One of the things I can recall bumpier than this weeks start, was the ride on the cargo rack of a Suzuki King Quad about 8 miles into the Steese Nat’l Recreation area at Beaver Creek, about 80 miles NW of Fairbanks, AK.
I anticipate the rest of the week will resemble the ride back out after a day glassing meadow for griz.
Well whether this was going to be the week which resolved everything or not, despite dizzying valuations, the markets decided to go on another little insane rally, as illustrated by the NYSE Net Advances – Declines Line rendered thus:
Looks pretty flashy to me. Then to confuse the picture here is K2 PM chart:
Confused yet, with the NYSE and the Precious Metals in parallel sync?
Kind of reminds me of Zimbabwe and Venezuela markets going nuts trying to adjust for what the markets anticipate as future inflation which seems the only rational answer so far. Then there is this one, Coal Miner #1, on a rip. Remember Coal? Everyone hates it, not? Well maybe not everyone:
Love it or hate it, its one ripper of an upside breakout. So there you have some of it.
Also for those paying attention, copper, lithium, uranium, silver, gold and P.M.s, generally on a rip. A favorite but poorly known graphite developer, of mine is NOU.V, New Moon Mining, run by whom I consider to be a real go-getter, Eric DeSauliners. Take a look if you like long shots, gambler’s bets and long shots.
First Majestic, in the silvers is a lead whom I like, and Nevada Copper, are a on a breakout, again on your own due diligence.
Don’t want you to miss out on our next Recommendations, and Tactical Insights, so sign up and come aboard for gains in our January Issue, out the end of the month..
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Did any of this make any sense to me? In the greater part, I was incredulous at the insane valuations of the DJIA style markets.
First on the left is the DOW, on the right is the Average Stock that you or I might own. Did you notice they went up in lockstep, and were equal at the end whereas
our average stocks usually lagged. Apparently the insanity is contagious or the markets knows something we don’t. Apparently as well, the market for Metal Gold and for Senior Gold Miner Stocks knows something also.
The BLUE line is the GDX, index of the Senior Gold Miners.
The RED line is the price of the Canadian Royal Mint’s Gold Metal inventory of .9999% gold used to mint the RCM coins. There have done more or less the same thing, arriving at the same place, about the same time as the DJIA and our Average Stock.
Thank goodness Bitcoin is going thru the roof, taking pressure off REAL GOLD METAL prices so we can still buy some before the price skys on us.
DEC 31, 2020
Won’t there always be Gold to buy in Bullion Coin form ? Yes but at what price ? The fractionaRCM Gold coin I bought back in 2015, when everyone was sure Gold was going to break down and go to Hell in a hand basket, has doubled since then, with no attention from me. Its resting comfortably. Silver on the other hand has been an uneasy rider from that point forward, the bullion coins returning to their post mania plateau of days past, only this year. So were are we at: Gold has doubled, and Silver is back where it was in the years following its Post-Mania correction.
Where does that leave us. I hope, balanced between assets in Silver, and assets in Gold. Gold Miners, and Silver Miners are going to fluctuate with wars and rumors of wars. Always. What can you do, what should you do?
Protect your assets. Looking at all the data, you can see that families without assets, depending on wages, once adjusted for inflation and cost of living, have been impoverished by declining wages by Fed’s own charts and data. Should you be in stocks? Would you go out in the jungle or on the Arctic tundra as a rookie, or without a guide who knows the territory? Would I send the uninitiated out to the slaughter with no remorse. NO, NO and NO.
Look around, consider a free copy of the common sense, easy to understand “DG Letter” Straetgy & Tacktics by dropping me a note to “DenaliguideX@Protonmail.com, and requesting a free copy. See if it is as simple and easy to understand as I been striving to make it. It might make a difference for you, and your family. If you like it you may wish to subscribe to it, which is back by a no-questions money back satisfaction guarantee.
You have seen seven years of surpression instigated by the loss of the USA’s AAA debt rating, as Gold was hitting highs, ratting out the FED and US Treas, that this was OK. We can see by this time it didn’t turn out so well. The GDX plunged 50 points, from 62.5 to 12.5, where it refused to budge. This took the Gold Miners Index to the bottom where the US Govt shut down the Miners in 1942, arguably the lowest point of WWII, an 80% drop, where the GDX refused to break and bottomed out. In my opinion, this was the direct result of whom I suspect was JPM acting as agent for the Exchange Stabilization Fund (ESF), a sub-unit of the US Treasury, sold the equivalent in paper forward contracts, of Newmont Mining’s most recent two years of production, in ONE DAY. As a result the real Metal Gold price, and holders, bambozzled by this smoke and mirrors act, reversed the trend which ended at 1049 US, the price of the “India” put.
