As if on cue to support the prior post highlighting silver’s ‘mysterious’ decline, we have this just out, on Newmont Mining.
Newmont’s in free-fall.
For long-time visitors to this site, today’s events should be no surprise.
These reports, here and here, posted back in April, identified reversals in gold miners GDXJ, and implicitly GDX, to the day.
We’ll include a quote from the first linked report below:
“It’s a fairly safe assessment, nobody expects a downside reversal … nobody”.
And yet, here we are.
As the administration and the financial press, becomes ever more confused and bipolar; even now, re-defining the long-held definition of ‘recession’, we have Wyckoff analysis time and again, cutting through the media trash to determine the highest probability for the market.
Newmont Mining (NEM) Weekly
The chart below has current conditions for Newmont.
Also shown is the location of the first post linked above, released before Newmont began its decline.
At this juncture, NEM has penetrated long established support; technically it’s in ‘spring position’.
The expectation is for some kind of (weak) rally attempt. We’ll see if it’s able to get back above support.
It’s a significant, if not major event, when one market participant (collectively) hands off the trading vehicle to another.
In a decline, that usually means the ‘average investor’, the least disciplined, least knowledgeable, gives up and hands off to the professionals; the ‘strong hands’.
In a blow-off top, the reverse is true.
The professionals lead the ignorant along with whatever narrative is necessary so that enough volume is created to successfully exit positions.
The changing of hands for gold and gold miners, was identified on this site, here, here, here, here, here, here, and here, starting over two-and-a-half months ago.
The analysis was consistent throughout; we are not in a long-term, sustainable, bull market. That stance applied most specifically to gold miners GDX, and GDXJ.
For that assessment to change, price action itself would have to change character; not the lagging momentum indicators, moving averages, price oscillators and so on that are themselves, defined by price action.
So, let’s take a look at what gold (GLD) is saying about itself.
Gold (GLD), Weekly Chart
First, the un-marked chart.
Next, we see a medium to long term trendline that’s been decisively broken and tested.
Getting closer-in, we can see the oscillation about the line, the break and subsequent test (with reversal).
Well, that brings us to Harry Dent.
Love him or hate him. Here he is, offering up a perspective that’s not going to be popular.
How can gold (GLD) decline from here?
Let’s take a look.
If the wedge above is in-effect, if it’s the dominant factor at this point, then a break depending on location would take GLD down to about 130-ish.
If that happens, it will be a big event … down to approximately $1,300/oz.
However, it’s what may come next, that will be totally unexpected.
It’s interesting, the wedge in blue has a measured move target right to the bottom of the larger wedge in magenta.
To get below $900/oz, will be a very different place.
With that in mind, this site has presented time and again, we’re in an unprecedented world-event.
‘Normal’ is not coming back … ever.
Awake, or Not
Jerimiah Babe, in one of his latest videos hints there’s a strange vibe to what’s happening: Time stamp 5:20,
‘There’s something going on here …’
The Fed may actually be telling us the truth … just not in the way we expect.
You have to be awake to read between the lines.
Inflation may indeed be ‘transitory’ as they say because consumer demand is going to evaporate.
As with Newmont Mining in the Senor Miners Index GDX, ProLogis is the largest market cap in the Real Estate Index, IYR.
When markets ‘thin-out’, when they reach the end of a long sustained bull move, capital exits the lower caps, the lesser performers, and is thrown into the last man standing; the largest cap(s) in the sector.
In can be argued, that’s where we are now with IYR.
As expected, because of the near thousand point drop in the Dow, YouTube’s abuzz with everyone attempting to figure out what’s going to happen this coming Monday.
The Maverick does an excellent job (linked here) of posing the question, ‘Where are we’?
He doesn’t even bother with are we in a market collapse; that’s pretty much a no-brainer. It’s the ‘where’ in the collapse, that’s the question.
Real Estate … What’s Next?
From this site’s perspective, we’ll let the market itself tell us what’s likely to happen next.
Since the focus over the past week has been real estate (IYR), let’s look at the largest cap ProLogis PLD, to get clues on the next potential action.
ProLogis PLD, Weekly Chart
First, we’ll look at the big picture.
PLD was vaporized in the last market collapse.
We should also note, it took about 12-years to get back to pre-crash levels; good ‘ol ‘buy and hold’ 🙂
Of course, a multi-year covered call strategy could have been implemented if maintaining long. With that approach, PLD could have potentially become a cash-cow.
Note on the chart above, PLD didn’t just up and crash; it gave clues well beforehand.
We’ll go into those clues in a later update.
For now, let’s look at next week’s probable action.
ProLogis PLD, Daily Chart
First, the un-marked chart to show where action finished up on Friday.
Next, we see an upthrust, test and sharp reversal.
Price action finished at support and just below the lows set on Monday, the 18th and Monday the 25th.
