Month: February 2016

CEF, Central Fund of Canada and Detour Gold DGC, GDX

Hamilton

cef feb 26 2016

Something bothers us with the Central Fund. It trades in US$$ so the lows should have been worse than if measured in terms of depreciating Can$$. Yet from July 2014 to the end of 2015 this stock traded hardly any lower and it’s lows stayed within a range of $13.57 and $12.52. That is a range of just a single dollar over 28 months or about 4% of the peak value of US$26.

It seems that today the market (whoever that may be) knows that gold is a screaming buy. This is a complete reversal from just a few months ago. This begs the question if everybody is, once again, wrong. We do not have the answer but just observe that at roughly $18 this stock will have reached the 4th wave of previous degree and will have retraced about 38% of the initial drop. Also, and this is outside EW, the RSI very predictable peaks with the stock. It may be doing that again right now. Other stocks, for instance IMG have similar patterns.

It is therefore possible that this stock is doing an a-b-c X a-b-c and could start the second a-b-c any moment now. Detour Gold DGC also made a low in October of 2014 at $2.50 and is presently trading at $22.50. A possible peak is at about $25.

dgc feb 26 2016

Note that this stock did not make a low late last year or early this year like most others. Food for thought, that is all. The market in general, as per the XAU or GDX , both also in US$$, still looks to have a good way to go, 30? But even here the RSI is warning of a potential minor turn.

GDX feb 26 2016

NKO, Niko Resources just a vague memory

Hamilton

nko feb 24 2016

We were very lucky to exit this stock back in September of 2012 with a decent gain, looking to perhaps buy it back later but never got to doing that.

These guys had been around for a while and then all of a sudden decided to go overseas and offshore. First oil and gas in India and Bangladesh, then Indonesia and Trinidad. Then a corruption scandal and here we are at 9 cents. This is full circle, something that tends to happen when there are bubbles.

We show this chart because it a good schematic picture of what can happen. We have seen this with iron ore, oil and so on and it is impossible to know in advance if there will be a soft landing  or a crash. Commodities, of course, always come back simple because they will continue to exist. Companies are not that fortunate. Their debts can pull them down below zero.

Natgas, update

Hamilton

natgas feb 24 2016

We still think that the December low is the low, for the foreseeable future. The move from 1.68 to 2.50 has all the characteristics of a wave one. Wave 2 is scary in that it is, or will be, retracing wave one almost entirely. This is fairly normal but also rather exhausting if you are waiting for it to go higher. In the chart there is room for a minor wave 5 to complete the C. However, it may well be that the bottom was already reached at $1.80 a few days ago.

CMG, Chipotle Mexican Grill update

Hamilton

CMG feb 23 2016

We suggested a sell at about $600 and were wrong by $150 but that changed rather quickly. Deutsche Bank has a sell on this stock. We either have a completed 5 wave sequence down followed by an a-b-c correction, or we have only completed waves 1 and 3 down and are now in 4. Either way there is a lot more to go.