Posted by steve101 on 23rd of Nov 2016 at 08:58 am
Steve, however, the commercial net short is still not in the
range, so far as we know, and I did a count on the dollar as an ABC
off the 2008 low, with a price projection of 106.7 if wave C =
1.618 of wave A. In this count the dollar would be in wave 5 of C
which could take until next spring to fully play out.
Posted by steve101 on 23rd of Nov 2016 at 08:47 am
Steve, I closed my miner positions on the morning of August
15th.
Is it prudent to take 1/4 positions in some miners on a retrace
to the 19.80 level? The .618 retracement in GDXJ is 30.48. The .618
in SIL is 29.99.
The BPGDM is likely to be close to zero. Sentiment is in the
toilet. Looks like a wave 2 in Elliot wave. Wave 2's can go deep. A
.781 retracement in GDX is about 16.75. Your thoughts?
The sell off in precious metals was created by positioning.
Fractals showed this in advance.
What the 'maps' say next.
The violent
move down in precious metals (
GLD) (
SLV) has left
commentators scrambling for an explanation. Personally, I don't see
the point. If it was down to the Chinese holiday, will you expect a
similar move next time they take a break? Will a dissection of the
reasons of this move prepare you for the next one?
The point is
I don't try and explain every move after the event. I look forward.
What is driving price and how is price reacting when that driver
changes? This can be prepared in advance and analyzed in real
time.
The Fed's
decision to keep rates constant in September was made out to be a
big deal. On balance it was always the most likely outcome, but I
admit to half expecting a shock hike. You can never be sure in
these things. After was all said and done it didn't matter much. As
I concluded in my last article,
In the
end, the decision may go either way, but positioning suggests the
reaction in precious metals will be down. I will sell into any
rallies in gold with a stop over the $1352 high.
The short
lived spike higher on a no hike was really the perfect short. If
the 'no hike' driver was as strong as many made it out to be, why
did the rally fizzle out after two sessions? Price should have been
at new 12 month highs. As I've said before, if everyone expects
something, there is more risk than reward.
Analysis of
positioning and cycles had already prepared me for a brief spike up
and a much larger decline. What happened after the September Fed
meeting just followed a pre-determined 'map', shown here from my
last article. The box foresaw the spike up, and the rest is pretty
self explanatory.
The green
price action shows how S&P500 (
SPY) participants
positioned themselves leading into a big Fed decision in December
2015. Of course the Fed did raise that time and the SPY sold
off.
The decision
this time round was not so important. The point is, the patterns in
gold (black) were so similar leading into the September Fed, the
positioning and sentiment had to be nearly identical. If
participants in SPY had been taking profits on longs and
preparing
for a sell-off, gold participants were likely doing exactly the
same thing over the last few months.
another view on gold from a few days back. Same structure as SPX before the rate hike sell off last Dec. Focus now on Nov/Dec? pic.twitter.com/3AyFvKODi0
Drilling companies are an important part of the precious metals
environment. I am introducing the so-called "DRILL" index. This
index should replicate the price action of a few drilling
companies. Here is the list of these drillers:
Energold Drilling
Major Drilling
Geodrill
Capital Drilling
Orbit Garant
Cabo Drilling
Although Energold is also operating in the energy sector and Major
Drilling's offer is more complex than in the case of a usual
driller, all these companies sell their services to
precious metals miners.
Now, let me show two charts. The first one shows the DRILL index
(comprising the drillers listed above). The second one shows
the DRLL index relative strength against GDX (the broad
precious metals stock market):
Posted by steve101 on 19th of Jul 2016 at 11:17 am
Back in mid-2014 when Matt showed two stocks in Weinstein base
patterns I bought both of them. AUMN was around ,50 cents and RIC
around 1.20. I sat on them. RIC kept going up with pauses. AUMN
gave me indigestion. But now the weekly moving averages are aligned
and it seems ready to roll. Sold RIC around 10. I like Weinstein
base patterns. Matt and Steve. These are great potential patterns.
Is there any way to sort for these sort of things. Remember Louise
Yamada comments... The longer the base, the higher in space.
(Assuming they don't go out of business and the sector is turning.
Thanks by the way.
There has been a huge move in speculative silver longs as we
approach a net long position of 70,000 contracts. Historically this
is a huge amount of net longs and is significantly higher than the
net long position we saw in 2011 when silver was close to $50 per
ounce. I
t is the silver market where investors need to be extremely
cautious in because we have far surpassed the previous net long
speculative positioning seen in 2011 - there's a lot of speculative
money in the silver market!