Wide, high-volume bars tend to get tested.
So, we’re below the lows with a wide high-volume bar. That puts PLD, in spring position.
Because PLD and IYR (and the rest of the indices) finished at or near their lows, there may be some downside follow-through this coming Monday.
Price action’s the final arbiter but there’s potential for some kind of upside test in the coming week(s).
As a courtesy, the DRV chart below shows the entry location for DRV-22-02 (not advice, not a recommendation) and the current stop.
Note how liquidity has picked up over the last two weeks.
Friday’s volume of 309,800 shares, was the largest ever for the inverse fund.
That’s how one YouTuber described the Wyckoff method.
Well, judge for yourself.
The analysis in question is linked here and the video is here.
If you look at the video closely, the area called out as the ‘secondary test’ can also be identified as a ‘spring’ set-up.
Note how that spring goes straight into an up-thrust; the one being discussed at time stamp: 0:34.
Wyckoff analysis is both science and intuition.
The good part is discernment, the ability to intuitively perceive events, is a God-given gift.
By definition, no amount of Artificial Intelligence can fully replicate that ability.
Of course, that doesn’t mean the people J.P. Sears refers to at time stamp 3:26, won’t try.
So, let’s move on to the market at hand; corn and more specifically, Teucrium tracking fund CORN.
From the week of the Derecho breakout to this past Friday’s close, is a Fibonacci 89-Weeks.
Friday’s weekly bar was also a reversal.
The week closed with the highest net negative volume since the week of October 15th, 2021.
Looking closer at the volume, we see the large spike during the week ended March 4th, followed by successive weeks of elevated volume.
There’s also a terminating wedge with a potential throw-over; similar to what’s happening in Newmont Mining (NEM).
This market appears to be ripe for chaos.
Hitting The Mainstream
Adding to the probability for some kind of ‘event’, the price of corn is hitting the mainstream.
Throw in some real or fake news on food processing plants and the pressure for government to ‘do something’ continues to build.
The opportunity to go long CORN was way back at the Derecho.
At this point, prices are elevated to the point where risk appears to be increasing … potentially leading to a momentary price spike downward (not advice, not a recommendation).
If that happens, there’s likely to be chaos for several days as clearing firms either slow their payments, halt/cancel trades, or go bankrupt altogether … similar to what happened during the London Metal Exchange melt-down.
Before we get to the charts, we’re going to start with an unlikely source:
Dr. Vernon Coleman
His latest video post is here; it’s important to watch in its entirety.
At time stamp 13:30, in the link, he says that restrictions are backing off, not because of any real change of conditions; no, they’re backing off to clear room for the next scam.
For obvious lies to have any effect, one has to have a whole pack of idiots to believe them.
The last post showed with the anecdotal ‘Target’ update, of that, there is no shortage.
So how does one think a dirty, dangerous mining operation is going to be functional with an ever declining or impaired workforce coupled with a potential ‘climate lockdown’?
Let’s not forget, these operations are also working to solve problems that don’t exist (i.e. ‘sustainability’ and ‘net zero’).
Was it like this in 1929 ?
The latest post from Economic Ninja, talks about the market becoming more “narrow” … which is just an alternate term for “thinning-out”.
All of this brings us to the market at hand: Gold and the miners.
Newmont Mining (NEM):
We’ll go straight to the inverted daily chart of NEM:
This prior post did an excellent job showing the potential bearish reversal conditions for NEM.
However, there’s at least one more bearish condition and that is, ‘up-thrust’.
Remember, that if it’s ‘up-thrust’ on the regular chart, it becomes ‘spring’ on the inverted.
The zoom chart below shows price action has come back to test support quickly; an indication the downside thrust cleared out the weak hands and allowed strong hands to take positions.
We’re talking ‘inverted’ here.
So, what’s likely happened in the real (non-inverted) world:
The herd has bought into the inflation narrative.
They think Newmont, the miners and the gold market, are breaking out to the upside. Meanwhile, back at the ranch, the professionals have likely used the opportunity to sell or sell-short.
Back In The Day
Way back in the day, when Steven Van Metre, still had his 1970s wood-paneled office, he used to talk about how the Fed knows its actions are deflationary.
Also, how the Fed was in no way going to educate the public; so, they let that public believe that it’s all about inflation and dollar destruction.
The herd is nearly always on the wrong side of the trade. Here’s a blast from the past to help make that case.
Data Dump & Asset Transfer
With so many bits of data swirling around like Cryptos, Digital Dollar, UBI, Supply Chain Destruction, Depopulation, Neo Feudalism, and on, who of us in the proletariat, really know how it’s all going to play out?
However, there’s one thing of which, we can be sure:
It’s an asset transfer of Biblical proportion.
Next On The Schedule
This post is already long and we’ve not discussed the mining indices and downside projections.
Depending on price action or news, we’ll cover that in tomorrow’s update.