In the aftermath of this sham, Gold Metal real, broke out of its old high, and registered a new one this month at 2050 US, and the GDX ralled from 12.5 to 45.40, 363%, or a bona fide triple, with more in the offing as it digests this gain. Seems as if further gains are to be had by those who can stay in the Gold Miners without getting shaken out by intra-day shenanigans.
Yes the beginning was long ago, and not 2012 when the USA credit rating was downgraded. Events can trace back to 1971 when Nixon removed gold convertability from the US Dollar, to 1933 when FDR took the USA’s gold private, and on and on. It matters not at all, zilch, zero, because this is now. 2020, when financial fundamental shenigans distortions finally came into open view.
What happens now / next ? Here are two different momentum charts based on the breadth of the GDX, showing a new uptrend likely to start in September, in my opinion.
The middle figure is the clearest in terms of momentum movement, which allows you to see what I think is an imminent turn-up from the downtrend or flat correction from July, into an uptrend sometime in September. I won’t belabor the obvious, and tell you what I think you do, because I think if your reading this your savvy enough to know.
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It’s as clear as a bright sunny dawn, that multiple financial failures are what is draining all the cash the FED is putting out as repo’s. That’s probably not the sun you see coming over the horizon but the closest nuclear meltdown of a bank or derivatives bomb. Maybe its Deutsche Bank’s meltdown from the money it advanced Bayer to buy Monsanto.
So unless you are a Friend of the FED, how do you tell the players. They don’t sell player programs to the public nor do they post the game times or timeouts.
Back in 2013, someone, probably with the $ and blessing of the ESF (Emergency Stabilization Fund)(sometimes employing JPM as agent) hammered Gold and related products down in the TAX Day 2013 Massacre, so far in fact that there is still a gap unfilled from six+ years ago. The gap shows up a lot better on smaller interval and Gold Stock charts.
Many, many stocks show gaps, as yet unfilled waiting to be an island bottom, to include GLD, SLV and RGLD.
So now we play this waiting game, as Gold bottoms out again, and the Fed floods the globe with “play” liquidity, supporting positions that have already popped but cannot be revealed to the public lest they “lose confidence”.
Due to the untold trillions the Fed has already pumped in during the last two months the bank charts looks as if there are in no short term danger. Long term, what pops is anyone’s guess, so much has been pumped up so far.
Lets focus on what we can use to tip us off when things start breaking down. Using some Indexes of Banks stocks not in the public eye.
First is a Community Bank Index on Nasdaq, QABA, then FTXO, theNAZ Bank Index, comparable to BKX, and also $BKX, then XLF, the Financials.
For right now, the Financials, the broadest net out there, cover what we need to see.
Basically JPM paid down its loans, with 130 Billion Dollars of reserves, and poured the rest of the funds into bonds, causing the deficit of lend-able reserves that then caused the spike in over night money, and gave the FED a great excuse to “NOT QE” half a trillion a week into the over night funds market, on a continuing basis. Hmmmm ? Was it planned or coordinated. IMO, probably not. Did JPM know the FED would backstop or bail them out? Based on past experiences here, I’d say they bet on that big time!!
Like I say, “Its your money, you decide!!” My call here is the FED will keep on bailing anyone and everyone, foreign or domestic, until they can’t. Where does that leave you? I am always on the watch for incorruptible mediums, not subject to watering down, meddling, or inflating. There are a number of these mediums available, but generally not pushed by the mainstream paradigm. A historical quote says “Seek and ye shall find.”, I think it is right. DG
Oh its Tuesday, (Friday) yes another bank just crapped out. Sixty (60) Billion this time? No its bigger, ninety (90) Billion this time.
What we got here is a serial implosion down the daisy chain. Whoops there goes another 100 Billion rat-hole!!! Hey, isn’t it only one a week? OK, some weeks its only 60 Billion!! Maybe its only ¾ of a Trillion annually, hey, its NOT QE, right? Well, maybe its a derivative, that went the wrong way. Or a Whale Trade against the oil price, which drained a Hedge Fund. Does the “Ping Pong Ball, Mouse Trap” detonation scenario bring anything to mind? Look it up on YouTube. Maybe the song “HIGH HOPES” done by Sinatra expresses it best.
It was an insurance company in 2008. In UK, it was Northern Rock Savings. With the FASB accounting board OK’g valuation at mark to fantasy, is this is any surprise that the banks and other institutions are using 300 to 1, or more leverage? With serial meltdowns up and down the daisy chain, it seems to me, that even if the FED moves to fill every hole it can find Some hole, somewhere, sometime will go unobserved, like the lurking subsurface fire after a lightning storm, that emerges in a conflagration that grows exponentially until it exceeds the capacity of the firefighters to bring it under control.
