Home Sweet Home!

Home sweet home. Woohoo.

Good water pressure, a $500 espresso machine, and a decent cup of coffee for the 1st time in a week (I really don’t get how some people drink the stuff they drink and find that acceptable), and a giant desk with a custom built computer and 6, 23inch monitors.  You know, just the small things in life that make all the difference, lol. (That I can’t really even sit at or use because I’m still not really in great shape and my back and hands are always the worst of it. So sitting at the desk, or typing on the computer for too much isnt really possible. So please excuse some weird typos, cause they’ll be a lot of “speech to text” going on for a bit.)

Oof, I could go on and on about this experience, but Ill spare you all. Cliff notes: I REALLY need to do a better job of keeping up with this before it gets to this point. “Normal” ferritin (iron) blood level is about 50-200. Mine is 718. (When I was first diagnosed with hemochromatosis, it was 5,000)

So, hemochromatosis, is actually not THAT uncommon. Basically, an evolutionary response to my European ancestors not getting a high iron diet and retaining iron due to that. (And I get stuck in the nice little period of time where my body doesn’t realize I live near some of the best steakhouses in the world…)

Problem is, it “settles” in your joints and organs and tears them apart. (think of what metal shards would do in your car engine, and its basically the same) When you reduce the blood levels, it pulls back out from joints and organs and things improve. But as you’re doing that, blood levels could just stay at say, 700 for a while as it pulls the stored iron it thinks it needs from everywhere else. But you get better as this goes on. Slowly. The humor of this is, the only treatment is literally to just give blood. Usually, 1 pint or 2 a month for a while then eventually like 1 pint every 6 mos or so. I’m one of those types that tends to pass out from needles, lol. They always seem to think I’m exaggerating when I say that until they see a guy who’s 6’ 3 and 185lbs hit the floor. Scares the crap out of nurses. It’s especially fun when the needle is still in your arm. So consequently, I don’t tend to do it as much as I should.

Some adjustments on some meds, a really bad reaction on those adjustments, more adjustments. Def doing a lot better, but def still not great. Only so much staying in the hospital can do so best improvement is finally getting to be home again. Man, I can’t tell you the massive exhale that is after all this. I HATE hospitals. (Not an uncommon opinion I’m sure)

But Man, I picked a hell of a time to go. A presidential candidate gets an assassination attempt a few days before, the biggest cyber outage in history, and a sitting president, eligible for reelection, drops out 4 mos before election day. Literally unprecedented events we haven’t seen happen in a half a century. In relation to all that though, markets have been fairly muted really. In the week since I was gone, gold launched through 2400 to break to new highs by $30, only to collapse right back to 2400 again. Meanwhile, silver is retesting lows and miners are holding in very well at the moment. SPX turned down hard fri and is looking to break lower again today now. Bonds pulled back from recent gains slightly and calmly, which is what I was hoping to see so there might be an opportunity to add soon there. Platinum and copper got another flush down and that’s been about 2 mos of correction on both of those after some fast gains, so we are probably reaching the end there too and may be a good shot soon at buying some copper miners and adding 1 last time to sbsw or impuy or other platinum stocks as both now are looking about as flushed out as I was expecting. COPX tested the 200day ema yesterday, nearing support here in this 40-42 area (that was resistance spring-fall last yr) and about -20% now from highs in may.

The problem in gold, (Imo at least) sentiment and positioning. I think we’re just too extended and bullish for anything too sustainable for very long. We were so close to retesting highs it seemed likely we would try for it, which I mentioned a few days ago, and we broke, JUST enough to fake everyone into “buying the breakout” only to flip the boat and dump $50 on Fri. (And I’m really not a fan of that weekly rejection candle, but it’s one candle on a bull market and we went through this in March (a couple times) and what happened while everyone got worried? We did it a couple more times then broke higher anyway.)

But sentiment was VERY dif then and that’s the point. So was the cot positions. I said this back in the winter when everyone was worried that “everytime commercial shorts got this high, silver crashed”. (which is the wrong way to look at cot reports anyway, its about the large spec longs, not the commercial shorts) It's not the same market. Every major breakout and new highs on gold and silver, large specs longs (and inversely, commercial shorts ) reach highs then go even HIGHER. This is where it gets tough, for 2 reasons. A) you have a tendency to naturally look at “what happened last time”, but last time was a bear market. In bull markets, large spec longs move to new highs and stay there the entire time. (Just look at 2009-11 for example. We broke 1k at ath long/shorts for large specs and commercials then basically stayed there for 2 yrs while gold doubled.) and the other reason it’s difficult is there is no “limit” like there (kind of) is on the downside. At lows where we see large specs and managed money going short, you can buy confidently (and blindly even) and just be patient. Like the crash in Oct, the momentum chasing crowd, (large specs and managed money particularly) went net short RIGHT at the low, then a ripping rally was driven by forcing them all to cover quickly, gaining double what we lost on the downside in the same 2 wk time period. On the upside, it’s a matter of “how high is high?” and there is no answer. Basically, since golds bottom in 2001, every push to new highs as we’ve gone up has also come with new highs in positions. So we should expect the same. How much is “too high” though? It’s not as straightforward, but I think we’re close. This break higher came with a large rush of buying with it. Positions on large specs and commercials are at the highest levels on gold in 4 yrs. (basically when we peaked in 2020. So that’s not an insignificant problem imo)

