Cdn. Two PG insiders were back at it yesterday as well. I am still looking to stinky bid Victoria to reenter that name. Insider buy there yesterday too.
I am circling Bear Creek, but am still a little concerned about CoT positioning in silver. My silver proxy is CEF (8.6% discount) which has about a third in silver. I bought that yesterday. I added pretty aggressive to PHYS at the 9.42 area. I am looking to reenter Continental if this chomps a bit lower. I will renter SPPP below 7.00.
The action of the last couple days looks like heavy spec shorting. In general the spec longs were already liquidated, although there may have been some small spec dumps earlier in the week. Almost the entire large spec position built up in the rally is gone. We aren’t too far from the extremely bullish historic positioning seen last year when the sector took off. Tax loss selling is about done as well, so I am calling this a great entry point, not just OK as was the case last week.
Therefore this time and level works for me. I have always been a scaler, moving slowing at first, but now my pace has quickened. If slingers try more thin market attacks I will take the blue light specials.
The gold mining and junior sector is in a much healthier place than it was one year ago. By and large the names I am using got placements done at higher prices and are not in a squeezed position. Producers got revenues for three good quarters of stronger POG. Balance sheets are in much better shape than last year. Therefore I just don’t see the silly season levels (or a complete give back) of last year reached.
The rationale the slingers are using post-FOMC is that the Fed is signalling three rate hikes. I would suggest one tops, and I have my doubts about that. The Fed funds futures are pricing two and a half hikes, and I believe this is the peak. Going forward we will see endless Yellen wolves and nasty economic data, especially in secondary deriviative data. Completely tune out crime syndicate financial networks and rags. There is also an historic political crisis impending, see TNN today.