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Black Friday Bedlam Means Kiss The Taper Goodbye

Black Friday Bedlam Means Kiss The Taper Goodbye

Submitted by QTR’s Fringe Finance

It’s semi-hilarious that when Covid first occurred…

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This article was originally published by Zero Hedge

Black Friday Bedlam Means Kiss The Taper Goodbye

Submitted by QTR’s Fringe Finance

It’s semi-hilarious that when Covid first occurred at the beginning of 2020, I couldn’t get a single soul to listen to me when I warned that the market would eventually react negatively.

Now, entire continents stop all travel, immediately consider lockdowns and markets sell off 2% every time a new variant makes its way into the news cycle. 

Just hours after Goldman Sachs made the dumbass move of predicting a quicker than expected taper, index futures are getting destroyed on news of a new Covid variant out of South Africa – days after I warned that the market could wind up getting its salad tossed heading into the new year. That prediction was for reasons other than another Covid variant, but I stand by my analysis. Just three days ago, I wrote:

I’m often one of the first people to joke about how nonsensical the idea of a Santa Claus rally is, but it puts the idea of a rising market over the holidays into everybody’s head, every year. Obviously, it’s just made up bullshit-lingo used to provide an excuse for people to buy overvalued money losing crap in the market, but it seems like a good year to remind market participants that a rally doesn’t always have to happen.

You can read that article here: The Market Could Collapse Heading Into The Holidays

Additionally, I had already detailed several reasons why I believed the NASDAQ could be on the verge of a collapse without warning here: Why We Could Be Staring Down The Barrel of A Catastrophic NASDAQ Crash And Not Even Know It

As mentioned, the overnight panic has been due to a scary sounding report of a new Covid variant out of South Africa. The variant may evade immunity, reports say, but is still being evaluated by scientists. Newsweek summed up the hysteria:

Scientists have voiced concern about a new COVID variant that has a “really awful” combination of mutations that could possibly cause the virus to evade immunity.

The variant, now called B.1.1.529, was reported on just days ago after a small cluster of cases were spotted by Tom Peacock, a virologist at Imperial College London in the U.K.

As of Wednesday this week, the variant had been detected in Botswana, South Africa, and Hong Kong, and there were only 10 cases reported, The Guardian newspaper reported.

Despite the low number of cases, B.1.1.529 has some experts worried due to the mutations it has.

In a Twitter thread on Tuesday, Peacock said the variant had a number of notable mutations such as K417N, S477N and E484A among several others associated with the virus’ spike protein. The virus uses this protein to enter human cells.

Peacock wrote: “Worth emphasising this is at super low numbers right now in a region of Africa that is fairly well sampled, however it very very much should be monitored due to that horrific spike profile (would take a guess that this would be worse antigenically than nearly anything else about).”

As of this morning, the new variant has already been detected in Israel and is likely going to wind up spreading globally, so it’s probably a good idea to just accept that fact now.

While the significance of this variant as it relates to people’s actual health remains to be seen, its significance in terms of macroeconomic policy and certainly today’s trading session shouldn’t be overlooked. If you want to know more about the science, Zero Hedge did an excellent job of summing up the key points of what we know about the new variant in their overnight coverage.

Here’s my wild-ass guess at the path this new variant is going to take us: more than likely back to all time highs, but not before we hit some (potentially large) bumps in the road first. While I happen to think this will be the Delta variant part 2 (in that it drums up a lot of hysteria and then everyone eventually ignores it), that doesn’t mean the government and markets won’t overreact to the news.

Remember, scary sounding words like “mutation”, “spike protein” and “variant” are a prompt to act like hysterical hyenas and usurp power unilaterally for those on the left side of the aisle (read: our entire government right now).

We will have more information over the coming days as to what the government’s response is going to be globally, but if the U.S. follows the lead of the U.K. and the EU overnight, its looking like travel bans, mandates and lockdowns could all once again be on their way.

If the government uses this variant as a an excuse to assert even more control over the country and lock down again:

  1. You can kiss any plans to taper goodbye for the time being. This’ll create political turmoil, as tapering seems to be the only “solution” politicians have explored to inflation running rampant in the country. Expect prices to continue to rip higher and the market to potentially react positively.