That is the surprising conclusion of contrarian analysis, which for
months now has stubbornly refused to turn positive on gold — even
as the yellow metal has suffered a death by a thousand cuts. Just
this week, for example, bullion hit a fresh three-month low —
among indications that gold’s recent decline has violated some key
technical levels.
But what contrarians focus on is market sentiment, and on that
front there has been a big change: For the first time in a long
time, a large number of short-term gold timers have decided to
throw in the towel.
As a result, the market-timing community on balance is now more
bearish than it has been in 14 months — which, according to the
contrary logic of contrarian analysis, is a bullish development.
The last time the typical gold timer was as gloomy as he is today,
gold began a two-month rally in which it gained more than $200.
Consider the average recommended gold market exposure level among a
subset of short-term gold market timers tracked by the Hulbert
Financial Digest (as measured by the Hulbert Gold Newsletter
Sentiment Index, or HGNSI). This average currently stands at minus
40.6%, which means that the typical gold timer is recommending that
clients allocate nearly half their gold-oriented portfolios to
going short the market.
That’s a particularly aggressive bet that gold will keep declining,
and — at least according to contrarian analysis — these timers are
unlikely to be right.
As recently as last week, the HGNSI had not fallen below minus
21.9%. That was less than the lows to which this sentiment index
fell last December (minus 36.7%) and in the summer of 2013 (minus
56.7%). And that, in turn, led me to conclude that contrarians were
not yet ready to bet on even a short-term rally.
That’s why, in mid-July —
the last time I devoted a MarketWatch column to a contrarian
analysis of gold — I argued that sentiment conditions were
not yet favorable for gold. “Unless you have nerves of steel and
are ready and willing to hold on to gold despite extraordinary
volatility,” I concluded, “you might want to wait until sentiment
conditions are more favorable.” Gold at that time was trading at
around $1,310 an ounce.
The usual qualifications apply, of course. Sentiment is not the
only thing that moves the markets. And even when contrarian
analysis is right, it doesn’t necessarily have pinpoint accuracy.
But, because sentiment analysis has been on the correct side of
this gold market in recent months, it’s definitely noteworthy that
it’s now more optimistic.
While the Comex utilizes highly
leveraged paper contracts to control the price of silver, physical
metal continues to be drained out of the Shanghai Futures
Exchange.
In just one week, total inventory has
declined by another 24%. At the beginning of August, there were 148 metric tons of
silver on warrant at the Shanghai Futures Exchange. In
just three weeks, 29% of the total inventory was removed.
The majority of this decline took
place last week when 22 metric tons were withdrawn on Friday
alone.
From the SRSRocco Report:
As I mentioned in a earlier article,
the Comex is more of a paper trading exchange in which the majority
of contracts are settled in cash. However, the opposite is
the case with the Shanghai Futures Exchange as the majority of
contracts are settled with physical metal.
On the chart below you can see that the move from 2000 low to
2008 high is clearly an impulsive move which I labeled Wave (I) or
Wave (A). This impulsive move has been followed by a corrective
pattern which revealed to be an Expanded Flat Pattern (labeled
A-B-C). The structure of a Flat Pattern is called a 3-3-5 which
indicates that Waves A and B are both composed of three waves and
Wave C is composed of five waves. I think that Wave C of the
Expanded Flat Pattern took the form of an Expanding Wedge Pattern
and has ended right at the bottom in December 2013. This bottom
could mark the end of either a Wave (II) or a Wave (B) but in both
cases we should soon see a new impulsive leg up labeled Wave (III)
or Wave (C). I have also put an alternate red count which indicates
that a possible impulsive Wave 5 down could be underway and reach
the $150 level but I do not favor this case for the moment. Price
action in the coming weeks will be key and the HUI Index should
reveal its intentions very soon.
The HUI/Gold ratio chart shows that the impulsive move Wave (I)
or Wave (A) from 2000 bottom to 2003 high has been followed by a
long Triple Threes Corrective Pattern labeled (W)-(X)-(Y)-(X)-(Z)
for a Wave (II) or a Wave (B). You can notice that the HUI/Gold
ratio is at the same level as the bottom in 2000 which indicates
that Miners are extremely undervalued and at a level that could
generate a strong move up.
Precious metals miners have successfully digested their sharp
gains from early summer. The miners have continued to hold above
key retracements as well as 200-day moving averages that are now
sloping up. The miners, despite some fear from market participants
remain in position for a September breakout to the upside.
