Category Archives: Gold & Silver

What’s wrong with this picture?

October 25, 2020 By in GDXJ, GLD, Gold & Silver, Gold Miners, JDST 11 Comments

The good part about price danger points, price action does not need to go far to confirm or negate the trade.

We’re at that point now with precious metals and more specifically, the junior mining sector, GDXJ.

A brief search for YouTube “gold higher”, turns up the list below. 

The amount of bullish biased videos is easy to find. 

Everybody’s doing it.

Gold To Explode

Embrace The Dip

Growing Debt, Gold higher

Ray Dalio, Gold Price Up

Expect $2,500 Gold Price

Peter Grandich, 100% In On Mining Stocks

Silver Price Will See Explosion

Silver, Time To Buy is Now

How High Will Silver Go?

$36 Silver By End Of 2020

Who wants to hear that a favorite investment or market is heading lower?  

Getting to the chart of GDXJ and what’s wrong; it’s obvious.  

There’s a huge non-confirmation.  

The gold tracking fund, GLD is back at or near all time highs and yet GDXJ (the junior sector), is down -58.8%.

There is no way to paint this in a positive light.  Down nearly 60% is massive. 

One way to look at it is, the junior sector does not believe gold (and silver) prices can be sustained at current levels.

Or, if they are sustained, there must be something else at work that would prevent them form obtaining a substantial profit.

Either way, the last report on the sector stepped through the current price action.  We’re at the danger point for GDXJ.

A move higher in the coming week will put a dent in (or negate) the bearish scenario and a move lower will help to confirm.

Stay tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Newmont: Wedge Breakout

October 23, 2020 By in GDX, GDXJ, Gold & Silver, Gold Miners, NEM

The entire precious metals sector may be about to take an unexpected hit.

Prior updates have discussed the Newmont (NEM) bearish divergence and reversal.  This update shows a rising wedge breakout to the downside.

Using standard analysis techniques on the chart below, we get a measured move to the vicinity of 47 for NEM.

A decline of that magnitude, a drop of over 22%, may be the catalyst for a whole other bearish scenario.

Just based on empirical observation and analysis generally available (YouTube, et al), it’s pretty safe to say that no-one is prepared for a significant decline.

Well, almost no-one.  As reported back in late September, the only YouTube analyst (that was located) proposing the idea of a decline was Sajad, in this report.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Fail: Gold Miner Indexes

October 21, 2020 By in GDXJ, Gold & Silver, NEM

When in an uptrend and prices start to flag, it’s a warning that energy is lost.

The Newmont update showed the heavy hitter was in a reversal.  That update gave specifics on how or when the reversal would be negated (and back into an uptrend).

It’s not happening. The upside hasn’t showed … or, at least not yet.

The next trading day, Newmont (NEM) lost 1.5%. The day after that (yesterday), was another down day with a loss of nearly 1%.

Today, NEM is attempting to move higher. However, the weekly bar is still in reversal.

The mining indexes themselves are not so clear.  The junior index with its weekly chart below, has it reversing last week and now attempting to move higher.

It’s losing steam.  It’s no secret that failed moves can be the most dynamic of all price action.

The market is ‘supposed’ to go one way … in the case of the silver/gold miner’s, they’re supposed to be moving higher; Hyperinflation and everything, right?

What if everyone’s on the wrong side of the trade?

What if the expected hyperinflation is years away? 

This juncture right now, appears (not advice, not a recommendation) to be a low risk area to go short.

In the case of the junior index GDXJ, if price action closes up for the week, the bull market may continue.

If not, and GDXJ closes down for the week, the up-trend looks like it’s failing and the entire sector could fall apart.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Newmont Mining (NEM) Reversal

October 18, 2020 By in Gold & Silver, NEM, Wyckoff 4 Comments

Newmont Mining (NEM) is the heavy hitter. 

Newmont’s in the Senior Mining Sector GDX with a market cap that’s equal to the next six mining operations combined.

If Newmont has reversed, the entire sector is likely to follow suit.

At this juncture, that’s exactly what’s happened. 

The chart below shows a weekly MACD bearish reversal in-effect.  In-effect means the technical indication is correlating with the price action result.

Newmont appears to have made its high and is now heading lower.

Of course, the gold miners reversing and heading lower is completely opposite the established narrative.

Price is always the leader.  Price action in NEM has probabilities pointed to the downside.

So, how will we know if the direction changes and resumes an up-ward course?  What price level must be reached to negate the current reversal scenario?

Since we’re right at the edge, the danger point, small fluctuations change the outlook significantly.

Recall in a prior update, the quote from Wyckoff that effectively said:

‘At pivot points, price action can go either way.  It’s as if the weight of a feather can determine the next likely direction.’

That’s where NEM is now.  Price action is tight.  The picture changes to the upside if we get a push above last week’s high:  NEM, 64.33.

That’s just 1.66, points, or a 2.65% move from were NEM closed last Friday.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Trending: Biotech

September 24, 2020 By in Biotech, BIS, Gold & Silver, IBB, SLV

Today’s action may be in a trading channel.

It’s a Fibonacci eight days from the low of September 4th, to the top on the 16th.

That time correlation, along with the channel hits, help to provide validity to the set-up.

Our short position in the sector has not changed appreciably.  There was a slight backing off yesterday, by reducing the size about one-percent.

However, during today’s action as IBB was making intraday highs (BIS making lows), the short position was increased, via BIS.

In any event, we have a hard stop at the day’s high, IBB 134.85, which is approximately 31.46, on BIS:  Not financial advice, not a recommendation.

