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Category Archives: GOLD&SILVER STOCK ETFS

ZGD: BMO Equal Weight Global Gold Index ETF

This ZGD is a fairly new addition to Canadian ETFs, which is a bit over 5 years old. The invisible wave count previous to 2013 can be used from any other Canadian ETFs with some differences. It’s an equal weight ETF  and will produce different wave patterns, but in general they will react the same as most other ETFs.  I show Minor and Intermediate degree tops and bottoms with the Minor degree 5th wave being a diagonal. ZGD made its bottom in mid 2015 long before any other gold stock related ETFs did. Again, I could be wrong on this, but I have to call them the way I see it, even if it means missing out on the next leg.

I hate to miss out any any bullish phase, so this is a tough call.

Any price action “after” the 2015 bottom belongs to the bullish side as a potential expanded counter corrective move. The 2016 rally is what I call a “C” wave bullish phase, which peaked suddenly in mid 2016. $14.50 CAD seems to be the peak after which all gold stock related ETFs start a grinding bearish phase, with parts of it fitting into a falling wedge. Falling wedges are very bullish indeed, but any wedge can fool us, especially if it is a fairly small one.

ZGD is now poised to do one of two things, blast up, or keep falling! “It’s now or never”,  as I like to say. All ZGD needs to do is decline just a fraction below the 2015 low, and then this market will have confirmed, that a “complete”retracemet, has taken place.  In short, we may find out the hard way what a fake bull market can do. Way back at the 2013 lows we can see a gentle sloping decline between 4 points. This is a bullish pattern as the markets are starting to bunch up.

I only have one Gold/ZGD ratio from today, and it’s sitting at 146:1. I may get an expensive ratio reading from the Mid 2016 peak, but that still requires more homework.

Chances are good I will update this ZGD more frequently as it deserves far more attention at this critical stage.

With most gold stocks pointing down and gold pointing up, many analysts say that gold stocks will catch up! I don’t believe in this “catch up myth” as they were saying the same thing at the 2011 peak and it didn’t work.

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GDXJ, Gold Stock Bull Trap?

The start of the bull market in early 2016, soared with small subdivisions This bullish phase ended in mid 2016 at about the $50 price level before GDXJ started to turn down again. For just about 2 years, GDXJ has been grinding sideways for far too long in a bullish correction. A horizontal wedge has also formed which compounds and confuses the next potential move. If we look at it from a bearish point of view, then it’s an easy guess, otherwise it can soar out of this wedge just as easily.

Even now the Gold/GDXJ ratio is hitting a break wall with todays reading at 39.8:1 which makes GDXJ a bit more expensive. This ratio should spread, as any decline intensifies. I have 62:1 as my cheap ratio, but we may never hit that again for a very long time.

Most of the gold stock related ETFs also have this sideways wedge,  so it’s not just some isolated pattern.  The well heeled gold stock contrarians who have very deep pockets will just be buying more, but for a new player this decline would hit them hard.

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HUI Gold Stock Correction Review: Will It Ever End?

Since the 2011 peak gold stocks have been grinding downward until early 2016, when suddenly gold stocks exploded and soared until mid 2016. Now the HUI is grinding sideways for over a year, but I think there is at least one more leg up to come. This 2017 sideways action shows up in many of the other gold stocks related ETFs so it’s not an isolated pattern at all.

At this time I’m working gold stocks like a big Primary degree triangle, but that will have to be adjusted if gold stocks don’t break out of their slump that they have been in.   I also looked at the ABX (Barrick) stock, which does not show this pattern, but it showed a very nice zigzag correction already completed.

I just can’t see Barrick’s stock soaring while all others are left behind so for now I will remain bullish until this HUI clears a new record high with a “C” wave bull market. “C” waves can produce some stunning moves.  Barrick also contains a Wedge or inverted Megaphone, which can be powerful signals, before the trend turns again.

We could even be heading to a “D” wave peak, so the bigger gold bullish phase is not over yet,  from my perspective.

The Gold/Hui Ratio is sitting at 7.60:1 which is more expensive than the 3:1 ratio, I have recorded. Cheap is about 10:1 so we’re not that expensive when we use gold as the measuring tool.  In zigzags the “A” wave crashes can be very straight, but then the “C” wave is choppy and travels at a slightly different angle.

In a flat type of a pattern the leading “A” wave can be very choppy, but then the trailing “C” can explode, or implode with a sheer vertical drop, depending on what side of the market we are on.

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PSAU PowerShares Global Gold & Precious Metals ETF

In a search looking for other related gold stock, ETF patterns I found 3,  but I will work with just one of them. PSAU is one of them, which also pays a current dividend yield of 4.65%.   PSAU ETF Guide | Stock Quote, Holdings, Fact Sheet and More

Since early 2016, PSAU bottomed like so many other gold related stock assets did, and then PSAU exploded into the mid 2016 peak after which PSAU went south  developing a bearish phase. The first move up in 2016, ended with a 245% gain, and gathered worldwide attention that a gold bull market has arrived.

It took the majority 6 months or so to figure it out, and as soon as the mass media talking heads were in consensus agreement, the gold stock market turned bearish. Bitcoin was the latest craze, and who needs gold when Bitcoin is as good as gold? Nothing is as good as gold, except “gold”.  Dumping gold for Bitcoins was the battle cry, but then Bitcoin crashed and has yet to break out into new record price territory.

Late last year PSAU seemed to have turned upward again from a base of $18, touching $20 before backing off. Yes, that $18 price level is a line drawn in the sand, because if we are back to the bullish phase, we don’t want to see that $18 price level get trashed for any reason. Even if that $18 price level didn’t hold, this bull market is not over until the majority of my Gold ratios show overbought conditions.