What can the “monetary authorities” do to alleviate a crisis, leading to unstoppable sequence of events. Short of an alien invasion on the scale of “Independence Day”, I don’t think there is anything that can be done that will neutralize a financial failure orders of magnitude larger than witnessed in 2007-2010. In September, the over night rate spiked from 1% over night, to 8% over night and it took a FED injection of 100 Billion to calm it down by the end of the month to the 2% level. Bottom line? Banks are not trusting each other to lend to, over night. Same symptom as 2008. Will the sequence be the same ? Likely not. Will it follow similar lines? It might. But the tune will be the same.
This is what it may look like if the
serial meltdown of the financial daisy chain gets out of hand:
Red in this
chart is the 50 day simple moving average. Blue on this chart is a 20 day
simple moving average. I call this a
Double Crescent Formation. This is an
example of a “price” set up, with the two moving averages in upturning
crescents. On-Balance-Volume in this set
up is not optimal. Optimum for
OBV would be if it was turning up in the same measure as the Blue line, the 20
day simple moving average. A note here
is that JE often moves counter cyclically but with weak cycles, so at times it
may not react as in an optimum “set-up”, but I liked the Double Crescent
Formation to illustrate.
This is not
a recommendation, but an illustration, to help you recognize this kind of set
up when you run across it. We will
discuss other types of set-ups and where to look for them in future posts. Good Luck,
For most of us the reason for price
movements, can be pretty masked most of the time. This latest weakness in Gold, has a clear
reference to China, as shown in this LINK , based on China’s vacation week, its National Days
which ended today. The charts in the
linked article give graphic representation of this phenomena going back to 2013. I think the data exist further back but this
is quite graphic and worth a look in my opinion.
Got to be one
of the prettiest Bull Candles I’ve seen, rebounding as if they had read my
forecast for the end of Gold weakness.
CCI is an element I use here, helping Bird-dog or Point turning
the same vehicle, lets look at the 200 Day Moving Average, and refer to
Here the 200
Day Moving Average is the mean, constructed for the last 10 trading months, so
its stable. Notably, at the peak of this
leg, in early September GDX was 30% above the 200 Day Moving Average, almost
completely over-extended until the decline in October. Today the GDX is 10%
above its 200 Day Moving Average, in what I think is a completely sustainable
position. For most uses, the 200 Day
Moving Average provides a stable mean to compare daily prices with as to
determine trend. This is a Bull Trend
On-Balance-Volume (gray line behind price) provides a check on the validity of a price move, going in directional correlation to the price. Deviations and divergences from that correlation make me skeptical of the integrity of the price movement. MACD is in a low position, below zero, perhaps bottoming. Turning up in a bull move would signal good strength, the kind you want under a Good Buy.
previous Recco’s and recaps, all are in good standing, not surprising, the
strongest and weakest have swapped positions as this Precious Metals market get
itself together to resume its up trend.
Pretty much this index is either mis-used
Commonly when RSI is in the upper or
lower level it is called, either Over-Bought
which are both very inexact and can be terribly misleading.
Labelling a stock either Over-Bought or
Over-Sold, can position and investor to do the wrong thing.
The term I like
to use, is Over-Extended, either to the Up-side or the Down-side. In each case RSI is in a place where
reversals can begin to be effective.
Below RSI 30 or over RSI 70, is where
reversals often come about, but when they come about is not as clear cut
without another confirming measure or two.
Just being in those zones is no guarantee of reversal yet.
We all know we can count on stocks
fluctuating, the question
clearly is how to use that knowledge to
your advantage and profit.
The problem is that a stock’s RSI can
loiter in a given zone for some time without setting up a trade. Weakness or strength in the stocks advance
can signal it dropping out of whatever zone its in. Sometimes after leaving a zone, the RSI can
go right back into that zone.
Saying it is Over-Bought, may
give you the idea that a decline is imminent, same as Over-Sold as a
term may make you think that stock is ready to run to the upside, but no such
thing has to happen in either case until the timing indicators confirm or deny
it happening. Except for a crescendo in
the volume and then watching it diminish, there is no extra clue in those
charts to give you any hint of what is to come next, or when. So, do not be given a pre-set idea of what to
do when you hear those terms. It follows
that we will discuss confirming measures of using RSI.
For sake of discussion, RSI in its
simplest form, is the current price, divided by the stocks previous price any
number of days ago, specified in our calculation.
It is an
internal calculation of the stock’s internal strength, either stronger or
So now, neither chart gives you any
indication of a support or resistance, for either
of these stocks, so without further confirmation, this is a guessing game.
So, when we take up further using other
measures to confirm or deny the validity of an Over-Extended move, we will try
to find out which way this is going, and if we are luck, how far it might go.