Below is a weekly candle plot
showing GDXJ, GDX and GLDX. Each index has held most of its gains
and is holding well above the moving average which is now sloping
up. While GLDX is holding above the 50% retracement of recent
gains, both GDX and GDXJ are holding above the 38% retracement of
their recent gains. Moreover, note how GDXJ has formed large tails
during three of the five negative weeks. That signals weakness is
being bought.
China is said to have allowed three more banks, including a
foreign lender, to import gold, sources with direct knowledge of
the matter told
Reuters. The move comes as the world’s top gold buyer
gears up for its strongest effort yet to gain pricing power of the
metal.
This brings the number of firms allowed to import gold into
China to 15, and comes ahead of the launch in September of a new
international bullion exchange in Shanghai, with which China hopes
to become a price-discovery center.
China and other Asian gold trading centers such as Singapore are
calling for more localized pricing of the precious metal as they
seek alternatives to the so-called London fix, the global benchmark
for spot gold prices, which is under investigation by regulators on
suspicion that it may have been manipulated.
Posted by steve101 on 25th of Aug 2014 at 04:41 pm
If they go back to where they came from, maybe we can be excited
about RIC or AUMN in three or four years. Those looked decent when
you pointed them out. RIC had a fundamental catalyst, but I took
positions in both. Just keep your eye peeled for them when they
show up.
Posted by steve101 on 12th of Aug 2014 at 11:06 am
I bought RIC at 1.30 after researching it and determining a
fundamental catalyst would likely occur to support the weinstein
base formation. I bought SA at $8 using the 5RSI I learned how to
use from listening to the updates. I was a co-incidence that the
next day the mining permit was approved by the regional government
in Canada. They still need the national governments approval
farther down the line. I bought AUMN, after it did a 50%
retracement from the first thrust up and retraced to $1.00. T I
think there are other gold stocks with weinstein base formations
(some smaller caps) and others with near term production starts
some time in between now and mid-2015 which will have catalysts for
their stock to appreciate. I have been buying some gold stocks not
mentioned here, because Louise Yamada, the famous tech analyst in a
speech once said that if a stock has a high volume high in it's
weekly or monthly chart, it is likely to eventually find it's way
back there (unless it goes out of business, or gets bought out, and
after the sector it is in starts to turn is the best time to buy
it). You can not predict when a high volume high will be retested
so one may have to wait years for it to happen. Some gold and
silver stocks with high volume highs include GPL, and AXU. Both of
these stocks have high production costs so a rising gold price is
needed to get them back up there. Also, Stillmont Advisors has the
best track record in analyzing the price movements of gold and
their indicators confirm that the move up from 1999 to 2011 and the
subsequent move down, which is likely completed, is a wave 4(it
could still correct lower but after last Friday, the last key Fib
projection for a low it is much less likely), and new highs will be
seen. The charts and research are very convincing. Given their
track record I have been acting accordingly with my portfolio.
The community is delayed by three days for non registered users.
From Seeking Alpha: Time For The Gold Bulls To Step Up If There Are Any Left
TWMJF
Posted by steve101 on 23rd of Nov 2016 at 04:58 pm
Also, regarding miners
USA Durable Goods Orders (MoM) for Oct 4.80% vs 1.50% ...
Posted by steve101 on 23rd of Nov 2016 at 08:58 am
Steve, however, the commercial net short is still not in the range, so far as we know, and I did a count on the dollar as an ABC off the 2008 low, with a price projection of 106.7 if wave C = 1.618 of wave A. In this count the dollar would be in wave 5 of C which could take until next spring to fully play out.
Is it prudent to take 1/4 positions in some miners?
USA Durable Goods Orders (MoM) for Oct 4.80% vs 1.50% ...
Posted by steve101 on 23rd of Nov 2016 at 08:47 am
Steve, I closed my miner positions on the morning of August 15th.
Is it prudent to take 1/4 positions in some miners on a retrace to the 19.80 level? The .618 retracement in GDXJ is 30.48. The .618 in SIL is 29.99.
The BPGDM is likely to be close to zero. Sentiment is in the toilet. Looks like a wave 2 in Elliot wave. Wave 2's can go deep. A .781 retracement in GDX is about 16.75. Your thoughts?
Best, Steve
Look how $USB:$USD has tracked $GOLD moves
Posted by steve101 on 16th of Nov 2016 at 09:58 am
https://gyazo.com/4af8645acb6832d82f8cfa6aeac427c5
article: The Precious Metals Drop Was Mapped Out In Advance - An Update
Posted by steve101 on 7th of Oct 2016 at 05:14 pm
The Precious Metals Drop Was Mapped Out In Advance - An Update
Summary
The sell off in precious metals was created by positioning.