We’ll be starting our third year with this bull market, and it may still take 1-2 years before it’s finished. GDX and GDXJ have similar stock patterns, but PSAU pays out a much higher dividend payment.

My top trend line is based on the two biggest dips connecting the bottom trend line. I always draw these trend lines in parallel fashion, but there is no guarantee that the top trend line will ever get hit. I have to check a few more top and bottom ratios, but I have at least two I can work with. Our present Gold/PSAU ratio is sitting at 66.36:1, and it still has a long way to compress until we get into an expensive 27:1 ratio. PSAU may never reach that extreme, but a ratio of 66:1 seems to be pretty normal right now.

I believe that PSAU can still double up from todays price levels, as “C” wave bull markets can and do produce some amazing or stunning vertical moves.

Short term the gold stocks could still be in a correction mode, but long term I’m still very bullish.

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GDXJ And SIL ETF Reviews

GDXJ is a gold stock related ETF. The great thing about ETFs is that we don’t have to worry about any single company fundamentals. All we need is a very good understanding, where gold stocks are in their bullish or bearish phases. Recently the story was that investors were dumping gold related assets, to jump onto the Bitcoin Mania bandwagon. Of course the Bitcoin bandwagon has now crashed and is burning in a huge electronic fire. No sooner that this bearish news about gold came out, GDXJ stopped falling and has now started to soar again. GDXJ reacting the opposite way of bearish news, is a very bullish sign in itself.

You won’t find those indicators in your trading tool box, but smart contrarians look for those signs all the time. I see this action during many “ABC” corrections.

During last weeks Bitcoins carnage, and a $9000 price crash, gold stocks kept right on trucking along.  I have dropped my degree levels down to Minor degree again, which means a bullish phase is still coming. Any “C” wave bull market, could send this gold stock related ETF to new record highs.

Any bullish phase ends when many bulls are present, like they were back in mid 2016. I called for a correction at that time, which ended up being about 18 months long. Long drawn corrections are necessary to wash out all those emotional investors, that have no clue about longer term cyclical investing. They panic anytime the market goes against them, forcing them out just before the biggest bullish phase starts to move. I can’t  give any specific “buy” or “Sell” instructions, but I can only relay my bullish or bearish mood at any given time.

The Gold/GDXJ ratio is still relatively cheap as it’s at 37.85:1 at the time of this posting.  This has compressed a bit from a recent base of 40:1. My extreme expensive Gold/GDXJ ratio is 10:1, so we have a long way to go, before this gold market becomes expensive again.

 

SIL has a different bearish phase, that other ETFs didn’t have. SIL just finished a bigger and longer correction, but has now synchronized in time with other turnings. From the 2016 bottom SIL produced a stunning move, which can only happen in a very short time span. The SIL bandwagon also had to crash, producing a bearish phase. Bearish moves in a bull market are necessary to get rid of all those freeloaders, that think they can just jump on at anytime they want. Emotional investors will always get burnt when they chase a bull market, or when they try to take their entire positions all at once.

Contrarians do not do any panic buying or selling, as they were buying during the entire 2015 decline, with GTC orders. Everybody hated gold stocks at that time, but look what happened shortly after. The majority always gets in at a top, and in the case of SIL they left a 360% gain on the table. I believe SIL can break to a new record high again, as this second bullish phase starts to kick in.  At a minimum, SIL would have to completely retrace that mid 2016 peak of $54. This is so close to a Fibonacci 55 number, where a 61% (1.618)  move above $55 will get us close to the $89 price range. SIL would end up just below a major double top.

The thing with anything silver related, is that during its entire life, it contained wild and crazy zigzag moves. These zigzags fit best as diagonal waves. A single zigzag bull market fits very well into any diagonal related run.

The recent Gold/Sil ratio is sitting at about 39.66:1 which is still very decent from my perspective. When the Gold/Sil ratio starts getting closer to 20:1, then we may have to look at the bigger bullish phase again.

Due to the fact that commodities are all leveraged, Elliott Waves don’t always act the same. Fear is the main fundamental that drive commodity prices up or down, not supply and demand numbers. Fear of missing out, fear of gluts and fears of shortages, is the real driver of prices. Hope and greed don’t have very much time to set up between mini panic attacks, while in the stock markets, it could take years for hope and greed to set in.

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XAU, PHLX Gold/Silver Index Review

There is also another listing where this XAU symbol will show up, and that is Goldmoney   A Crypto type money, which is actually backed by real things like gold. I use it as a savings account and can send grams of gold to anyone that also has a Goldmoney account. Goldmoney has  been around for a lot longer than any Crypto currency that I know of.

Besides the XAU, I also looked at the Barrick (ABX) bear market, which is very similar to this XAU gold stock index. 2017 looks like it is a setup for a flat in a potential wave 2 correction.  Overall the gold stock bear market, shows a better defined 5 waves down, which I’m using as a Minor degree 5 waves.  A five year bear market with 5 declining waves, has a nice ring to it, but how it fits into the bigger picture, is still not clear enough. I will not produce mindless little numbers and letters, as many wave counts get trashed on a regular basis. Each broken wave count has to give me back some useful information, that I can use to create a better fit. 

I can adjust the degree level at anytime, but what is important to understand is that Gold stocks are still in a bull market, and in the end can also go vertical. A flat inside a potential wave 2 correction, is a powerful combination as they can explode once the “C” wave position has completed.

 Since this bull market and correction, is about 2 years long, I can see that we may have 2 more years for this to play out.  The more violently it moves up and down,  could also shorten this time frame. The overriding factor is that another leg up is still coming, and we should never waste a bull market in commodities.

As we can see, the gold market is very cyclical, and Rick Rule calls it, “The most cyclical market on the planet”.  The real contrarians know all about this cyclicality and have been making money from it since the 1970’s. 

