I think the upward movement of the stock on another down day in gold could certainly be indicative that the pour is imminent Rick.
I’m going to hold off on posting charts until tomorrow. I’m going to purchase a sub to tradingview charts so that I can put all my MA’s on it. I tried to today and screwed something up so it won’t let me make another attempt today.
Here’s the monthly oil futures chart. Oil is up $1.30 tonight, currently at 60.82 and hitting the top of the upper downtrend line of the giant falling/bullish wedge. The RSI on the daily and weekly charts are overbought, so I wouldn’t be surprised if we get a pullback here, but we could just keep going on to the 130 & 180ma’s above at $69 and $71.25.
I created a bit of a charting lesson for someone so thought I would share it here for anyone interested…
This chart is a daily interval broken into 4 sections from left to right. It is not the current activity but runs from May '17 to March '18. The first section NVO is in a consolidation. The second section covers the bull run and the beginning of the bearish period. The third section covers the confirmation and continuation of the bearish period. The fourth section shows the beginning stages of what ended up as a new but short lived bull run. The moving averages on the chart are the 20ema (red), 50ma (blue), 130ma (black), 180ma (yellow). (There are two horizontal lines, orange and green, running through the chart which don’t have anything to do with this). The only thing to note about the first section is that there is a long period of consolidation going on with NVO here and the 130 and 180 MA’s are the resistance point for the entire consolidation period.
The second section begins the breakout. Note that the 20ema first crosses above the two longer MA’s, followed by the 50ma. Note also that, as the stock rises, the 20ema is solid support, for the most part, up to and a little beyond the “B” area on the chart. There are a few days when the 20ema support is broken and a few times the candles even close below the 20ema, but they are always very close to the 20ema and recover quickly back above it within a day or two, never showing any kind of strong selling until just after the highs are hit at “B”. The 20ema often is the area of first support when a stock is in a strong bull run, and the first area of resistance when a stock is in a strong bear run. When a stock is in a long bull or bear run, eventually there will be days of heavier selling and the 20ema will be broken. This is where the 50ma can be helpful to keep you in the trade and not miss out on a potential next leg higher. Watch for retracements to find support/resistance at the 50ma and then move back to the 20ema and continue the trend.
From the start of section 2 up to the highs marked by “B”, NVO is in a strong uptrend, never getting close to the 50ma. There is an early signal on the chart though, once the highs at “B” are confirmed by a small retracement back to the 20ema, to warn you that the bull run might be over. You can see that “A” on the chart marks the first highs NVO hits before a retracement to the 20ema. At the bottom of the chart there is another “A” marking the level the RSI indicator hit at the corresponding price highs. Now you can see at “B” that NVO clearly hit new price highs, but the RSI at that point did not hit a new high. This is called bearish divergence and is the earliest way I know of to get an indication that a trend may be ending. In this case it did indeed indicate the end of the bull run for NVO. The next indication the bull run was over was in the price action just before “C”, where NVO appeared to be ready to start the next push higher, but failed and, at “C” finally lost the support of the 20ema, tested the 50ma and then lost that support which is confirmed at “D”.
Now we’re at section 3, where we aren’t yet bearish but now watch to see what the stock does at the 130 and 180ma’s. In regards to the moving averages, regardless of the time frame I use them on, and I use them on every time frame I look at and use them the same way, I always use the 20ema and 50ma (and sometimes the 30ma as well) as gauges of the strength of a trend. When a trend is strong, those three MA’s will hold the price movement. I use the 130 and 180ma the way most use the 200ma, as overall indicators of bullish/bearishness. If a stock is under the 130 and 180 then to me they are bearish. I am either looking to short them or waiting for either a bottom formation and other indications of a potential bottom, and/or I’m waiting for the price action to get back above them and hold as support, at which time I again become bullish on the stock.
So at “D” NVO has lost the support of both the 20ema and 50ma. Two days later the selling intensifies, note the 20ema crossing down over the 50ma at that time, and the price action goes down to the 130ma and bounces a bit, then at “e” goes lower and penetrates the 130ma support. It holds there for a couple days and makes a move back above the 20ema at “F”. There are a few reasons not to get bullish here at “F”, but from the perspective of the moving averages the 20ema is under the 50ma, and price has not gotten near the 50ma, and you want to at least have price break back above the 50ma and hold as support before even thinking about getting bullish again. I also use trend lines and some other tools to help make those decisions and don’t depend solely on the MA’s. From the highs at “F” the bearish trend, which is now confirmed due to the failure of price to recover back to the high at “c”, continues and busts strongly through the 130ma and heads straight to the 180ma, and then breaks the 180 support at “g”. From there the selling volume drops off and the stock drifts slowly down in a consolidation which continues to the area on the chart labeled “I”. The area marked “H” indicates an early indication of potential bullishness for a few reasons: 1. The dip in price just prior to “H” held a support level and did not meet or exceed the previous low which I didn’t mark but you can see pretty much dead center between “g” and “H”. 2. Price broke above the 20ema just before “H” and pulled back to hold support at the 20ema. 3. The 20ema at the point of “H” has flattened from it’s downward trend and is just starting to turn upward again, while the 50ma has caught up to it and is also beginning to flatten. At “I” price breaks above the 50ma, hits a slightly higher high than the previous week of trading, and ends up closing above the 50ma. At “J” you have a break above the 180ma and consecutive days of the 180ma holding as support. From there what you can’t see is that price eventually breaks back above the 130ma and makes a mildly bullish run for a few months before another breakdown.
