Good Friday morning all. What a week! Brexit scared the sh*t out of the markets, but our friendly neighborhood central bankers were standing by to manipulate stocks AND bonds higher.
Over the last 7-8 years I have said the following more times than I can remember; “financial events are occurring that no one alive (or dead) have EVER seen take place, nor would they ever believe that they could possibly take place”.
Negative interest rates in 35% of ALL global government debt. Central banks that openly admit they are buying stocks and manipulating markets on a regular basis (Japan and China). And folks, if you don’t believe that the ECB and our FED are active in the equity markets, let me be the first to tell you that the word “gullible” is not in the dictionary.
In other words, hell yes they are manipulating our stock markets!
Just like the 98% depreciation of the US dollar since the FED was first created in 1913, we continue to see absolute financial insanity from our central bankers of today. What a terrible year 1913 was…we not only got the FED but we got the IRS in 1913 as well. Woodrow Wilson…thanks for nothing.
Precious Metals and Miners at Fresh Two Year Highs
I guess we should be thanking central banks. If it wasn’t for their ongoing currency destruction (and absurd decision making), we would not be sitting on massive gains in precious metals miners. Gold and silver are surging higher again this morning ($1335/oz and $19.14/oz), but again, the big gains are taking place in the miners. GDX is trading at $28.40 in the pre-market, a fresh 2 year high.
I think it’s safe to say that we are killing it. Since January 20th, we have 1184% gains in just two of our mining stocks.
Here’s what I find interesting this morning. The VRA momentum indicators show GDX at just 80% overbought…once this level hits 95% we can begin to get a little concerned about short term pullbacks….but at current levels, it is common to see huge breakouts…like the one happening now.
I continue to see this as the beginning of what will be the most incredible bull market in history…and I offer this chart as my evidence.
This is a 5 year chart of GDX (below). I’ve featured GDX charts for a long while now, but we see something pretty amazing in this 5 year chart. First, take a look at the explosion in volume since the move higher began. Now, compare it to the volume when GDX was hitting all time highs back in 2011.
Could there be more of a stark difference?? In my 31 years I have never seen a volume expansion of this nature. And remember this…trading volumes in the broad market continue to shrink! This makes the events occurring in GDX even more impressive.
Stocks are a leading indicator….always have been…and GDX is speaking to us loud and clear. The move higher is going to be stunning (to most).
Finally, take a look at the blue lines I have inserted. As of this morning, we have broken the first line, putting GDX at a fresh 2 year high. Now, we begin to target the top blue line…because thats where GDX is headed next. The top line sits at $37.75, meaning we have another $10/share move on the way. That’s another 37% higher…obviously, my favorite miners will continue to ramp higher as well.
Central banks may destroy the financial system as we know it…I believe they are doing this right now. But that gives the smart money investor some off the chart opportunities. Sadly, 99% of the planet will suffer a great deal from the carnage thats on the way. Just another major reason that I appreciate and respect our VRA Community. We’ll be here together…surviving…and yes, prospering greatly.
Until next time, thanks again for reading…have a great July 4th all. Stay safe, stay frosty. Here’s this incredible chart…