I don’t use any of the external indicators, that the majority are using as the majority can never win at this game, so why use all their tools?

I use contrarian indicators and one of these is the Gold/XAU ratio. The XAU has been pretty low on my radar screen, but at this time we are at a 15.75:1 Gold/XAU ratio.  An expensive ratio is closer to 5.21:1, (Dec, 2010)so there is lots of room for gold stocks to still move up.

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HUI Gold Stock Index Review


At this time I’m trying a different wave count for the 4-5 year, HUI bear market. If I constantly start having to use the smallest degree on my list of 15 degree levels, then I know I may have to increase my degree level by at least one degree. I still have three degree levels left, so there is lots of room to extend with.

What I see in the HUI is a potential running flat. There is some downside wiggling room left, but in the long run this gold stock bull market is not finished. A running flat is extremely bullish and from its base it can soar in a stunning fashion.

At the 2016 bear market low, the majority of analysts were bearish. When the consensus is bearish, and the forecasts for conditions to get worse are constantly hammered home, then ask yourself, “Who is left to get out”?

The reverse happens at any major top. When the consensus of expert analysts, paint us a rosy picture for the future of gold stocks, Ask yourself, again”Who is left to get in and buy”?  At a bull market top, you have analysts shouting to the rest of the world how great the gold stock bull market is going to be. Yet the HUI crashed and burned for close to 5 years.

My saying I like to use is, “market bottoms are the breeding grounds for bull markets, and bull markets are the breeding grounds of bear markets”.

My point is that the resource markets are cyclical and if you ignore this fact, you will miss every bull market that comes along.

Rick Rule – Resources: Bear Markets are the Authors of Bull Markets – YouTube

Rick Rule understands the cycles in the gold markets, and this short 10 minute video is important to watch.

Right now the Gold/HUI ratio sits at 7.10:1 from a base of 10:1. We would have to get closer to 3:1 before it starts to get very expensive.

At this time 2018 sure looks like it could be a banner year for gold related assets.

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HUI, 2000-2017 Gold Stock Review

 

Many of the other gold stocks related ETFs and indices have very different wave counts. Some look more bullish while others look far more bearish. This is what diagonal wave structures can do.  The 2008 crash was not a surprise event as Steven Jon Kaplan had short positions on GDX and I tried shorting GDX as well, but got forced out several times before I gave up.  The 2008 crash showed that gold stocks “AND” the general stock markets can crash together, at least for a short period of time.

The angle of the 2008 crash assured the contrarians that another bullish phase would happen. The HUI took its sweet time about it because it sure looked like another zigzag in a bullish phase. Gold stock insiders were selling again at the 2011 top, while stock market insiders were buying across all indices that I cover. 

Sure enough, by the 2011 top the stock mania was ready to fly as gold stocks imploded in a long 4 year bear market. From the 2011 top which I use as a Cycle degree wave 3 position, the gold stock markets displayed what looks like a set of 5 waves down. Due to the diagonal nature of the decline, there could be a single zigzag during the 2013 sideways correction. 

In early 2016 the HUI hit a bottom with about a 10:1 Gold/Hui ratio from an expensive ratio of 3:1. Today the Gold/Hui ratio is 6.45:1 which is shifting a bit towards the expensive side, but it will take much more than that to kill this gold stock bull market. Not until we see a sustained expensive Gold/Hui ratio and reports of gold stock insiders selling again, will this bullish phase be ready to pop one more time. 

Even now gold stocks are not displaying a great looking potential “C” wave bull market, so we have to expect some wild moves that may surprise us. 

I show three trend lines,  and the peak of the center trend line could be closer to reality than the top trend line is.  Technically speaking, I would love to see that 2016 HUI top,  get completely retraced. It is one of the ways that will help confirm that we are still in a bullish phase correction. 

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End Of The Lithium Mania?

I think the hype about Lithium for electric cars and batteries has been hyped for far too long.  Besides, if Apple takes a big hit, the demand for Lithium could dwindle dramatically. There is no way of being completely sure that the LIT bull market is just a big zigzag, but we sure can see a massive amount of shares being traded. Smart money selling to dumb money, would be my best bet.

We have a sharp spike to the upside which can take a very long time to correct. When markets go vertical it can also mean the end of the bull market. This could take a long time to play out as we would have no real support price level we could count on. The best support would be $23, and that could also just be temporary.

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HUI Gold Stock Review

I looked over the Barron’s gold index before I looked at the HUI. They both do not give me any great clues as to the potential location we may be at. That 2016 low was a major low as all the gold/ratios have confirmed. The 2011 to 2016 gold stock bear market fits into a 5 wave sequence better than any other sequence, so it can put us into a potentially large degree zigzag. It would also mean that no new record high can happen as zigzags cannot go above their starting point, of the correction.

I’m not happy with the HUI pattern between the February 2017 top, to the July 2017 bottom. It does not fit well into a wave 2 correction at this time. Worst case we could be heading up a “C” wave leg, which cannot break out into new record highs. Instead of a 1-2 wave count we could be in an “ABC” count just as easily. Any trend lines that I do have are there to try and box the pattern in, but at times that works about as well as trying to lock a herd of angry cattle, into a corral.

There are at least 3 other gold stock related ETFs with this same type of a pattern. In the long run I’m bullish as any Gold ratios are not anywhere near any extreme at this time. Besides, no gold stock insiders as a group has sold out, besides Steven Jon Kaplan would be one of the first to post this information when it happens. Insiders do not buy their own stocks back on a whim, nor do they ever sell on a whim. They will hold for many years if they have to, and our wave counts should never conflict with this information.

