Saturday, November 21, 2015

Gold Stocks Buckle

There is absolutely nothing good that can be said about the mining stocks at this point. Then again, there has been little good to say about these things for a long, long time.

The month of October provided a bit of a glimmer of hope but the rally could not even make it to the 200 day moving average before failing. The secondary top near 140 lies between the 100 day and the 200 day moving averages and is now going to be a key technical level that will stand in the path of any recovery rally.
Downside momentum remains strong at this point with no evidence of any concerted buying. (more)

Is The Platinum Plunge Over?

Investment demand for this precious “white metal” has declined by 380,000 ounces from the fourth quarter of 2014.   That figure is probably already outdated with the most recent plunge in prices. Investors’ appetite for this “precious metal” has hit new lows on the misery index. In addition, platinum prices are trading at a six-year low and the platinum: gold ratio is at its lowest point in two years.
There are two main reasons behind the recent decline in platinum prices. One reason is weaker  industrial demand due to a stagnating global economy. The other reason is the recent downtrend in the price of gold which is pulling down the entire precious metals complex.
However, there are a couple of reasons why the price of platinum may be close to a bottom. For example, above ground platinum stocks are expected to fall by 17% on a year to year basis in 2015.  Also, there is a possibility of a short covering rally. This is because gross speculative short positions in platinum recently hit at an all-time high, suggesting negative sentiment towards platinum is overdone
 Only technical analysis will help spot the bottom……so let’s go directly to the charts.

Daily Platinum Futures

Quarterly Platinum Futures

The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low

I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday.  I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already.  Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low.  Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine.  In fact, the Federal Reserve is so confident in our “economic recovery” that they are getting ready to raise interest rates.  Of course the truth is that there is no “economic recovery” on the horizon.  In fact, as I wrote about yesterday, there are signs all around us that are indicating that we are heading directly into another major economic crisis.  This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us.
Overall, the Baltic Dry Index is down more than 60 percent over the past 12 months.  Global demand for shipping is absolutely collapsing, and yet very few “experts” seem alarmed by this.  If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia(more)