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

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 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 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 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 is warning of a potential minor turn.

GDX feb 26 2016