Here is another triangle. It suggest that this iShare should go down further which contradicts any notion of the stock market going down. Once again, triangles are usually 4h waves or B-waves, This would be a B. They normally have 5 waves but they are known to extend by increments of 3 waves as in a-b-c-d-e-f-g. This one has lasted a full year and seems to be complete as of the start of February.
For info only, no idea what it means.
We are rather agnostic about the precious metals. The idea of buying them as a hedge against the world collapsing does not seem to be fact based. They drop together with stocks. That they constitute “real” value as in contrast to fiat money is also a little stretched. Both are highly dependent on a “mutual understanding” with respect to their value. And everyone can readily sympathise with the notion that it is a complete waste of time and money – better used elsewhere – to dig up the stuff and then bury it in a vault, why not just agree on who owns it where it is? But apart of all this it does look like silver is at a critical point here or near here. We are at a 4th wave of previous degree, a normal retracement level. It has lost 50+% of its peak value and more of the run up over the past 10 years or so. The RSI is oversold and the MACD is already pointing the other way for 1/2 year. We are aware that some EW-ers like to suggest that the whole structure is, somehow a triangle. There is no such thing to our knowledge. The count that might fit is the one shown. An initial a-b-c down followed by an a-b-c up which has yet to complete the c part. This is bullish only on an interim basis as it targets about $37. Even so it could lead to nice gains on such silver stocks that have recently been cut in half (proportionate to silvers price). FVI would be an example even though we do not recommend the juniors. A Kinross at $7.40, down from $25 is starting to look a little like value, at least relative to where it was.
Hecla is the oldest US precious metals miner and also the largest and lowest cost silver producer. According to it’s website its cost for silver is a negative $1.45, which simple means that “side-show”, consisting of other metals pays for the entire operation and then some.
From an EW perspective the rise from below$1 to $13 is probable one single large “wedge”. In 2008 this wedge collapses towards the base but does not quite make it. This collapse, by the way, is a pretty good indicator of how well the precious metals actually “hedge” or protect you against financial turmoil. Then from the lows in late 2008 the stock rallies in what almost certainly is a B-wave counter-trend correction. In plain English that means that we have to go down again and establish a new low , $1. Alternatively a more complex correction may be unfolding, but even then a return to about $ 4 is almost a given. The stock is already down by more than 40% and there has not been a shortage of turmoil lately. Looking at the SLV, it certainly does support the notion that silver may , in fact, have topped already.
Fortuna sheds some light on the situation but it is not conclusive one way or another. The stock appears to be making a triangle but that does not really fit, so I suspect that it is a 1-2 on the way down. A drop now through the lower trend-line should resolve the matter. That this is possible , regardless of what silver does, becomes far more plausible if one realizes that this company has some major environmental issues to overcome.
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.