Yesterday the Nasdaq went down on more weakness and many of the popular fad big cap tech stocks that make up the Robinhood top 100 list and things such as the ARKK ETF fell hard. I don’t think the stock market is getting ready to crash, but we are obviously seeing a continuation of the great rotation out of the past fad winners of last year and into new things that began in February continue. Things such as banks, REIT’s, and construction stocks are winning big this year and now mining stocks are starting to go up along with commodities in general.
Take a look at this chart of the GDX ETF in comparison with the ARKK ETF on the bottom of it.
Since March, the GDX gold stock ETF has been going up while ARKK has been lagging it and the S&P 500. It’s an ugly situation for those in ARKK, as it is much like what happened with the Janus fund in 1999 and 2000. This morning, in fact, NFLX could run into some trouble as it fell over 8% last night in after hours trading after it reported earnings.
Gold made a double bottom in March to launch a new rally. This is one of the reasons why gold stocks are doing good. Typically at the start of a new gold rally the big cap mining stocks such as NEM go up hard first, with many of the smaller cap junior and exploration stocks lagging at first. Then as the rally develops more to bring confidence back to traders money starts to move into the smaller stocks to launch them.
We aren’t at that point yet, but some of the better positioned small cap mining stocks are starting to move. You can see that, for instance, in the action in my top stock pick for this month, Pacific Ridge Exploration. It is coming out of this giant gold stock consolidation phase an emerging leader. The stock trades as PEX on the CSE and PEXZF on the US OTC. For my first post on the stock, which includes an in depth profile on it go here.
I talked about the general stock, gold, commodities, and Bitcoin yesterday with Jim Goddard of www.howestreet.com in this interview.
Disclosure: Mike Swanson owns shares of Pacific Ridge Exploration. Because Pacific Ridge Exploration is a small cap stock with a market cap of less than $100 million he has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post (04/04/2021). Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Sonoro Gold Corp. This third party paid Timingwallstreet Inc., $16,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days from the date of this post (4/04/2021). This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.