  2. We can eventually expect more stimulus checks, as we head further down the path to stagflation and universal basic income. The additionally stimmies will throw a wet blanket onto job growth and make the nation’s labor shortage worse. This should be a massive tailwind for gold, which is up about $25/oz. as of the time of this writing. Bitcoin selling off like a risk asset this morning leads me to believe my long held thesis that BTC is a risk-asset and not a hedge may be correct. I’ll keep looking for rotation from BTC (risk on) to gold (risk off) in the event of deleveraging. Remember, gold also sold off in early 2020 prior to ripping to all-time highs. When margin calls come in, people sell whatever they can get their hands on.

  3. Travel stocks could get pasted and stay-at-home stocks could rip. Of particular interest is oil, which has had a monstrous run over the last 6 months. Even though President Numb-Nuts is failing at actively trying to micromanage the oil market (as the Saudis look on and laugh), oil could still pull back further as perceived demand would crumble in the event of a lockdown. Also of note are names like Peloton (PTON) and Zoom (ZM) – both of which are more than 50% off their Covid-catalyzed highs.

  4. Pfizer, Moderna and Johnson & Johnson could have a heyday again, especially if the new variant spreads (it will) and can evade current vaccines (undetermined). One has to think about whether or not the new variant will be able to evade the vaccines on the market. Should this turn out to be the case, it would not only be the impetus for another round of unilateral power grabs by the government, but could also send the stocks of Pfizer, Johnson & Johnson and Moderna into the stratosphere as it would almost ensure, at the very least, new booster shots, and at the very most, an entire new round of vaccines.

And if the government decides to do nothing about the new variant, we likely wind up going back to all time highs in 2022 anyways, as it’ll probably still be used as an excuse to delay the taper.

I think the only thing that could send the markets moving much lower in very fast fashion would be a lockdown style attitude from the government without clear messaging from the Fed that they’re going to back off the gas when it comes to the taper.

The odds of this are low, in my opinion, but it would be your classic lose/lose scenario.

I’d love to be able to tell my subscribers that I know exactly where the market is going to go today, and in the week ahead, but the fact of the matter is that I don’t, but for my prediction that we could see volatility heading into the end of the year.

With so many unknowns at play (the severity of the variant, how governments and the Fed will react), I’d rather be honest with you and tell you it’s too early to try and analyze than make up some shit to justify why I charge for analysis behind a pay wall to begin with.

The only one true honest inclination that I’ve had so far this morning has been that Gold rising just $20 on this news doesn’t seem like quite enough. It had already started to feel like sentiment was shifting back towards gold as an inflation hedge over the last couple months. A brand new round of stimulus from the government would only act as a tailwind for that thesis. Lockdowns that keep production and labor suppressed would also act as a tailwind, as they’d keep a bid under consumer prices.

If I had to make any bet, I’d say this headline too will pass. And even if it doesn’t, Covid is already over for me in my head – an attitude I suggested many should gift themselves heading into the holidays.

Enjoy your Thanksgiving leftovers, and your long weekend.

*  *  *

Read more from QTR:

1. Covid Is Over (If You Want It)

2. Two Reasons The Market Could Collapse Heading Into The Holidays

3. When The Global Monetary Reset Happens, Don’t Forget Who To Blame

4. Pride Goeth Before The Bitcoin Fall

5. Cathie Wood’s Sweet Superficial Success

This was a free preview of paid content from QTR’s Fringe Finance. Zerohedge readers always get 10% off a subscription to my blog for life by using this link.

Tyler Durden
Fri, 11/26/2021 – 09:40








Author: Tyler Durden

Precious Metals

BMO Reiterates Ratings On Osisko Gold Royalties After Preliminary Results

On January 10th, Osisko Gold Royalties (TSX: OR) reported its preliminary fourth-quarter deliveries and portfolio update. Osisko received 19,830 gold
The…

On January 10th, Osisko Gold Royalties (TSX: OR) reported its preliminary fourth-quarter deliveries and portfolio update. Osisko received 19,830 gold equivalent ounces for a total of 80,000 equivalent ounces in 2021. This is at the higher end of their 78,000 – 82,000 guidance. The company says that preliminary revenue for the fourth quarter is C$50.7 million and cost of sales came in at C$3.7 million.