I’ll put up some charts for Novo and Karora, as well as AUMC/MDMN and gold tomorrow or over the weekend.
Here’s a couple quick charts for AUMC and MDMN. These three charts are the monthly, weekly, and daily intervals in that order from left to right. AUMC is pushing to get support above the 50ma on the monthly but hasn’t made it quite yet. The 20ema and 50ma are turning up, and the 20 has crossed over the 50 and is headed for the 130ma soon, so that chart is turning bullish. On the daily, all the MA’s are in the right alignment and turning upward so it should be interesting to see how things go over the next month or so.
MDMN is doing the same as AUMC, but due to the higher volume looks more uniform in its movements. There’s a nice easy upward slope developing. Would sure be nice to see it gradually move even back to the .03 levels after all this time in the basement.
I’m sure many here are aware of the IMF and SDRs as explained in April 30, 2019 review titled “Valuation of Special Drawing Rights” (SDR). … or Maybe not!. …
Cut and paste may be necessary to look this one up as it becomes more obscure.
Selected Decisions and Selected Documents of the IMF, Fortieth Issue – Review of the Method of Valuation of the SDR—Method of SDR Valuation and Amendment of Rule T-1(c)
https://www.imf.org/external/SelectedDecisions/Description.aspx?decision=15891-(15/109)
“4. The list of the currencies that determine the value of the special drawing right, and the amounts of these currencies, shall be revised with effect on October 1, 2021 and thereafter on the first day of each subsequent period of five years in accordance with the following principles, unless the Fund decides otherwise in connection with a revision:”
Prepared by the Legal Department of the IMF
As updated as of April 30, 2019
Has this October 1, 2021 now been changed? It appears the Fund has decided otherwise in it’s meeting of February of this year! Any predictions on what the PM charts and broader market will do with the following “new” anticipated changes in physical gold holdings requirements for paper trades on the COMEX and LBMA? Will this eliminate much of the leveraged buying of futures contracts and options? Interesting times ahead … Is this signaling a return to basing global currencies exchange rates on the strength of their declared gold reserves, including that of the US dollar?
Basel III and Gold
Currently, there is an imbalance between the amount of unallocated gold included in paper gold contracts and the physical gold available to honor those contracts traded on the COMEX or LBMA bullion exchanges. The unallocated gold is sometimes estimated to exist at a 100:1 ratio to physical gold available for delivery. This condition has persisted because few contract owners have requested delivery of the physical metal to settle these contracts. Lately, this has begun to change, applying pressure to the physical bullion market in doing so. Beginning in June of 2021, Basel III rules will require banks to hold unencumbered physical gold valued at 100%. Unallocated paper gold receipts will not be considered equal assets for the purpose of evaluating financial strength. Banks have wisely already begun to gravitate towards receiving physical delivery in preparation for compliance with Basel III rules. …
Another benefit for the owner of precious metals will be the absence of monthly metal-smashing done by those trying to manipulate prices lower as option expiry periods get close. When banks hold physical metal as a primary reserve asset, they benefit more from gold’s rise than from a temporary drop in price. Increased gold prices will allow banks to reduce debt and other liabilities on their balance sheets, putting them in better financial positions. This will help create a new reality that aligns the interests of individual physical gold and silver purchasers with the interests of the large institutions holding the gold or silver. In this world, there may only be two prices for gold and silver; the price to purchase, and the price to sell. Gone will be the days when you also have to wonder how much above or below spot price you must pay or receive to complete a purchase or sale of precious metal.
Yes, Easy - I was reading about this the other day. I believe naked shorting of gold will be history as of June 27, 2021 (per Basel III). So, all the short contracts are going to have to unwind before then, as banks will no longer be able to count gold paper and derivatives as Tier 1 assets. That was my take on it. If accurate, it seems to me this could be like rocket fuel for the price of gold. However, there is some concern that Basel III will be delayed yet again, but the author I was reading (a Briton, I believe) said it’s getting to be too late for a delay.
I was wondering if there is any correlation between stimulation checks going out to individuals/households and the price of Gold and Silver. I found this instead and found it quite interesting. I know commodity prices were correlated, but oil is very closely correlated it seems as an indicator. This is an older report from 2017. Is it still true today? I wonder as there are so many new mining technologies being employed in the last couple of years:
Who Truly Controls the Price of Gold and Silver?
APR 28, 2017
Many people have many theories on what forces are behind changes in gold and silver prices. Theories abound about how the Fed and various central banks can do whatever they want to manipulate the market of these precious metals. And accusations have even been directly levied in some cases, such as claims that the silver price has been artificially kept low for the past decade.
