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The Dow Jones Industrial Average had a nice rally today as America opens up from the lock down. The appetite for risk on assets is back on the table.
Who wants gold and silver when the DOW is set to rocket ever higher?
Gold is back to the line in the sand at around $1700 per ounce.
Silver was only down slightly and holding on to recent gains which have been impressive. Is that not a lovely chart? It would be nice to see silver consolidate here and extend the "handle" to set up another upside run.
So much for my wish list, we shall have to wait and see what the market does and not what I want silver to do!
The miners have been taking a beating as of late. Last Tuesday GDX hit a HIGH of $37.49 and closed a week later at $34.08.
Clearly this is a "risk on" market, at least for today.
As a general rule, I don't put much stock (pun intended) in the market movements on the trading session after a holiday. The market always seems to want to do a reset from the holiday before the "real" trading begins tomorrow.
My feel, and this is just my gut, is that after such a huge run there will likely be some profit taking and consolidation in the precious metals market.
We have entered the "slow season" for gold and silver. Actually, we have entered the slow season for the stock market as well.
The old market adage of "sell in May and go away" might be delayed a bit since the market floor on the New York stock exchange opened today after being closed for several weeks.
I did see a few articles on zerohedge that should provide a bit of food to chew over.
First this little article about how large investors are dumping stocks while retail investors are buying with both fists.
They Are Outperforming Hedge Funds, And This Is What They Are Buying: https://www.zerohedge.com/markets/they-are-outperforming-hedge-funds-and-what-they-are-buying
In the article there is a review of what these retail investors, through Robinhood Investment, are buying and it is almost beyond belief.
Take one guess as to what the number one stock the retail investors at Robinhood are buying these days.
Go on guess!
If you guessed Ford Motor Co. you would be absolutely correct!
Seriously????????? Ford?????????
Let me get this straight, some 36 plus million Americans are out of work and will not be able to make car payments in the near future. The impending explosion in repossessions is only a few payment cycles away. Add to that the fact that Hertz Rental, declared bankruptcy, and is dumping most of its fleet at a huge fire sale. Sure now seems like the perfect time to buy stock in a car company.
What could ever go wrong?
Of course, these retail investors could be way ahead of the curve. Each may have taken their time off from work to read Von Misses dissertations on a "crack up boom" wherein the stock market rises as the currency debases and the real economy falters. Sure ok, I get it.
In fact, the Two Year Treasury Note auction today show the interest rate diving to zero, 0.178% to be exact.
Record Large 2Y Auction Prints At Record Low Yield As Bid To Cover Tumbles: https://www.zerohedge.com/markets/record-large-2y-auction-prints-record-low-yield-bid-cover-tumbles
Pay attention!
For silver stackers, in the next few days or weeks, we may see another great opportunity to pick up some nice coins.
I figure that silver is the ultimate winner in the unfolding scenario.
Lets suppose for a minute that after the lock down the economy does have a V shaped recovery. Silver is an industrial metal necessary in almost every electronic device then silver WINS!
Suppose because of all the monetary printing, the currency debases rapidly, silver is a "precious metal" (real money) that means silver WINS!
I just don't see how FORD is a winner. But then again I thought the YUGO was a great idea.
Ah, the memories of my pure genius, if only the damn things could go more than 50 miles without the need of a tow.
Peace out and stack on!
Stay safe and please pay attention, we are living in epic times.