Fractals showed this in advance.
What the 'maps' say next.
The violent move down in precious metals ( GLD) ( SLV) has left commentators scrambling for an explanation. Personally, I don't see the point. If it was down to the Chinese holiday, will you expect a similar move next time they take a break? Will a dissection of the reasons of this move prepare you for the next one?
My view is the move has been in the making for many months. I don't want to waste everyone's time by doing victory laps, but I first wrote about silver topping on August 2nd, and most recently warned ' Precious Metals Could Move Down Regardless Of Fed Decision'.
The point is I don't try and explain every move after the event. I look forward. What is driving price and how is price reacting when that driver changes? This can be prepared in advance and analyzed in real time.
The Fed's decision to keep rates constant in September was made out to be a big deal. On balance it was always the most likely outcome, but I admit to half expecting a shock hike. You can never be sure in these things. After was all said and done it didn't matter much. As I concluded in my last article,
The short lived spike higher on a no hike was really the perfect short. If the 'no hike' driver was as strong as many made it out to be, why did the rally fizzle out after two sessions? Price should have been at new 12 month highs. As I've said before, if everyone expects something, there is more risk than reward.
Analysis of positioning and cycles had already prepared me for a brief spike up and a much larger decline. What happened after the September Fed meeting just followed a pre-determined 'map', shown here from my last article. The box foresaw the spike up, and the rest is pretty self explanatory.
Looking forward
There's a fine line between reviewing previous articles to set context and boasting about their success. Some of my methods may seem strange to new readers so I invite you to read previous articles to get a better idea of the methodology. Basically I look at previous similar events and price patterns to get an idea of what could happen this time around.
Here's another example I posted on Twitter.
The green price action shows how S&P500 ( SPY) participants positioned themselves leading into a big Fed decision in December 2015. Of course the Fed did raise that time and the SPY sold off.
The decision this time round was not so important. The point is, the patterns in gold (black) were so similar leading into the September Fed, the positioning and sentiment had to be nearly identical. If participants in SPY had been taking profits on longs and preparing for a sell-off, gold participants were likely doing exactly the same thing over the last few months.
Here is the same chart today -
This 'map' can act as a good guide for expectations going forward. It suggests a further sell off to $1180. This is a pretty important level as it held three times throughout 2013 and 2014 and a very basic technical analysis can highlight it as significant. I expect some sharp short squeezes along the way, but I will hold my short position for below $1200.
Drivers for a further decline
The fundamental context to me is important, but as I have already said, fundamentals must be analyzed together with price, positioning and sentiment. If gold were to drop to $1180 by the November Fed meeting and the majority of participants thought it would drop sharply on a Fed hike, I'm convinced it would end up actually rallying on a hike. If the Fed were to hike at $1375 after a strong rally and bullish sentiment, I'd expect the exact opposite.
The main drivers in precious metals will continue to be a combination of rates, inflation, and dollar strength. These are all interdependent, and to muddy things further there are other inputs such as NFP and the actions of other central banks. I need to simplify the narrative. Basically I think precious metals will continue to sell off as the break of $1300 is forcing liquidation of late and weak longs. There will continue to be an accompanying story of 'hike fears' in November and December, but at the moment this is no more than noise. What matters to me is the cycle of selling leading into the next meetings.
If precious metals sell off in a way suggesting smart money is starting to accumulate and weak longs have capitulated, I will consider going long. If there are media headlines and a spate of fear mongering articles on how gold will sell further, then I will certainly look to take the other side. Judging by the above map, this may be the case once $1180 is tested.
Confluence
The other 'map' I highlighted in my last article also suggests $1180 is an important level. This is the 'consolidation top' template which gold often follows (the template used is from the 2011 highs onwards).
This fractal projects a move from $1180 back up $1250 (where gold is currently trading) then all the way back down again to form a double bottom at $1180. This is exactly what the first SPY map above projects. Quite an amazing confluence, but after this point the maps diverge (as they must at some point). I'll be very happy to catch what I can of the projected moves before this point.
At the moment I am using the fractals in this article to guide my short positions, but depending on how well they track, I will consider going long under the right circumstances. I will update if and when this happens.
Conclusions
Fractals and historical examples show us how participants are positioned. This is the number one influence on how any instrument responds to predictable events.
I shorted gold after the September Fed meeting based on fractals and will remain short as long as price follows the maps in this article. My ideal target to take profits is $1180, but I will be scaling out below $1200, and will consider longs in this area depending on context.