One contrarian indicator I use is the Gold/Hui ratio, which is sitting at 6.23:1 right now. Very cheap was 10:1 with very expensive being closer to 3:1. At present this does not tell us that a sudden HUI crash is going to happen any time soon. Besides, only the late comers that take big positions, will get burned if that were to happen.

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Gold Stocks GDXJ Bull Market Update

Gold stocks with this mid sized gold mining companies have finally started to act in a bullish manner, even though they are lagging gold at this time.

Any lagging on the part of gold stocks is not a concern at this time because the Gold/Gdxj ratio is still on the cheap side at a bit under 40:1. Real cheap was 62:1 one which occurred way back in early 2016. There is lots of room for GDXJ to move to the upside so I don’t think gold stocks are ready to die. We have a higher low as well, which is the conventional description for a bullish phase.  I will not be a happy wave analyst until all gold stocks retrace the entire August 2016 top.  A new record high  would confirm this entire bearish phase.

When and if GDXJ gets closer to a 10:1 ratio then it will be time to look for a major top of this gold stock cycle. This may take until late 2018 to play out, but we have to be aware if this gold bull market will end sooner.  In time I may have to adjust my degree levels up by one degree, but that can always be adjusted at a later date.   It is virtually impossible to tell the difference between a “D” wave bull market and an impulse as both have the same bullish mood associated with them.  The only way we can know the difference is the choppy nature of the bullish run.

Some may be tempted to jump on the gold bandwagon now, but those emotional moves can backfire if gold stocks are ready for a correction. From the 2016 bottom to the mid 2016 top, gold stocks have gained close to 300%,  yet gold investors left that all on the table for the contrarians.  I doubt there is another 300%  gain from todays price, but, stranger things have known to happen.  The bullish move from the early 2016 base was not a vertical move, but “C” waves are  famous for going vertical when the party is ending.

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ZJG Canadian Gold Stock, ETF Review

Many of the gold stocks related ETFs that I write about, do have slightly different wave patterns. Some of the odd patterns break all my bullish outlook, while others look much better.  Since the early August 2016, double top, gold stocks have been grinding out a correction, which may have completed with the December 2016 bottom.  It looks like a potential 1-2 wave count start, but then it starts to fall apart as we start up the anticipated wave 3.

When the start of wave 3 started acting, “funny”, I knew a diagonal wave count would make a better fit. It would still be part of a bigger “C” wave bull market. “C” waves can stay depressed for long periods of time, but then get up and go in a wild move that nobody was expecting.

The US dollar spent over two years around that $79 price level before it turned and soared in a massive move to the upside.

To help confirm that a bigger bullish phase is still alive, two peaks should get retraced. This would be wave 1 in Minute degree at $10.50 and then the big top of $12 should also get retraced.

Higher lows are still being played out so my bet is that gold stocks will see a new record high before it will ever see a new record low!

Any bullish opinion on my part should not be used as a “buy” signal or investment advice, besides investors with low 6 figure trading accounts, are much better served with a newsletter subscription from Steven Jon Kaplan, “The True Contrarian”.  

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HUI Gold Stock Bullish Review

I have to give readers a small warning about the wave count above, as it is a very bearish wave count in the long term, but still very bullish in the short term. All other gold stock ETFs have different wave counts between each other as well, so this creates many different scenarios. 

If this market is a potential zigzag, then the HUI must not travel to new record highs, but must stop short of any August, 2016 peak. This wave count could easily fail by charging through the August peak. I have seen other wave patterns like this, where the market soared. When we look at the Gold/Hui ratio we are not near any potential overbought condition or expensive to gold.

The ratio is 6.52:1, up from the cheap side of about 11:1. It would have to travel towards 3:1 before gold stocks become expensive when compared to gold. We are still a long way away from any extreme Gold/Hui ratio, so this HUI could be sending the wrong signals. 

Even SIL has the same pattern, but with a much longer looking wedge. Unless I hear that Steven Jon Kaplan turns very bearish on gold stocks and sells all his gold stock positions, I will remain bullish. He will not even warn you about selling anything, the orders will go out to his members in email, and they will execute their sell orders at the same time.  

I have a contrarian friend that would also turn very bearish as he has been a True Contrarian subscriber for many years. If the real wave action starts to deviate away from the bigger bearish scenario, then that is a good sign.

As a disclaimer, when I talk about any gold stock wave count, they should not be used as a buying signal or any buying investment advice, as I’m not a registered investment advisor. I consult with people that have the desire to better understand the Elliott Wave Principle (EWP) from a long wave perspective.

Some gold related funds like CA: PME, which I have a small position in, is even paying out $5 CAD per month on 200 shares.

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HUI Gold Stock Index Review

Gold stocks have not performed as well as gold itself, but notice that gold stocks never corrected as much as gold did recently.  

The HUI bottomed in early 2016, and then blasted up, in what can be counted as a single wave 1-2 as well. Markets have a tendency to fool as many wave counters as they can and the same wave pattern could turn into a diagonal zigzag 5th wave.  Could a zigzag carry gold stocks to new record highs? They sure can but generally they end up being rather weak overall. 

The Gold/Hui ratio, which the contrarians use will help us decide when the time is near. Bull markets don’t end when they are pointing down, as they always end with a last euphoric move to the upside. Will it be an even zigzag once it becomes more obvious? I doubt it as even zigzags are a rarity and not the norm.  Sometimes they come out even but then the zigzag will alternate, between the A5 and C5 waves.   They will change in physical size as well, which at times is hard to imagine when counting waves. 

In the case of the HUI index, the C5 wave has a much bigger physical wave structure than the A5 wave, so this fits into a bigger zigzag as well. 

With a potential 4th wave bottom in early 2016, it will give the bullish phase lots of room to travel higher, but we also have to be aware that a “D” wave may also still be in effect. Again, we have lots of time for this to happen and my favorite contrarian would have to turn very bearish on gold stocks as well. 

