Seabridge Gold

During the coming ‘insolvency event’, could Seabridge Gold (SA) get back down below the $6.00 level?

If there’s any take-away from 2020, it’s that anything can happen.

Recent SA price action shows a wide trading range with high volume. 

Typical market behavior is to come back and test.

Looking at SA from a relative strength perspective, we have the top three majors (GDX) listed in terms of the highs in August, to most recent lows:

The three majors are ‘officially’ in bear markets while SA is hanging just above the – 20% level.

On a relative scale, looking at price action, SA is reluctant to head lower. It’s exhibiting relative strength.

If and when the markets (S&P, Dow, NASDAQ) reverse in earnest, there’s likely to be wide spread panic. Just like last time and probably worse.

It’s the person (or entity) that keeps their head under such conditions that has potential to establish long-term, low risk positions.

As a side note: If and when we get there (panic selling), and if SA pushes below well established support (6-area), the initial plan is to open a major long position … but with a significant caveat.

That caveat is:  We’ll take possession of the actual physical shares (not advice, not a recommendation).  The broker could put up a fuss and charge a fee.  So be it.

The world economic forum has already stated, the next “planned” event will be cyber attack

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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.

JDST Trade Yields Gain: 18.63%

The JDST trade, discussed over the past several weeks has been closed as of today.

Price action in the Junior Mining Index, GDXJ, declined sharply during the day but failed to decisively penetrate support at the 52.00 area.

Combined entry price for three separate JDST entries (9.98, 10.38, 10.58) was 10.19.  Exit price was 12.09.

Since the short trade was executed with the leveraged inverse fund JDST, we’re not going to wait around to see what happens next.

Inverse funds have a habit of ‘blowing up’ as happed with this exact fund just a few months ago.

These vehicles are absolutely not for the novice and even the experienced pro can get impaled on them every now and then.

In fact, the last substantial trade in JDST was closed out on March 12th, 2020.  That exit was just two days before the fund had its monster disconnect.  Enough said.

On a separate note; because of the price action and position of NEM, it’s now in Wyckoff spring position. It thus has the potential to move higher from here.

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 Hits Trend, Heads Lower

It’s about two hours after the open.

Newmont (NEM) has already tested upward into its trend-line.

Then, it reversed and makes a new daily low.

Not good for the bullish case.

The daily chart shows three hits on the right side line as well as a possible trading channel.

It seems hard to believe. It looks like NEM has seen its highs for the year and possibly much longer.

As always, anything can happen.  It’s still very early in the session and there could be a reversal … although a low probability.

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

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

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

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.