Osisko Gold currently has 13 analysts covering the stock with an average 12-month price target of C$22.88 or a 51% upside to the current stock price. Out of the 13 analysts, 4 have strong buy ratings, 8 have buy ratings and 1 analyst has a hold rating on the stock. The street high sits at C$27, representing 78% upside, coming from Haywood Securities. While the lowest price target sits at C$19, representing a 26% upside to the current stock price.

In BMO Capital Markets’ note, they reiterate their C$20 12-month price target and market perform rating saying that the preliminary results were consistent with consensus expectations.

On the results, BMO says that all the results came in line with consensus expectations. The consensus estimates were 19,700 equivalent ounces, C$53.3 million in revenue, and C$4.2 million in cost of sales.

BMO says that in the news release, the company outlined a number of expected 2022 catalysts which include further expansion to Mantos Blancos, ‘imminent production’ at Santana, Ermitaño, and advancing Tocantinzinho under new ownership.

BMO says that they have not updated their estimates for the companies outlook and keep their estimates tied to their models of the mine operators under their coverage so there is a potential upside to their price target.

Below you can see BMO’s updated fourth quarter, full year 2021, and 2022 estimates.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post BMO Reiterates Ratings On Osisko Gold Royalties After Preliminary Results appeared first on the deep dive.


Author: Justin Young

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Precious Metals

Confessions of a Day Trader: Pump up the volume, this one’s in the bank

This week saw the day that APT traded with a 6 in the front. Amazing to think that once they … Read More
The post Confessions of a Day Trader: Pump up…

Each Monday, Stockhead’s resident day trader gives us a peek at the highs and lows of his trading diary and hints at what might be coming this week.

Platform used: Marketech
Round Trip: A round trip is $10 up to $25,000 and then above $25,000, commission is at 0.02% in and at 0.02% out.
Rules of engagement: Never hold any positions overnight (unless forced) and try to avoid any suspensions (if possible). No shorting.
 

Monday January 10

Mmmmm is all I can say about today. Mmmmmm!

Volumes very low. Hard to find anything, though CBA made a classic 11am move and everything else was just bland.

Both APT and FMG allowed me out with just a couple of minutes to go. The results of no profit and $12.00 profit sum up the day.

So, that’s $172 for the day and put in a bit of time and energy to produce that. Mmmmm. Off for a swim and a beer.

Image: Marketech

Recap:
Bought 500 CBA @ 102.66
Bought 600 APT @ 72.27
Sold 500 CBA @ 102.98 ($160.00 profit)
Bought 2,500 FMG @ 20.63
Sold 600 APT @ 72.29 ($12.00 profit)
Sold 2,500 FMG @ 20.63 ($0.00 profit)

Got a text off a mate and this was my reply in blue:

Bitcoin (which I don’t trade but watch) hit $39,500 that night (inflation hedge vs gold, had gold up Bitcoin down) and Friday APT traded down to $69.03.

 

Tuesday January 11

After yesterday’s effort, decide to be a bit more aggressive on size today. CBA broke down below $101.00 a few times today and gave me two opportunities.

Both times left sell limits at $100.98 because if they were going to push back above $101, they would need to take me out first, so for the sake of 2c it is a good strategy to have.

Just put sell limits below key breakout figures as sometimes they can reach that figure and fall back.

Then as I’m laying down with a nice sea breeze blowing through I noticed FMG getting sold down with not long to go. Made a 3c turn on 5000 and could have gone either way, so was a ‘heads or tails’ trade and heads came in!

Up $645 and spent a bit on brokerage but this allowed for smaller turns required to get a profit.

Image: Marketech
Image: Marketech

Recap:
Bought 1,500 CBA @ 100.98
Sold 1,500 CBA @ 101.15 ($255.00 profit)
Bought 1,500 CBA @ 100.82
Sold 1,500 CBA @ 100.98 ($240.00 profit)
Bought 5,000 FMG @ 21.04
Sold 5,000 FMG @ 21.07 ($150.00 profit)
 

Wednesday January 12

Back to finding my ‘zone’ a bit today.

Working out that volumes are not as big as they could be but there’s still some volatility going on.

For example, CBA’s day range was $102.48 to $100.82 and FMG’s was not as dramatic at $21.20 to $20.68, but both have support(ish) levels. CBA $101.00 and FMG $21.00.

Doesn’t really mean anything in the real world but in the stock market world, they get sold down and bought back up.