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GDX, Gold Stock, ETF Review

 

I will stay with my Intermediate degree wave count at this time. It will take some time to confirm this wave count, and in the longer run GDX should clear all previous peaks.  The $32 price level will be the main price level to retrace, but GDX should also push much higher than the 2016 highs. Between each gold ETF    there are differences, but in general we should have completed a Minor degree wave 2 bottom. 

My last Gold/Gdx ratio calculation on April, 22,  calculated at 54.34:1. Today it calculated at 53.85:1 which is a bit more expensive.  I see that there is still a long way to go,  before any real extreme becomes clear. In the future we could get a rapid completion of this ratio, which would then flash a warning sign. When we reach the 3d of a 3d wave count, then we are at the midpoint of this 5 wave move, after which only waves 3-4-5 in Minor degree need to be completed. 5th waves have a tendency to extend in commodities, but in no way does that mean it is a fundamentally stronger wave. 

All this could still take the rest of the year to play out, as we progress in the “C” wave bull market. 

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ZJG, Gold Stock Review

This is a Canadian priced ETF that tracks the junior gold companies. Recently in May, we had another bottom, after which we see a small wave heading north. Some key wave counts were broken in the last little while, and what we have now is a potential, “ABC” zigzag crash in Minor degree. That would make a nice setting for a 5 wave run to play out.

There is a big difference in the physical size of these waves compared to the 5 waves that started back in early 2016. This would be alternating patterns between the A5 waves and the C5 waves in a zigzag.   We have very little downside room left before it breaks the “B” wave bottom in Intermediate degree.  If everything holds, then we are looking at a potential “C” wave bull market, which can be very dynamic. It can fool around and produce a short wave 3, but then add on an extended 5th wave.

Any “C” wave bull market is one of the best places to be, but these corrections can keep us fearful, thinking that it is going to plunge much further.  Too many people spend their time in trying to guess how far any asset class can still fall, instead of looking at it, on how high it can go. Yes, we have differences in pattern between all the gold stock ETFs, but none of them show signs of being extremely expensive when we use gold as money. 

ZJG opened a little gap as it started, so there could still be a bit of back filling. 

I think that ZJG can still double from this months low prices, but it sure will not happen overnight, as it may take the rest of the year to unfold.  I don’t have too many Gold/Zjg calculations, but we are sitting at 148:1, which is compressed a bit from 2017 readings.  

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SIL, Silver Stocks, ETF Review

 

From the early 2016 bottom, this silver stock related ETF, soared much higher than several of the gold stock ETFs. This also makes it a prime candidate for an Intermediate degree top in August of 2016.  A few days ago, SIL may have bottomed, and if this is the case, then at a minimum SIL would have to clear my wave 1 in Minor degree. 

We also have the waves of this zigzag alternate very well, as this set of 5 waves has so far made bigger physical waves than the early 2017 SIL bullish phase. 

This makes for good alternation and is a very common wave structure. Now SIL just has to make a bunch of slick moves, to help confirm what we are potentially seeing at this time. 

The Gold/Sil ratio this morning calculated out at just above 35:1.  This is not an extreme expensive ratio, as we would have to get closer to 20:1 when SIL becomes overbought again. I have been buying silver bullion for myself, as it works like a savings account very well. 

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GDXJ Gold Stock Bullish Review

 

Gold stocks have been on what looks like a bearish trip, but we do have a potential, “ABC” corrective bottom,. This would, eventually, take the gold stocks into new record bull market territory.  Since I have a a potential early 2016 Primary degree “A” wave bottom,  we could be in a bigger triangle, by heading up to a “B” wave in Primary degree. All full 5 Minor degree waves would also have to play out. 

Any other potential “B” wave other than a triangle, could push gold stocks to new record highs, past the 2011 peak.  This doesn’t normally happen with a zigzag, as we would be short one extra move. I would also have to drop our present Intermediate degree top down one degree, which would eventually turn the entire move into a flat. 

We have time to think about this until we see another very bullish top. By that time the Gold/Gdxj ratio could show some extreme readings, but we are still far away from that happening. This morning the Gold/Gdxj ratio touched 39.56:1 which it has done only three times, since the start of 2017. 

This is far removed from the potential extreme expensive ratio of 10:1. 

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GDXJ Gold Stock Crash Review

 

 

Gold stocks with the GDXJ ETF has broken the wave 2 key support and has now pushed well past old wave 2 bottom.  Several other related gold stocks, ETFs,  and indices are getting very close to breaking new lows, as well.  At this time I can still get the rally and down cycle, into a corrective pattern, but another game changer would be if the blue “B” wave  in Minor degree does not hold.  

I have mentioned it before that, the entire gold stock bullish phase is a bearish rally, but still a long way to go.  Replace the A wave top with a 4th wave in Intermediate degree and we could have the makings of a zigzag crash that still needs to break below the $18 price level.    This is the least desired outcome as that would send my ratios into disarray in the short term.   Either way,  the ratios will be expanding all the way.   At that December 2016 low, the Gold/Gdxj ratio hit a bit over 39:1. Today that ratio is 39.53:1, which already makes it cheaper when compared to gold, than the December 2016 bottom. 

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GDX, Gold Stock, ETF Review

 

 

GDX, which reflects the HUI pretty well, and  is trucking along,  maintaining higher lows, pretty consistently. In Dec 2016 GDX hit another bottom, after which it soared off in another leg.   There is a high probability that we are in a much bigger gold stock bull market, which may be a “D” wave bull market in Primary degree.  

