Monday, August 8, 2011

Today's market chart for miners

I've been following the development of these five lines all day.


GLD, the gold ETF, has been the haven obviously. I'm not going to add much here cos the world and his wife are writing up this ticker tonight and there's little point in repeating the same banalities.

GDX, the gold miner ETF (biggest holdings in this one are ABX, GG, NEM, KGC, AU, to give the general idea) tried its very best to keep up today, but it was already fading when that dismal Obama speech killed off all chances. Methinks there were forced liquidations here that were used to pay off other places of nastiness in big portfolios. All things being equal GDX should rally tomorrow, but that "all things being equal" should be understood as a big fat caveat in this week's unstable trading scene.

SLV, the silver ETF, was the embodiment of the liquidity concerns of the market. The Gold/Silver ratio moved to 44X today and for context, that ratio was under 40X last Wednesday. Silver is not the new gold, nor is it a store of wealth. Silver is silver, the Jekyll and Hyde metal. SLV's performance tomorrow is likely to be a direct reflection of what comes out the FOMC and if Benny talks helicopters, SLV rallies. If not, it sinks.

GDXJ, the junior miner ETF (biggest holdings here are junior producers like SMF.to, NGD.to etc etc) was always going to be in trouble today but it did put up a decent showing til ObamaTime and rally 4% from the bell before the same sort of drag GDX felt set in. One noticeable thing is the separation it saw from the SPX at the end of the day, as broad market indices got really really whacked into the bell.

The S&P500 index had a horrid time. Again, no great spiel here for want of avoiding the bleedin' obvious, but again that last 30 minutes of hammer selling kind of suggests to me a line that has a rally in it tomorrow.

As for the IKN Weekly roadmap of this week, this is what yesterday's published edition, IKN118, had to say about today:
"Tomorrow Monday: Sell-off on the S&P US debt downgrade, risk-off, juniors get hit, non-liquid stocks do odd things, political noise on Italy. Gold used as safe haven, so GLD and GDX continue to go their separate ways."
I think that one goes down as a win, as does the fast daytrade your humble scribe opened and then closed in RIO.v for a quick and healthy profit. Tomorrow Tuesday had its own paragraph in IKN118 and, be the call right or wrong, I'll share it on the blog tomorrow afternoon after the bell. DYODD, dude.