Seeking Alpha

Christopher Wallace

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  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Lots of different indicators you can use. The bullish percent index, as the article demonstrates, has a great track record at calling turning points in the gold miners. I have learned to be patient and wait for it to give a signal. MACD xover is also good at generating signals on the miners.
    Feb 21 09:30 AM | 1 Like Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Bullish percent index has fallen down to 6.67%. Not a typo. Sentiment is now extremely bearish. I am looking for a bottom to be made in here soon. A move up in the bullish percent index would be a buy signal for the gold miners.
    Feb 20 11:31 PM | Likes Like |Link to Comment
  • Gold Bulls And Bears Should Short GDX [View article]
    A fundamental thrust of this article is that mines have a finite life, and are in a constant state of depletion until their resource is exhausted. And this is true. But I would quibble with the author's conclusion that GDX and other gold miners should be shorted for this reason. First, you could apply that reasoning to every non-renewable natural resource extraction business and conclude that all of those businesses are a short as well. That is just too broad and sweeping for me. Second, it ignores the fact that all of the major miners are aware of depletion of their resources and so are constantly on the look out for new resources: they buy additional properties to explore and they buy junior mines to develop.

    The author points out this depletion problem becomes greater over the long term. But I think it was Keynes who said: "In the long term, we will all be dead". I think the record has been pretty firmly established that gold miners can make for excellent trading vehicles for short and medium term investors.

    I agree with the author that mining costs have risen substantially in recent years. This has impacted results of the miners. However, I would make the counter-argument that buying GDX and other well-managed gold miners on dips can be a very profitable enterprise, and would probably yield a better result at these low levels than shorting GDX.
    Dec 1 11:04 AM | 3 Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Full disclosure: I have sold my senior gold producers and now own only a few micro caps which I have partially hedged with inverse gold and silver etfs. I have not gone bearish on gold long term. However, the move off the bottom has now become substantial. Sentiment has turned decidedly bullish since Bernanke's QE4ever announcement. The trade looks crowded and interim toppy to me right now. I expect a pause in the action and will probably return long in a week or two, depending on how things play out. For the record, the bullish % index remains bullish at a level of 72.41, and has not turned down.
    Sep 24 11:06 PM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    The move in gold seems to be showing strength. Here is another contrarian indicator: "Thursday, August 23, 12:26 PM Citigroup's private bank reportedly has pulled its $500M investment from John Paulson's Advantage and Advantage Plus funds. The funds are notable for going down a lot over the past year and a half, and their big current bets on gold miners"
    Aug 23 12:51 PM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Wow, that is a wild coincidence. I have just begun to look at TBT and am right now working on an article overviewing the shipping industry! I think the bond bubble may finally have burst and I want to establish a position. I am trying to separate the wheat from the chaff with the shippers. So far the most attractive ones look like DSX, NM and BALT, to me. Risky for sure, and I am still researching to form my final opinion, but they do show some value here.
    Aug 16 01:53 PM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Since the buy signal was given on July 28 after the close GDX has moved from 42 to 44. Hardly much of a move at all. Directionally the signal has been correct, but to be honest I expected the magnitude to have been larger. Hopefully those big gains are still coming. Technical indicators all still positive, but the move has shown less power than I would have predicted.
    Aug 15 10:25 AM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    And now perhaps the most contrarian indicator of all, a bulge bracket bank goes negative on the metal :)http://on.wsj.com/OLtQUi
    Aug 7 01:37 PM | 1 Like Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Yes, I posted the signal here on July 28, about 12 comments up. I am now long GDX, NUGT, IAG, NAK.
    Aug 6 06:06 PM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Bob Moriarty provides additional evidence of a market bottom in gold: http://bit.ly/QwyNDa
    Aug 1 09:25 PM | 1 Like Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Signal given on Friday's close: http://bit.ly/Iti5hP Bullish percent has turned up from a near record low. This should result in a tradable rally in the gold miners. Given it is coming off of such an extreme reading, I would not be surprised if the rally is substantial.
    Jul 28 12:07 PM | 1 Like Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Probably true in the short term, but I am looking for a more substantive move, not one that is a reaction to news of the day. Ben, Spanish yields, jobless numbers etc all move markets for hours and days, but I am looking for a more enduring trend, one that re-establishes itself shortly after the news of the day has its temporary effect. We will see if this turns out to be such a move.
    Jul 27 05:01 PM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Record short position in gold: http://on.wsj.com/OTWNJn
    Bullish percent has not yet turned up, still 7.14%. But action in miners today could create the signal very soon.
    Jul 27 01:56 PM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Adding to the stash of contrarian data points, I just read that the outflow of gold from GLD was "291,000 oz on Thur alone", largest 1 day drop since May. So far in July the outflow is 393,000 oz compared to an inflow of 1.2 mil in June. Sentiment is now very low.
    Jul 23 11:15 AM | Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    "You have to buy before a trend change because it is psychologically so difficult for everyone to do so. " I cannot argue that but I do not practice it either. Hands are too scarred from catching falling knives!
    Jul 23 10:34 AM | 3 Likes Like |Link to Comment
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