Note: I do not blindly buy at a price level. Fundamental drivers, sentiment, positioning, and patterns all play a part. Trading can be beautifully simple, but knowing what to ignore is the hard part.
Click "follow" by my name at the top of the article to receive updates and other trade ideas.
Follow me on Twitter - @elroytrader - for shorter term ideas and trade entries etc...
Disclosure: I am/we are short GLD.
Additional disclosure: I am short gold futures on a daily rollover contract
GDX
GDX follow up
Posted by steve101 on 4th of Oct 2016 at 06:02 pm
Your call was excellent. I sold all my precious metal stock positions, on the morning of Aug 15th, getting out near the highs thanks to your analysis.
From blog: Drill Index foreshadows topping in precious metals miners
Posted by steve101 on 1st of Oct 2016 at 10:03 am
Drilling companies are an important part of the precious metals environment. I am introducing the so-called "DRILL" index. This index should replicate the price action of a few drilling companies. Here is the list of these drillers:
Although Energold is also operating in the energy sector and Major Drilling's offer is more complex than in the case of a usual driller, all these companies sell their services to precious metals miners.
Now, let me show two charts. The first one shows the DRILL index (comprising the drillers listed above). The second one shows the DRLL index relative strength against GDX (the broad precious metals stock market):
The charts show that between the end of 2010 and the end of 2012 DRILL was much weaker than GDX. To remind my readers, in that period the entire precious metals sector was topping so the DRILL index may be considered as a good leading indicator for gold etc.
In other words, when gold and gold related stocks are going up but the shares of drilling companies are going down - be very careful.
Further, since the beginning of 2013 drillers and gold related stocks were generally behaving in the same way.
Last, since the beginning of 2016 DRILL, similarly to the entire precious metals sector, has been in its bull market mode.
On the other hand, since middle June 2016 DRILL has been much stronger than GDX, which, especially in August, entered its severe correction. Well, I will be closely watching the DRILL index in search of a positive correlation to the gold related stocks.
Back in mid-2014 when Matt
Posted by steve101 on 19th of Jul 2016 at 11:17 am
Back in mid-2014 when Matt showed two stocks in Weinstein base patterns I bought both of them. AUMN was around ,50 cents and RIC around 1.20. I sat on them. RIC kept going up with pauses. AUMN gave me indigestion. But now the weekly moving averages are aligned and it seems ready to roll. Sold RIC around 10. I like Weinstein base patterns. Matt and Steve. These are great potential patterns. Is there any way to sort for these sort of things. Remember Louise Yamada comments... The longer the base, the higher in space. (Assuming they don't go out of business and the sector is turning. Thanks by the way.
http://stockcharts.com/h-sc/ui?s=aumn&p=D&yr=0&mn=8&dy=1&id=p44544866420&a=305524483&listNum=61
http://stockcharts.com/h-sc/ui?s=aumn&p=W&yr=5&mn=3&dy=0&id=p32666233350&a=417097167&listNum=61
http://stockcharts.com/h-sc/ui?s=aumn&p=W&yr=14&mn=6&dy=0&id=p11331544996&a=295131192&listNum=61
http://stockcharts.com/h-sc/ui?s=ric&p=W&yr=14&mn=6&dy=0&id=p11331544996&a=295131192&listNum=61
Silver Net Longs Rise To An All-Time Record Above The 2011 Silver Peak; Caution Advised
Posted by steve101 on 24th of Apr 2016 at 09:18 am
http://seekingalpha.com/article/3967534-silver-net-longs-rise-time-record-2011-silver-peak-caution-advised?isDirectRoadblock=true&uprof=80
There has been a huge move in speculative silver longs as we approach a net long position of 70,000 contracts. Historically this is a huge amount of net longs and is significantly higher than the net long position we saw in 2011 when silver was close to $50 per ounce. I t is the silver market where investors need to be extremely cautious in because we have far surpassed the previous net long speculative positioning seen in 2011 - there's a lot of speculative money in the silver market!
Brophy, can't read without stockcharts membership
From John Murpchy - particularly dollar/commodities
Posted by steve101 on 11th of Sep 2014 at 08:23 am
An aggregate of market timers recommend 50% short position gold/gold stocks. Very bullish!
Posted by steve101 on 10th of Sep 2014 at 09:50 am
Opinion: Gold may be a ‘buy’ as investors turn ever more bearish
Published: Sept 10, 2014 6:00 a.m. ET
The last time such gloom set in, the yellow metal staged a rally
CHAPEL HILL, N.C. (MarketWatch) — Gold is finally getting close to a bottom in prices.