As of this post, 7:00 p.m., EST, the S&P 500 futures are trading down about -0.50%, giving the inference that downside action will continue at the next session.

Silver futures have dropped another 4.5% – 5%. Price action’s heading straight down.  Nearest chart support for the SIZ20 (December) contract is around 20.00.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Silver Freak-Out

September 23, 2020 By in Gold & Silver, SLV 1 Comment

It’s all starting to sound like the global warming scam. 

‘It’s only ten years before all the ice caps will be melted’.  Problem is, it’s only been ten years for at least 40-years!

Note:  For a total evisceration of the AGW narrative (or hoax), Tony Heller has done an excellent job.

Which brings us to silver and the boogeyman of ‘hyperinflation’s just around the corner’.  It could be the latest false narrative that’s not panning out.

At some point, the dollar will go to zero.  That’s well understood by anyone with a modest amount of financial knowledge.

It’s what happens before that; that’s what’s important.

Even J. Bravo, is starting to think it may not be a slam dunk to dollar zero.  He had a guest on a while back that got howls of disapproval with his deflation (first) assessment.

Not saying the premise is right.  Just saying when there’s that much of a consensus (hyperinflation), it has a nasty habit of not coming to fruition.

As always, anything can happen.  We could get hit with a solar flare or a massive volcanic eruption throwing everything out of balance.

Matter of fact, both of those are highly likely right along with a near earth miss, asteroid passing within 13,000 miles … tomorrow.

In the meantime, we’ll focus on typical market behavior.

The last update stated:  “Barring any additional upside, the expectation is for price action to retrace and test the wide, high volume chart areas.”

Fast forward to now.  There was just one more blip higher before silver began its correction in earnest.  This is normal and expected market behavior. 

The chart shows there’s potential to go all the way back to support levels at the 17-area.

However, it’s also possible we’ve seen a top and silver’s headed to new lows (time stamp 3:10); That’s completely opposite the consensus and potentially a more likely result.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Silver Top?

August 21, 2020 By in Gold & Silver, SLV 1 Comment

The silver bulls may have been sufficiently trapped.  If so, they’re subject to a beating via reversal.

2017-02-10_6-36-21-border

The markets aren’t friendly and silver’s one of those that never takes prisoners.

As mentioned in an earlier post, even trading genius Ed Seykota (of Market Wizards fame), early in his career, was impaled mercilessly by silver spikes.

As always, anything can happen and some new demand come in to lift SLV higher.

However, when you look at the typical form of a silver topping pattern, it looks like we’re there.

If there’s a caveat, the chart pattern insert is on a weekly basis and the current chart is daily.

Markets are fractal.  Patterns can (and do) repeat at all time-frames.

Barring any additional upside, the expectation is for price action to retrace and test the wide, high volume chart areas.

2020-08-21_15-42-55-SLV-Daily-Close-3-bar-notes

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Is Corn The Catalyst?

August 20, 2020 By in Banking, Bonds, Corn, Gold & Silver, S&P 500 2 Comments

Bonds, biotech, the banks; or is it corn that’s the catalyst?

Everyone’s focused on the markets, the S&P 500.

Fotosearch_k8956751Meanwhile, back at the farm (literally), the food supply is undergoing controlled demolition.

If the supply chain continues to be restricted with prices rising ever higher, the silver and gold ‘stackers’, may have to liquidate their hoard just to survive.

Getting back to corn; the technical position of the ETF, CORN was highlighted yesterday in this post.

Now, with about an hour before market close, CORN has posted a 38% retrace and reversal ( if close is at or above current levels).

On top of that, it may be too early but maybe not.  CORN is now trending upward at over 400%, annualized.

One day, does not a trend make.  Then again, wouldn’t it be nice to know early on of the possibility?

2020-08-20_13-42-53-CORN-Daily-4-bar-notes

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Corn Flattened

August 19, 2020 By in Biotech, Corn, Derecho, Gold & Silver, SLV 12 Comments

Ten percent of the U.S corn crop was instantly wiped out last week during what’s described as an inland hurricane.

The video here goes into more detail about correlating events.

iStock-1019396932

To limit the food supply even further, driving prices higher under the guise of inflation, the ‘speck’ (time stamp 6:00) has invaded 100% of tested agriculture workers in California.

The corn ETF mentioned at Time Stamp, 4:16, in the linked video is shown below:  CORN is the ticker symbol.

The ‘derecho’ breakout is clear.  Currently, CORN price action has retraced slightly and is testing support levels.

2020-08-19_9-20-04-CORN-Daily-4-bar-notes

In separate markets, biotech (IBB) has posted another sell, sell-short signal with this session’s new daily low (not financial advice).

Silver is reversing as expected.

Whether or not this is just the beginning of a long down move to form new lows (for SLV), is unknown.  Of course, such a position or thought is, completely opposite the consensus view.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Random Notes

August 12, 2020 By in Bonds, Gold & Silver, IBB, Interest Rates, Lumber, MRNA

Notes for the day … not in any particular order.

Lumber futures:   Prices up over 180% in five months.

2020-08-12_11-40-37-notesInterest rates are rising.  10-yr rates up.  Similar set-up as August, 1987?

Frustration with the mindless herd growing.

Biotech testing yesterday’s move lower.

Moderna (MRNA) has formed a wedge and is near a downside breakout.

Drunk and ‘working’ from home.

Internet censorship:  Oppenheimer Ranch Project no longer monetized.

Silver and gold, future test of new lows?  At time stamp 2:58, Sajad hints at same ‘testing the lows’ scenario as was posted with Silver Up, Then Down on July 25th.

 

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.