What is Goldtent TA Paradise?
Pure Plunger (HOT!)
Was noticing some very interesting volume activity today in UGAZ; 11:20am and volume is already at an all-time high of 54MM shares ahead of the NG storage report at noon. I’ve been looking at this chart for a while thinking “Now this is what a capitulation bottom looks like!”. These volume spikes on little price movement are often very telling. I like the gap down bullish flag on monster volume.
I know many are looking to buy miners now but I think it’s premature, at least based on what I’m seeing in the charts right now. On the daily the 13ema is still firmly in charge as resistance, and I think we have another instance where a bearish flag has broken down and is backtesting in a weak consolidation structure. I suspect this consolidation is a prelude to the next hard leg down which could start any day now. Wouldn’t you rather see the 13ema become support before making bullish bets?….otherwise I think longs are trying to swim upstream.
Adding a chart at 12:40pm – showing some GDX vulnerability here. GLD gap fill, GDX thin zone fill and both looking to move down more while S&P moves sideways to up.
The EUR is forming a small falling wedge very near the candle neckline for the massive h&s. It has broken out of the h&s on a line chart as you can see here but not yet on a candle chart (not shown).
I think it is gathering energy here now in order to punch through that candle neckline for the h&s, which is set around 104,60. When it does that, I think the USD will break out above 100,40-50. As I have suggested many times, the EUR is driving the USD and not the other way around. The USD just happens to be on the other side of the USD index when the EUR now very soon starts its final collapse.
One interesting thought one can have is to think about what happens to the USD and the USD index if the EUR blows up as I think it will if it comes close to its PO for that huge h&s. Then the USD index will be history I guess in its present form.
I have now bought my first tranche of EUO. Yeah, I know, we do not have full confirmation yet as it has “only” cleared the line and not the candle neckline. But hey, look at that h&s and all other stuff that is going on…
I think this is a bearish falling wedge, i.e. it might not bounce, and if it does, I am fine with that and will then just buy my second tranche on the top of that bounce.
And yes, that is a small bear flag (green) forming just below the neckline on WTI.
And DWTI is BT.
Look at the potential for reverse symmetry on both.
I think this might be it for COMM. Would not be surprised if EUR starts its final collapse very soon by the looks of COMM.
This is still work in progress, but almost there. If there are any others you want me to look at, let me know. I have divided this into 3 sections: ETFs (excluding GDX and GDXJ as they are in the global matrix), Big cap miners, small cap miners. I have been through all the financials and these companies shown all satisfy my criteria, the main ones being cashed up, good cash-flows or near term cash flows, no debt issues, no other issues on the balance sheet of concern, good development and exploration pipeline.
I have also rated them using Weistein’s model. Of interest is that 60% of the smaller caps are already in stage 1, whereas only 30% of the large cap are in stage 1. For this reason, the small caps should be the focus over the coming weeks and months, for down day accumulation, whilst waiting for the gold cycle to finally bottom.
A handful of the small-caps are outstanding companies, with potential to outperform. I will highlight these at a later date. Today I am planning to buy another few miner stocks, and will provide an update on these buys mid-morning today.
in 2008/09, the gold miners achieved stage 1 to 2 transition fairly quickly, then rallied sharply into the stage 3 peak in 2011. Then it was into stage 4 decline. About half are still in stage 4. the other half in stage 1 have been laboring for some time, so this is a very different stage 1 than 2008/09. its more of a process, looking for an event to light the fuse. that event is approaching. not there yet though.
the longer the stage 1, the bigger and stronger the stage 2 advance, as there is a lot more dynamic energy behind it. which means the next bull market in the gold miners should be a big one. a life changing event for those who get in early and know whats coming in stage 2.
From Spock at the Chartology Forum :
the Fed would know this history. if they do not raise, the USD will continue to strengthen, further killing corporate earnings and global growth. so they will raise and continue to raise into 2016, in order to get global growth and earnings back on track. its all counter intuitive and non-consensus, and therefore the correct course.
one strategy: long USD into the rate hike, then go neutral USD
Looking at a line chart, both the USD and the EUR have now clearly broken out of corresponding, absolutely massive formations. On a candle chart they both have not broken out yet. I think this is the way to look at these two now; h&s and inverse h&s. And also in the way that the EUR is driving the USD.
As I see it the PO for USD is ca 117-133 and for EUR it is ca 55-75, depending upon how you measure it really, either way though, both have a long way to go as EUR brakes down from here.
I think these necklines can be used now in order to take long term trades in e.g. EUO or UUP.