Some may even try to get the entire structure into a wave 1-2 and not an “AB” like I have. This doesn’t compute as it would be a very tall wave one, which rarely happens. When they look long,  chances are good its an “A” wave  before any wave 1. An Intermediate degree zigzag would need a 5-3-5 type of a move, but we are a long way away from even getting close, as we need wave 3-4-5 still to complete in Minor degree.  Mind you the 5 waves up can be so choppy and erratic that every correction could seem like  the end of the bull market.

A bull market is very hard to kill, until it has played out all moves according to the script of an inverted zigzag.   Tracking the Gold/Gdx ratio helps to give us more of an objective view when these gold stocks are starting to get very expensive. At present we are sitting at about a 53.46:1 ratio, which is a bit more expensive, but nothing I would jump up and down about, or find alarming.  If we ever end up closer to 30:1 again, then we may have a different ball game and all other contrarian indicators would need to be reviewed as well.

We still have a long way to go as the next target is to breakout to all time new bull market highs, past the $32 price level.   

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Silver Daily Chart, Bullish Phase Review

 

I have complained many times that silver does not confirm many of the moves that gold makes. Trying to force the same wave count onto silver, or trying to turn its bull market into impulse waves, is a futile effort. For years that is exactly what I was doing, until I realized that the entire silver wave structure, is nothing but a crazy diagonal.  Silver also ended its bullish phase in 2011,  after which it started a decline. Sure,  parts of the silver bear market can be a high grade impulse, but in the end this also falls apart.  A double zigzag could actually be part of a bigger triangle, which ended on a Primary degree “C” wave in late 2016. 

What followed this 2016 bottom, was another very wild ride up. Right from the bottom, any perfect impulse wave structure was trashed rather quickly.  Most of the time this is a warning, that any impending rally would be a potential bear market rally, but how big or how long of a bear market rally,  was debatable. 

Still, this 2016 bottom was so bearish, and silver related stocks were so cheap, that a bull market was bound to happen.  This August 2016 top ended with about a $7 net move, after which it started another grinding decline.  For now at least, silver can be part of a “D” wave bull market, which has lots of room to move to the upside. We already have been in the “C” wave part of this bullish phase, and we need 5 waves up in Minor degree to help confirm it.

In the last days of February 2017 silver peaked and started what looks like a straight move down. Second wave corrections can do this, especially in commodities so I see nothing strange about this move. If and when the 4th wave correction comes, this is when we can get a complex pattern that will keep us scratching our heads for many months,  as the 4th wave correction plays out.  Sure, I can be very wrong, but bullish phases are not that easy to kill. They swing from one extreme and then over to the other extreme, which we can measure with Gold/Sil ratios, and other gold stock ratio calculations as well. None of these contrarian indicators are anywhere near extremes, so this bullish phase is alive and well from my perspective.  

Last week only had 50% bulls present, so that alone tells us that many silver bulls are still out there to come in. Silver had a 24 month low of 16% bulls which in this case was another extreme. Any extreme in  the 80% or higher range,  will start to sound off alarms as this silver market would be starting to get overbought. 

This could happen at a “D” wave top, and we know that “D” waves are all bull traps. The majority cannot tell the difference between a real bull market and a big bear market rally, but the wave analysts eventually have to figure it out.  When they do figure it out that silver is in a bull market, then chances are good that the silver bull market is finished! 

First waves and “D” waves can have very little differences in mood,  and about the only way to tell the difference is by “pattern”.  Price never makes a wave count, as the little blue book clearly shows us. (EWP) 

The silver market imploded in 2011 from a giant, “Stock Mania”  bull attack,  not from some government conspiracy that may or may not have been lurking, in the silver market.  This will happen time and time again, as mainstream stocks will always compete with gold and silver.  

In the long term, silver may hit the $27-$30 price range, after which we can run into some very strong resistance. 

 

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HUI, Gold Stock Bull Market Review

 

 

The HUI will give us a pretty good general idea about the gold stock bull market. The GDX ETF also reflects the HUI very well. From the early 2016 bottom the HUI exploded in a wild ride up until about August 2016, before it imploded again down into  the December 2016 bottom.  I believe that this was just a correction, in an ongoing bull market that still has two major legs up to go. Waves 3 and 5 of a diagonal “C” wave.  This should take the HUI well above any bull market highs, even though it could be a “D” wave bull market.

Wave 1 and two in Minor degree have already completed, so gold stocks should have no problem in clearing the wave 1 peak in Minor degree and the “A” wave peak in Intermediate degree. Somewhere along this path I’m sure we will get extensions and vertical moves, that the majority could not even imagine could happen. “C” wave bull markets are notorious for doing just that, and time will be the biggest factor, to make it come true.  

We may just be, at the first wave in Minuette degree, so we have a long way to go. The Gold/Hui ratio is still in the middle of two extremes, and with a bigger number with the HUI, the ratio moves at a snails pace. Very expensive was about 3:1 and today this ratio is at about 6.29:1.

When the entire gold stock bull market has extremely bullish news with it, and when the 5th wave completes, then it will be important to see what the Gold/Hui ratio is at.  The Gold/Hui ratio is just one contrarian indicator, as insider selling will be another.  All other gold stock ratios will also show us ratios to the extreme expensive side. Until then, this bull market is alive and well. 

When we do get closer to another extreme,  I will increase my ratio calculations as now I may just do it once a month or so.  

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GDX, Gold Stocks On Fire!

 

It looks like the rate increase sent gold and gold stocks soaring. This is a good sign if the gold stock continues to rally. In a bigger bullish phase GDX must clear, it’s 2016 top of $32, but how it gets there is the million dollar question.  At this time a zigzag wave one may be in the works, ending at the middle trend line at about the $29 price level. Of course, if a better impulse wave is alive and well, then the next top trend line, would  get sliced up with little effort. 

