Month: June 2013

XAU Philadelphia gold/silver index, update and ZJG

Hamilton

Then 11/20 /11, and now charts;

xau 20 nov 2011xau june 21 2013 b

At the time we had identified the top around 240 quite accurately and were looking for a drop of about 100 points in wave 3 and a further 80 points in wave 5 after a 4th wave rally. So far we see no compelling reason to change the analysis. Wave 4  (of C) may start here at around 90, slightly lower than the 100 or so anticipated but the difference is not material.

As a reminder, the XAU consists of 13 senior gold miners so that does not bode well for them but  a lot worse for the juniors. First, however, we should get a tradable 4th wave. Below is the 30 year detailed chart, in brown this scenario, in purple a possible bullish alternative.

xau june 21 2013

Notice that we are already trading well below the 30-year average. Like in all wars, the Fed. is fighting the last one and is surprised to find itself trying to create inflation rather than dampening it.     The idiosyncratic characteristics of gold stocks are such that they do not necessarily move in tandem. Some may be chocking on colossal misinvestments while others are trying to digest badly managed take overs. Some have political problems and again others are not in areas where you would like to go on vacation. As a group, this is what can be expected. Below are the juniors by way of BMO’s ZJG, see also previous two blogs.

zjg 21 june 2013

IAMGold , IMG, update

Hamilton

img june 21 2013

A few months ago at about $8.50 this stock looked as if it might have been a buy. It wasn’t, but here again things are looking a lot brighter. The two legs down A and C are presently vector equal. Both the RSI and MACD are pointing up and the stock yields 5.6% and trades at a p/e of 7. Looking at the big picture, the stock has now dropped close to the lows of the 4th wave of previous degree (at $3 ?), see below.

img 21 june 2013 b

Just under $4 you hit the line from the lows going back to 2001. If it goes there or even a little lower remains to be seen, but regardless, it is already pretty obvious that buying at $4 beats buying at $24. This is what is known as buying low and selling high (as we suggested, see many blogs ago), it is what almost nobody ever does, it is that difficult..

ELD, Eldorado update

Hamilton

Then  (Sept. 2012) and now;

eld sept 2012eld june 21 2013

The target then, calculated on the basis of equality between the A and C legs worked out to , roughly, $5. The low, so far, is $6.23. We caught the high of the B-wave precisely to the tick (see previous blogs) so there is no reason to tempt the Gods for an encore. Suffice it that somewhere around here or a little lower, this low cost producer is a more attractive buy than at $22. By the way, $4 is roughly the low point in a 4th wave of previous degree.

CEF.a Central Fund of Canada update

Hamilton

Then, exactly a year ago, and now charts;

cef.a 2012cef.a june 21 2013

We are not sure of anything, then or now, but we reached the 50% target at $16 and then some, all the way to $13.83 (Big chart does not show that low). That target was based on the retracement of the last leg up. If calculated on the entire travel from zero it works out to a bit above $13. By the way, the fund already has dropped below it’s channel as drawn and may already be overlapping earlier lower degree waves. If not already it would certainly happen at <$12 which essentially means that a complete free fall is possible  as it will then be safe to conclude that a complete 5 wave sequence was completed at the $26 peak. Always use a stop!