Year: 2011

NEM, Newmont and Gold and Silver.

Hamilton

NEM aug 8 2011

GLD aug 8 2011

slv aug 8 2011

The “conundrum” continues. Above we have NEM, Newmont, one of the lager or at least mid tier gold producer.  Below that , the stuff, by way of the GLD which represents 1/10th of the gold per ounce price, and below that silver by way of SLV, all in US$ terms.

These are 5 year charts. Newmont has gone nowhere, the stuff has roughly doubled over the last 3 years and tripled over 5. Silver out-performed the other two by a wide margin, more than quadrupling in just 3 years. But there is no harmony between the 3. Clearly there is a complete and total disconnect between the miners and the stuff, and then there is a disconnect between gold and silver. Silver looks like it has already peaked and is completing a corrective retracement. Gold has just broken out of its channel.

I suspect that the cause of these non-confirmations lies in the massive growth of the various ETF’s. The simplicity and liquidity of these investment products diverts capital in a disproportionate way into what happens to be in vogue at a certain point in time, without the limitations with regard to individual participants and volumes such as apply to commodity futures. Raw capitalism at its best, someone will be in tears before it is over.

RDS.A, Royal Dutch

Hamilton

rds.a aug 8 2011

Among the integrated oil companies Royal Dutch has served best in predicting what oil might do. The (very clear B-wave) announced well in advance that oil was not going to $200, at least not for a while. Here we are at about $60 with very clear overlap, virtually making an immediate rise to higher highs virtually impossible. This leaves only a more complex correction which would call for a drop to about $40 anyway, or straight down. Eitherway it is not likely that oil will hold last nights lows of $79.

DAX , update

Hamilton

 

DAX aug 8 2011

The DAX dropped from 7600.41 to a low today of 5502.63, or 2097.78 points or 27.60%, much of it in a matter of a month. Put differently the drop has erased 2100 points of the roughly 4000 points gained over the last two years counter-trend rally, that is about 1/2!

The problem now is that this is not likely the end of it. Sure we could get a 800 point rally any time now but when all is said and done the structure of the drop is such that it cannot be finished at this point! The chart is weekly and does not show today’s low. It corresponds roughly with the bottom of the triangle in the middle of the A-B-C

One reason why Germany is doing so poorly is obviously the fact that much of the burden of holding the Euro together falls on it’s shoulder. It also benefits to a great extent of the present arrangement, the dilemma is do you keep it or go it alone.