That is the surprising conclusion of contrarian analysis, which for months now has stubbornly refused to turn positive on gold — even as the yellow metal has suffered a death by a thousand cuts. Just this week, for example, bullion hit a fresh three-month low — among indications that gold’s recent decline has violated some key technical levels.
But what contrarians focus on is market sentiment, and on that front there has been a big change: For the first time in a long time, a large number of short-term gold timers have decided to throw in the towel.
As a result, the market-timing community on balance is now more bearish than it has been in 14 months — which, according to the contrary logic of contrarian analysis, is a bullish development. The last time the typical gold timer was as gloomy as he is today, gold began a two-month rally in which it gained more than $200.
Consider the average recommended gold market exposure level among a subset of short-term gold market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This average currently stands at minus 40.6%, which means that the typical gold timer is recommending that clients allocate nearly half their gold-oriented portfolios to going short the market.
That’s a particularly aggressive bet that gold will keep declining, and — at least according to contrarian analysis — these timers are unlikely to be right.
As recently as last week, the HGNSI had not fallen below minus 21.9%. That was less than the lows to which this sentiment index fell last December (minus 36.7%) and in the summer of 2013 (minus 56.7%). And that, in turn, led me to conclude that contrarians were not yet ready to bet on even a short-term rally.
That’s why, in mid-July — the last time I devoted a MarketWatch column to a contrarian analysis of gold — I argued that sentiment conditions were not yet favorable for gold. “Unless you have nerves of steel and are ready and willing to hold on to gold despite extraordinary volatility,” I concluded, “you might want to wait until sentiment conditions are more favorable.” Gold at that time was trading at around $1,310 an ounce.
The usual qualifications apply, of course. Sentiment is not the only thing that moves the markets. And even when contrarian analysis is right, it doesn’t necessarily have pinpoint accuracy. But, because sentiment analysis has been on the correct side of this gold market in recent months, it’s definitely noteworthy that it’s now more optimistic.
Click here to inquire about subscriptions to the Hulbert Sentiment Indexes.
brief article
SLV comments
Posted by steve101 on 1st of Sep 2014 at 01:44 pm
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While the Comex utilizes highly leveraged paper contracts to control the price of silver, physical metal continues to be drained out of the Shanghai Futures Exchange. In just one week, total inventory has declined by another 24%.
At the beginning of August, there were 148 metric tons of silver on warrant at the Shanghai Futures Exchange. In just three weeks, 29% of the total inventory was removed.
The majority of this decline took place last week when 22 metric tons were withdrawn on Friday alone.
From the SRSRocco Report:
As I mentioned in a earlier article, the Comex is more of a paper trading exchange in which the majority of contracts are settled in cash. However, the opposite is the case with the Shanghai Futures Exchange as the majority of contracts are settled with physical metal.
Also, we can see that since the beginning of July, 131 metric tons, or 56% of total silver stocks were removed from the Shanghai Futures Exchange. At this trend, it would only take a few more months to totally wipe out the remaining inventory.
I’ve received emails from some of my readers asking me “What does the continued draw-down of silver at the Shanghai Futures Exchange mean?” Unfortunately, I don’t trade silver in the futures markets, so I don’t really understand the dynamics behind the Asian markets.
ry to London precious metal trader, Andrew Maquire. As many of you all know, Andrew was one of the key players who assisted two JP Morgan whistle blowers to contact Bart Chilton at the CFTC about silver manipulation.
Nothing really came of the silver investigation, but that is no surprise. Regardless, it would be interesting to see what he has to say about the continued removal of physical silver from the Shanghai Futures Exchange. If, I receive a reply, I will publish it in an update.
A FEW WORDS ON PHYSICAL SILVER INVESTING
Lately, I have noticed on my site and elsewhere there is an increasing percentage of DISILLUSIONED precious metals investors. WSo, I recently contacted Turd at TFmetalsReport to see if he might forward my inquihile I can empathize with investors being frustrated that the price of silver has gone nowhere but lower over the past several years…. it doesn’t mean silver is a lousy investment.
I purchased my first ounce of silver at $4.52 an ounce back in 2002. That price is nearly 5 times less than the current price. Of course the prices of everything increased since 2002, such as the price of a barrel of Brent sweet crude oil which was only $25.
Brent crude is currently trading at $102 a barrel. Which means it’s now 4 times higher than its 2002 price of $25. If you bought silver in 2002, you protected yourself from the ravages of inflation as well as the collapse in the value of the U.S.Dollar.