But according to Steve St. Angelo of SRSroccoreport, a different factor is at play — and it’s not the one people expect. While he agrees that the Fed and Central Banks do intervene in gold and silver markets, their influence is limited to upward movement. The greater cause of price changes, Steve finds, is oil.
Don’t believe him? Check out the charts below. Since 1940, the ratio between oil price and gold price has been — with a few exceptions — in almost complete lockstep. The relationship goes back even farther when talking about silver price.
(https://goldsilver.com/blog/who-truly-controls-the-price-of-gold-and-silver/)
Rich,
One year later a few changes noted. Could you post a new analysis on MUX?
There was an after hours Q1 summary released today.
BY Reuters
— 2:19 PM ET 05/07/2021
May 7 (Reuters)
MCEWEN MINING ( MUX): Q1 2021 RESULTS
MCEWEN MINING INC
CASH AND LIQUID ASSETS AND POSITIVE WORKING CAPITAL AT MARCH 31ST, 2021, WERE $52.5 MILLION AND $35.3 MILLION, RESPECTIVELY
PRODUCTION IS EXPECTED TO INCREASE THROUGHOUT 2021 AND END 20% TO 40% HIGHER THAN 2020 Source text for Eikon: Further company coverage:
Long term it looks like MUX could be getting ready for another big run easy…
$5? $9? Tough call!
Needs to get through 1.32, 1.54, & 1.61 on those overhead MA’s and it could get interesting!
Thanks Rich - I do agree with you that it looks good on the charts.
I can’t remember, however, but I recall that the “problem” with MUX from a fundamental standpoint is that they are in the (what I will call) depletion phase of their corporate existence - in other words, they have their reserves which are simply being depleted, and it’s just a matter of time before they run out, hence a relatively lower value. This was pointed out to me in the context of my prior question as to why a company, like Novo Resources, could be valued HIGHER than MUX. Maybe Mr. McEwen has something up his sleeve on MUX we don’t know? Good luck - and thanks for the constant charting - very helpful.
Thanks TR and mrbubba. Appreciated. I hadn’t heard the depletion phase of their corporate existence explanation before. MUX short position is now 9% after remaining at 18% for the past year or two.
TR, could you do a chart on Skeena Resources: Eskay Creek. I gave this a passing mention back in July last summer. They had news out this morning. I had planned to add to my position, mostly due to Eskay Creek, this morning. After this news came out, I’ll have to see.
SKEENA CLOSES C$57.5 MILLION PUBLIC OFFERING
May 17, 2021
Vancouver, BC (May 17, 2021) Skeena Resources Limited (TSX: SKE , OTCQX: SKREF ) (“Skeena” or the “Company”) is pleased to announce that it has closed its previously announced bought deal public offering (the “Offering”). Pursuant to the Offering, Skeena issued a total of 18,548,388 common shares (the “Common Shares”), at a price of C$3.10 per Common Share for gross proceeds to the Company of approximately C$57.5 million. This total includes 2,419,355 Common Shares issued in connection with the full exercise of the 15% over-allotment option granted to the Underwriters in connection with the Offering.
(Skeena Closes C$57.5 Million Public Offering | Skeena Resources Limited)
I don’t think this one will be a tough call. interesting chart that should show a strong reversal?
Hi easy. I’ll put it up when I can. Maybe tonight, but I’ve been going all day, feel pretty tired and still have things to do. Might be tomorrow.
Get some rest TR. Hopefully the PM stocks will take a rest tomorrow, too. Many were too hot to touch today. Just like I usually don’t try to catch a falling knife metaphor for stocks, many were too hot to touch today. Notable activity to the upside in quite a few, including HL, EXK, CDE, PAAS, ASM, MUX, AG, KRR, KNTNF, ELO to name a few. Hope all on board were doing well with their favorites today. I don’t like chasing a stock on the way up when it’s on fire. Blackrock Silver may be my best opportunity on the open tomorrow. They just completed an $8M bought deal private placement announced today. It should be easier to catch a trade in BKRRF, BRC.V tomorrow than what Skeena’s bought deal of C$57.5M put on the radar of too many today. I missed catching my bid on SKE.TO this morning.
Thanks Rich for taking the time. Be blessed my friend.
Has anyone been following Lithium America (LAC)?
Charts are starting to show a possible recovery after a long decline.
Daily Interval
Weekly Interval
4 Hour Interval
Disclosure: I recently added to my position in the 12s & 13s.
Slipped in the Eloro weekly chart in my previous post inadvertantly. Any comments? It’s been on an incredible tear after some great drill results. I expect that will continue as it has an extensive drill program underway. Not much movement the past week. LAC may be taking a breather, also, so here are a couple more charts for anyone interested.
In the chart above PPS has bumped up against 200MA (4hr) resistance. Daily 200 MA, however, is at 13.80, which should offer a very strong support in the event of a retrace. I do expect a buying opportunity as resistance at the 100 MA alligns with the same resistance level as seen in the 4hr interval chart.
This has been a very tradeable stock for long and short term investors.
