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HL, Hecla

Hamilton

hl mar 16 2016

Hecla is one of the few pure silver mining operations. It is always good for pretty wild moves. For some reason we haven’t paid much attention to it but today we noticed that it too is sporting a classic “diagonal” triangle, an expanding one. The characteristics are simple that all waves, both up and down are comprised of three wave structure, that is an a-b-c. This , of course, differs from normal impulse waves which are always 5-waves in the main direction and 3-waves in the opposite direction. Also this is the only pattern in which overlap may, and usually does, occur. Alternation, between waves 2 and 4 is often absent.

I have no idea how long the pause in the middle will take or what form it will have, but after it is over we should continue to move towards $4. That is a cool 60% even if it does not go any lower.

Gold, the stuff, and Silver update

Hamilton

Here are the then, December 24, 2015, and now charts as usual;

gold dec 23 2015gold mar 16 2016

This is the same “diagonal” that ABX displayed. They are very reliable patterns and almost always result in a violent reversal back to the starting point. We view golds trajectory as an initial 5-waves down, then an intermission, where we are now, and then another 5-waves down to complete a big A-B-C correction to, perhaps $250 or so. That may or may not be correct, but for the moment it does not matter as this diagonal should be retraced and we are only halfway. Another $75 down would probable do it. In any event you do not want to miss the opportunity as it is almost guaranteed. Maybe Yellen will surprise us all and put her foot down with another increase.

Silver, by the way, may be doing the same thing;

silver mar 16 2016

TCK.B Teck update

Hamilton

tck.b mar 16 2016 b

In our 2011 blog we explained how this stock would decline either in an A-B-C zig-zag or a simple 5-wave sequence, all depending on where the actual top was. Most probable it was in 2007 so this C wave had to become a 5-wave sequence (see also Vale and WLT). We have that and we have participated in the first up leg, good for about a 100% return if sold close to $11. In this chart you can see why that $11 level was important. It is the upper trend line of the channel that has been operative for the better part of the last six years. The stock simple cannot break out on the first run.

If we are correct in our overall assessment than one should expect a retracement of about 38% at the very least, of course if we are in a new bull market we should go to new highs but that might be a lifetime away. 38% of about $60 is $22 and if we take $4 as the starting point that gets us to $26. So really we should own this stock, but not if we can get it cheaper than it is today. We think chances are good that you can get this for $7.50, see below;

tck.b mar 16 2016 s

If you can get the stock at say $7.50 or lower, your return will improve dramatically, after all the “buy low” part of “buy low and sell high” is half of the equation. If this analysis is correct “break out” should soon follow after which a double is again a reasonable expectation as W1 up appears to be a 5 wave sequence and should then be followed by another. In the worst case it could become an a-b-c correction but should still lead to a double, give or take.

By the way,  gold stocks are trading in the same way as TCK.B.  They probable, recently, completed their first leg up (see ABX) and are now correcting in a wave 2. Gold itself idem ditto except it may have a lot further down to go ultimately.

VRX update

Hamilton

vrx mar 15 2016 b

We are at a low of $65 and called the top quite accurately even if it was the second time. Our target was $50 which equates to the top of wave one in an extended 5-wave sequence. This is only one out of a number of possibilities.

The count as shown (in previous blogs) cannot possible be correct. By the time we get to the ground floor one has to assume that a full correction has taken place. That is not possible if this is a 5-wave down sequence. More likely it is a double zig-zag or a–b-c  X  a–b-c. The p/e is still above 30 but certainly down from 225 or so. We suspect that at least one more minor wave is needed, as shown in detail below;

vrx mar 15 2016 s

This is a log chart, as it must be given the idiotic range. Now we are only $7 away from the $50 mark but a little lower is definitely possible and we will get to the $50 today.

PS. Now that the stock has gone all the way to $45  and that is where the two legs are about equal on this log scale. If you were to start both legs with a 1-2,1-2 setup you could also view this as a simple A-B-C , 5-3-5 with C equal to A, shown below. A 4-5 would still be needed but it does not have to travel that much further. Interestingly, for a brief moment this stock had a larger capitalization than the Royal Bank!

vrx mar 15 2016 ss