He Is Not Calling the Top. He’s Waiting for the Old High.
John Feneck told Mining he is waiting for $50 silver. That is not a bear call. It is a floor call from a man whose largest position has been the metal for two or three years, and who has already said the old all time high is the level that now has to hold.
In March he put the number on the tape after the January washout failed to break it.
“Fifty was the all time high previously. Now 50 in our view is the new floor, like 50 to 54. We don’t see those levels being touched unless there’s a black swan.”
The title of this interview is the same trade, said out loud. Silver ran through the number people used to treat as a ceiling. It tagged the high 60s. Feneck did not chase the spike. He wants the retest of the level that used to be the record, because that is where the new bull market either confirms or fails. If it holds, the buyer who waited gets the ounces and the equities at the price the market already proved it can defend.
The rest of his map has not changed. From the mid 60s he has been willing to say the next round number is not a fantasy.
“I’m much more overweight silver. I’m much more bullish on silver, but I would say from $68 here, I see a hundred by next year, for sure.”
He is not selling the four figure story. He wants the move you can bank. Back into the 70 to 90 channel, then $100. The $50 wait is how he gets there without paying the spike.
The juice, in his telling, is not the coin. It is the producer at a price that already makes the income statement look absurd. All in sustaining costs around $30 and a metal at $70 is free cash flow by the fistful. He has said the line before, and it still fits a pullback that stops at the old high.
“These companies are printing cash.”
And the older line, from when $50 was still the upside, is the one this interview turns around.
“If we have $50 silver, then you would want to be buying silver equities with both hands right now.”
That was the breakout case. This is the retest case. Gold, in the same stretch, he has treated as stable rather than broken, with support he has marked in the $3,900 to $4,000 area and a Fed that does not have the room for a 2016 style hiking campaign. Position for next year, he told Investing News, because the backdrop looks better then than the tape does today.
Feneck is not waiting for silver to die at $50. He is waiting for the old record to become the bid. If it does, the equities he wanted with both hands at that price are the trade. If a black swan cracks it, the floor thesis is the thing that was wrong. Until then the wait is the position.