I think we also just have to stop for a second here in order to take in the magnitude of this situation. We are talking about a BO from two absolutely huge ca 13 year formations regarding the two instruments that control most markets. And we are talking about a BO with an absolutely massive potential for a very big move in a very short space of time. Let´s hope this starts off well and goes all the way. So many factors have worked together for us to be able to experience this. If it materializes it will be a fantastic opportunity to maybe double our portfolios before PMs bottom. What a scenario…
Unless COMM and PMs do not bottom now but I do not think so.
I was taking a look yesterday at a chart I posted back in Sept when I was suggesting a move to $18 could be in the making while the GDX was hovering just above $13. Many thought I was nuts. There were calls then for a stock market crash that would take the miners down with it. Of course the stock market rallies 10% from there and GDX prices ran a little north of $17 but the move was substantially as I expected. I don’t know if the stock market will crash from here but the set up for a hard downturn is far better today than it was in late Sept yet nobody is talking about that. Instead I see calls for parabolic rises in the stock market and tradable bottoms for the GDX….I’m definitely not in that camp!
Back to the GDX chart, I dropped my TL a bit, suggesting the May 2015 island was a headfake and I like this fit. So I’ve charted out a proposed path that purposely integrates MA’s benchmarks but also fits what I’m seeing in this chart’s structure. What immediately struck me is how similar the blue highlighted areas look. It really looks like a swift move down into Dec will fit well fractally from here. The rise from there may be a hard bounce or take on a bearish flag ahead of another parabolic decline late spring into the final lows around $10.50, similar to the structure from May to Aug this year. I like the fit….now let’s just see what happens.
I like this company. Its sitting on nearly $3 billion is cash at the moment. Its cash costs are now around $610 per ounce, its all in cash costs (including mine capex amortization) are about $835 per oz. It has reduced its costs by around 15% over the last 12 months (cheaper oil, cheaper labor, cheaper materials). So basically, its costs are dropping with or faster than the gold price over the period, which means the margins are not getting squeezed. Based on cash costs, its gross margin is over $450 per oz. Quarterly production is 1.3 million ozs x $450 = $585 million quarterly free cash flow. This thing is a cash cow, which is now priced by the consensus to fail. Amazing how wrong the consensus is. I bought a 5% position last Friday, and will continue to buy it on dips.
And here is the kicker: If gold prices rise 10%, then NEM free cash flows rise from $585 million quarterly to $715 million quarterly, or 22%. If gold prices drop 10% over the next 12 months, and NEM continue their cost base reduction at a similar rate, their free cash flow does not change.
Now I know fundamentals do not mean anything for traders. But a some stage, one has to sit back and have a look under the hood for some of these companies, and reflect whats happening, and whether the consensus is wrong. Now I am starting to see some real value with some of these companies, such as NEM.
Here are some rough numbers for NEM:
Current assets $5 billion ($3 billion in cash)
Current liabilities $1.5 billion
Quick ratio greater than 3 (excellent)
Book value $14.5 billion (after write downs)
Market cap $8.5 billion
Price to book value 0.58….which means the company is priced by market at 58c in the dollar (crazy).
Which means its a takeover target. Buy the company, sell the assets, and pocket $6 billion profit.
I’m reading all these posts about a tradable bottom here but frankly I don’t see any chart evidence at all for that. Perhaps we’ll see evidence as we move into MA’s benchmark targets around Dec 7th but charts are all pointing to a collapse of the GDX consolidation that has occurred the past couple of weeks…at least to my eyes.
In the school of “GG leads”, I believe it’s tipping the GDX’s hand of what’s to come….more down and current support morphing to resistance.
Meanwhile, I last shared on Oct 12th my chart that tracks a nice fork fit with the 30-year yield against the GDX. It pretty much nailed the last GDX swing high and again it’s suggesting a big move down in GDX any time now as yields are poised to rise. I think that move started Friday actually as options expiry briefly bumped GDX to $14 and then whammo.
With the backdrop of the SM being at what I believe to heavy resistance levels, the GDX should have quite a bit of difficulty rising from here. We’ll see how the charts develop next week.
