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August 20, 2018 | Beware of the Dead Cat Bounce

Lobo Tiggre, aka Louis James, is the founder and CEO of Louis James LLC, and the principal analyst and editor of the Independent Speculator. He researched and recommended speculative opportunities in Casey Research publications from 2004 to 2018, writing under the name “Louis James.” While with Casey Research, he learned the ins and outs of resource speculation from the legendary speculator Doug Casey. Although frequently mistaken for one, Mr. Tiggre is not a professional geologist. However, his long tutelage under world-class geologists, writers, and investors resulted in an exceptional track record. The average of the yearly gains published for the flagship Casey publication, the International Speculator, was 18.5% per year during Tiggre’s time with the publication. A fully transparent, documented, and verifiable track record is a central feature of IndependentSpeculator.com services going forward. Another key feature is that Mr. Tiggre will put his own money into the speculations he writes about, so his readers will always know he has “skin in the game” with them

Some plain talk today. Precious metals rallied Friday. Huzzah!

But does this really mean the pain is over? Before breaking out the champagne, we should consider the possibility that this is just a reaction to the preceding dramatic declines—a so-called “dead cat bounce.”

Let’s pull back to look at the bigger picture.

As you can see, Friday’s uptick isn’t even visible. From this chart, I draw three conclusions:

  1. This is not gold’s biggest correction in recent years.
  2. There is no technical support at current prices.
  3. Friday’s uptick does not establish a new upward trend.

I am not turning bearish on gold and silver.

I’m just saying that it’s very possible we’ll see more weakness in the days and weeks ahead, before the real rally resumes.

The sideways trading so far today confirms this in my mind.

This is not a time to chase resource stocks. It’s a time to weigh valuations carefully and place selective bids for undervalued assets.

That’s what I’m doing.

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August 20th, 2018

Posted In: Louis James

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