The Gold/Gdx ratio also shifted to the expensive side at 52.91:1. This is still very decent and definitely not in the nosebleed section. When we get closer to the extreme expensive ratio of 30:1 then we may need to be more cautious, but for now this bull market is still alive.  This gold market will always try and shake off all the freeloaders, that think they can ride an easy bull market. 

This afternoon, the US dollar crash sure helped in sending gold stocks up, so this also help my bearish case for the USD. 

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ZJG, Canadian Gold Stock, ETF Review

 

 

I’m sure many gold stock bull riders are in some degree of panic right now, as gold stocks are crashing. Contrarians don’t panic, as they know catching what others throw away is just buying on the dips.  They always have some orders in at lower prices, with GTC orders. These orders can be done days ahead of time, so you never have to hang on the screen risking an emotional decision. 

Eventually this ETF should clear all 2016 highs. We are still in what I call a “C” wave bull market. These “C”waves can be relentless once a good one gets going. If short term trading is on your mind, then you never want to miss a “C” wave bull market.  

Due to the fear factor very few of the majority will buy into a falling knife, so most of us will miss these “C” waves when they do come.  I added to my positions in this ETF recently, and will hang in there until such a time when all the bulls are back!  If ZJG makes the $20 price level a year or so from now, that would be great.  At the same time, many of my indicators must be flashing their pretty red lights, especially when the ratios start to get out of wack. 

I still have to back check more with the Gold/Zjg ratio, but today we are sitting at 149.5:1. Just a quick check for a high extreme ratio reading, we are looking at about 56:1  All we need is two extreme Gold/ratio readings, but 4 extreme readings would be better. This is one of the few ETFs that I have to build a good ratio base from scratch. The problem is the ZJG does not have a long historic record.  

Many times when I explain ratios  they always want to try and forecast the price of gold. Doing it that way destroys the stability of the gold Troy ounce and you are no longer using gold as money.   Gold companies can come and disappear like Bre-X did in mid 1990s, but gold has survived for thousands of years, and still makes the best measuring tool today. 

 

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GDX Gold Stock, ETF Review

 

 

So far gold stocks have suffered the same fate as gold, as it seems we are in a mini crash at this point. More downside may still happen, but I sure do not want to see a complete retracement of the February bullish move. If it drops to a 60% retracement that would be just fine, as that would still produce a higher low which is the conventional description for a bull market.

If the wave 1 has already happened then we should get a far bigger move than what I have at present.  Even though both asset classes are crashing the Gold/Gdx ratio, which sits at 56:1 right now shows that gold stocks are getting cheaper when we use gold as money. I always use the futures gold cash price so I get more consistent readings. The gold price from the Kitco site will work just as well.  

A “D” wave bull market, could be real and even would match my old wave count.  Eventually GDX should breakout past all potential resistance wave structures, as that is what “C” wave bull markets are famous for. The majority will not clue in to a bigger bullish phase, until they are all bullish again. By the time that happens the gold stock bull market could be over. “C” wave peaks are also famous for creating blow-off spikes, which are usually produced by extension after extension. Mind you, many contrarian indicators also have to come in, as the Gold/gdx ratio is just one of them.

All the other gold stock related ETFs would also have to show us extreme readings. This is still far away so this mini crash should be just a correction.

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GDX ETF, Gold Stock Mini Crash Review

 

 

Finally gold stocks have made a move to the downside , which was a rather sharp move.  For the next few months or  longer,  I will be looking at gold stocks from a “D” wave bull market perspective, as my original degree level may have been too low.  Even now a wave 1 in Minor degree would be too soon, but this market can produce some serious extensions, so the  Minute degree wave 1, may not last too long. 

The longer this drags out, the higher GDX will go if project a couple of parallel trend lines.  The mood for a “D” wave top will be about the same as any wave larger degree wave 1 would be. It would also show some very expensive Gold/Gdx ratios.  Right now we are sitting at about 54.86:1 which is still rather cheap when compared to gold.  If we get closer to a 30:1 ratio,  then gold stocks would be approaching the expensive side. On most new  record highs I will take ratio calculations if I remember. 🙂  For now I think we still have a long way to go,  before the contrarian indicators I use,  start showing themselves consistently.

Very seldom do I talk about the fundamentals, as from my perspective, they are irrelevant. Many traders used to call fundamentals as”funny-mentals”.    Markets behave in the opposite direction of the herd, when the majority of bull riders think they have a free and easy ride.  

  At the extremes, fundamentals will always tell us the wrong things, as no popular expert was calling for a  potential bull market back in late 2015.  Yet the contrarians have been accumulating gold related assets for over a  year already, well before the real bottom in late 2015. 

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HUI Gold Stock Review: 2003-2017

 

 

The HUI is the mainstay of all gold stocks, and most of all the other US priced gold stock ETFs, will act much the same. The bull market leading up to the 2011 peak can only fit as a diagonal 5th wave, and even then I can still make adjustments for a better fit. At the 2011 peak my Cycle degree wave III can fit very well at this time.

Of course, then the 2011 Stock Maina started to kick in, which killed the golden bull. The bullish mood in 2011 was unprecedented as the major reversal caught all the bullish experts by surprise. If you haven’t figured this out yet, the markets will always act this way, as they will never let the majority win. It is also mathematically impossible for the majority to win money from the majority.

In a bull market the majority always seems to be winning, but their profits are always left on paper. Paper profits are never real, when they are not converted to useful cash.

Buying stuff based on the wealth effect will eventually crush us all, as we would be buying with unrealized paper gains.

In the end the HUI is acting much like all the other gold stock related ETFs, but it never hurts to keep an eye on all of them. I can’t track them in detail as much as I would like, as I’m maxed out on how many asset classes I can cover.

