Replies to post #5141 on Mining Sector Ideas

[gfp927z]

Bigworld, >> not rushing in to buy <<

That seems like a good strategy. I probably jumped in with the 4% stock allocation too soon. And with the metals, the brief rally can easily fizzle. They sure haven't been acting like 'disaster hedges' over the past month.

Based on the latest news flow, a de-escalation looks very unlikely, at least in the near term. Someone (Bibi) just bombed right next to the Bushehr nuclear powerplant again, so that makes twice in 2 weeks. Even if Trump wants to de-escalate, Bibi can just keep adding fuel to the fire. If he can force Iran into a response strike on Dimona (or stage a false flag), that gives Bibi his chance to go full nuclear on Iran.

So are Trump's hopeful statements just wishful thinking, or deliberate spin / BS to buy time to get more assets in place (troops to take Kharg island, etc (?) Or is he so out of touch that he actually believes his 15 point plan had any chance? His advisors are a combination of neocons, foreign policy neophytes, and butt kissing yes men. Not exactly the caliber of Kissinger, Schultz, Baker, etc.



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[gfp927z]

Bigworld, >> not rushing in <<

Well, I decided to undo the buys from yesterday (S+P 500, metals ETFs). I don't see how Trump gets out of this Iran mess anytime soon. You never know, but it's looking like a quagmire / quicksand.

Current allocation -

Cash ------------- 32%
Treasuries ------ 40%
Metals related - 28%



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[gfp927z]

Another question concerns the metals. When do they start moving like disaster hedges again?

Analysts point out that when the Iran war hit and stock markets began to crumble, the big institutional players had to close out margin positions and raise liquidity. The metals were up so huge over the past year, that was a logical place to take profits and get the needed liquidity, The process fed on itself, and gave the metals bigger losses that they would otherwise have had.

The question now is at what level does the 'disaster hedge' aspect return to dominate? Fwiw, I figure the bullion ETFs need to at least reach their 200 MAs. That is what the institutional players are likely watching. The miner ETFs (GDX, SIL) have gotten close to their 200 MAs, but the bullion ETFs (GLD, SLV) still aren't that close. But the metals had such a massive runup, it's hard to pick an ultimate bottom based on charts. That said, reaching the 200 MA would be a good place to start at least. Fwiw, I decided to forget about trading the metals ETFs, and will just continue to hold the core LT allocation (28%).



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