Weekly rollup | Feb 27-Mar 05 2023
Stocks Mentioned: Exmar NV (EXM), Wheaton Precious Metals (WPM), Newmont Corporation (NEM), (FNV), Centerra Gold Inc (CGAU), i-80 Gold Corp (IAUX), Argonaut Gold Inc (AR.TO), Marathon Digital Holding (MARA), Rio Tinto Group (RIO)
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February 27 2023
Buy Exmar NV (EXM). Breakout from base following a long sideways consolidation after the gap higher last August. Exmar is an LNG play.
Housing sector is in a lot of pain, though you wouldn't know it by looking at the homebuilders.
February 28 2023
Buy Wheaton Precious Metals (WPM)
If gold has bottomed and is about to bounce, there's a trade here. Bonds appear to have bottomed so perhaps gold has as well. Either way, some gold miners do look good technically and offer an interesting setup.
If you can buy WPM at $41.5 and set a stop loss at $39.8, you can take a ~$2.5k position for a risk of just $100. The trade may go south fast, but if this is the bottom, that's a phenomenal risk/reward. Bigger miners NEM and GOLD are still falling knives, but the stocks on the table above are not. I excluded FNV from this list due to Cobre Panama nationalization risk.
If this trade goes my way, I'd like to add CGAU and IAUX, maybe even old favorite AR.TO for added oomph. For now, Buy WPM with a stop at $39.8 for a risk of 4.1%.
Short Marathon Digital Holding (MARA) IMMEDIATELY at $7.42
MARA is restating 2021 financials and delaying the filing of 2022 financials. The company says it made a mistake in accounting for bitcoin impairment and mining pool operations. You can take that at face value or assume they're downplaying the real trouble. If the former, it's not likely to be meaningful. If the latter, it will be meaningful. Bitcoin gets marked up every month end so a strong up day like today is a good day to short and await events. For now, loose stop at $9.24 but I'll update with a real stop loss based on how this breaks.
March 02 2023
"It looks like we have the whole market on one side and the RBI on the other,"
- a spot trader at a private sector bank said.
"There is no way to deduce how long can this continue."
If this sounds ominous, that's because it is. Every single central banker thinks he can fight market forces and win, but eventually is forced to let go of the currency. The rupee has been depreciating slowly thanks to foreign investor inflows offsetting capital flight by Indians. Now that both foreigners and Indians are taking their capital out at the same time, the RBI will be forced to throw up its hands and let the rupee slide rapidly. Holding rupee denominated assets is like being the proverbial frog in the kettle with lukewarm water.
An old article (September 2015) that's still relevant - A Requiem for the Rupee
Source: The Mad King
Imagine a crazy looking coot holding this chart up in front of your neighborhood McDonald's like a Jehovah's Witness recruiter or doomsday prepper. Doom is actually close at hand, unless the money printer goes brrr again.
10Y and 30Y yields blasted past 4% pre-market. Stay short tech stocks and copper miners!
History in the making folks. Front row seat to the Fed destroying retiree's savings by annihilating their bond portfolio. The gentlemen who preferred bonds are going the way of Randolph and Mortimer. Broke.
Copper miners are unusually strong, especially RIO, which beautifully held the 100 DMA and bounced higher. Not a reason to close the short position, but I'm wary now.
March 04 2023
The pile of dollar-denominated corporate bonds and loans in the Americas trading at distressed levels rose to $237.2 billion in the week ended Friday, about a 1.63% increase from $233.4 billion a week earlier, according to BBG data.