In 2002, the U.S. Dollar Index reached 120… today it’s trading at 82.
Trader MIC
Posted by steve101 on 29th of Aug 2014 at 11:09 pm
Miners Elliott Wave Projection
On the chart below you can see that the move from 2000 low to 2008 high is clearly an impulsive move which I labeled Wave (I) or Wave (A). This impulsive move has been followed by a corrective pattern which revealed to be an Expanded Flat Pattern (labeled A-B-C). The structure of a Flat Pattern is called a 3-3-5 which indicates that Waves A and B are both composed of three waves and Wave C is composed of five waves. I think that Wave C of the Expanded Flat Pattern took the form of an Expanding Wedge Pattern and has ended right at the bottom in December 2013. This bottom could mark the end of either a Wave (II) or a Wave (B) but in both cases we should soon see a new impulsive leg up labeled Wave (III) or Wave (C). I have also put an alternate red count which indicates that a possible impulsive Wave 5 down could be underway and reach the $150 level but I do not favor this case for the moment. Price action in the coming weeks will be key and the HUI Index should reveal its intentions very soon.
The HUI/Gold ratio chart shows that the impulsive move Wave (I) or Wave (A) from 2000 bottom to 2003 high has been followed by a long Triple Threes Corrective Pattern labeled (W)-(X)-(Y)-(X)-(Z) for a Wave (II) or a Wave (B). You can notice that the HUI/Gold ratio is at the same level as the bottom in 2000 which indicates that Miners are extremely undervalued and at a level that could generate a strong move up.
The impulsive Wave (I) or (A) lasted 381 weeks and the corrective Expanded Flat Pattern lasted exactly 300 weeks which shows a time period ratio of 0.78 (Fibonacci ratio). The HUI Index has always been connected to the 0.78 Fibonacci ratio both in price and time and it should not be a surprise that such impulsive move from $35 to $520 has been corrected by a pattern of 300 weeks’ time duration.
On the chart below you can see that the HUI Index is still holding above its standard deviation channel and its symmetry guide line that caught exactly the 2008 and 2013 bottoms. It is bullish price action until the market proves otherwise.
The last chart is the HUI/SPX ratio which is forming a Reversal Base Pattern and a bullish breakout would mean that Miners are outperforming the Stock Market.
The Elliott Wave Principle applied to the HUI structure is telling me that an impulsive Wave (III) or Wave (C) could be underway very soon as markets are always composed of at least two impulsive legs up. The Elliott Wave Principle combined with the analysis of the element of time makes me favor the black bull count for the moment. In case the market chooses the alternate red count, one of the great advantages of the Elliott Wave tool is to prepare the trader psychologically for the highest outcome but also to alert quickly in case of a different scenario. Until the market reveals his hands it is important to be patient as a bull market never goes straight up. Trying to get in and out usually ends up by losing money as traders are shaken out by the strong hands. This is how bull market works.
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Courtesy of Cycle Trader MC - http://tradermc.com/
chart showing potential symmetry btw HUI topping pattern and recent bottoming pattern
Posted by steve101 on 29th of Aug 2014 at 10:20 pm
HUI Timing Boxes
In the previous post about ‘Gold Miners & Inflation’ it was mentioned that the 2013-2014 would-be bottoming grind in
HUI has been almost exactly the duration of the 2010-2011 topping grind. Here is a visual to put with that statement.
The current yellow box is an exact duplicate of the 2010/11 box, which came with an over-bought MACD crossed down. The breakdown candle implies that September would be the month that a break UP candle comes into play if this relationship has any predictive power.
Taking it further, as also noted in the previous post, the Ukraine noise does not help the sector and indeed could hurt in the short-term, because it keeps the wrong gold bugs on the tout. So NFTRH keeps open some minor downside targets.
Taking it further still, those downside targets would end up being buying opportunities if gold’s macro fundamentals start to improve, which despite the emails I get to the contrary, really has not happened yet beyond a few ongoing positives. But it had not happened yet in 2000 either.
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article
Posted by steve101 on 29th of Aug 2014 at 10:14 pm
Gold Miners Consolidate And Hold Support
Precious metals miners have successfully digested their sharp gains from early summer. The miners have continued to hold above key retracements as well as 200-day moving averages that are now sloping up. The miners, despite some fear from market participants remain in position for a September breakout to the upside.
