Month: November 2014

GLD update

Hamilton

gld nov 6 2014

If this is indeed a triangle – there are one or two shortcomings – then it measures to a downside target of about $1000, slightly more than a month from now. Of course it is not obliged to do exactly that. The RSI is already looking a bit oversold and the MACD is downright positive. This chart suggests that the next big move, regardless from where it starts, should be up to, at least, the $1375 level. For the inferior goldstocks, that are essentially a leveraged play on the metal, that is a large and tradable move.

gold nov 6 2014

In the big picture we can conjure up all sorts of scenarios, none of which will actually happen. Some believe we are in a 4th wave, to be followed by a 5th. If so the best guess would be that at the coming low of say $1000 , we are completing just the A of a correction that should ultimately take us down the usual 62%. The numbers on this G&M chart are monthly and do not show the actual extremes! If this is a 4th then it should not overlap with wave 1, which had an actual high of $880, very close to the 62% retracement point on this chart. There are numerous variations to this theme (for instance a triangle 4th wave which would promise ridiculously large ups and downs for the next 10-20 years etc. etc.) For FIAT currencies there is only one certain outcome, zero.

DGC, Detour Gold update

Hamilton

dgc 5 nov 2014

Just a quick refresher. This stock comes from $40. At the $3 level of almost a year ago, it had completed  an a-b-c correction losing almost all of it’s value. The rebound to $15 almost certainly had to be a first wave up. That has now corrected 62% or so. With hindsight we can assume that the $3 level was too low and therefore it is unlikely to hit that level again. In any event a rebound to $10 is a reasonable expectation here. A buy now or above $4.

ABX update

Hamilton

abx nov5 2014 babx nov 5 2014 s

Back on Febr. 3d we recommended selling this stock at about $22(saving you 40+%).The reason was simple that there we had a near perfect a-b-c up. We left it alone for the better part of half a year which is the hardest part. When I was working on the institutional side I once explained to my boss and president that most of the time he was paying me to do nothing. Perhaps I should have elaborated as , in hindsight, he obviously did not understand.

   In any event here we are at an exactly similar juncture. Another a-b-c, this time down, may be complete at these lows, give or take a millimeter. The market loves harmony and symmetry and here it is again. Of course this could just be part of a wave 3 followed by a 4 and 5 much lower but that would bring the stock to a ridiculous level close to zero. Furthermore the RSI and MACD are also suggesting an imminent turn.

    Interesting in this regard is a Swiss referendum on November 30, just 3 weeks away. What it proposes is, in essence, the return of the gold standard at least for about 20% of the money outstanding, basically where it was more than a decade ago before the Swiss Central Bank started selling the stuff at rock bottom prices (Just like the boys and girls on Threadneedle Street). If it passes, and there are indications that it might, it would not only be a major embarrassment for the authorities who have steadfastly opposed such a move, but it also would require Switzerland to buy something like 2/3 of the annual world production on fairly short notice. In short fireworks soon is a distinct possibility!

On the basis of the XAU, we are definitely close to our original target, set a long time ago, of 60. It’s low today was at 62 and a bit.