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Gold vs. Gold Miners

As the major averages quietly approach all-time highs, we haven’t heard a peep from the political noise machine.

Has the swamp finally dried up?

Not a chance. In fact, we can always rely on the financial media to drag politics back into the fray when the news cycle slows down.

The press latched onto a Trump tweet early Tuesday as stock wandered into the red. New tariff threats aimed at the European Union became the day’s trading touchstone:

Trump Trade

Back in the real world, I seriously doubt an early morning tweet like this one was responsible for the Dow shedding almost 200 points on the day. The averages needed a quick break. The S&P had just posted eight straight days of gains. A little pullback following a virtually uninterrupted two-week rally is nothing to worry about…

First up: new “natural energy drinks” are coming to your neighborhood Walmart.

New Age Beverages Corp. (NASDAQ:NBEV) shares jumped nearly 40% to kick off the new trading week after the company announced Walmart would begin carrying its Marley brand drinks.

“The natural beverage company is already shipping to Walmart distribution centers and each of the three flavors of Marley Mate will be available at stores this month,” Bloomberg reports. “The company describes the beverage as ‘a natural energy drink that has the taste of tea with the uplift of coffee without the crash.’”

Why the fuss over some hippy-dippy yerba mate? Probably because New Age is working on cranking out some Marley branded drinks infused with — you guessed it — CBD. The drinks approved for sale at Walmart do not contain any CBD yet due to sticky legal reasons. But it’s an important foot in the door if Walmart embraces cannabis products down the line.

Either way, it appears the over-eager NBEV buyers are coming down from the initial buzz of the Walmart deal. The stock slipped lower by more than 11% yesterday.

NBEV

NBEV could use some time to consolidate Monday’s monster move. I’ll keep an eye on it since many high-profile cannabis stocks continue to struggle this week.

Don’t look now — gold is back above $1,300 again following its choppy March performance.

It’s now been more than six weeks since gold set its year-to-date highs approaching $1,350. But the resilient gold trade is perking up again this week, jumping back above $1,300 after finding support near its March lows.

As we’ve discussed many times this year, gold has built a monster base since it registered its bear-market lows in late 2015. Over the past three years, gold has bounce off its lows near $1,050 and attempted several rallies that have all failed before hitting $1,400. Now, a five-month rally is setting the Midas metal up for what could be its most important breakout in more than a decade.

But like most major moves off bear market lows, gold’s bounce has been anything but orderly.

GOLD

While gold has frustrated investors, gold related investments look like they’re ready to make another run. When we last checked on the VanEck Vectors Gold Miners ETF (NYSE:GDX), it was bouncing off its March lows. As I noted earlier this year, we’ve noticed a major change in character in GDX compared to last fall when the miners found news lows as gold stabilized in the $1,200 range.

October’s breakout was a sloppy mess at first. But these volatile stocks are gaining the traction they need for a meaningful rally. In fact, the miners continue to look constructive even as gold becomes volatile following its retreat from $1,350.

GDX

A close above $23.35 should trigger the next leg of this rally.

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

View More By Greg Guenthner