FMG trade went on longer than I thought and CBA again gave me two opportunities. Go to bed thinking ‘should I up the size even more or will that bring me undone?’

Sipping a nice single malt as I type and contemplate my movements for tomorrow and asking my trading ‘God’ for guidance. Up $775 for the day.

Image: Marketech
Image: Marketech

Recap:
Bought 5,000 FMG @ 20.90
Bought 1,500 CBA @ 101.57
Sold 1,500 CBA @ 101.73 ($240.00 profit)
Bought 1,500 CBA @ 100.99
Sold 1,500 CBA @ 101.18 ($285.00 profit)
Sold 5,000 FMG @ 20.95 ($250.00 profit)
 

Thursday January 13

Pre-market, the news that USA inflation was at a 40-year high got me thinking about gold.

Then out of the blue, CHN opened down and I lined up 4000 to buy and then chickened out and made my order 2000. I thought there maybe something fundamentally wrong as a reason for marking it down.

As it turned out my timing was good but my size was not. Then later on, CBA gave me another opportunity when it fell below $102.00.

Good result for not too much effort today. Plus $585.

Image: Marketech
Image: Marketech

Recap:
Bought 2,000 CHN @ 8.34
Sold 2,000 CHN @ 8.55 ($420.00 profit)
Bought 1,500 CBA @ 101.98
Sold 1,500 CBA @ 102.09 ($165.00 profit)

 

Friday January 14

Well today was the day that APT traded with a 6 in the front. Can you believe it? Amazing to think that once they were par with CBA.

Just shows that a quality dividend payer will always win in the end. Not touching APT now until they become Block on the 20th.

Got a fix on CBA and also MFG. The range on CBA was $102.65 to $100.50. WTF is all I can say and today was all about patience.

Low volume and inflation scares and a Friday and an Australian holiday mode all adding to the volatility.

Up $2635 gross and $2089 net after brokerage (CBA the main culprit). Bring on Monday!

Image: Marketech
Image: Marketech

Recap:
Bought 1,500 CBA @ 100.59
Bought 2,000 MFG @ 19.58
Sold 1,500 CBA @ 100.81 ($330.00 profit)
Sold 2,000 MFG @ 19.65 ($140.00 profit)

The post Confessions of a Day Trader: Pump up the volume, this one’s in the bank appeared first on Stockhead.


Author: Bottom Picker

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Precious Metals

Lundin Gold Sees BMO Reiterate $14 Price Target After Production Beat

On January 10th, Lundin Gold Inc. (TSX: LUG) announced its 2021 full-year production results. The company announced that it produced
The post Lundin Gold…

On January 10th, Lundin Gold Inc. (TSX: LUG) announced its 2021 full-year production results. The company announced that it produced 428,514 ounces of gold, beating their own high range of guidance, which was 420,000 ounces. The breakdown was 289,499 ounces of concentrate and 139,015 ounces of Doré. The company processed 1,415,634 tonnes this year with an average throughput of 4,121 tonnes per day and a recovery rate of 88.6%.

Lundin Gold currently has 9 analysts covering the stock with an average 12-month price target of C$13.69, or a 36% upside to the current stock price. Out of the 9 analysts, 8 have buy ratings and 1 analyst has a hold rating. The street high sits at C$15.50, or a 54% upside from Stifel-GMP. While the lowest 12-month price target is C$11.75.

In BMO Capital Markets’ note, they reiterated their C$14.00 12-month price target and Outperform rating on Lundin Gold, saying that the company had strong fourth-quarter production.

For the fourth quarter Lundin Gold produced 107,900 ounces, beating BMO’s 104,600 ounces, and they note that the companies throughput and recovery rates have been steadily increasing each quarter in 2021.

Though the full year beat was unexpected by many, BMO believes that this was expected due to the strong production at Fruta del Norte with their throughput increasing 4,200 tonnes per day. Additionally, they expect Lundin Gold to come in at their own guidance for all-in sustaining costs.

Lastly, BMO believes that Fruta del Norte has started to accumulate high-grade stockpiles, which has only started in the last quarter or two. They believe that the building “of modest stockpiles as a positive for the mining operation.”

Below you can see BMO’s updated fourth quarter, 2021, and 2022 estimates.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Lundin Gold Sees BMO Reiterate $14 Price Target After Production Beat appeared first on the deep dive.



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Author: Justin Young

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