FED LENDS $100 BILLION TO BANKS THIS WEEK TO COVER LOSSES.
BRENT CRUDE OIL SPIKES TO $70 A BBL, SETTLES AT $60
SAUDI ARABIA SAYS ALL DAMAGE TO OIL PLANT REPAIRED
Which two (2) events, in your mind, had
the greatest effect on price action in the markets this week?
To my mind, not anything on this list
had any more than a 24-hiccup effect on any of the markets out there.
Nothing. These two charts show
Now if all this is true, why is the
Inflation Index lying to us in the open?
inflation index, knows The truth as to what happens on its turf.
Except for items # 2 and #3, there is
little we can do to verify any of this.
Even the best due
diligence investigation we can do, cannot produce any real evidence of any
of this, except by what we are told by “Official Sources”.
Thus, like John Snow of “Game of
Thrones” fame, we “know nothing.”
I don’t need
to boggle you with packs of charts.
Evident, is that someone knew something.
We know it was known to “them” in the month of August. Who “they” were cannot be verified,
but chances are its the “usual suspects”?
Rather than the laundry list of our most
recent bad actors, lets look at WHAT happened that we can verify, and “cui
bono?”, Latin for “who benefits?”
In the chart of XVG, we
see prices languish during August, only to sprint in September to a level yet
below their heights in July. XVG
is the “average share” of stock in Value Line’s Index, so the changes would
appear in most every stock out there.
OK, that is a fun fact, so what?
It means to me, that “they” or someone, knew by end of August that a
rally was imminent. Now with oil prices
declining to $25 a bbl, by the end of next year, it would mean that many oil
producers and Saudi Arabia, in reality, would be bankrupt. Now if a huge player, a “whale” as they are
named, bet that, it could make or lose a lot of money. The “whale” bet lost, as evidenced by the FED
having to pump $100 Billion into the market for overnight bank lending. Banks would not or could not lend that $100
Billion to keep the “whale” afloat, so the Fed had to step in or watch the
whole lending system lock up as it did in 2008.
Well the current situation, due to all the money pumping that occurred
from 2008 to now, means that we are now exponentially far above the place from
where the economy and markets fell in 2008 – 2011, and with far less
support. Given a scientific wild guess
on the subject, I would we are one hundred (100) or more times pumped up than
where we were in 2008. A simple reading
of Zombie companies (those who would be insolvent without constant borrowing),
I think would
support that supposition. So what? Well what happens when the lending
stops? Something breaks in the financial
system with a loud snap as it did this week, and the Fed has to step up and
throw bundles of funny money at it, to try to stem the bleeding in the wound. Why is that a problem? Because, friends, someone is not a believer
or beleaguered to the extent they must act in a contrary fashion to protect
themselves and cause the financial system to start bleeding from a new
wound. This is a self-replicating cycle,
and each wound becomes larger than the previous, and creates consequences many
times that of the wound. You see where
this ends? I do! The safest thing to do is to buy things of known
value, mostly likely with physical value and assets, that cannot be
expropriated by others, man, nor beast, nor government. I leave the selection to you, and invite you
to subscribe to the DGS Letter to learn more. Good Luck!!
Check back on our discussion of MACD
in Tech Talk!!
So XLE is comprised of about 30 stocks,
and the above curve measures the speed with which the number of stocks OVER
their 50-day moving average increase or decrease, based on the MACD formula
Below is based on the price of crude
oil, interpreted in Bull Candles.
On or about September 3, a Bull Candle appears,
(unmarked), just poking its head above the trading range at 6.20, then falling
back to 6.10 support level.
What no one got is Chart Above + Chart
Below = Saudi Oil Plant attacked by BLACK SWAN!! – Now, was it a FALSE FLAG ATTACK?
With 19 precision
hits was it the Houthi Rebels, you think?
Was it the way to get
the oil price up where it is needed for producers?
So, when MACD Signals and Bull Candles
result, Big Things can happen!
Here we have a
downtrend, looking as if it is punctured by two big Bull candles already
penetrating the 50-day moving average to the upside. Unlike Rogers, this cannot be a Three (3)
White Soldiers formation as the 2nd bull candle did not open within
the body of the first bull candle. Later
it could become a two-candle continuation pattern, as long as the gap between
the first two candles is still open.
To me this
seems quite promising. Next Gen is a
uranium finder, developer and miner, so it has the risk profile unlike that of
petroleum companies. As well this
uptrend could flop, but when something is set in motion with this much energy
underneath it. If this continues, the 200-day
moving average is within reach let’s say in a week or two, of being breached to
the upside, again, a bullish development.
Now maybe in the next post or next week, we can see what the
On-Balance-Volume is doing to validate or deny the current moves.