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Robert Duval
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Full time Investor / Trader, 17 years. Specialist in risk management, with intermediate trade focus, US stocks, international ETFs and commodities. Believe in correlation of markets, must understand all markets to trade one well. Self taught through continuous study of myself and other... More
  • Cheer Up Suffering Gold Bugs - Rally Coming! 15 comments
    Nov 5, 2013 8:21 AM | about stocks: NEM, GLD

    Most who follow my writing would call me a bear on gold for the most part. I am far from a gold bug.

    I think overall of gold as an unproductive asset that is dug up out of the ground, sold to someone, who puts it back into an underground vault.

    However; the gold pendulum may have been stretched a little too far at this point in time.

    The fundamental reasons; which are far less important than the technicals; could include very weak, persistent sentiment towards gold; and very bullish sentiment towards every risk asset. The spread between these, is pretty stretched.

    Fear is certainly no-where to be found, although I remain unconvinced we are in a true "bubble " for US equities as seems to be a popular view.

    Another possibility; is recent Fed comments that inflation is simply too low. Inflation would be a potential catalyst for gold.

    None of the above is particularly important. What is important; is yesterdays action in not gold; but the gold stocks; particularly Newmont Mining (NYSE:NEM), but also to an extent the group.

    It is said, that stocks always lead the commodity. Certainly that has been true on the way down for gold. Yesterday; NEM roared out of the gate to about a 3% gain; with zero help from gold; and the total absence of help from bonds; the euro; or weak stocks.

    This got my attention; as the gold stocks had been looking like a basing pattern for a few days prior. NEM closed at the high tick of the day, and so did the overall ETF's.

    If this is significant; we should see a gold rally within a day or 2. This could simply be a deeply oversold bounce in the stocks; but I would look for the commodity to bounce to 1350-1360 as well.

    High risk - so no warranty at all. If the gold stocks sell off today, the whole thing just might be noise.

    LONG NEM.

    Disclosure: I am long NEM.

    Additional disclosure: This is not investment advice. Not liable for any decisions made. I am not an investment advisor.

    Themes: GOLD Stocks: NEM, GLD
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Comments (15)
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  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Euro Tanks again this morning. Gold hangs tough. NEM, indexes hang tough. A big rally is likely coming.
    5 Nov 2013, 08:53 AM Reply Like
  • rodh7858
    , contributor
    Comments (136) | Send Message
     
    Hi Macro
    Thanks for the article. I have been intrigued by PM and PM stocks since over a month because of the extreme sentiments (between gold bulls and bear camp) and how badly they have been beaten.
    I love US equities & am not a gold bug but I do believe gold needs to be added in everybody's portfolio. I bought half my position in $AUQ couple of days ago.
    Do you think its time to get back into $NUGT?
    5 Nov 2013, 09:14 AM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » It is a severely wasting asset. Those etf's are effectively options and only for a trade-- like a few days to a week. I am long NUGT but would slam it out on any weakness.

     

    Best position chart is NEM, IMO
    5 Nov 2013, 09:19 AM Reply Like
  • rodh7858
    , contributor
    Comments (136) | Send Message
     
    Yes, definitely NUGT/DUST are just trading vehicles due to the tremendous slippage. I don't hold them for more than a few days either. I am on the sidelines and looking for opportunity to take a quick dip into NUGT.
    5 Nov 2013, 09:30 AM Reply Like
  • rodh7858
    , contributor
    Comments (136) | Send Message
     
    Hi Macro - Tomorrow is ECB rate decision. Do you have an opinion on which way they will go and its impact on Gold and Dollar?
    6 Nov 2013, 12:53 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Nope. I suspect no cut; Euro rally, but have decided to assess afterwards. Out of NUGT at 46, holding long NEM only.
    6 Nov 2013, 01:17 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Gold has still undecided how its reacting to the ECB rate cut. I would think in the end bullish -- but will wait and let price decide. Long NEM only as a conservative holding.
    7 Nov 2013, 08:18 AM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Market has voted ; and I expect now a gold sell - off. Out of all long gold exposure, will trade gold from short side...
    7 Nov 2013, 10:19 AM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Note I am now short Gold and stocks. Strong GDP + ECB, + price action. Expect test of 1300 then 1250 levels.
    7 Nov 2013, 01:43 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Lousing timing for a bullish Gold article! Should say " Gold Collapse Imminent!" Can I change it?

     

    Aggressively short Gold.
    8 Nov 2013, 09:06 AM Reply Like
  • CoinsK
    , contributor
    Comments (2828) | Send Message
     
    The best time to get Bullish is when something is just near the end of a down cycle. So good article IMHO.
    8 Nov 2013, 03:53 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Things change. Gold is becoming messy. I am back to neutral; covered with an OK profit. We should have broken today, didn't. In addition gold stocks are again trying to rally. On the sidelines with gold for now.
    8 Nov 2013, 03:58 PM Reply Like
  • rodh7858
    , contributor
    Comments (136) | Send Message
     
    Macro - I did not realize you had changed your stance since writing this instablog and that you were short gold. I am still holding my long $AUQ and have some $NUGT too.
    8 Nov 2013, 04:21 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Flat gold. When I see like today, gold prices fall while gold stocks rally all day with the market, this is confusing, so I went flat.

     

    Would have thought gold might have cracked a lot more, as well.
    8 Nov 2013, 04:50 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7178) | Send Message
     
    Author’s reply » Well, this instablog was premature. I am at a loss tonight as to the Gold market. Not the first time.

     

    I'll give everyone, a preview, of the next theme.

     

    Bear in mind, I'm not a writer, but a full time, pro trader for the past 15 years.

     

    My last one, titled "Did Carl Icahn signal a top in the Momo stocks" (by selling his Netflix position) was written at the peak for these names.

     

    Hopefully saved some folks money, and they can rotate into the next actionable theme.

     

    My next one, will be all about Brazil being the next great investment opportunity.

     

    Since Brazil has been in a bear market for the past three years, and everyone hates it by now, writing about it is far from discounted garbage, but great value. Stay tuned, as I write how it will be one of the next great bull markets again, with several catalysts about to arrive.

     

    Btw, No true pros I follow, see the current market as a "bubble", that's simply a CNBC invention. Nothing new there.
    8 Nov 2013, 08:36 PM Reply Like
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