Two months ago I adjusted my ultimate bottom PO to be 66 in the HUI. If I had to guess when I would say possibly in the spring. I dipped a toe in the water today buying a few of the better looking PM stocks thinking we could be set up for a bounce here. I have stops in below the recent lows. So a rally from here then a violation of the current lows would be my most favored scenario,
Having said that, I was cleaning out my chart file and ran across this chart of the HUI that I originally made in May 2014 once it had built its consolidation diamond. I post it here unchanged since then. Of course the price action is automatically updated to today. But the yellow annihilation zone is unchanged since then and was totally blank at that time. We hadn’t actually entered the zone yet. I got the PO from the H&S BO to BO method. It was measured off the May 2014 bar which is slightly too early as it was a forecast and had not broken out yet. It finally occurred in September so it needs slight upward adjustment. With that adjustment made it would perfectly nail the bottom here now. The X was the original forecast bottom. Kind of spooky and makes me wonder is this the bottom? Since I drew this chart we have had 2 additional crashes (not colored yet). One can see we are smack dab in the heart of that target PO zone. I even colored the extreme bottom red when I made the chart 18 months ago….look where we are now. When this was drawn the HUI was around 225 and an ultimate HUI target of 102 seemed simply ludicrous. In fact this was the first chart we published out in the public media and it was met with universal derision. Fools they called us.
So I have to wonder, did we actually nail it way back then? Don’t know only time will tell, and todays action was pretty ugly. But maybe my sixth sense kicked in by dipping my toe in the water today. It may be worth a small shot at least. I am keeping stops tight.
GLD Gold Holdings at an 86 Month Low !
That would be seven years and two months!
Once again, this ETF has proven to be a most excellent indicator of Western-based investment demand for the yellow metal.
It is probably no coincidence that the Dow Jones/UBS commodity index is sitting at a thirteen year low!
Copper is at a fresh six year low…
Platinum is at a seven year low…
What is incredible to me is that there still exists a contingent of those who actually continue to spout the nonsense that the reason gold is so low is on account of manipulation!
With the Dollar not far off from a 12 1/2 year high, what do they expect gold to be doing, soaring higher???
The simple fact is that the strong Dollar combined with a slow growth global economic environment, has completely undercut any reason to tie up precious investment capital in a metal that pays no yield whatsoever. That is the reason gold is performing so poorly, not because of some cockamamie price manipulation scheme.
I have said it many times now, if anything, the Fed wants a HIGHER gold price, not a lower one. They are attempting to stave off deflation not inflation. That is where their battle is focused. A falling gold price is the exact opposite of what they want to see.
I know I run the risk of repeating myself too often but I think it continue to merit saying that while the Fed views falling commodity prices in general as a positive, at some point the fall in commodity prices drops too low for their comfort. The reason is that such an environment is deleterious to those industries that are involved in the production, distribution, manufacture, handling, etc., of those commodities. That results in lost jobs ( just think about the oil patch and everything that is tied to that sector – exploration companies, equipment companies, small town restaurants, hotels, etc., ) which outweighs the benefit to consumers and end users of those commodities. I am not sure if we are at those levels yet for certain commodities but I think it is safe to say that we are rapidly reaching a price point at which the fall in crude oil, if it continues, is going to be of big concern to the Fed. The pain in the oil industry is perhaps as bad as I can ever recall seeing it.
In this sort of environment, one in which a major commodity index is sitting at a 13 year low, why in the world would the Fed be employing the so-called “evil bullion bank cartel” to pressure the gold price even lower? The entire theory requires the adherent to suspend all rational thought process and market analysis. Then again, it is a lot easier for the various gold gurus to keep espousing this nonsense and continue duping their groupies rather than simply admit that they have been totally and completely wrong. Alas, humility is the single most important virtue that is lacking from so many in the gold cult. They would rather lose huge sums of money than actually try to learn what went wrong with their analysis and understanding of the markets. Blame it on the manipulators and console themselves with the idea that they are to be commended for “standing strong when others gave up”.
Maybe we can carve those words on their financial tombstones.
The reason I am so disgusted with this is because I have seen firsthand what these people have done to the lives of the many victims they have utterly deceived. We are talking about a trail of human wreckage, one involving crushed dreams of retirement, college educations, financial and even psychological well being and marriages in some cases.
Gold, to these people, has become nothing but a curse, especially the gold mining shares which have financially obliterated them. Had they simply stopped listening to their gold cult leaders and instead heeded the voice of the market, they would have lost some money, but not been ruined as so many of them now have been.
So many have forgotten that the last time gold entered a bear market, the downturn in price last TWENTY YEARS before it reversed. That may be fine for some who are still young but some are advanced in age and quite frankly, they do not have another twenty years on this planet in which to try to recoup their losses.
This is the number one thing to learn for all of you who are attempting to learn the art of successful trading/investing. There are only two sides of a market – the WRONG one and the RIGHT one. The only way one can be on the RIGHT SIDE is to check their opinion against the opinion of the market to see whether or not it is the correct one. And how does one discern the opinion of the market? Answer – understanding the price chart and learning to hear what it is saying.
Master this art and you are well on your way to being a success, needing no one to hold your hand and quickly learning to avoid the fraudsters and egoists that infest the world of markets.