So, the point is, can we expect a +20%, 3 month major move higher from here like we saw in March? No. But that doesn’t mean we don’t push to 2500 region over a month or so and have some good moves in miners that come along with it as things hit a more extreme level and make a more major medium term top here.

This is why I was a bit hesitant on the idea initially of buying puts at all for a hedge. As a general rule of thumb, don’t sell markets making higher highs, don’t buy markets making lower lows. The trend is your friend. That great feeling of nailing a breakout like we did makes you think you’re the smartest person in the room and you naturally want to do it again right away. It’s usually best to just take profits and wait to buy again rather than try to bet on the correction as well. So that was a mistake, and I don’t think we should attempt that again. As gold makes higher highs and higher lows, lets just be patient and only look for long positions, rather than get cute and try and nail the corrections. But that is exactly why I said I don’t want a huge position here in a similar way to what was working very easily from 2021-2023, only about 5% hedge on the gold portfolio. Any chance I can get to rant on the importance of portfolio management I will take it so here it comes yet again. All in all, if your sitting the way I have outlined, with about 25% of your gold portfolio holding physical or GLD, SLV or similar, and about 25% in royalty companies, after cashing out 50% in June on a huge gain in miners and just sitting on the cash, with 5% on those GDX puts we only went 2/3s of the way into anyway and then stopped as to not dig ourselves deeper, this is nothing. Your physical is holding, your wpm is up 20% in 2 wks, your rgld is up 15% in the same time, your 45% cash is cash, and your 5% hedge is down 70% after basically doubling half your portfolio in our miner picks from March to June.

Overall, you’re sitting pretty. You’re up significantly for the yr, you’re gaining over the last few weeks on this rally, your fomo is managed due to that. You gave back a very small amount of gains on the put losses here. Your simply just not MORE leveraged in positions that over the last few decades have spent 90% of the time going lower, increasing debt, issuing more shares, making bad management decisions and destroying shareholder value. (Miners I mean, in case that was not incredibly obvious for anyone who has looked at a chart of HL over the last 20 yrs.)

You’re not gonna catch every inch of gains Every time so get that out of your head immediately. We got the big chunk of high probability profit and that’s the point. Then we got out of the way. You look at miner charts and it becomes pretty clear. You get these huge gains over 3 mos or so, then you give it all back. (and then some in many cases. In that same example of HL, it was $27 back in 1987. It’s been down hill ever since, but with some VERY nice ST gains in between if you time it right) It’s simply a question of “is the probability of significant gains from here higher than the probability of significant “give backs” of the gains we already gave?” and since cashing out in June, imo, that is still a very clear “no.” and that’s what matters.

On the daily perspective and looking at miners too, SO FAR we’re doing exactly what I said we should look for in a bullish situation. We came back down, and we’re seeing buying support price here near 2400. 2 steps forward, 1 step back. Money is coming in patiently and strategically, buying this correction, so far.

PCE on Fri, and fomc next week. I think this could be a flip of the coin either way. That hard push down I think was an indication of a market too overheated, but this basic, “2 steps forward 1 step back” we have here on gold is exactly what you want to see in a bullish market.

There’s also the point I’ve noted about the highly disproportionately, and in no way random, amount of highs gold sees in the months of aug-sept (about 11 of the last 15 yrs). So it’s VERY likely we do it again, just to push into the 2500 region next few weeks, and then spend the FALL cooling off rather than the summer (which was my original expectation) and getting another end of yr rally, but instead prob BOTTOMING by the end of the yr as we then spend a few mos cooling off and shaking out the ever increasing excessive bulls and momentum chasing here.

Some people (Billy D I believe particularly) basically noted that. “What if we’re looking for about a 3 mo cool off but we’re going from the high in April as opposed to the MARGINALLY higher high in May. Well, then, that lines up with what we’re seeing. A low in July and push higher. And it seems that was right. Good job!

