JWU GOLD NITRO UPDATE
1. Kirk retired.
2. Well, he retired until he believes the super-crisis is about to reassert itself, on your financial head. He still sleeps with his hand-held phaser, set to kill.
3. Having said that, Kirk Jr. is here, and going to look after the juniors price grid. There’s still some naked shorting going on, abeit a fraction of what is was….
4. There’s also, quite simply, a lot more volatility in the juniors sector.
5. Attention all Edwards & Magee fans (current & prospective) please click here now: http://www.gracelandjuniors.com/images/stories/14july/2014jul27gdxj1.PNG Focus on the $44.60 zone, and specifically, $44.68.
6. That’s the right shoulder high, and even a tick trade above there kills the top pattern (technically).
7. Yesterday’s move above the neckline was good news, but h&s tops don’t die until the right shoulder “bad guy” high is killed.
8. Is there anything else important that YOU should note about that pattern?
9. Yes. The breakdown through the neckline on Friday came on rising volume. Per E&M, volume should not pick-up on a penetration of a h&s top neckline, if it is valid, but it should pick up on the penetration of a h&s bottom neckline.
10. So, while the biggest good news for you is Goldman off there terrorist masks and putting on “gold is a normal asset” uniforms, the rise in volume on the neckline penetration and the Friday bounceback are both “lightweight” good news as well.
11. The Goldman statement revolves around the cost of production zone. Scotia India’s top econs were the first to proclaim the $1150 zone as a massive “floor for gold”, based on the cost of production zone.
12. I didn’t retire Kirk because of that single Goldman statement. It comes as another positive event in a year long process of bank econs moving from playing the role of gold market terrorists, to asset embracers.
13. They aren’t parabola demanders, and nor should they be, but gold, as the ultimate asset, as least deserves to be treated as a regular asset, particularly when 2.5 billion citizens have no interest in playing flip trader with it at all.
14. Kudos to Adam Hamilton for understanding that gold’s strong season begins because of the Indian wedding season, but less kudos to him for thinking that the rallies that often happen in November-December are because of Western gold jewellery buying.
15. The tonnage moved by Western gold jewellery buyers is too small to create that rally. It’s Indian Diwali preparations that move the price.
16. The Western buyer (both institutional and retail) is the elephant in the price driver room, but the themes they buy into are inflation and financial system risk, not rings and bracelets for Christmas. Having said that, I’ve mentioned before that Western gold jewellery buying is hitting multi-year highs, and every ounce bought is a big help, in the big picture.
17. Relative strength. Institutional power players don’t buy via pgen to zero. Some do buy value, but, partly for marketing reasons, they like stocks that are “outperforming”. Buying a stock that is lagging the market, when the market is a downtrend, is buying relative strength.
18. When an uptrend is underway, like it almost is in GDXJ, money managers don’t like buying junior stocks that are underperforming GDXJ or indexes like it. GDXJ traded slightly above its March highs (equivalent of gold $1392) during the June rally.
19. Please click here now: http://www.gracelandjuniors.com/images/stories/14july/2014jul27aem1.PNG Institutional money managers aren’t that interested in hearing about “here’s one that’s a sleeper, and poised for gains!” They want relative strength.
20. On the seniors side, you can see Agnico blowing away Goldcorp and GDX itself, in terms of relative strength. That’s what gets the attention of money managers and hedge funds.
21. On the juniors side? Well, you know what the money managers are looking for! Please click here now: http://www.gracelandjuniors.com/images/stories/14july/2014jul27centamin1.PNG That’s Centamin, a current pillar of relative strength, and apparently is roughly on track to produce about 300,000 ounces this year. It made it into a London Stock Exchange top 250 index.
22. Please click here now: http://www.gracelandjuniors.com/images/stories/14july/2014jul27kirk1.PNG Somebody call Kirk Jr, asap! After blasting to the 5.80 area for its March highs, Centerra was basically carved in half in a month, just in time for the June “it’s all over, and we go down into July from here, I promise!” lows.
23. The gurus blew it, and Centerra is another gold stock blowing the doors off GDXJ! They do operate in Russia, but seem unaffected by the sanctions on the price grid, and are targeting, longer term, 1 million ounces a year of production, which would make them a senior producer!
24. Gridtime! The age of terror is over, and life at Graceland Juniors, your life, is about to get very very hectic and exciting. Lets cheer for “Doctor J” (GDXJ) and the lagging individual juniors to join team relative super-strength, on price grid, very soon. I’ll be going over more of these stocks on “gold nitro” on a daily basis. See you there!
Kirk Jr. on the gold explorers bridge, out!