I may track well over 13 ratios, but the most important ones must be measured at the extremes. This week the Gold/Hui ratio calculated at 5.75:1  which does not change as dramatically as other ratios do.  When the Gold/Hui ratio strikes near 3:1 again, then we have a very expensive ratio, which may be accompanied by insider selling.  Until then, this gold stock bull market is alive and kicking, which most of the mainstream experts, have still ignored at this time.

Chances are good when the talking heads jump on the gold bandwagon, and the news blogs are all bullish on gold, then gold stocks will be ready to crash or correct. The markets will never allow the late comers to make any profits as they will lose even in a bull market.  Leaving 170% gains on the table is not an option for the real contrarians, which the HUI has done once already.

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ZJG, BMO Junior Gold Index ETF (ETF) Review 2010-2017

 

 

 

Many of the charts I show will not show all the data, but I use many other gold stock indices where I can see and count the bigger picture. This a Canadian dollar based ETF so there are currency exchange differences always to consider. 

The bear market decline from late 2010 to early 2016, was the result of the stock mania which kicked off about 2011. In other words, it was the strong US dollar that killed the golden bull, which has now started to reverse since early 2016.  The fast move up is very typical of an “A” wave move, and they can be mistaken for a wave 1 as well. First waves are never the longest waves, so I’m sure that we are not going to get some super duper 5 wave sequence. At a minimum it would have to triple in physical length just to come close to looking like a great impulse.

The mid 2016 to late 2017 bearish phase can even fit into a triangle which can’t happen in a wave 2 decline. If the impulse is ruled out, then the only thing left is a huge bear market rally.  Since we already have a single zigzag decline, this means that these gold stocks could eventually break out to new record highs. (Complete retracement of the entire bear market)

The top horizontal line shows where an open gap is positioned, so this may become a turning point in the next year or so.

The faster this ETF will go the sooner the top line can get hit, but at this time it is impossible to judge if this speed can be maintained.  At a minimum, we could see these double from todays price levels, and if luck and the bullish mood (the force)  are with us, we could see much more.  

There will be no updates this Monday except maybe later in the day, otherwise I will resume posting on Tuesday. 

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GDXJ Junior Miners Gold Stock Review: 2010-2017

 

 

I believe that the big top back in late 2010 was the Cycle degree wave three, and the bear market that followed was only one part of the Cycle degree wave 4 correction.  The 2013 bottom has a special meaning, as there were many obvious reports of gold stock insider buying. Apparently they have a history of  buying just a few times in a bear market, and don’t buy as frequently as the seasoned contrarians do.

This bear market works well as one big zigzag, with the last 5 waves being a very ugly diagonal set of waves.  These types of waves are very common and are a real challenge to count out in real time.   When GDXJ hit bottom in early 2016, the Gold/Gdxj ratio hit 62:1. This was an insane number and represents and extremely gold stock oversold situation. Virtually all gold stock indices or ETFs gave us the same insane ratio indicators and we have to remember that when we look forward, up and down any set of wave positions. There is much more to the EWP than just mindless wave counting, which the majority practice.  The real contrarians have a far better understanding when buying low than any wave counter does because they have accumulated more wealth than any wave analysts I have ever read about.  

Anyways, I can go on and on about how inefficient wave trading really is as it will never change anything. They will continue to miss every major bull market that will come down the pike.

Before the 2016 spike in gold stocks you have to accumulate positions long before the bottom, which the EWP does not teach you. In reality the EWP has to confirm what the contrarians are doing and are going to do in the future. 

Even if Gold stocks are in a big fake bull market contrarians will never be left behind. (Primary Degree “B” wave bull market)  They know that markets travel from extreme oversold conditions back to extreme overbought conditions. It is the Gold ratios that give us an objective reading on the markets, and on Friday this ratio was about 31:1. This is the most expensive since the gold stock bullish phase began, but still far away from any extreme expensive reading of 10:1.

Just because gold stocks made a decline, I would be crazy to show you an extremely bearish wave count at this time, when I know my contrarian friend has been buying.  

This bull market will not end until we read about consistent gold stock insider selling, matched by an extremely expensive Gold/Gdxj ratio.  Many mainstream analysts, wouldn’t touch gold stocks at this time, but I bet they will turn bullish once a new gold stock extreme gets reached. 

GDXJ should eventually hit anywhere on the top of my trend line, and this will depend on the speed that GDXJ will travel at. This will be true with all the gold stock indices and ETFs. 

Short term anything can still happen, but longer term this bull market is far from being finished. 

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GDX Gold Stock Bull Market Review

 

 

We can replace the HUI with GDX as a gold stock indicator, as GDX tracks the HUI very well. It is also easier to figure out the Gold/Gdx ratio.  Since early 2016 gold stocks have seen an explosive rally, but also got hammered in a summer type of a correction. This correction can contain an expanded pattern which, if it is true, then gold stocks should have no problem in breaking out to new bull market record highs. 

Depending on the speed this progresses, we should get close to the top trend line one more time.  This is still a substantial move. I visited my contrarian friend who manages some large accounts, and we both are in agreement that there is a lot more upside to go.  Not until we get some clear gold stock insider selling reports, and GDX becomes very expensive when we use the Gold/Gdx ratio, this bull market is not going to end anytime soon. 

The next phase is off to a good start, but is still hazy to the degree we are now in. This may not clear up until we see a sudden drop, otherwise gold stocks can just keep grinding along, as they have done already. 

There is no way I can be bearish with such a pattern even though the Gold/Gdx ratio got a bit more expensive recently.

Today this ratio is sitting at just under 50:1 from a maximum cheap ratio of 84:1. We would have to get close to 30:1 or more before gold stocks become very expensive again. This is not going to happen overnight so be prepared for a long ride mixed with some surprises along the way.  

As you can see my next target wave position at the next top is another “A” wave in Intermediate degree, so hopefully we can milk this run as much as possible.  

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