The usual then, March 16, 2016 or a good month ago, and now charts;

Sometimes the Gods do smile on the EWaver. This is a perfect example of the “diagonal”, the expanding type as the get wider as they progress. The structure is always a 3-3-3-3-3 and it does not have to reach the lower trend line at the end. It should reverse violently from that low point. The minimum target is invariable the base of the structure, in this case approximately $4, but obviously it could go a lot higher and perhaps even make new all time highs. But sticking to what we know for certain, $4 is the target and  it should be reached, in the worst case, in a corrective a-b-c.

The c and a are almost equal. We are at the $4 level. It was a violent move. The RSI and MACD are showing extreme levels so this could be it. We simple do not know. Ashanti Gold, AU has the same pattern but still has two or three dollars to go up to reach it’s initial target of $19 or so. Similar patterns are all over the place, FVI, Fortuna is already making a new high. FCX, AU, ABX, PAA, K, XAU etc have either doubled or tripled so from here things are less certain or clear. The trend is your friend, unless, of course, you outstay your welcome.

Below is a chart of Fortuna. We are not sure what to make of it but things are back to normal very fast in some stocks;

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.

Hecla is one such silver stock that we have previously mentioned. Back in January we even suggested this was a good, but risky, buy at about $4 for a target of about $7, potentially a 75% gain. Below is what has transpired so far;

HL has a tendency to do very nice wedges and then reverse. Here the wedge is quite visible even if it is debatable in strict EW terms if it actually is one. The a-b-c rise from the lows is plain vanilla text-book stuff. It looks more or less complete with the a-b-c structure having traced out a pretty symmetric pattern with c equal to a. Of course this could still become more complex but, in the event you did buy on the recommendation we would sell now and take the roughly 50% profit. Notice that the RSI is already well into overbought territory.

See also previous blogs that more or less anticipated today’s events. The top chart gives the big picture. It was a screaming buy at under $1 back in 2001 – on account of the multi year wedge that ended then – when it started of gaining by a multiple of 8x in a matter of years. In 2009 it crashed like everything else but then regained its composure in what was undoubtedly a B-wave. The implication is that the stock should ultimately make a new  low. The first stop , as almost always, the level of the b wave in the  larger B-wave. In this case just above $4  which we did today.  Obviously this stock is not a buy for a long term hold, but it may be for a quick trade. If you are so inclined it could bounce a few dollars, perhaps even to about $7 before resuming the down trend. Percentage wise that would be a great trade but also a little risky.   

The cause of this problem is that authorities have shut the mine down as a result of accidents caused by rubble in the shafts. Supposedly it will take a year to clean it up. Almost 300 people work here and this is a very old mine,if not the oldest one (Coeur d’Alene  is just up the road). If it lives up to it’s name, “Lucky Friday”, things might be resolved a lot faster providing a good backdrop to a bounce. My guess is that we are in a 5th wave now that should not go beyond $3, but not at all sure it will go that far now.

The mine has gone 25 years without a fatal accident and the owners are determined to reopen it as soon as possible. Coeur d’Alene (CDE NY ,CDM TO) has not been affected recently but has somewhat underperformed HL

Below is  day chart. It is little more than a wild guess;