This is the problem with marrying any idea like “cycles” or “count” too much. (Which I think norvast does too much of in particular. In the meantime, guys like Simon have taken the same analysis and come to a totally dif conclusion. And that’s always the case with any method you’re using. People tend to see what they want to see to confirm the bias they have, rather than letting the evidence speak for itself. It’s not easy. I think it’s particularly difficult in gold because we all like gold for the same basic reason. We can do basic math, add it all up and conclude this WILL end badly and does nothing but get worse on a daily basis so how can you be anything but bullish? The answer is, markets don’t go straight up. Gold is not like spx where 401k buying comes in monthly to the tune of billions, etc. it’s a relatively small market. The participants are the participants. We all KNOW that if the public moved more into gold price would be massively higher but people have been saying that for decades and it hasn’t happened. If anything, I think it’s gotten worse. For reasons I’ve pointed out before. The public WAS more interested in gold in 2020, and what did the gold experts say? Buy bullion with 10% of your investment portfolio and sit long term? No. They pushed silver at 30/oz. They said buy 50m MC jrs that will 10x that instead lost 90%. The result is, that public now wants to get back to even and “never buy gold/silver/miners again.” Good job guys, weve once again, become our own biggest hurdle to accomplishing that goal of furthering public interest in gold. But I digress, as always.)

So, the point is where does that leave us right now? I’m not particularly interested in trying to chase a 2 wk gain, but if you want to short term trade, id keep it small, and be quick to take profits and exit a position entirely the moment it starts acting crappy (especially in miners). I think fomc and PCE are the obvious catalysts for a move here and I think there is an equal chance it either sparks a few weeks of a higher high, or a drop that faked everyone out breaking higher last week, then breaks 2300 to settle in for a buyable low and a flush out of excessive buying and bullishness over the next month or 2. Considering the small position size of the GDX puts, and the fact that they were only 2/3s in anyway, and that there is about 8 wks till expiration and they’re down 70%, there’s not much I’m worried about “saving” on that position that isn’t, imo, worth rolling the dice that we just tipped the boat too much and set ourselves up for a breakdown coming soon. There is also the continued weakness in the economy, the fed looking to cut, the inverted yeild curve looking to soon “uninvert” as the fed does cut, and the 100% correlation those 2 things have that precede recessions and market crashes to worry about. That continues to be an elevated risk and a reason to not be super aggressive or leveraged here on anything imo.

IF, we hold near these levels, in which anything in this area of 2400 down to about 2350 even is acceptable as a 1 step back/higher low, and spark some more buying coming in strongly after fomc and PCE, then I think we got something. I just don’t think it lasts too long. You might get some very nice profits out of a few weeks. Or not. We’re very overheated but bull markets do that and stay that way, but I still think this is a gamble and being too bullish here is pushing your luck.

So let’s see how this next week unfolds. I’m not gonna sell my puts because there is nothing there to get back I’m all that worried about at this point. If you went WAY more aggressive than a 5% hedge, you may want to reduce ahead of PCE now that we have pushed back down after that move up and appear to be holding decently with some outperformance in miners. (Again, the importance of portfolio management. Whether to sell here or not is a totally dif answer depending on whether we’re talking about 5%, down 70%, or 20% down 70%. It’s not as straightforward as just buy/sell. It’s a matter of how much and your expectations/ for what purpose your doing it for, positions size, etc)

Now, for other things, give me a bit to catch up. Like I said before, if there’s a question I missed, if there’s a refund owed from patreon, etc, please just message me or email me again about it and don’t feel like you’re being annoying. Trying to manage the move from patreon to the new site with everyone and then getting hit by this has just been an absolute organizational mess to me. I apologize and appreciate everyone’s patience and I assure you I will take care of everything (eventually) in terms of refunds, questions etc. I really appreciate everyone’s patience here and support. It’s just terrible timing, but thank you all for making this mostly a painless situation in terms of both the website move and my recent medical “vacation”.

Thank you to everyone for your messages and caring about my health. Almost everyone said the same derivative of “health comes first” and 100% that is true. (Remember that in your own life too, because it’s WAY easier to SAY that then to do it yourself, lol. We ALL tend to push our luck, grinding ourselves down to nothing because unfortunately, its necessary to just SURVIVE these days, but in reality, your hurting yourself more than your helping, which I of course found out again, the hard way.). In addition to ironing out final stuff on closing patreon down, refunds, and the moving to the new site, yes, these things happen health wise. Nothing anyone can do to predict them, it just is life. (Was preventable though, to some extent, im just an idiot) That being said, there’s the simple matter of a precedent for how we operate here, what I do, what I try to provide and what you guys pay for all of that, that has simply not been up to par last couple of weeks. And that’s just not fair. You’re paying for something I haven’t delivered on, simple as that. So, give me a little bit to figure out how to do it, but EVERYONE is gonna get a refund or discount accounting for that in some form. If your monthly, a discount code for next month, if your annual or monthly and canceled, a refund of some sort. Give me a bit to figure out the details and logistics on that and get back on track with that, as well as everything else here in life that feels like a big ball of mess. And again, thank you all for your compassion and patience, it truly means a lot to me.

Now, Back to business!