Below is a weekly candle plot showing GDXJ, GDX and GLDX. Each index has held most of its gains and is holding well above the moving average which is now sloping up. While GLDX is holding above the 50% retracement of recent gains, both GDX and GDXJ are holding above the 38% retracement of their recent gains. Moreover, note how GDXJ has formed large tails during three of the five negative weeks. That signals weakness is being bought.
Meanwhile, Gold remains in a listless, trendless state. Volatility indicators are at multi-year lows while open interest is down 46% and recently touched a five year low. These conditions can lead to big moves but not always and not immediately. The price action of Gold suggests that a big move is not necessarily imminent. In any event, Gold is likely to follow the direction of the miners. If the miners breakout in September, it is reasonable to assume that Gold will climb upwards and eventually above $1400.
There have been quite a few reasons to worry about the miners. The US Dollar is rallying. Commodities have plunged in recent months. The COT for Gold and Silver looks bearish. Gold has not put in an “official” bottom (according to some). Moreover, the miners were up substantially since the start of the year, providing an excellent opportunity to take profits. Yet, despite all these negatives the miners have held support and digested their gains in bullish fashion. That in itself shows strength and perhaps signals the transition from bear to bull.
September, a month of breakdowns and breakouts (as we previously mentioned) now awaits us. We are positioned for the breakout. The evidence favors the bulls. If something changes then we will review the situation. If we get the breakout then the key for us speculators and investors will be company selection.
Shanghai launches international bullion exchg in Sept to bypass london fix
Posted by steve101 on 29th of Aug 2014 at 09:58 pm
China Allows 3 More Banks to Import Gold, Sources Say ( Reuters)
China is said to have allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter told Reuters. The move comes as the world’s top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.
This brings the number of firms allowed to import gold into China to 15, and comes ahead of the launch in September of a new international bullion exchange in Shanghai, with which China hopes to become a price-discovery center.
China and other Asian gold trading centers such as Singapore are calling for more localized pricing of the precious metal as they seek alternatives to the so-called London fix, the global benchmark for spot gold prices, which is under investigation by regulators on suspicion that it may have been manipulated.
Weinstein base
LNG
Posted by steve101 on 25th of Aug 2014 at 04:41 pm
If they go back to where they came from, maybe we can be excited about RIC or AUMN in three or four years. Those looked decent when you pointed them out. RIC had a fundamental catalyst, but I took positions in both. Just keep your eye peeled for them when they show up.
Steve
RIC and SA
SA has been a very strong PM stock...kudos if anyone ...
Posted by steve101 on 12th of Aug 2014 at 11:06 am
I bought RIC at 1.30 after researching it and determining a fundamental catalyst would likely occur to support the weinstein base formation. I bought SA at $8 using the 5RSI I learned how to use from listening to the updates. I was a co-incidence that the next day the mining permit was approved by the regional government in Canada. They still need the national governments approval farther down the line. I bought AUMN, after it did a 50% retracement from the first thrust up and retraced to $1.00. T I think there are other gold stocks with weinstein base formations (some smaller caps) and others with near term production starts some time in between now and mid-2015 which will have catalysts for their stock to appreciate. I have been buying some gold stocks not mentioned here, because Louise Yamada, the famous tech analyst in a speech once said that if a stock has a high volume high in it's weekly or monthly chart, it is likely to eventually find it's way back there (unless it goes out of business, or gets bought out, and after the sector it is in starts to turn is the best time to buy it). You can not predict when a high volume high will be retested so one may have to wait years for it to happen. Some gold and silver stocks with high volume highs include GPL, and AXU. Both of these stocks have high production costs so a rising gold price is needed to get them back up there. Also, Stillmont Advisors has the best track record in analyzing the price movements of gold and their indicators confirm that the move up from 1999 to 2011 and the subsequent move down, which is likely completed, is a wave 4(it could still correct lower but after last Friday, the last key Fib projection for a low it is much less likely), and new highs will be seen. The charts and research are very convincing. Given their track record I have been acting accordingly with my portfolio.
Perhaps another commodity weinstein base pattern?
Posted by steve101 on 10th of Aug 2014 at 12:30 pm
http://stockcharts.com/h-sc/ui?s=KOL&p=W&yr=4&mn=0&dy=0&id=p44939838427&a=356457046&listNum=36
Another weinstein base pattern?
Posted by steve101 on 10th of Aug 2014 at 12:22 pm
Is the global rare earth ETF in a weinstein base pattern, and how do we determine when it is ready to run?
http://stockcharts.com/h-sc/ui?s=REMX&p=W&yr=4&mn=0&dy=0&id=p44939838427&a=356457046&listNum=36